Manufacturer in Declining Industry
Makes Breakthrough Market Share and Profitability Gains.
A small manufacturer of conveying, drying, and blending equipment for the plastics industry found itself in the unenviable position of actually losing market share in an industry that was in decline. With many plastics manufacturers taking operations offshore, the opportunity to sell and service equipment in U.S. plants was significantly diminished. The organization had already done all it could to reduce costs and to improve delivery of equipment by undertaking several Lean Manufacturing initiatives, but its management team was struggling to increase revenues and to stop their erosion of market share.
Although skeptical that the tools of customer value management could effectively address the situation, the President of the company decided to “stick his toe in the water,” and to focus the initiative on two strategically important product/markets. MVS’s customer value analyses for the two product/markets revealed that the organization’s Lean Manufacturing initiatives had paid some important dividends: they were now the value leader in one product/market, and positioned to achieve leadership in the other. The keys that they had been missing were that (a) they were positioned to leverage strengths on key quality drivers, and (b) they now understood the critical vulnerabilities of their competitors.
Working with MVS facilitators, the management team brought in representatives from their sales agencies to collaborate in the development of a competitive marketing plan. The plan was focused on those agencies where (a) current customer loyaltywas at risk, and (b) there were high concentrations of competitors with specific vulnerabilities. Collaboration with the sales agencies in development of the competitive marketing plan proved invaluable by breaking down artificial barriers and streamlining process flows. Concentrating the plan on key geographic areas resulted in a highly focused and cost-efficient plan deployment.
Leveraging their strengths on key quality drivers produced a market share gain from 11% to 24% in a single year, and a five-fold increase to the bottom line!