Strategic and marketing management and recommendations for Hayward Tyler

1. Strategic and marketing
management and
recommendations for Hayward
Tyler
1

2. Executive summary
The report aims to recommend and justify the most successful strategies for
Hayward Tyler in terms of corporate and business scopes. Recommended
action for Hayward Tyler in the future is product development via
differentiation strategy, called energy-efficient pump in existing markets but
serving demands of energy saving and emission reduction of corporations. It
is justified from the key trends and business environment facing the
organization in recent time. Energy-efficient pump will be a potential and
profitable product to mark the brand of Hayward Tyler and transition its
position to either Star or Cash cow in BCG matrix by increasing market share.
To achieve this certain transition, the organization should invest in marketing
activities. Some new points suggested are the clear specifications of two
functions (energy saving and emission reduction) of new product in package;
offer of warranty and extended warranty; premium and odd price; new
factories in existing countries; and direct mail, loyalty scheme, advertisements
via business magazines and TV as well as a meeting to PR new product. This
strategy receives the high scores of suitability, acceptability and feasibility.
2

3. Table of content
Executive summary .......................................................................................... 2
1. Introduction .................................................................................................. 4
2. Choice of corporate strategy ........................................................................ 5
2.1 Application of Ansoff matrix .................................................................... 5
2.2 Mode of entry ......................................................................................... 8
3. Choice of business strategy ......................................................................... 9
3.1 Base of competitive advantage .............................................................. 9
3.2 Market segmentation ............................................................................10
3.2 Marketing mix .......................................................................................11
3.2.1 Product ..........................................................................................12
3.2.2 Price...............................................................................................12
4.2.3 Place ..............................................................................................13
4.2.4 Promotion ......................................................................................13
4. Evaluation of the strategy and recommendation ........................................15
4.1 Suitability ..............................................................................................15
4.2 Acceptability .........................................................................................15
4.3 Feasibility .............................................................................................17
5. Conclusion .................................................................................................17
Reference list .................................................................................................19
Appendix ........................................................................................................22
1. Business trends facing Hayward Tyler ...................................................22
2. Industry growth of four markets of Hayward Tyler ..................................24
3. Internal capabilities and technological orientations for Hayward Tyler ...24
4. Industry environment facing Hayward Tyler ...........................................26
5. Details of energy-efficient pumps ...........................................................27
6. Competitive advantage of Hayward Tyler ...............................................27
3

4. 1. Introduction
Hayward Tyler is a multinational company headquartered in the UK and
currently expanded into three other countries, including China, India and the
US. At that time, the organization has faced some business trends, which are
both positive and negative (Appendix 1). These issues will largely influence
the strategic plan of Hayward Tyler. For example, maturity in pumping
technology and requirement of renewable energy will force the organization to
make changes in its products in order to match these technological and social
trends. Despite negative market growth in the UK, the home market, the
organization could exploit better performance in international business thanks
to rapid growth of pumping market value in its foreign countries (Appendix 2).
Regarding internal environment, while Hayward Tyler is capable of stabilizing
its financial performance, upgrading technology and acquiring strongly
connected architecture, the most important orientation for the organization is
technology, based on new pumping technology and business management
automation such as lean management (Appendix 3).
Based on above background, this report aims to recommend and justify the
most successful strategies for Hayward Tyler in terms of corporate and
business scopes. Following are three research objectives developed from this
purpose.

