Strategic Planning:

Husky Injection Molding Systems

October 22, 2012

Strategic Planning:

Husky Injection Molding Systems

October 22, 2012

Take 2 Consulting GroupTake 2 Consulting Group

Husky

Agenda

Summary of

Framework

Summary of

Framework

11

Statement of

Intent

Statement of

Intent

22

Presentation of

Alternatives

Presentation of

Alternatives

33

Recommended

Action Plan

Recommended

Action Plan

44

Implementation

Strategy

Implementation

Strategy

55

Risks and

Contingencies

Risks and

Contingencies

66

Five Forces Analysis

Threats of Entry & Power Levels: HighThreats of Entry & Power Levels: High

Industry:Industry:Injection Molding Machine

High Threat of Entry

High BP Suppliers

High BP Buyers

Low Threat of Substitutes

High Rivalry Among Competitors

Preliminary Analysis

Willingness to Pay [Thinwall System]:Willingness to Pay [Thinwall System]:

Preliminary Analysis

Willingness to Pay [Preform System]:Willingness to Pay [Preform System]:

Current Strategy

Competitive Advantage Source: DifferentiationCompetitive Advantage Source: Differentiation

Classic Differentiator

Innovative products

Operate more efficiently

Serve a niche market

Price Premium

Value communicated through sales force

Industry:Industry:Injection Molding Machine

Statement of Intent

To determine Huskys best course of

action to ensure continued success

despite a short-term soft market.

To determine Huskys best course of

action to ensure continued success

despite a short-term soft market.

Goal:Goal:

Presentation of Alternatives

Increase competition with Nestal by lowering

machine prices to 20% of current markup.

Increase competition with Nestal by lowering

machine prices to 20% of current markup.

11

Hold prices constant while introducing a leasing

program for firms unable to finance new capital.

Hold prices constant while introducing a leasing

program for firms unable to finance new capital.

22

Increase machine prices to price of indifference,

eliminating differentiator status.

Increase machine prices to price of indifference,

eliminating differentiator status.

33

Baseline Analysis

Industry Demand Forecast for Husky Products:Industry Demand Forecast for Husky Products:

Baseline Analysis

Baseline Scenario KPIs [No Action]:Baseline Scenario KPIs [No Action]:

Analysis of Option 1:

Option 1 KPIs:Option 1 KPIs:

Increases demand

Perpetuates detrimental price war

Boosts sales in a trying year

Analysis of Option 2:

Option 2 KPIs:Option 2 KPIs:

Focuses sales pitch on benefits rather than price

Allows firms low on cash to invest in machinery

Spreads machine revenues over multiple years

Analysis of Option 3:

Option 3 KPIs:Option 3 KPIs:

Increases profit margin overall

Negatively impacts market share [Decrease in QD]

Risky strategy in a tight market

Recommendation

22Hold prices constant while introducing a

leasing program for firms unable to finance

new capital.

Hold prices constant while introducing a

leasing program for firms unable to finance

new capital.

Implementation Short-Term

0-6 Months:0-6 Months:

Implement leasing option

Formulate credit terms & lease-to-buy terms

Institute training seminars for sales force

Prepare them to better communicate value

Design new compensation plan for sales force

Prioritize lease contracts & whole-system

sales

Implementation Short-Term

6-12 Months:6-12 Months:

Continue to expand leasing program

Redirect marketing to support leasing options

Continue with heavy R&D Expenditures:

Reduction of resin use & overall waste

Energy efficiency & life cycle design

Systems engineering

Redesign sales force compensation plan

Utilize AMC to build cross-functional synergies

Implementation Long-Term

1-5 Years:1-5 Years:

Continue to direct marketing

funds to support leasing initiative

Plan partnerships between AMC

& technical research universities

Continue R&D investment with addl funding

for energy efficiency & alternative energy use

Focus design on leading the industry in

quality, low waste, and energy efficiency

Implementation Long-Term

5-10 Years:5-10 Years:

Maintain R&D & AMC educational partnerships

Utilize for advanced training of sales force

Formulate & implement sustainability goals

Expand current CSR initiatives

Position Husky product lines & systems as

sustainable solutions

Consider strategic acquisitions of smaller

preform PET or thinwall injector manufacturers

Contingency Plan

Demand does not strengthen in the near future.Demand does not strengthen in the near future.

11

Lease option allows greater flexibility for

financially constrained buyers.

Redirecting marketing towards leasing supports

continued cash flow.

New focus on systems solutions opens up new

markets and forms of revenue.

Contingency Plan

Prolonged Resin cost increases at greater rate.Prolonged Resin cost increases at greater rate.

22

Investment in low resin

technology and low waste design

hedges against increases in price.

Can also use this efficiency to

further differentiate product

line from competitors

Contingency Plan

Competition enters preform or thinwall market.Competition enters preform or thinwall market.

33

Continue innovating through efficiency and whole

system solutions to differentiate Husky lines.

Further emphasize Educational Partnerships:

Build brand loyalty by training students on

Husky products

Provides path to employment for engineers

Concluding Remarks

Thank you for your time.

Any Questions?

Thank you for your time.

Any Questions?