| Issue 11 |

Yuval Kaddar, VP Marketing & BD, Keter Plastics

• Number of employees in firm: 4,000, half of them in Israel
  
• Number of employees under my direct responsibility: None (!)
  
• We provide: Consumer goods of many kinds, including: sheds, closets, shelves, toolboxes, sanitary tools, baths, water taps.
  
• I'm on the job for: 3 years. I studied Economics at Hafia University and was in the yacht and marine business until I was 42. My last position in that field was project manager for building the Herzlia Marina. After that I moved on to marketing positions. I spent 5 years as VP of Marketing & Trade at ACE DIY, and later 2 years as VP of Marketing & Costumer support at ZAG, before I arrived at Keter.
  
• I like on the job: The creativity - creating new things, developing new markets, reaching new clients.
  
• Most difficult on the job: Overcoming international cultural gaps. It is difficult to sit in Israel and think like someone from the USA, New Zealand, Brazil, Japan and other countries we do business with.
  
• Goals I set for myself: I am completing a period of business development in the UK market, and I hope it would yield fruits in the upcoming year (new clients, and shelf space in most of them). On a personal note - continuing to nurture my family and the relationship with my wife Tali.
  
• Our vision: Keter is a family owned company (Segol family), with an informal culture, and yet a very successful one. Our dream is to be the world's number one plastic consumer goods manufacturer, and we're getting close.
  
• Original product in our market: A shed that used to exist in metal only was developed in plastic at Keter, and is now being sold in large numbers, in spite of it's higher price. There are two main reasons for this success. First, unlike metal sheds, it does not require the casting of a floor - as we provide a plastic floor as part of the shed, saving high costs to costumers. Second, the assembly of our plastic sheds is simple and quick - without screws, and by one person alone.
  
• Sources of innovation: Examining the market and clients. We look for products made from other materials that we can make in plastic, or for existing products we can improve. For instance - a new ironing board we deveoped from plastic(!).
  
• Book recommendation : "The Agenda: What Every Business Must Do to Dominate the Decade", by Michael Hammer. It is our bible at Keter, and was given to all our managers at a company event a year ago.
  
• To purchase the book: Amazon | Barnes & Noble
  
• Our review on Hammer's earlier book: Reengineering the Corporation
  
• BPM Workshops based on Hammer's ideas: contact us
  
  
• Send comments to: yuvalkhrz@keter.co.il
• Would you like to be interviewed?: contact us
  

Blue Ocean Strategy / W. Chan Kim, Renee Mauborgne / Harvard Business School Press

In our column on strategy of LaZOOZ February 2004 issue, we described the Strategy of Value Innovation, offering a real and important alternative to common strategy approaches (based on Michael Porter's models). The two INSEAD professors who developed the Value Innovation approach in their 1999 article, published earlier this year a full book on the subject, describing how to execute Value Innovation strategy step-by-step, in practice.

The book is the talk of the day in the US marketing community, and covers a much wider spectrum than the original article. The differences between Competitive Startegy (a-la Porter) and Value Innovation strategy are shaprened. One major difference is the unique offering to costumers. Porter, in his famous smile model (see here), suggests that one should focus on differentiation (providing some added value) or cost control (offering the lowest market price). By contrast, the authors recommend that one should offer a product or service which is better and cheaper at the same time (by providing only what is truly and mostly important to costumers, and eliminating or minimizing the features that costumers consider unimportant).

Another important, and rather surprising, difference has to do with the type of costumers: the book urges readers to focus on "non clients", that is - those who have not yet purchased products or services from the kind that you sell. It is exactly there, claim the authors, that the real growth potential exists. Instead of crowding around each fraction of market share and existing clients, the suggestion is to understand what could make those who don't buy at all change their behavior. New insights on "non clients" and the development of appropriate products and services to suit them will allow you to penetrate new markets, free of competition, and enjoy a leading position for one or two decades, so they claim. They call this "Blue Ocean Strategy", a place where a predator fish can hunt smaller fish at ease, as it has no competitors - as contrasted by Competitve Strategy, which they call "Red Ocean Strategy" (where many predator fish fight each other for every piece of food, causing the water to be blood-red).

The book is a practical guide, not only for "Blue Ocean Strategy" development, but for its implementation in a big, hard to change, organization. It is not a thing to take lightly, as every strategy, and surely such a different and innovative one, demands organizational tools and continous efforts for its implementation. To conclude - it is probably the most important management book of the year. Do not miss it.

• Buy the book at : Amazon | Barnes & Noble
• A list of other must-read books for managers 
• For information on ZOOZ workshop based on this book : see page 10 of our Strategy and Marketing workshops description (Hebrew Pdf file), or contact us

Yellow Tail wines by Casella

In the "Blue Ocean Strategy" book (see above), there's a wonderful example of a winery that succeeded in penetrating the highly competivive US market thanks to a bold strategy, becoming within two years America's best selling imported wine, while creating its own blue ocean. While competitors cater for lovers of fancy wines or for those who go for cheap wines, Australian Casella winery wisely approached the "non clients" public - drinkers of beer and cocktails (a market 3 times larger than the US wine market).

The Yellow Tail wine series by Casella, initially presented in 2000, offered a refreshing innovation to those who up untill then avoided wine drinking - sweet wines with a definite flavour of fruit, that is light and pleasant to drink, resemebling the common beers and cocktails in that respect. In addition, only two wine types were offered - white (Chardonne - the most popular white wine in the US), and red (Shiraz - a light and fun to drink wine). Packed in a unique bottle (a strong colored Kangaroo label, and an identical bottle for both types), and attention drawing store presence (salespersons wearing a white trekker's hats and raincoat) - the choice was easy and expected. Yellow Tail wines did not even presume or attempt to adhere to conventional wine market standards: the wines are not antiquated, do not have complex tastes, are not sent to tasting competitions, and do not even mark the name of the winery in large letters on the bottle.

The result was soon to follow: wine critics disapproved of the "simple" wines - but the public loved them exactly because of their simplicity and immediate pleasure they provide, and bought them by the crates. Yellow Tail wines have become the fastest growing brand in the history of imported US wines. People who did not drink wine until then - tried it and enjoyed themselves. Those who used to buy cheap wines - upgraded and enjoyed as well (they cost double the price of cheap wines). Those who used to drink expensive wines switched in order to save on price, and enjoy a simple and refreshing drink. Moreover, the frequency of wine drinking has risen. Today Yellow Tail wines sell in the US more then French, Spanish, Italian or any imported wine. In addition, they carry a high profit rate, as their simplicity lowers production, operation and stock management costs substantially. Casella winery is expected to enjoy a "Blue Ocean" for years to come.

• For Casella website : click here
• For details on Systematic Innovation workshops: see here or contact us