To suggest and explain the most suitable choice of corporate strategy
for Hayward Tyler regarding Ansoff matrix and mode of entry;



To recommend and justify the most appropriate choice of business
strategy for Hayward Tyler in terms of competitive advantage, market
segmentation and marketing mix;



To evaluate the suitability, feasibility and acceptability of these
recommended options for Hayward Tyler and build the complete

marketing plan.
It is noted that this paper represents a consultancy report rather than a market
research. Hence, its contents concentrate on the recommendations of the
future development of Hayward Tyler in relation with its current business
environment instead of its current strategies. Then, scope of the report is
expanded to global business market of Hayward Tyler, not solely in the UK.
4

5. 2. Choice of corporate strategy
2.1 Application of Ansoff matrix
Ansoff matrix is a four-quadrant model to categorize growth strategies,
including (1) market penetration, (2) market development, (3) product
development and (4) diversification (Figure 1).
Figure 1: Ansoff matrix
Source: Watts et al., 1998, p. 102
Figure 1 clearly explains the growth orientation of each strategy in terms of
market and product. For instance, diversification leads to the creation of new
products offered in new markets in comparison with market penetration, which
focuses on current markets and products (Watts et al., 1998; Veiga and
Franco, 2015). Each is considered distinctive path for the organization to
know its scope of growth and expect long-term achievements (Veiga and
Franco, 2015). Among four options, there are three reasons for Hayward Tyler
to grow from product penetration strategy.
Firstly, there are many barriers from economic and political issues to hamper
Hayward Tyler to enter a new market, focusing on great uncertainties. Based
on PESTLE analysis in Appendix 1, Brexit, a decision to leave the EU from
UK Government, has made economic and political situation in this country
very uncertain and conservative (Barley, 2016; Krishnan and Ghaddar, 2016).
5

6. It threatens free trade of the organization inside the EU and lowers degree of
openness relating to other countries. This causes entering any new market to
be the riskiest choice for Hayward Tyler because it may suffer from
Government restrictions and abandon benefits of free trade. Specifically,
general pumping industry is not open for new entrants and experiences a
fierce competition with both local and global suppliers (Appendix 4). In
addition, even though the organization gains stable financial performance, last
year, its profitability ratios (ROA and ROE) reduced significantly (Figure 2).
From Figure 2, this reduction in profit will result in low feasibility for Hayward
Tyler in expanding to new market.
Figure 2: Profitability ratios of Hayward Tyler from 2010 to 2016
20
15
10
5
0
2010 2011 2012 2014 2015 2016 ROA
-5
ROE
-10
-15
-20
-25
-30
In contrast, because existing markets of the organization are growing fast,
1.2% in the US, 10% in India and 12.2% in China (Appendix 2), there remain
many chances for Hayward Tyler to continue exploiting its available markets.
Generally, despite global slow consumer spending, economic growth in four
existing markets of Hayward Tyler is positive between 2015 and 2016: 2.5%
for the UK, 1.6% for the US, 6.7% in China and 7.6% in India (Appendix 1).
Thus, current markets are still attractive and profitable for the organization in
the future while new markets are very uncertain and risky.
Nevertheless, Hayward Tyler has yet performed best to exploit its current
markets fully based on its current products. Its competitors still dominate
6

7. these markets, for instance, Sulzer Pump gets dominant share in the UK (IBIS
world, 2016). That said, market share of Hayward Tyler is not high in its
existing markets. It will be very redundant for the organization to enter a new
one without any concentration and it is urgent to make changes of existing
products. Particularly, orientation for product development has been clearly
defined in the internal analysis of Hayward Tyler, about new pumping
technology (Appendix 3). This growth choice is in line with the status of
maturity in technology in pumping industry (Appendix 1).
When applying BCG matrix, which stands for growth/share matrix to evaluate
the current status of a company in a market (Hambrick et al., 1982), it is
clearly observed that Hayward Tyler positions as dogs in the UK (low market
share and negative market growth, -9.7%) while being question marks in three
foreign markets (low market share but high market growth). Thus, there needs
many investments of the organization into these existing markets to transition
to either star or cash cow. Such investments require both new product
development and marketing efforts. As a result, product development is the
most suitable strategy for Hayward Tyler in the future. In application, two
elements of this corporate strategy are (1) focusing on China, India and USA
apart from UK and (2) Research and Development to offer new pumping
technology. Grounded on business trends and industry growth in existing
markets in Appendix 1 and 2, suggested tactics for Hayward Tyler in line with
product development are:

Firstly, it is recommended that Hayward Tyler should continue investing
in existing markets in China, India and the US. But, because of the fast
growth of pumping industry in these markets, the organization should
consider new productions in existing ones, including Vermont in USA,
Delhi in India, and Kunshan in China (Hayward Tyler, 2016a). It leads
to the proposed mode of entry in these new production lines, which
serve the creation of new products to satisfy changing demands of
existing customers toward renewable energy (Department of Energy &
Climate Change, 2016).



