06:05
Faizan
How do you gain effective strategic advantages over competitors? It's easy: Build a better business model and then expand on your initial successes by providing more of what customers cannot get elsewhere.
When American Woodmark, a low market share maker of kitchen cabinets, first scouted out ways to improve its competitive position, the firm had no strengths to build on. It did notice, however, that customers were unhappy waiting weeks or months for new kitchen cabinets. With the advent of discount home stores, the firm saw an opportunity to compete based on low prices and fast delivery.
By reorganizing its purchasing and manufacturing processes, American Woodmark was able to gain advantages of low-cost manufacturing while still speeding products to stores.
American Woodmark's success with fast delivery to home improvement outlets propelled the company forward for many years. The company realized though that it could lose its strategic advantage when competitors began to match and in some cases exceed its performance. That challenge was a wake-up call that an improved business model was again needed.
The next vision was to become a fully-integrated just-in-time manufacturer who could create a broader choice of brands, lower costs, and improve quality while still providing fast delivery and low prices. The core building process would occur around a team-based work cell. To implement this change required changing the company's culture, helping everyone learn new ways of working, and replacing almost every procurement and manufacturing process the company employed.
With this new approach, the company could begin to offer more product, price and quality alternatives in home centers without increasing costs or hurting delivery. As a consequence, more fashion will be able to appear in America's kitchen cabinets.
Building on these strengths, American Woodmark was also able to expand its offerings to include vanities.
When American Woodmark, a low market share maker of kitchen cabinets, first scouted out ways to improve its competitive position, the firm had no strengths to build on. It did notice, however, that customers were unhappy waiting weeks or months for new kitchen cabinets. With the advent of discount home stores, the firm saw an opportunity to compete based on low prices and fast delivery.
By reorganizing its purchasing and manufacturing processes, American Woodmark was able to gain advantages of low-cost manufacturing while still speeding products to stores.
American Woodmark's success with fast delivery to home improvement outlets propelled the company forward for many years. The company realized though that it could lose its strategic advantage when competitors began to match and in some cases exceed its performance. That challenge was a wake-up call that an improved business model was again needed.
The next vision was to become a fully-integrated just-in-time manufacturer who could create a broader choice of brands, lower costs, and improve quality while still providing fast delivery and low prices. The core building process would occur around a team-based work cell. To implement this change required changing the company's culture, helping everyone learn new ways of working, and replacing almost every procurement and manufacturing process the company employed.
With this new approach, the company could begin to offer more product, price and quality alternatives in home centers without increasing costs or hurting delivery. As a consequence, more fashion will be able to appear in America's kitchen cabinets.
Building on these strengths, American Woodmark was also able to expand its offerings to include vanities.
Posted in: business
