Competitive advantage in the U.S. paper and paper products industry

Abstract

Many firms in the U.S. paper converting industry are engaged in the commodity business of manufacturing finished paperboard products from paper stock. Contrary to the typically held mindset, these firms do not have to be relegated to the low margin end of the business. This thesis applies the various dimensions of the Delta Model to the paper converting business of the Chesapeake Corporation to define a new competitive positioning that will attract, satisfy, and retain the firm's customers. The overall objective is to develop the key elements of a new business strategy for Chesapeake upon which the business strategic agenda can be built. A new business model for the firm is presented that is centered on the "Total Customer Solution" and "System Lock-In" options of the Delta Model. The future business scope created by this new competitive positioning is defined and discussed in terms of new products and services, market segments, geographic coverage, and unique corporate competencies. These factors are used to identify three initial market segments that provide Chesapeake important opportunities to offer added-value to customers. Specific value propositions by customer segment are presented. The intent of each value proposition is to engender deep customer relationships that ultimately make Chesapeake successful because its has enabled its immediate customer to serve its own customer in a superior way.