Reference no: EM133050756

For more than 50 years, Waxmax Sdn Bhd has achieved considerable success in the manufacturing of a commodity plastic product known as polyethylene terephthalate (PET). It is a form of semi-crystalline polymer material that is used predominantly in the production of plastic bottles and containers. However, in 2015, Waxmax began to face increasing competition from rivals based in Malaysia and overseas. Waxmax also found it hard to counter the rivals' labor-based cost advantages, which led Waxmax to change the game it played during those splendid years. Waxmax had foreseen significant potential in developing into a niche-differentiator strategy. So, Asyraf Johan, Waxmax's president, decided to go upscale by shifting to digitalised production methods specialising in producing high-end industrial hygienic cleaning equipment using stiffer plastic called high-density polyethylene (HDPE).

Until now, Waxmax is recognized as a producer of a specialized high-end industrial hygienic cleaning equipment called Waxwell Ultra-safe Technology (WUSTECH). WUSTECH is designed for use in food processing, diary processing, quick-serve and healthcare industries. WUSTECH comprises twenty different cleaning tools which are available in four different colours. Waxmax offers a range of colour-coded cleaning primarily to provide a diversity of product functions particularly to help the customer who chooses to prevent the risk of cross-contamination at the factory site. These cleaning tools are also customised for cleaning task needed in food processing, pharmaceutical, and healthcare sectors. Customers are aided by Waxmax professional consultants on the planning and effective use of WUSTECH either at the showroom or at the factory site too. Besides being made from ISO14001 environmentally certified materials, WUSTECH tools are also autoclavable, making them suitable for heavy cleaning usage such as sterilising using steam under high pressure.

After a few years of displaying consistency in its profitability, startlingly the past two years, sales revenue for WUSTECH are showing a decreasing trend that had triggered a negative sign of performance of the company. The Chief Operating Officer (COO) has also highlighted unprofitable product lines that require attention and resources redundancy ever since the company changed its methods of production. At the board of directors meeting, a few recommendations were made to turnaround Waxmax performance decline and reinvigorate growth towards profitability. Asyraf believes that WUSTECH would still have the potential in the market which is viewed as matured, as HDPE is one of the materials that the modern world cannot do without especially in the industrial sectors that are susceptible to contribute to environmental impacts. Even so, Asyraf said at the board meeting that this fate is not inevitable. WUSTECH is the safest, efficient and sustainable industrial cleaning equipment and highly demanded in the food, pharmaceutical and health industries. Hence, with precise intervention, WUSTECH will be able to generate sales and improve performance.

Question:

Identify the type of business-level strategy previously and currently used by Waxmax Sdn Bhd and, differentiate these strategies in terms of the competitive advantage and markets served.