63The case does not explicitly describe the price-flex program or the absorption of raw materials costs as price cuts, but they are.Harvard Business School Case4
Price War: Is Signode Ready?64Past behaviours are an indication.Signode’s competitors are ready and willing to cut prices. Signode is less capable of competing on price, actions by Signode that initiate price cuts will be counterproductive and play into the hands of the competitionHarvard Business School Case5
Price War: Is Signode Ready?65Signode’s three largest competitors are lower cost providers of steel strapping (Alpha and Bentley are subsidiaries of steel producers, and Sanford has lower overhead). [Case p. 7]Harvard Business School Case6
Price War: Is Signode Ready?66All of Signode’s competitors are more focused. With narrower product lines and less sales and customer support service, they are better able to compete on the basis of price.Harvard Business School Case7
Price War: Is Signode Ready?67Alpha, Signode’s major competitor, has already pre-empted Signode’s price leadershipby announcing a price increase for “a select group of customers.”Harvard Business School Case8
68Decline of Signode’s Industrial MarketMarket-Shifting
69Positioning of Signode
Full Line Full Service Supplier70Very high value added system sellerImproving technical assistanceIncreasing R & DProviding Better Sales and Customer SupportIndustry Specialist•170 standard sizes of steel strapping (12 accounted 73 %)•More than 550 standard types of sizes of steel strapping machines•Tools•Customized strapping•Customized designed •Hand tools and power equipmentsHarvard Business School Case
HighLowHighLowCost to ServePrice PaidScatter Plot of Signode top 1200 AccountsHarvard Business School Case
73Signode Unclear product policy and non existent account selection and management strategy
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