WWSA Case Study

Wolfgang Wiesel SA (WWSA) is a Swiss manufacturer of printing equipment for the

graphic industry, specialising in printing large billboards, banners and XL posters. The

company started out in Interlaken in the 1950s as a local manufacturer of all-purpose

printing equipment, but real growth did not come until the fi rm's management decided,

in 1987, to specialise in the graphic industry. The company moved its headquarters

to Basel and grew into a major international player with sales offices, distributors

and agents in 34 countries. Annual sales are approximately %230 million.

WWSA has traditionally focused on innovation as the engine of growth. Over the

years the fi rm has developed and launched an impressive number of technological

innovations that have contributed to the state of the art of printing in the graphic industry.

Too many products and no focus

Recently, WWSA's management has noticed that actual sales growth is no longer

according to plan. In most of its major markets, sales are fl at, while the total market

still grows by 2-3 per cent each year. In 2010, WWSA decides to hire a consultant to

take a closer look at the fi rm's business and fi nd a way out of the slump. After several

interviews with senior management and a few selected customers and industry

experts, the consultant realises that, as a result of all these innovation efforts, WWSA

simply has too many products. All these products serve specifi c niche customers

with specifi c needs, but the whole portfolio lacks focus. Even worse, there appears to

be no underlying theme to all the products offered to customers in the graphic

industry. While every individual product still makes sense, the whole product range

has grown to unwieldy proportions and it has become impossible to communicate a

clear strategy to customers that communicates the fi rm's corporate identity. This is

refl ected in management's inability to state succinctly what makes WWSA's products

unique. Similarly, WWSA's salespeople are unable to clearly explain to potential

customers why they should buy from WWSA rather than from one of its competitors.

Developing a value proposition

To deal with this problem, WWSA needs to develop a clear value proposition for all

of its major products. To jump-start this process, WWSA's management and the

external consultant selected one of WWSA's key products that was launched fi ve years

WWSA: In search of a value proposition 337

ago but failed to command the level of sales that was projected: the XL Big Poster Printer.

This is a specialised printer that can print very large posters, which are used to display

advertising messages, hide scaffolding when a building is being renovated or increase

the aesthetic value of blank concrete walls. These photo-realistic digital prints (with

up to 300 dpi) allow advertisers to catch the eye of the target audience in highly

frequented locations. The consultant guides WWSA through a systematic process

in search of a suitable value proposition that can be used to persuade customers.

Step 1: Identifying potential value elements

The process starts with a small group of XL Big Poster Printer salespeople and other

managers brainstorming all the elements of the printer that customers may value.

This brainstorming session results in a list of eight potential value elements: fast

turnaround time, low costs, consistent colour accuracy, large printing formats, near

photographic quality on many different media types (high gloss, matte, canvas, silk,

vinyl, cloth), high uptime, good product support and close dealer network.

Step 2: Identifying the next-best alternative

Having identifi ed the potential value elements, the group of employees is asked to

identify the next-best alternative: that is, the vendor that is perceived by customers

as the most relevant competitor for this particular product. This turns out to be easy,

since a new competitor arrived on the market four years ago and quickly established

itself as a major player in the big poster segment.

Step 3: Identifying the key value elements

The next challenge is to identify those value elements that are really important to

customers and where WWSA offers superior value compared to the next-best

alternative. The management team starts with assessing both WWSA's and Competitor

X's performance on all eight potential value elements. Initially, the management team

assesses performance on all eight value elements only qualitatively. This results in

the following table:

Value element WWSA Competitor X

Turnaround time + ++

Costs ++ +

Colour accuracy ++ ++

Printing formats ++ ++

Quality on different media types ++ +

Uptime ++ +

Product support /+ +

Dealer network /+ +

338 WWSA: In search of a value proposition

Next, the management team conducts a series of face-to-face interviews with ten

customers of big poster printing equipment. During these interviews, WWSA's team

tries to get a better feeeling for the customer's perception of big poster printers and

WWSA's and Competitor X's performance in this area. Based on these interviews, the

team concludes that WWSA's just average performance in the areas of product

support and dealer network does not really matter to customers. Customers typically

have their own technical support staff to maintain and repair equipment and do not

rely on manufacturers or dealers for product support. As a result of these interviews,

it becomes clear that customers base their purchasing decisions on two key criteria:

print quality on different media types and uptime.

Step 4: Formulating a value proposition

WWSA's team takes a closer look at the two criteria of print quality on different

media types and uptime. They take an in-depth look at information from current

customers and perform several calculations. Based on all of this, they conclude the

following:

On some media types, WWSA's printer provides better print quality than

Competitor X's printer.

WWSA's uptime is 98.4 per cent, compared to 94 per cent for Competitor X.

This results in the following value proposition: WWSA's XL Big Poster Printer offers

better quality at signifi cantly higher uptime.

Step 5: Formulating strategy

Based on the fi ndings from this exercise, WWSA's management team wants to

formulate a strategy to improve the sales and market share of their XL Big Poster

Printer. However, a closer look at the data uncovers some troubling fi ndings. First,

while their printer provides better print quality on some media types, these concern

only a few media types that are not commonly used by most customers. So, even

though there is a competitive advantage here, it is only minimal. In addition, while

the XL Big Poster Printer enjoys superior uptime, the problem is how to convince

customers of this, since detailed data to support this claim are lacking. In fact, some

members of WWSA's management team doubt that customers can be convinced of

the benefi ts of the superior uptime and suggest that the XL Big Poster Printer should

be discontinued, since customers perceive no signifi cant difference in performance

between the two alternative offerings. What should be done?

Questions

1 One problem is that customers do not see the difference in uptime. Indeed,

Competitor X's salespeople will dispute the difference in uptime and will point to

other advantages of their printer, such as its superior turnaround time and

product support. How should WWSA deal with this problem?

2 How can WWSA substantiate its claim of superior uptime to potential customers?

3 Discuss reasons for discontinuing the XL Big Poster Printer. Next, discuss reasons

for continuing with this product.

4 What kind of information does WWSA's management team need to resolve this

situation? How can it get this information? What are the major problems that

WWSA might encounter in collecting the required information?

5 How can WWSA use the experiences from this particular exercise to clean up its

product range and make its offerings and accompanying strategy more focused?

This is a fictitious case, but based on real experiences of real firms. The case description is

an amalgam of the experiences of several B2B firms trying to develop a competitive value

proposition in competitive markets.