Dominion Motors LtdCase Analysis

BBM, NMP Term III

Group 4Argha Ray - 15 Chakra Dhar Kundu - 22 Khushal Malik - 28 Sanjay Kumar Prasad – 45

Context• Dominion manufactures Control Panel and Pumping Motors for Canadian Oil

producers.

• Commands 50% Market share.

• Spartan and Universal are chief competitors.

• Addition of 1000 New Wells each year for next five years offered a mouth watering Market Opportunity.

• Had heart in their mouth after discovery of Hamilton’s Engineering Report.

Alternatives:• Slash prices of 10 HP Motor and bring at par with 7.5 HP Motor.

• Reengineer 7.5 HP Motor with 105 Torque.

• Build 5 HP Motor with 105 Torque.

• Persuade Hamilton to overturn Bridges’ study.

Considerations:• Bridges’ study still not in public domain.

• Study still to be independently verified.

• Wind may blow Bridges’ way as an immediate impact.

• Study ignores Overmotoring guideline of NEMA.

• Industry shift from General Purpose to Special Purpose Motors may eat into profits of all Canadian Motor Manufacturers.

• Immediate loss of sales to Spartan.

• Advocating NEMA standards.

• Engineer’s Love of Margins.

Timelines:

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Reengineer 7.5 HP Motor with 105 Torque (Alternative 2)

Build new 5 HP Mortor with 105 Torque (Alternative 3)

Seasonal Sales Cycle for 80% of Mortor Market

Year 1985

Bridges to submit Test to Hamilton Top Honchos

Dominion discovers about Tests from salesforce

Bridge's concludes Oil Pumping Motor field Tests

• It took Bridges’ 5 months to submit study to Hamilton’s Top Management.

• Study unlikely to percolate to entire industry before September.

Analysis:Alternative 1:

• Foolhardy to reduce prices of 10 HP Motor as kneejerk reaction.

• Sends out signal of capitulation to the market.

• Tacitly acknowledges Bridges’ study.

Alternative 2:

• Violates NEMA standards.

• May encounter resistance from Rig Operators.

• Tacitly acknowledges Bridges’ study.

Analysis Contd..

Alternative 3:

• Tactical advantage in long run.

• Production can be started before completion of 1985 sales cycle and still has one month cushion before September.

• Minimal sales impact as Bridges’ study, if accepted, is likely to have impact from next sales cycle.

Alternative 4:

• Bridges may not see reason on Overmotoring.

• Collusion between Bridges and Spartan may not be ruled out as study suggests acts of omission and commission on Overmotoring.

• Further tests may even acknowledge Bridges’ study as Industry standard.

Decision:

• Highlight Overmotoring.

• Lobby with NEMA to institute independent study.

• Approach Hamilton and Bridges to work further on the study to buy time.

• Work on 5 HP Motor (Alternative 3) to cover flanks for 1986 Sales cycle.

• Strengthen Intelligence Gathering by Salesforce.

• Uphold NEMA standards for long run industry viability.