Secondly, new pumping technology should focus on energy-saving
expertise. It means in addition to current product lines (boiler circulating
pumps, canned motor pumps, varley gear pumps, subsea motors and

7

8. submersible motors), Hayward Tyler should research and develop new
pump, which minimizes energy consumption and is safe for
environment. Emissions released from pumping such as carbon
dioxide and greenhouse gas could be reduced potentially from new
pumps. These new products can be called “energy-efficient pumps”.
Some details of suggestions in shown in Appendix 5, for example,
effective maintenance, improvement of sealing and replacement of belt
drivers.
2.2 Mode of entry
For new production lines, mode of entry to China, USA and India should be
taken into account. Theoretically, classification of entry mode based on
degree of control for focal firms is shown in Figure 3.
Figure 3: Classification of entry modes in international business
Currently, existing platforms in foreign countries of Hayward Tyler are created
via wholly owned subsidiary (WOS), for example, Hayward Tyler India Pvt. in
Delhi, India and Hayward Tyler Pumps (Kunshan) Ltd. in Kunshan, China
(Hayward Tyler, 2016a). But, these WOSs are solely responsible for customer
service, except for production of vertical and horizontal pumps in USA. Thus,
new factories are recommended to open in these existing countries to assist
these customer service centres locally. Since new factories deal with
innovative R&D on energy-efficient pumps, intellectual property is highly
required. Hence, high control over new plants is compulsory.
Since currently, subsidiaries in India and China connect directly with factories
in either the UK or the US, the degree of control over foreign operations is
8

9. maximum and resource commitment is substantial. With nearly 16 years in
India and 13 years in China, the organization has accumulated sufficient
experience in these markets, thus it could cope with risks here and guarantee
top-down decision-making from the headquarters to foreign subsidiaries.
Therefore, it is reasonable for the organization to establish new factors in
India and China via wholly owned subsidiary. These plants should be placed
near from current customer service centres in these countries to save cost of
transportation.
3. Choice of business strategy
3.1 Base of competitive advantage
To identify and evaluate base of competitive advantage, Porter’s generic
strategy is applied (Figure 4). It is comprised of four specific strategies,
including (1) cost leadership, (2) differentiation, (3) cost focus and (4)
differentiation focus.
Figure 4: Porter’s generic strategy
Source: Awade, 2014, p. 701
Based on the conceptual framework of Yusuf et al. (2015, p.57), an
organization can differentiate over its rivals via products, distribution or
marketing; can utilize cost leadership through either cost reduction or
exclusive market share; and apply focus strategy by sourcing from specialist
9

