Husky Injection Molding Systems Limited - Case Study Example

?Running head: HUSKY INJECTION MOLDING SYSTEMS LTD Husky Injection Molding Systems Ltd Insert Insert Insert 3 October 201 Executive Summary Husky Injection Molding Systems Ltd remains one of the best performing Canadian companies that have established unmatched global presence. Growth, expansion, and constant profitability remain the key aspects that the company strives to achieve. Nevertheless, constant competition in the industry, increased fuel and oil prices, and reduced production of resin interplay to create an environment tough for Husky to realize its objectives. Faced with such situations, it is proposed that Husky needs to develop strategic plans that are appropriate, which when effectively implemented are likely to lead to realization of the company’s goals. The report looks at the problem facing Husky by carrying out in-depth analysis of the industry, before providing recommendations and action plan for the recommendations. The concentration and preference for the recommendations is motivated largely by the internal and external environment Husky operate in, resources the company has, and the exhibited market potential and future sustainability of the company. Therefore, the recommendations are perceived to fit well with Husky’s strategic growth needs - expansion, profitability, and continuity. Husky Injection Molding Systems Ltd Background In 1953, Robert Schad established Husky Injection Molding Systems Ltd (Husky para.1). Since its creation, Husky Injection has established itself as one of the cherished and celebrated brands in the supply of injection molding equipment and services to the plastic industry. The company owns one of the broadest product lines in the industry, and the company’s products are used by clients in manufacture of a range of plastic products that include bottles and caps for different beverages, food containers, components for automotives, and consumer electronic parts (Husky para.2). At the same time, the company takes part in manufacture of hot runners, robots, and other secondary systems used in plastic manufacture. Since its establishment in 1953, all the way to early 1990s, Husky experienced accelerated growth that was accompanied by increased profits before the fortunes shrunk in early 1996. Starting in 1996, Husky became victim of slowed growth and reduced profits as competition in the industry became inevitable, specifically from low-price competitors. Also contributing to Husky’s dwindle was the increasing shortage of resins that constitutes raw materials for plastics, which led to plummeting in machine demand. The severity of these incidences could not be wished away or ignored; rather, it called for decisive actions by the company. In such scenarios, the company is forced to develop winning strategies if it has to survive and continue into the future. Faced with availability of numerous options in terms of strategies, the best alternative option becomes a problem and this calls for the company to have thorough understanding of both the internal and external environments in which it operates. Problem Statement Husky Injection is a kind of company that has grown and realized satisfied performance due to presence of a formidable internal leadership culture that Robert Schad created in the company. Customer-centered values, hard work, environmental consciousness, egalitarianism, perfectionism and good health constitute the main categories the company has prioritized its values. Robert Schad owns majority of shares in the company (60%), a situation that makes it possible to arrive at key decisions affecting the company. Coupled with vast experience of many years, Schad remains the pivotal and fulcrum of the company as far as strategic planning take-off is concerned. Apart from possessing a strong internal management culture, Husky prides itself in possessing core values that place the company above others. Research and development (R&D) remains the bedrock of the company’s competitive advantage. As a result, the company continuously feeds the market with innovative, quality and premium priced products that competitors find difficult to match. Moreover, technology, specifically adoption of the latest technology development makes Husky to remain affront in developing products faster, encourages resin utilization, and is more durable. Value-added services or customer service and management has become another area Husky puts more concentration in meeting customers’ needs timely and efficiently, training customers, integrating its production systems for effectiveness and customer satisfaction, and production of turnkey factories. Other internal aspects that Husky has been heavily involved in include expansion decision and strategies in new markets, streamline of production lines, and maximization of economies of scale especially with regard to production and manufacturing. At the same time, Husky constantly tracks production and products of the competitors, and enhancement of internal sales force that is distributed in different locations across the globe. Nevertheless, despite these internal strengths, Husky’s external environment can be described to be ‘chaotic’ and competitive, that requires winning strategies. Husky has to contend with the issue of increasing oil prices that subsequently accelerate the operating costs of the company. Furthermore, production of PET resin decreased drastically, affecting the industry’s demand needs. No more PET products could be produced to satisfy customer needs, while the little available had its price abnormally skyrocketed. Competition is another issue that