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Manufacturer of Metal Cutting Machines
Background
The firm was founded 115 years ago in Chicago, Illinois, when two brothers
from Canada started the business in an eight-foot-square, unheated room located
in the rear of a boarding house.
In the early years, one brother designed the tools while the other built the
tools. Various devices and tools were perfected, mainly of and related to the
bench lathe line. Even though a number of products were built and sold, it was
the cataract line of bench lathes and attachments that was instrumental in
making the firm what it is today.
A totally separate set of events that took place during the First World War
would also shape the firm’s future. A small machining company located in
Rochester, New York, started manufacturing collets and feed fingers. This
company
also was experiencing rapid growth and was soon seeking additional space. The
search ended when a much larger shop was found and opened in Elmira, New York.
Around that same time, the firm was experiencing growing pains, which
precipitated its relocation to Elmira, New York from Chicago in 1931, and on
January 1, 1938, both firms merged and continued expanding by adding to both the
facility and the family of products.
Management realizes that to remain competitive they needed to continually
improve the firm’s presence in the rapidly growing and demanding industry the
firm serves by way of new products and accompanying machine tools. Thus, they
developed steps to strategically transform the firm into a stronger, more
flexible global manufacturing company. Many of these steps have led to mergers
and joint ventures with companies of complimenting products.
In the recent past, the firm has experienced declining sales
each year, worldwide. Domestic sales are off 50 percent; European sales have
declined close to 30 percent; and the Asian market is currently being fueled by
China, whose national economic plan is to develop its own local machine tool
manufacturers, making it more difficult to import machines if a similar machine
is available from a local Chinese manufacturer. At certification the firm
employed almost 1,200 and reported sales of $170 million.
Assistance Provided
The NYS TAAC performed a diagnostic of the firm’s operations, which concluded
the firm must develop ways to improve in the areas of marketing/sales
communications and new product development in order to compete more aggressively
against its larger competitors.
The recovery strategy would
address the firm's need for a structured, all-encompassing marketing communications
program. This program would combine the firm’s entire product offering (which is
now scattered), into one corporate identity; providing similar logos, product
messages, and printed material. Moreover, it would align the firm’s core products
with a customer base more appropriate for the equipment’s capability.
The second part of the strategy included new product development. The firm has
been facing competitors who offer on-line user friendly machine software.
Today’s customers are expecting more and getting more from their machines, and
one way of accomplishing that is through easier yet more sophisticated software
to run the machines at improved productivity.
Project Results
Both projects have been successful. The marketing communications project, the
first to be addressed, refocused and organized the firm's scattered marketing
efforts. This project assessed the equipment-machine market by researching the
background of the industry and conducting a competitive audit with an
understanding of the overall strategy of the firm’s desired direction.
The outcome was a clear direction for the firm’s market position; a unique
high-impact corporate identity that will communicate a clear value proposition
to the selected target audience; plus, a well defined tool kit that will be
instrumental in reaching the firm’s targeted audience.
The success of this project can be measured by the increase of $10 million
dollars in sales inquiries shortly after the plan had been
implemented.
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