Fiberline. Innovation project

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International Business Academy

FIBERLINE

Innovation project

Class: PB3

Made by: Csilla Bandi, Cristian Nechifor, Uldis Budrikis, Ilona Kolosova, Erika Laizane

Number of characters: 14 985

December 2012

1. Introduction

Fiberline has through its 30-year history developed from technology driven pioneer to market-driven, efficient supplier of composite profiles. http://www.fiberline.com/about-us/fiberline%E2%80%99s-history Today, company's communication is based solely on B2B communication; while communication to end user is left to window manufacturers. Therefore the main issues which Fiberline is dealing with right now are: “How to create a pull-effect with their product to the consumers and how to achieve a greater awareness of their product strengths among the end users.” Thus, in order to assess how Fiberline creates, delivers and captures value, we will start this paper with closer look at company's business model and then continue answering three main questions - who Fiberline should build relationships with, what kind of relationships and the most important - how to build the desired relationships.

2. Business model

2.1 Customer interface -

¤ Customer segments - window manufacturers

¤ Fulfillment & support - participation in exhibitions, face-to-face communication through sales people, pilot production series

¤ Info/insight -feedback from sales people and customers (construction companies, property owners)

¤ Relationships - wants to have „knowledge partnership” relationships with their customers, which includes advice on choice, assistance in developing special product for customer's specific requirements and assistance in development processes. The company is very customer-focused and tries to build value added relationships.

2.2 Core strategy -

¤ Business mission - “Fiberline is committed to being the preferred partner for key customers who require innovative solutions based on composite profiles.” http://www.fiberline.com/about-us/mission/fiberline%E2%80%99s-mission

¤ Product scope - wind turbine components, structural profiles, window and facade profiles

¤ Market scope - B2B with different window manufacturers

¤ Basis for differentiation - reduces heat loss through window frames and minimizes mold and condensation problems. In addition, extremely narrow window frames allow creating new, innovative design ideas which are not only stylish but also let more sunlight to enter the building. And the last but not the least - the window with Fiberline profiles has a very long lifetime even in harsh climatic conditions - and it requires practically no maintenance

2.3 Strategic resources -

¤ Core competencies: highly qualitative products, expertise in technical support, elaborated R&D, competences within the development of innovative solutions.

¤ Strategic assets: eco-efficiency, opportunities for modern designs and innovative technology.

¤ Core processes: consultancy, distribution and customer support

2.4Value network -

¤ Suppliers: raw material suppliers

¤ Partnerships: many Danish and international universities as research partners

3. WHO to build relationships with

3.1 Architects

Fiberline aims to create a pull-effect amongst private customers, mainly focusing on the German and Swiss market. Since they worked exclusively within the B2B market, they do not have experience in the B2C area.

Their primary target group in the B2C market includes young couples planning to build their own house, those wanting to remodel their old house or the ones living in blocks.

One way of reaching to the above mentioned customers is to find a middleman, who can act as a link between the company and the customer. Such a middleman is for example, an architect.

Customers aiming to build a house contact more architects, before deciding which one is the most suitable to carry out their plans. Customers also tend to check various rankings on the internet about the short -listed architects, where they are grouped according to experience, style or operational area. Since choosing the right architect means working and negotiating with them through many months, experience is a key factor. Also it is a very relationship-oriented approach, where finding the “common voice” with the architect sometimes has more importance than price itself.

What is important for Fiberline is to promote themselves amongst architects, contact them via telephone and organize meetings with them, where Fiberline products are presented. Partnering with architects would be a safe way to reach the relevant customers, as in these cases always the customer is the one looking for the architect and only the relevant customers would be dealt with.

It is not to be forgotten, that these partnerships are long-term oriented, and it would take between 6 to 12 months until the first customers are reached. In order to make these partnerships profitable for the architects as well, Fiberline could offer percentage after each customer.