10. supplier production or focusing on target segment or marketing. In application,
as described in Appendix 6, current base of competitive advantage of
Hayward Tyler is differentiation. In the future, differentiation in the industry
wide is recommended to be consistent with this existing selection because
switching cost from differentiation to cost leadership or combination of them is
very huge (Awade, 2014).
Another reason is the relevancy between Porter’s generic strategy and
Porter’s five forces model (Sumpio, 2013). Based on Appendix 4, the
organization currently faces high bargaining power of customers and fierce
competition, but low threats of entrants and substitutes along with low
bargaining power of suppliers. Thus, it will not suffer from the pressure from
suppliers to consider cost issue. In comparison, in the fierce competition with
key competitors from both domestic and global brands, differentiation is
required to attract loyal customers. Especially when bargaining of buyers is
high, they may not accept low price in compatible with high quality.
Moreover, this business strategy links closely with corporate strategy in term
of new product launch (Pretorius, 2008). As shown previously, it is suggested
that Hayward Tyler should create new product range called “energy-efficient
pumps” in its four markets (the UK, the US, China and India). This new
product is innovative and unique in comparison with too diverse product lines
of competitors such as Sulzer and KBS. Since it saves costs for the buyers
and satisfies their demands on environmental protection, premium price is
acceptable. Hence, cost leadership is unnecessary. And because these
pumps are proposed to offer in all existing markets of Hayward Tyler, certainly
no focus is made. Furthermore, market segmentation and 4Ps marketing mix
are presented to suggest specific tactics for the organization in applying
differentiation as business strategy.
3.2 Market segmentation
In association with energy-efficient pumps as new product launch in line with
differentiation strategy, it is recommended that customer profiles of these
products should be adjusted accordingly. There will be specific customer
demographics with new demands on this new product. In application of
market segmentation theory, four bases are considered, including (1)
10

11. demographics, (2) customer behaviours, (3) psychology and (4) geographic
(Pires et al., 2011). They are revealed to fit product development and
differentiation strategies as below.

Demographic: Corporations in oil & gas, nuclear and refinement &
processing sectors. They consider pumps from Hayward Tyler one of
their indispensable machines and then the organization is their
supplier. Because of importance of pumps in their operations, they will
be not sensitive to price and can establish the long-term contracts with
Hayward Tyler.



Behaviour: They buy pumps in bulk and build close relationship with
the organization. But, for this certain new product line, they should be
the companies, which are seeking for cost reduction from energy
saving and/ or desiring the environmental footprint in corporate social
responsibility (CSR). This target segment limits available choices of
pumps for them because existing products of Hayward Tyler and its
rivals may not service these expectations.



Psychology: These organizations should be interested in
environmental protection and sustainability to be ready for an energy-
efficient pump, which not only saves energy but also emissions to
environment.



Geographic: Still in the UK, the US, China and India in line with
product development strategy.

3.2 Marketing mix
4Ps marketing mix is applied to explain clearly the application of differentiation
strategy and new product development orientation. This mix is beneficial to
address the marketing plan toward a new product in order to ensure the
success of this product in the certain market (Tapp and Spotswood, 2013). As
mentioned previously after the application of BCG matrix, it is emphasized
marketing activities should be invested to improve current status of Hayward
Tyler in its existing markets. 4Ps stand for “Product, Price, Place and
Promotion” (Festa et al., 2016, p. 1550). These elements should align
selected market segment in the previous section and the choice of corporate
and business strategies.
11

12. 3.2.1 Product
Kotler and Armstrong (2015) list four elements of product strategy, including
brand, package, functionality and service.

Functionality: as a normal pump, but with two additional technologies:
energy-efficiency expertise and capability to minimize the emissions to
environment. Details of functions are shown in Appendix 5.



Brand: A new product range of Hayward Tyler, called “energy-efficient
pumps”.



Package: The box covering these pumps should have clear and
understandable specifications about the product’s Amps, pipe size,
carton weight, length, and ability to save energy and emissions. Two
final details should be differentiated from competitors’ products to
prove uniqueness in environmental issue of Hayward Tyler and
immediately attract the eyes and attentions of target customers.



Service: In line with details in Appendix 5, service about maintenance
should be expanded. Currently, the organization relies on
repair/overhaul service and field service, such as routine maintenance,
project management and rotating equipment (Hayward Tyler, 2016b).
No warranty is offered. Thus, in the future, to make this brand and its
products more differentiated, warranty from at least 1 year should be
offered. During warranty time, any maintenance and repair can be free
to customers. After this time, the customers could buy a certificate of
extended warranty like insurance form. The additional service is
reasonable and effective because pumps are considered fixed assets
of relevant corporations.

