Case Analysis/Observations Dominion Motors and Control Ltd is a leading company in Oil well pumping motors in the Northern Canadian oil fields since 1973. Their market share is 50% and they are known for their product quality. The unique element is they had an efficient sales person, which gives company a competitive edge in industry. Company also sells motor & control unit as a package. 80% of business is through direct sales and 20% is distribution & resale to small OEMs. The product purchasing decision is performed by production units also the Rig supervisors are important decision makers. The other Medium enterprises are followers and mostly make purchase decision by following large users. Hamiltion Oil Company who owns 30% of oil wells …show more content…
Marketing team together with Managements, Operations, Sales and Research & Development team has to make their strategy to retain its reputation and Market share. Major/Minor Problem DMS has 50% market share in Northern Canada Oil & well pumping motors, Companies market position is at stake once the results of Hamilton Oil Company are announced to the public. The results will not only impact DMC’s profitability the greater threat is on company’s reputation in market. Alternatives and Math The executives of DMC came up with four alternatives to their problem. The first was to reduce the price of their 10 Hp motor to 7 ½ – Hp model. Second proposal was to reengineer present 7 ½ motor to making starting torque equal similar unit of Spartan. Third Proposal is to design a definite purpose motor or the oil well pumping market. This ideally would be 5-hp motor with the starting torque of a 10-hp unit. Fourth Proposal is to persuade Bridges and Hamilton executives that the conclusion reached from their test results unduly emphasized obtaining the maximum starting torque available. Alternative 1 (Short term) Horsepower Manufacturing cost Total Cost List Price Price for Large Users Sales & Transport Cost Profit Margin 7 ½ $ 663.51 $ 714 $ 1950 $ 1200 $ 120 $