As part of the global plastics sector, Husky used a differentiation strategy rather than low cost or dual advantage. Its primary business was in plastic injection molding equipment and related services. Of the molding techniques, injection molding is the most specialized and therefore required the most intricate, customized, and expensive equipment. Husky chose to focus its main business on a few specific machine products, sold to several plastic processors over a large geographic region. This strategy allowed Husky to focus on its core products while stimulating growth with international expansion. Its main customers were all focused primarily on the manufacturing of plastics and plastic bottles as their main business. For these customers, the item produced by Husky’s machinery was their major product and the system was their primary capital expenditure. For this reason, it was important for these customers to have reliable, efficient machinery, with good customer service which is something that Husky had a reputation for doing. This strategy was evident in all its business functions.
Processors used a variety of techniques to form products from resin. However; the most complicated plastic shapes required injection molding. Husky applied this technique exclusively for its equipment. By focusing solely on this technique, Husky was able to perfect its injection molding systems and incorporate upgrades such as hot runners, which improved the quality of parts and reduced resin waste. Injection molding techniques were typically categorized by the force they could exert as this affected the type of product that could be manufactured. Husky focused on sales in the medium tonnage classification (150 – 900 tonnes), which were designed for PET preform and thinwall applications. Small-tonnage machines were excluded in its product mix as these machines are used for commodity products produced by assembly lines. The majority of large-tonnage machines were excluded which enabled Husky to keep costs down and focus on its core competency. This proved to be advantageous, as the market for injection molding equipment for the PET packaging application increased from $346 million in 1993 to $755 million in 1995 and was expected to increase to $1153 million in 1998. By focusing its resources on PET packaging applications, Husky was able to establish a first mover advantage for this particular application. Large capital expenditures and the need for reliable equipment, likely increased switching costs for customers. As a result, Husky’s reputation as durable machinery allowed them to charge a premium over competitors.
Husky machines were typically manufactured made-to-order which gave customers input when their particular machines were designed. With production in two locations, Husky could leverage the intellectual capital in the specific regions. The production facility in Canada, was very important to Husky’s strategy due to the technical know-how of the employees in this region and the strong industry presence in the area. This provided an attractive talent pool that could work in the job shop atmosphere at the quality standards Mr. Schad had come to expect.
Sales and Service
Husky chose to use in-house sales representatives, several of which were previously service people providing additional knowledge on products. This was contrary to industry practice which typically used a hybrid of in-house sales representatives and independent representatives. With in-house sales representatives, Husky retained more control over compensation and incentives. Just as importantly there were fewer conflicts of interest among the sale of competing products.
Husky had a history of investing in technology and making innovation a priority. Husky’s ability to establish itself as the leading firm in the perform niche with its new product...