3.2.2 Price
Pricing strategy involves the selection of list price, discount, bundling, and
psychological price and payment method (Kotler and Armstrong, 2015). For
Hayward Tyler, in line with differentiation strategy, it is not compulsory for its
products to be priced at very low range. In contrast, price is acceptably
premium (Awade, 2014). Noticeably, for customers, who are interested in and
seeking for energy saving and environment sustainability, they are not
sensitive to price (Joshi and Rahman, 2015). In addition, these corporations
12

13. can acquire huge benefits from energy-efficient pumps, including reduction in
variable costs and reputation from CSR. Thus, they will be willing and ready to
pay higher prices for this new product. It means Hayward Tyler should
consider these new pumps at the high-end market and charge higher price
than its existing product ranges.
Nevertheless, at the first stage of product development, a critical issue is that
these customers may face trade-off: to continue using existing pumps at lower
prices or to utilize new ones at higher prices but additional benefits. Trade-off
will result in suspicion whether the benefits of energy-efficient pumps could
compensate additional costs paid for them or not. Thus, to reduce the
negative affect of this suspicion, Hayward Tyler should think of psychological
pricing, which refers to odd price to persuade customers to purchase such as
9-ending number (Larson, 2014). Specifically, new products should be priced
at odd price, for instance, $269.99.
4.2.3 Place
Place refers to channel, distribution and inventory of the organization (Kotler
and Armstrong, 2015). Based on Appendix 3, Hayward Tyler has built a
successful architecture or business network in not only its home market but
also its global scope. Thus, placing could be appraised as one of its strengths.
Its current channels include customer service centres in India, China and UK
while its inventory is majorly stored in plants in the UK and the US (Hayward
Tyler, 2016a). To evaluate, the gap in distribution is very large because the
US customers may not access a customer service centre locally while Indian
and Chinese buyers may wait for distribution from factory in either the US or
the UK. Hence, it is urgent to fill in this gap. Specifically, in application of
product development, new factories should be built in Kunshan, China and
Delhi, India.
4.2.4 Promotion
Promotional mix is comprised of advertising, personal selling, sales
promotion, direct marketing and public relation (Figure 5).
Figure 5: Promotion mix
13

14. Source: Familmaleki et al., 2015, p. 75

Advertising: new product launch involves an indispensable range of
advertisements. Since target customers of Hayward Tyler are
corporations, advertising should reach them appropriately via business
magazines, TV and catalogs. Social media advertising may not be
much potential because of low accessibility with these target ones.



Personal selling: Salespersons should be utilized to introduce this new
pump to existing or potential customers in case they want to save
energy and lower emissions.



Direct marketing: In this field, direct mail is suggested since customers
of Hayward Tyler have long-term contracts with it, thus, contacts of
them are easily collected. Utilizing these data, the organization should
send offer of this new product to them via email and wait for their
replies.



Public relations: Regarding PR, it is recommended that the
organization should prepare for a public meeting with specialists, target
customers and journalists about the new pump to introduce about its
additional functions and test them directly. Reviews from specialists
and articles written by journalists could spread the noise of this new
product. Additionally, in the situation, in which trend of environmental
sustainability is very hot, the salience of this product in public will be
very high.

14

15. 
Sale promotions: Because target customers of Hayward Tyler are
corporations in long-term contracts, loyalty scheme should be
established via loyalty cards. Long-term customers will receive benefits
directly from these cards with the promotion of 1% or 2% depending on
negotiation.