appeared to suffocate Husky Injections where stiff competition emanated from key players such as Mannesmann Group, Cincinnati Milacron, Electra Form, and Engel. Some elements that competitors have tried to beat Husky with include diversifying their market, adoption of enhanced technology, low pricing of products, and expansion strategies in terms of acquisitions and joint ventures. This has affected Husky deeply, despite having sophisticated expertise than other players in the industry. Another challenge Husky has to deal with is economic pressures that in turn have led to incurrence of long-term debt, which by 1995 amounted to 15% total assets and continues to reduce earning ratio for the company. Recommendations Vision plays a success factor to any company or organization (Kumar p.55). For Husky, there is need for the management team to prioritize the company’s vision so that it has ability to capture the urgency in which actions need to be taken to revitalize the situation. The company’s vision needs to be ‘imprinted’ into employees’ hearts, thinking, actions, and even aspirations. To do this, Husky’s management should establish an employee-based learning and training system that integrates vision building of the company. Second recommendation has to do with increased acquisitions and joint ventures in promising countries, where competition is still in infancy. Husky’s management teams need to carry out global market situation analysis and identify the most untapped markets where venture should be proposed. To reduce on cost, the company should look for the most appropriate forms of joint ventures in the new markets. Subsequently, acquisitions of new businesses with critical values and technologies should further be part of Husky in increasing its expansion opportunities. Another proposal is for Husky to increase its research and development (R&D) funding. R&D remains the key and competitive aspect of Husky, hence more allocation to the sector should see increased R& D activities that result into innovations that are of high quality, speedily produced, and price friendly. Moreover, Husky depends a lot on internal sales force that is inadequate (300 people serving 70 countries). This shows that the company’s market remains underutilized and largely untapped. Therefore, the company should engage in integrating and training field agents who, under supervision of sales teams at every region, should expand the sales and market team of the company. In addition, diversification of products should constitute another strategy for adoption on the part of Husky. Analysis of Husky’s current products and area of interest shows that, with regard to machines, the company concentrates largely in medium-tonnage class products and less in small-tonnage machines and large-tonnage machines. Increased production in small and large-tonnage machines will enable the company to compete effectively with other companies. The last proposal suggested is for the company to increase its investment in the business, especially as competition increases. Investments opportunities have to be derived from customized market research and consumer needs identified. Action Plan Implementation of the above stated recommendations will need an action plan that outlines the procedure for the implementation process. Implementing of vision as the first recommendation requires integration and participation of broad-based members of the company. Input and suggestion from members is necessary especially with regard to where members envision the company should head. Research needs to be conducted prior to this, brainstorming sessions to be held involving employees, suggestions need to be fronted, and drafts need to be developed. This should be followed with adoption of a vision that captures the urgency of the organization to take off and each member to be aware of the vision. The second recommendation involves acquisitions and joint ventures, which Husky should pursue. Strategic action plan for this should involve setting up a sub-committee of globalization and internalization strategies. The committee should identify acquisition ventures that are appropriate for the company, and subsequently research on the most appropriate joint ventures in Europe, Asia, and Middle East the company should pursue. The third proposal has to do with increased funding for R& D. The suggested action plan for this should include finance, sales & marketing, research & development, and technology and development, together with General Manager’s office coming together and forming a sub-committee that conducts research on competitors’ products and come up with funding recommendations on the need to increase funding. Other proposals have to do with increased agent training and acquisition, diversification, and increased investment. Action plan for all these should involve the company undertaking market and environmental analysis through techniques such as SWOT, PESTLE, or value chain analysis. This will enable the company’s management to have a clear picture of the market and from this, tailor-made solutions should be developed with an aim to increase market concentration, market niche, and increase market acquisition. On overall, the action plan should have the input of all management efforts if genuine success is to be realized. Nevertheless, corporation, collaboration, and wide consultations should remain the tendons that connect the management team of the company. Works Cited Husky. Company Overview. 2011. 03 October 2011. . Kumar, Dhirendra. Enterprise growth strategy: Vision, planning and execution. London: Gower Publishing, 2010. 03 October 2011. . Read More