3.2 The German window market - focus on public buildings and offices

http://www.window.de/1191.htmlAccording to the VFF press conference, the European window and faзade market has grown by 0,4% from 2009 to 2011 after a major market break in 2009, collapsing by 22,4% during the financial crisis.

Currently, Germany is the biggest market in the European Union and it benefits from the energetically modernization plan started by the German government. Although Germany is the biggest market in the E.U, it is forecasted that it will not further grow in the close future. In 2010 Germany accounted for 12.6 million window units sold.

http://www.aluinfo.de/index.php/gda-news-en/items/germany-is-europes-most-successful-window-market.htmlAlthough the German market might seem saturated, a survey made by VFF shows that there are around 340 million window units that are in need of modernization. In Germany there are around 7.200 window installation companies and more than 100.000 employees working in this business.

Taken from a press communicate released by the public relations office of Gesamtverband der Aluminiumindustrie e.V.“For residential buildings, plastic is the preferred frame material whereas aluminum windows dominate when it comes to public buildings and offices. Overall, PVC has about a 56 per cent share of the market; wood has 16 per cent, wood/metal seven per cent and metal 21 per cent. Aluminum's share of the metal segment is over 90 per cent.”

Window Types

http://www.interconnectionconsulting.com/data/en/boxen_individual_praesentationen/6/MarketForecast/FullDetail.pdf

The fact that the Germans prefer the PVC windows when it comes to residential buildings shows that they are highly interested in the cost of the window, PVC being the cheapest material for building the window frame, and don't show a high interest in the design and aspect of the window, the plastic generally being less esthetic and modern compared to metal/wood or fiberglass.

We believe that Fiberline should focus on the public buildings and offices due to their higher interest in aesthetics and design. As it was mentioned by the CCO of Fiberline, the fiberglass frame that the company produces has similar characteristics with the aluminum and performs better.

3.3 The Swiss window market - focus on building owners

http://www.bau-muenchen.com/en/Home/Visitor/vi_service/ex_press_releases/~/brixlent_eprb2-action/navigate/page/detail/prid/24602495Switzerland together with Norway and Turkey represent a total of 15% of the window market. Considering the small size of the country, Switzerland represents a big market for window sellers making it one of the most attractive non-EU markets. Although PVC is mostly preferred in western, central and eastern Europe, Switzerland records a wood-metal percentage of 27%.

http://www.swissinfo.ch/eng/swiss_news/Boom_pushes_property_market_to_the_limit.html?cid=31620304” What's serious are the so-called mass evictions, when entire multi-family apartment blocks are given notice so the building can be renovated and profits maximized.”

This article shows that Switzerland is currently going through a renovation process of most of the residential buildings in order to increase their profits from rents. Here, Fiberline can promote their products to the building owners and present them the cost savings that can occur when substituting the old window frames with fiberglass.

4. WHAT kind of relationships

We believe that Fiberline could benefit more from their innovative products by establishing a close partnership with a German window manufacturer. This partnership would basically stand for producing a window under the name of Fiberline and the chosen partner and have a 50/50 involvement in the decision making. By doing this, Fiberline would have a bigger control over the final product and would have the opportunity to market it as wanted and target the “right” customers.

One of the possible partners could be the German window manufacturer Fahland GmbH. It is not one of the top window manufacturers in Germany, but we see a potential in smaller manufacturers, because of various reasons. The small or mid-sized window manufacturers would not have such a bargaining power as the big ones, but they can provide the same or equivalent service.

If this partnership is to be successful, Fiberline will probably need to improve their supply chain management. Increasing the number of sales automatically implies the need of a better control over the suppliers and distributors. Also, the fact that their partner will have its production close to the Danish border reduces the risks and costs of delivering the Fiberline materials.

From Germany, Fiberline and (the German partner) would have an easy access to Switzerland, the second most important market for Fiberline.

