Husky Injection Molding Systems Case Essay

Husky was founded in 1953 by Robert Schad. They were the world premier manufacturer of plastic injection molding equipment from the 1970s to the 1990s. The company has made products ranging from soft drink bottles and yogurt cups to automotive components and computer housing. They provide the plastic industry with inclusive and ample manufacturing solutions but charged a heavy price for there business. In the early 1990s they reached had an extreme increase in growth, quadrupling there net income and raising equity close to 40%. The reason for the rise in net income was because Husky produced machines that were unique, innovative, and efficient. They had evolved into a leader of the polyethylene terephthalate industry and put into place obstacles for competitors to enter. This helped eliminate the negotiating ability of customers. They also provided customer service that was quick and from trained technicians. After 1995 competitors entered the market with lower cost causing Husky to lose customers and in return lose money. As shown in the case Husky machines cost two hundred thousand more dollars then there competitors. Therefore, Husky has to show that there product is worth the premium cost. In order to find out if Husky’s machine is worth the extra cost we need to look at the cycle time, floor space occupied, and work per day. Husky machine has a slower cycle time by 1.4 seconds, they use 8.7 less square feet and works 3.4 hours per day. Also, we find that Husky machines can make the same amount of products in a year, 365 days, compared to their competitors taking 488 days. In the long run, Husky’s machine cost less than its competitors. This should show the customers that a Husky machine is worth the premium price but they first have to respond to some issues they are having. Husky, being an independent company, definitely has difficulties and unexpected problems. One of the biggest issues is the resin shortage. Husky Injection Molding Systems was unaware that this may be a problem, resulting in the shortage ruining a huge part of the industry. This failure not only affected Husky but the companies who manufactured equipment for it. Another issue is that competitors offered products very similar to Husky’s but with much lower prices. This made customers more resistant to paying the price for Husky’s product. Naturally, Husky Injection Molding Systems wants to respond to these issues while solving them as efficiently as possible. In order to do this, they need to come up with long and short-term goals. First, they need to make substantial improvements on return on investment. They need to show current and possible customers the higher quality and productivity that their machines provide. Next, lowering the price will increase customer awareness and will prevent competitors from joining the PET business. In addition to gaining customer satisfaction, the Husky marketing team needs to increase product awareness. Last, they need to explore different opportunities with other companies in terms of the molding system.