Growth Strategies for the U.S. Moldmaker: Positioning Your Company for Growth During Challenging Times
This final part will describe how to formulate a strategy in order to position your company during challenging times.
If your responsibility is charting the path ahead for your mold building company, it's understandable that at first it would seem like a daunting task because business conditions have dramatically changed.
In the previous three parts of this series, we discussed a competitive overview, how to harness time-compression technologies and how to expand toward overseas exploration. This final part will describe how to formulate a strategy in order to position your company during challenging times.
Quite a Difference
All that used to be needed to start a moldmaking business was a Bridgeport milling machine, a surface grinder, a robust amount of tools, a stack of business cards and the word getting out to a few local shops. Boom ... You were in business!
Today many of the mold shops that were able to start up and thrive from such humble beginnings are finding that it's a whole different ball game to continue that growth. One must do more than just possess the capabilities required. It's now necessary to pursue a position in the market by working a strategic plan. Growth won't come to us because we're ready; we must get ready in order to go for it.
As nice as it would be, there's no quick action one can take to single-handedly secure the growth of his/her company - no magic rapid prototyping machine, no grand slam advertising campaign and no quick handshake on an alliance that puts us on easy street. It's the working away at these areas and the advancements over time that lead to a stronger position in the marketplace.
How does one formulate a strategic plan?
1. Identify core competencies.
What is your company inherently good at? What skills, aptitudes and resources are possessed? What specialties can be leveraged?
2. Identify the market's needs.
What will your key customers need you to provide in years to come in order to continue to justify selecting your company?
3. Define your vision.
What do you want your company to look like in three or five years? This can be defined in capabilities, markets served, approximate company size, etc.
4. Define the steps.
If one were aspiring to be recognized as a premier builder of high-cavitation, multi-shot injection molds, it would not be achieved by running a big advertisement in a couple of magazines. One would have to communicate his/her advantage to the market through a program of actions carried out over time. Define a timeline that includes an increase in product development capabilities, time-compression technologies, overseas alliances, the addition of molding capabilities, increased marketing presence, etc. In order to determine which areas within your shop would be logical to develop further, you should consider the previous three factors.
What Does Your Company Do?
I recently asked an owner of a moldmaking company this question and he replied, "We build molds." I then asked, "Is that really the most accurate definition of what your company does?" After pressing on, he described how he goes beyond just building the mold. He is skilled at cleaning up his customer's geometry to assist in product design. He also designs and outsources overflow tooling to other sources and oversees the first run at a local sampling source.
"So, it may be more accurate to say that you're a plastics tooling provider or maybe even most accurate to say that you're a product development company that provides a means of producing production volumes of parts - when starting with nothing more than preliminary CAD geometry." There is something to be said for looking at what a moldmaking company totally provides to his/her customer in order to identify the next areas to develop.
If the above moldmaking company thinks of itself as simply a manufacturing company, then maybe purchasing a third electrode-cutting machine is the area to expand. But if the shop is considered a means of assisting its customers in developing products, then maybe those resources should go into hiring a full-time product designer, purchasing a sampling press, etc.
Staying on Plan
After identifying the key areas to grow, the steps that should be defined do not have to be overly ambitious. Think of the 'tortoise and the hare' example - it's better for one to define eight steps to be achieved throughout two years than aspiring to carry them out in the next month.
Knowing that there is a higher authority within one's company to whom to report can assist one in executing these steps. This is where some small- to medium-sized company owners choose to form a board of directors, which allows them to report on a biannual basis exactly where they are in their efforts to grow and position the company at the next level.
Avoiding Marketing Reluctance
As a company's capabilities increase, so does the need to properly communicate its advantages to the market. This entails having an appropriately sized marketing program in action at all times.
At one time, 'word of mouth' and an occasional effort to 'rustle up business' may have been enough to keep a company in RFQs, but today as buyer's needs and habits change and the competitive playing field increases, it can become a 'sin of omission' not to actively market one's company.
Getting the word out about your specialty - whether it is through mailings, trade shows, ads, presentations at industry events and conferences - should bring more than just requests for quotations. By highlighting a true advantage and having that advantage recognized by current and potential customers, a moldmaking company can be more selective in regards to the type of work - and the type of customer - with which to align itself.
Marketing efforts alone may achieve little or nothing. But, when used as part of a total communication program, it makes the job a lot easier and more efficient for the salesperson. Much like a basketball crowd is considered "the sixth man," these additional efforts make the traditional sales efforts more effective.
The Course Ahead
Few will say that the moldmaking business will be getting any easier in the years to come. As a matter of fact, it is widely recognized as an industry that is undergoing significant change, but that is not to say that the change needs to impact us negatively. The plastics tooling industry is one of the greatest industries in the world with which to be involved and as more and more sophisticated consumers inhabit the world, they want products and these products require tooling.
Where we stand in what has become the global tooling industry greatly depends on where we plan our steps today. The current strengths we use, the steps we take to pursue our vision and how well we communicate this to the market will determine the winners in the years ahead.
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