From the logistics point of view, the Fiberline is a supplier company themselves, therefore it has to be very flexible to the orders of manufacturers. In the case with windows, each order can be different and can require specific profiles, therefore the lean stocking approach wouldn't be the best. Even though the products have long lifetime, it is almost impossible to predict the demand, therefore we believe that in this case the agile „wait and see” approach would fit the most. Fiberline offers high variety of products but the volume is relatively low (see pic. 1).

5. HOW to build

5.1 The logotype

Every company has its own logotype, but not all companies are using it successfully. Good logotype is one of the success keys for the company. Logotype is the most important element of company's corporate culture.

Today, when competition level is so high, it is extremely relevant to distinguish and be recognizable. Logotype is the sign to identify the company for existing and future customers. People have to immediately understand what the organization is doing. Sometimes, just because of right color combinations, style and logotype design, we can see how serious the company is and if there is a future growth and future possibilities for it. Without it, it is not possible to make a brand and brand awareness.

profile composite window market

We think it can be a good idea to improve the logo of the company a little to make it even more recognizable. Even when you look for information about Fiberline on the internet - the logo of the company doesn't appear so often, therefore not so strong connection between the logo and this highly qualitative product appears in the minds of consumers. Therefore, we believe it should be improved and that with just a few adjustments FiberLine can sufficiently improve their brand. We came up with an example how it can look (see pic.2).

Furthermore, we would like FiberLine to brand themselves more. We believe that since they are producing the seen part of the profile also, they could make a small rib of the logo, less than half of a millimeter, on the profile close where the window opener would be. The logo would not be flashing really out, but under-consciously it would always be set in the customers mind. This would respectively increase brand awareness.

5.2 Creative sensory marketing - bus stops:

We believe that one way to advertise Fiberline in an efficient and economical way is to use the bus stop shelters as a product specimen. Sitting during the cold seasons waiting for the bus or train can be unpleasant and extremely cold.

Implementing Fiberline products in the bus stop shelters (see pic.3); adding warming lights; a slogan such as “We treat our customers with warmth” and the company's logo can significantly increase the brand awareness and create curiosity and interest about the product among the end user.

For example, Fiberline should use both of these ideas and merge them into one marketing campaign. Using billboard space in the bus stops and furthermore next to the billboard put a warming light which would give warmth as a sensory marketing tool. These tools can be the most effective, and especially in this case where people are standing outside in the cold and warmth would pull them towards. These marketing activities could be placed in the big cities of Germany and Switzerland like Hamburg, Berlin. Furthermore, these ads should not be placed on random bus or train stops, but on the main stops as train stations or city center stations.

5.3 Marketing idea - public advertising

This can be another marketing idea which can create a pull strategy for the company. Picture 4 is an example of promoting the Security Glass. This window was located in different public places and definitely grabbed attention and therefore created an interest in the product which was promoted. We believe that similar idea could increase also Fiberline brand awareness and an interesting slogan can deliver the most relevant information to the end users - what benefits Fiberline has to offer.

6 Conclusion

In conclusion, we believe that the company is developing with a moderate pace and going up maybe relatively slowly but quite surely. Faberline has a great product to offer the consumers and this message has to be delivered to them in the right way.

Firstly, after doing some analysis of the company, we came up with the solution that Fiberline needs a middle person to reach the end users. And a good option for that would be to focus on architects because they have a big power to influence the customers in the choice of windows.

Secondly, after short analysis of German and Swiss market, we think that Faberline should focus the most on public buildings and offices in Germany and on property owners in Switzerland.

And the last but not the least, Fiberline wants to create a pull-effect and it is important to notice that it requires some investments in promotional activities. Without that the goal cannot be achieved. Therefore, the biggest issue which appeared was choosing the right promotional activities. Relating that we came up with 3 main ideas - improving logotype and creating stronger brand recognition through it, doing some creative sensory marketing which would grab attention and create the curiosity among consumers and finally doing some simple public advertising which can increase the brand-awareness among the customers.

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