4. Evaluation of the strategy and recommendation
In application of Johnson and Scholes (1993), three criteria to evaluate a
strategy are “suitability, feasibility and acceptability”. When the strategy meets
all three conditions, it should be undertaken in reality and vice versa. Based
on above parts, selected strategy for Hayward Tyler is a new product
development via differentiation strategy, called energy-efficient pump in
existing markets but serving demands of energy saving and emission
reduction of corporations.
4.1 Suitability
Suitability determines whether the strategy fits business environments faced
by the organization or not (Johnson and Scholes, 1993). Thus, it links with key
trends via PESTLE model and power via Porter’s five forces model in
Appendix 1, 2 and 4. Initially, it could not be denied that any reason for choice
of corporate and business strategy for the organization has a direct link with
these trends and power. For example, the rejection of new market
development is derived strongly from political and economic turmoil after
Brexit decision (Barley, 2016; Krishnan and Ghaddar, 2016) while
attractiveness of existing market is explained from industry growth in
Appendix 2. Similarly, in selecting business strategy, the link with power via
five forces model is mentioned. Because of the strong and direct reference of
these appendices in previous parts of strategies, suitability is high without any
controversy.
4.2 Acceptability
Acceptability concerns with stakeholders and their expectations (Johnson and
Scholes, 1993). In application of power-interest grid, initially, stakeholders of
Hayward Tyler are recognized and classified in Table 1.
15

16. Table 1: Stakeholder analysis of Hayward Tyler
High power- Low interest High power- High interest

Banks

Shareholders/ Investors

Suppliers

Employees
Low power- Low interest Low power- High interest

Media/ Journalists

Local community/ Environment

Government

Customers
Source: Adapted from Ackermann and Eden, 2011 and Hayward Tyler, 2014
Based on Table 1, it is explained that banks and suppliers have powers to
influence the project or new product launch in terms of funds and resources
respectively, but they will not directly enjoy gains or suffer loss from this
project. In comparison, shareholders and employees, internal players of the
organization are key players to undertake the project and experience gain or
loss from it. Local community and customers do not directly affect change in
this project, but outcomes of this project could influence them (Ackermann
and Eden, 2011). Thus, high acceptability is achieved when the
recommended strategy on Hayward Tyler satisfies three above groups of
stakeholders.
Banks and suppliers: they will be beneficial from this project because
banks can engage with more borrowing from the organization and
suppliers can offer new materials to fit energy saving function. It means
contracts with the firm are extended.
Shareholders/investors and employees: Product-development-growth
strategy is expected to increase market share in existing markets for
Hayward Tyler and obtain new source of sales. Thus, it benefits
shareholders in profitability, market share and brand image. Employees
are satisfied because new employees will be recruited in new plants or
factories.
Local community and Customers: They are the most beneficial
stakeholders from this project. As mentioned previously, customers as
organizations can save energy and reveal their environmental
concerns to not only reduce expenditure but also gain reputation and
16

17. CSR. Similarly, the energy-efficient pumps are very relevant to match
local community’s demand on environmental sustainability.
4.3 Feasibility
Last but not least, feasibility of the project is measured to evaluate whether
the company has sufficient resources to perform the project or not in terms of
competitive advantages and finance (Johnson and Scholes, 1993). Appendix
3 and 6 are taken into account to confirm this criterion. In detail, Hayward
Tyler completely has resources to complete this project successfully (Table
2).
Table 2: Feasibility analysis of the recommended strategy for Hayward
Tyler
Resources Feasible for the project
Stable financial It ensures the company to have sufficient funds to
performance establish new plants in China, India, US and UK as well
as to invest in R&D and marketing activities.
High technological This core competency proves the feasibility for the
skill organization to add new technologies to form a new
product called energy-efficient pump.
Expansionary This resource supports the organization to adapt
architecture quickly new production lines in China, India and US as
well as link closely with the headquarters in the UK.
5. Conclusion
In conclusion, with the high scores of suitability, acceptability and feasibility,
the final recommendation for Hayward Tyler in the future is product
development via differentiation strategy, called energy-efficient pump in
existing markets but serving demands of energy saving and emission
reduction of corporations. It is justified from the key trends and business
environment facing the organization in recent time. Energy-efficient pump will
be a potential and profitable product to mark the brand of Hayward Tyler and
transition its position to either Star or Cash cow in BCG matrix by increasing
market share. To achieve this certain transition, the organization should invest
17

