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Trump Your Competition Through Strategic Repositioning

It is difficult to imagine that the world's largest cell phone manufacturer started in the late 1800's as a wood pulp manufacturer. Despite early external threats, by the beginning of the 1900's the business grew to include wire cables and rubber. A hundred years later, Nokia took a long hard look at its core competencies and determined which ones would take them into the future. It was during this time that Nokia made a strategic decision to enter the cellular phone market and today one is hard-pressed not to hear that familiar ring tone from a nearby cell phone.

What allows one company to survive, change and thrive while other similar companies with seemingly the same challenges do notHow does a manufacturer successfully cope with global competition and still maintain a competitive advantage in the market place

The answers vary but a key theme emerges. Companies that successfully position themselves to leverage their strategic core competencies (the things they do well) and stay exceptionally close to their customers are able to not only survive but also thrive in these increasingly difficult times.

Strategic Repositioning is a process that focuses on expanding a company's internal and external knowledge as well as capabilities to compete more successfully in today's marketplace.

The 5 Keys to Strategic Repositioning are:

1) Recognizing that success involves change

2) Understanding what your company does well

3) Discovering unarticulated customer needs

4) Exploiting your company strengths to meet those customer needs better and quicker than everyone else

5) Building a culture around market intelligence and customer focus.

Here are some examples of how companies successfully demonstrate the 5 Keys of Strategic Repositioning.

Success Involves Change - When Keith Peterson bought Humane Manufacturing in 1997, he knew he had to make some big changes. The 90-year old company was known as a steel fabricator of cow stanchions and stalls on dairy farms, but also made rubber mats for the dairy industry.By 1998, Peterson had sold off the less profitable steel division and bought an additional production facility. With the added capacity and change in products, he needed to bring in new customers and new work.

To do this, Peterson realized that he needed a lot more information about his customers and markets and he needed to let customers know where the company was headed. This CEO became intimately involved with his customers and his sales process, sending a strong message both to his customers and his employees that Humane was changing. "Just the fact that the president of Humane is there, 75-80 percent of the time we'll have an order before we walk out of there - just because the CEO cares about the customer," said Peterson.

Know What You Do Well - Titan, Inc., of Sturtevant, uses its considerable engineering and technical talents to design and build complex equipment to test electrical, hydraulic, and mechanical manufacturing quality for its OEM customers. President Greg Petro knew that Titan's growth strategy would require finding new ways to deploy their strengths in order to add value for their customers.

Petro formed a cross-functional team, which identified strategic competencies.

These competencies include company strengths that meet three criteria:

1) they add value to the customer

2) they differentiate the company from the competition

3) they are difficult to copy.

After the internal team agreed on a dozen strengths, the team asked key customers for their evaluations of Titan's competencies. The result was a clearer understanding of what Titan does well - from their customers' perspectives as well as their own. This knowledge is a valuable resource for focusing the search for customer needs and discovering new markets.

Discover Unarticulated Needs - When Debbie Simmons, President, started Kelle Company, she had little experience with the dance performance/dance costume industry.A successful clothing designer, she had neither taken dance lessons as a child nor been a parent to a dance class student. However, knowing that she needed more information to be successful in the design and marketing of her products, she made a bold decision. She called the customers.

"You would be surprised at how much the dance studio owners and teachers appreciated talking directly to the owner of the company," Simmons now says, "Of course, I was even more appreciative as it was really informative and helped me understand how to help our customers be more successful at their business."

Instead of specific costume design issues, Simmons focused on the Dance Studios' business processes and listened to the many frustrations the owners and teachers had with the dance costume industry. She turned many of these customer frustrations into key elements of Kelle Company products and policies. By putting a focus on customer service and delivery as well as keeping Kelle Company's designs fresh, Simmons has made Kelle one of the fastest growing companies in the industry.

Exploiting Strengths and Meeting Customer Needs -

Thermal Spray Technologies, Inc. of Sun Prairie grew out of a desire to improve the durability of lawn mower blades. In the late 1980s, Richard Wilkey, president of Fisher-Barton, Inc., a manufacturer of mower blades, began working with researchers at UW's engineering department to achieve this goal. The research indicated that thermal spray coating demonstrated a dramatic increase in wear resistance.

Realizing a wide potential for thermal spray coatings in other industries, Fisher-Barton established Thermal Spray Technologies in 1992. Today the company serves many industries - aerospace, agriculture, automotive, food processing, marine and medical devices, among them. The company has developed a coating for electro-surgical devices used by surgeons that eliminates the need for suturing and promotes faster recovery times.Thermal Spray Technologies, which started with three people in 1992, now employs 50, and has tripled its plant size.

Build a Culture Around Customer Focus -There are few better examples of a company that has built a company culture around its customers than Harley-Davidson. It is the longest continuous manufacturer of motorcycles in the United States and has outlived nearly all of its competitors.

Since its near demise in the early 1980's, Harley-Davidson has focused almost completely on creating a company with a customer-focused culture that is unparalleled.In the twenty short years since Harley-Davidson started their Owners Group programs, it has grown to over 500,000 members, each who own at least one motorcycle.

Is there any other consumer product in the world that will prompt customers to travel over several continents to be part of an "experience" such as the company's five-year anniversary parties Customers and employees alike take great pride in their affiliation with the company and this continues to make Harley-Davidson one of the great success stories of our time.

Many of these companies are good at one or more of the 5 Keys, but the companies that are good at all of these elements are able to keep repositioning themselves for continued growth and profitability. Companies that are great at Strategic Repositioning change their industries when they change their business. "When it absolutely, positively has to be there overnight - FedEx." FedEx changed the overnight shipping market forever by offering efficient and accurate shipping in a hurry. Today, even the US Postal Service offers an electronic tracking service to its customers. Many of its competitors offer a similar service; however, sending a package "FedEx" is synonymous with overnight shipping. FedEx continues to differentiate itself with more options for its customers (most at a higher premium).

The most important element of the Strategic Repositioning process is to start thinking about the changing conditions of your business environment before it has become absolutely necessary to find a new product, service or market. Seldom can a company fight for survival and successfully implement full-scale change at the same time. Take a good hard look at your company and compare it to the examples above. Are you ready to implement a strategic repositioning process Most companies can't afford not to.

Copyright 2003 by WMEP.org

WMEP provides technical expertise and hands-on implementation assistance to small and midsize manufacturing firms on advanced manufacturing technologies and business practices includinglean manufacturing, ISO, value chain management, and strategic repositioning services for manufacturers and manufacturing facilities located in Wisconsin.

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