This document outlines strategies for building competitive advantage in industries producing high-volume, capital-intensive commodities. It emphasizes the importance of low costs per unit through high utilization, operational excellence, and maintenance processes. It also recommends rapid expansion through continuous reinvestment, keeping debt below 30% and achieving 30% return on assets within 5 years. Additional strategies include designing plants for low built-in costs, expansion capability, outsourcing projects, and focusing on performance, non-unionized employees, and collaborative decision-making.

1. Building competitive advantage in - High volume, capital intensive, commodity product
Getting the ‘fit’ right
Value Driver:
Low cost
per unit
High utilization:
 Low waste
 Increase in throughput
 Operational excellence
 Maintenance processes
Operating Efficiency Capital Efficiency
Rapid Expansion:
 Little R&D, rely on suppliers
 Continuous investment through
reinvestment of retained earnings
 Debt < 30%
 30% return on assets (ROA) in < 5 yrs
Capital management:
 Low built in costs
 Design plant to built (save time)
 Design with expansion in mind
 High velocity task force to start a plant
 Project activity is outsourced
Human resource management:
 Performance enhancement
 Non unionized
 Organizational structure
 Collaborative decision making
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