18. in marketing activities. Some new points suggested are the clear
specifications of two functions (energy saving and emission reduction) of new
product in package; offer of warranty and extended warranty; premium and
odd price; new factories in existing countries; and direct mail, loyalty scheme,
advertisements via business magazines and TV as well as a meeting to PR
new product.
18

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21

22. Appendix
1. Business trends facing Hayward Tyler
PESTLE Factors affecting Hayward Tyler
Political

UK ranks 12
th
in the world’s most economic resilience
with the score of 78.3 for Government integrity and 93
for judicial effectiveness (The Heritage Foundation,
2017, p. 294, 295). In comparison, US ranks 17
th
, India
ranks 143
rd
and China ranks 111
th
position.

Current British decision Brexit results in political turmoil
in the UK (Barley, 2016).
Economic

Brexit results in some economic consequences: pound
depreciation, decrease in consumer confidence and
crude oil price (Krishnan and Ghaddar, 2016).

However, despite Brexit, in the end of 2016, economic
growth is calculated to be 2.5% (Kollewe, 2017). In
comparison, GDP growth rate in the US in 2016 was
very low, just 1.6% (Gillespie, 2017), China hits 6.7%
(Cendrowski, 2016) and Indian economy is predicted to
grow by 7.6% in 2016 and 2017 (The Economic Times,
2016).
Social

Energy consumption in the UK fluctuates dramatically,
for example, 0.9% increase in oil and 9% increase in
gas but 1.5% decrease in general electricity
(Department of Energy & Climate Change, 2016).

There is an increase in average disposable income in
the UK to £26,300 in 2016, but inequality is expanded,
for example, the poorest group rose by 5.1% while the
richest group fall by 1.9% (Office for National Statistics,
2017).
Technological

Technology in pumping sector in the UK is judged to
be mature (MTW Research, 2012).
Legal

Economic legal system in the UK is highly appreciated
22

23. with the high scores of Property rights (93.8), and
Regulatory Efficiency (The Heritage Foundation, 2017,
p. 294, 295).
Environment

There is an increasing
preference of clean energy
orrenewable source, which increases from 22.8% share in
2015 to 25.1% in 2016 (Department of Energy & Climate Change,
2016).
=>

Decreasing oil and gas price: It is derived from Brexit decision and
recent Chinese economy slowdown (Krishnan and Ghaddar, 2016).
This decline could boost demand on oil and gas products. In
association with this demand, sale of pumps can increase significantly.
However, since Hayward Tyler enters oil and gas market, price
reduction is not a completely positive signal because it may reduce
profits of this sector (Hayward Tyler, 2017b).



Sterling pound depreciation: It is associated with the Brexit decision
(Krishnan and Ghaddar, 2016). When pound depreciates against
foreign currencies, Hayward Tyler must pay more money for supplies
from foreign markets and receive less money from foreign operations in
China, the US and India.



Maturity in pumping technology: General pumping industry in the UK is
mature (MTW Research, 2012). It requires new innovations and new
product developments to leverage the maturity of this industry.



Shift to clean energy or renewable source: there is an increasing
preference of clean energy or renewable source, which increases from
22.8% share in 2015 to 25.1% in 2016 (Department of Energy &
Climate Change, 2016). This trend suggests a chance for Hayward
Tyler to add new product range, which focuses on sustainable energy.



Increase in disposable income but significant inequality: There is an
increase in average disposable income in the UK to £26,300 in 2016,
but inequality is expanded, for example, the poorest group rose by
5.1% while the richest group fall by 1.9% (Office for National Statistics,
2017). Hence, although increase in income signals the increase in

