Magnatag Case Analysis

How is Magnatag attempting to create a competitive advantage? Is that competitive advantage sustainable?

The whiteboard is a fairly simple, common tool used within various professions to maintain a visual log of information. Wally Krapt and his and his company, Magnatag Visible Systems, wanted to differentiate his version of the whiteboard, the Magnatag board, from the masses by focusing more on value drivers and the customer’s perception of value.

Mr. Krapt emphasizes value drivers in the following ways- technology, quality, delivery, and customization. Their technology increases value to the customer because of its ability to organize large amounts of data on a system of preset graphs and grids. Ordinarily, this information would be handwritten on the whiteboard, but without the same visual appeal and organization of the Magnatag. A company can save time and manpower hours with the Magnatag by having a piece of equipment that can do most of the work for them. Also, Mr. Krapt had the ability to customize the board to the buyer’s specific needs. Companies can request a simple, single, inexpensive board or it can be a system of complex boards. The board can be tailored to the specific industry of the company who uses it and has its own set of specific supplies to be used in conjunction with the board. Krapt’s goal is to make buyers feel as if the Magnatag’s usefulness is something they cannot live without.

One of the Krapt’s strongest assets are the inventory practices that allow for a quick delivery time. From ordering to the delivery of the product takes approximately three business days. They are able to accomplish this with a very succinct inventory practices that involves having parts on hand that are already premeasured and cut for specific boards so that time is saved in the actual manufacturing of the product.

Though the main focus was on value drivers, Mr. Kraft and his company seem to have a good mix of value and cost drivers. They produce their product in-house and only advertise through their website and catalogs. Most businesses come to know about Magnatag through word of mouth. They do not sell their product through retail chains as most producers of whiteboards do. Due to shipping costs, they only sell the Magnatag board in North America.

Traditionally, producers of whiteboards focus on cost drivers.