23

24. consumer spending, inequality suggests re-consideration of
segmentation.
2. Industry growth of four markets of Hayward Tyler
Country Market revenue (2016) Market growth Source
(2016)
The UK £1bn (~ $1,245bn) -9.7% IBIS world, 2016a
The US $27bn 1.2% IBIS world, 2016b
India $1.2bn 10% India Engineering,
2016
China RMB 278bn 12.2% SMI, 2013
(~$40.42bn)
3. Internal capabilities and technological orientations for Hayward
Tyler
Resource Value Rarity Inimitability Non-
substitutability
Stable Valuable to Not rare Not imitated Non-
financial reveal because other since each substitutable
performance profitability competitors company because once
and keep can enjoy the has its own financial
sufficient same or even market, performance is
funds for better financial target unstable, the
investment. performance customers company faces
such as and ways to many risks,
Sulzer (IBIS obtain especially
world, 2016a). revenues possible case
(IBIS world, of low trust
2016a). from customers
(Pump Industry
Analyst, 2014)
High Very Can be rare Can be Cannot be
technological valuable since not all inimitable substituted
24

25. skill because companies in because it since pump
general this industry depends on manufacturers
pump adopt lean employees’ consider
industry management skills and technology as
highly and ERP orientations one of critical
appreciates (Clark, 2013; of leaders. factors of
the Nuclear success.
technology. AMRC, 2015)
Expansionary Very Not rare since Not easy to Not
architecture valuable other imitate substitutable in
when facing companies because in case Hayward
competitors also identify each deal Tyler would like
and this chance, with other to expand
expanding for example, companies, business to the
business FMC (World the world market.
scope. Pumps, 2015) agreement
and Ebara of these
(Pump companies
Industry is required
Analyst, (World
2015a). Pumps,
2015).
To justify the benchmarking, which means the comparison of business
process and resources of one company against other companies such as
Sulzer and KSB, from VRIN analysis, it is recognized that the two best
practices are (1) new pumping technology and (2) business management
technologies, for example, lean management and ERP.
New pumping technology: KSB and Sulzer offer diverse products while
Hayward Tyler completely focuses on pump technology. Some
technologies are different, for example, Varley Gear Pumps, Subsea
motors and Solar Power Tower applications (Hayward Tyler, 2017c).
25

26. Business management technologies: Hayward Tyler adopts 5S lean
management and ERP successfully in comparison with its competitors
(Clark, 2013; Nuclear AMRC, 2015).
4. Industry environment facing Hayward Tyler
Porter’s five forces General pumping industry
Threat of new entrant Since this industry is highly regulated, there are many
serious barriers of entry (Giles, 2016). Hence, threat
of new entrant is low.
Threat of substitute These products such as reactor water clean-up
pumps, syngas and subsea motors are unique and
high technological (Hayward Tyler, 2017a). Hence,
this threat is very low.
Bargaining power of In the sector such as oil & gas, power, nuclear, clean
buyers energy and refinement & processing, the buyers are
corporates rather than individuals (Hayward Tyler,
2017a). Thus, they tend to buy in bulk and via
contract. Their bargaining power is then very high.
Bargaining power of This industry contains manufacturers, thus, products
suppliers are created by the companies themselves and
bargaining power of suppliers is low.
Existing rivalry UK market is very open for these pump
manufacturers and there is an increase in the
companies from Asia (China and India), hence,
degree of rivalry is extremely high (Eljidi, 2012).
Especially, Sulzer Pumps Ltd. now dominates this
industry in the UK (IBIS world, 2016a).
26

27. 5. Details of energy-efficient pumps
6. Competitive advantage of Hayward Tyler
In application of Porter’s generic strategies, Hayward Tyler tends to choose
either cost advantage or differentiation to position its strategic orientation
(Tansey et al., 2013). From above evidences, it is confirmed that the company
has relied on its differentiation instead of low cost. Hayward Tyler takes
advantages of its high technology and architecture to build its superior
products and accumulate customer trust. In comparison with its competitors,
key top ten rivals also offer high costs of pumps, for example, Sulzer, KBS,
ITT and Ebara. The companies, which adopt low cost, are minor with
negligible market share from domestic scale instead of global level. It
emphasizes that Hayward Tyler should not only prove its high quality but also
its distinctiveness against other competitors, who similarly select
differentiation strategy.
27

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