Dominion Motors & Controls LTD

Dominion Motors &
Controls Ltd.
Situational Analysis
Dominion
manufactures: Control Panel and Pumping

Manufactures.
Addition
of 1000 New Wells each year for next five

years offered a mouth watering Market Opportunity.
Commands
50% Market share. Other major players:

Spartans and universal motors.
Major
Customer : Hamilton Test report: Identified

Dominion motors inferior than Spartan and Universal
Motors.
Strategizing the plan to counter the Bridges Argument

with a full efficient Strategy.
Alternatives
Price: Reduction of 10 hp motor cost in comparable to
71/2 motor and focus on customer retention
Product: DMC motor Reengineering so as to get the

equal amount of thrust as that of Spartan motors
Definitive Purpose: Drive manufacturing towards
Definitive purpose motor to regain effective product

leadership
Counter Bridge: No changes in manufacturing line and
wait for the bridges hypothesis to stands true.

Meanwhile focus on persuading bridge regarding another
set of conclusion
What is at Stake
The Biggest customer of Dominion: Hamilton who
controls more than 30% share on oil producing wells.
Every year, addition of 1000 new oil wells

Dominions Revenue: 80% from large market. Hamilton
one of the key component
The season of highest sales is between April and

September
Competition from Canada and foreign manufactures

having 10-20% pricing advantage.
Decision Analysis
Alternative : Price
Reduce the price of DMCs 10 hp motor to that of 71/2 motor

Actual Price of 10-hp motor= $1580 to new Reduced price =
$ 1200
Profit
Selling per
Priceunit sales:
Suppose considering
Total Cost
0
200 400 600 800 1000 1200 1400 1600
curren
t
Future
ADVANTAGES
This is a quick initial way to meet the problem requirements

The company sales would not be affected for the current season
They get more time to analyze Bridges test and derive their own
conclusions
DISADVANTAGE
Reduced profits. Not a long term solution

Extra expense for user
If the power companies start penalizing for over motoring, the
customers would be at risk
Alternative : Product
Two ways of Reengineering 71/2 hp motor.
1. Increasing torque with increase in temperature.
2. Increasing torque with increase in frame size.
Going by this alternative would violate NEMA standards and would

lead to unbalanced motor design.
Even the cost analysis shows a reduced profit, hence this
alternative is not feasible.
1500
1000
500
0
Tempratur
Frame Size
current
ADVANTAGES:
No additional investment in plant and equipment is required.

Required Torque capacity is achieved.
DISADVANTAGES:
Reduced profits.
Equipment set up time is 3 months.
Will start torque war which would be detrimental to the motor
industry.
Customer reaction to the new product is uncertain.

The companys policy of maintaining NEMA standards is being
violated.
Alternative: Definitive
Purpose
Considering the definite purpose motor specification 5 hp
unit having torque of a 10 hp motor.
Monthly power charge paid acc. To horse power.
Horse
power(hp)
Base
rate/horse
power($)
Monthly
power base
rate($)
25
125
7 1/2
21.50
161.25
10
20.00
200
Referring to exhibit 2:
HP
Manufacturin
g cost
Total cost
$511.53
571.20
Fixed cost here is 571.20 511.53=$59.67

But the manufacturing cost of Definite purpose motor comes
around $665.
Including the sales commission and transportation cost(10%) . i.e
$104.5 for ($1045 S.P ) and $120 for (S.P $1200)
Selling
Price($)
*Total cost ($) Profit($)
1045
829.17
215.83
1200
844.67
355.33
Total Cost includes manufacturing cost, fixed cost and sales

commission and transportation cost.
ADVANTAGES:
According to industry estimates, an average of 1000 new wells
would be added every year.
But this alternative requires an investment of $75000 for the
required engineering and testing.
Therefore, Total sales from profit would be 1000 * 355.33=
$355,330
Hence, the pay back time for the initial setup cost would be
75000/355330=0.21 years
Hence , this alternative can be adopted as the profit is
considerable with less pay back time and DMC Ltd. Can catch up
with its competitors.
DISADVANTAGES:
The new wells coming up may require different motors.
Small companies may not want the same motor that Hamilton
wants.
Also it would take 4 or 5 months for the production to begin.
Alternative: Counter
Bridge
ADVANTAGES:
Not necessary to change the product and market strategy
DISADVANTAGES:
Bridges is more convinced of his interpretations and its difficult to
meet him directly
Presentation of different arguments is not known
Even if we try to alternate Bridges recommendations it would only
generate ill will.
Additional alternative:
Some executives believed that DMC should begin testing and
defining the motor needs of the companies various market
segments as it would be a long term investment in maintaining
DMCs future market position.
Requires additional hiring.
Recommendations
Adoption of Alternative1: Price : After the
Bridge result Published. Offer attractive
discounts.
Simultaneously, work on Alternative 3:
Definitive Purpose: To produce Definitive

purpose motor with investing in plant
manufacturing facilities.
Thank You

Dominion Motors & Controls LTD

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Dominion Motors &

manufactures: Control Panel and Pumping

of 1000 New Wells each year for next five

50% Market share. Other major players:

Customer : Hamilton Test report: Identified

Strategizing the plan to counter the Bridges Argument

Product: DMC motor Reengineering so as to get the

Definitive Purpose: Drive manufacturing towards

Definitive purpose motor to regain effective product

Counter Bridge: No changes in manufacturing line and

wait for the bridges hypothesis to stands true.

controls more than 30% share on oil producing wells.

Every year, addition of 1000 new oil wells

The season of highest sales is between April and

Competition from Canada and foreign manufactures

Reduce the price of DMCs 10 hp motor to that of 71/2 motor

200 400 600 800 1000 1200 1400 1600

This is a quick initial way to meet the problem requirements

Reduced profits. Not a long term solution

Going by this alternative would violate NEMA standards and would

No additional investment in plant and equipment is required.

Customer reaction to the new product is uncertain.

Monthly power charge paid acc. To horse power.

Fixed cost here is 571.20 511.53=$59.67

*Total cost ($) Profit($)

Total Cost includes manufacturing cost, fixed cost and sales

Simultaneously, work on Alternative 3:

Definitive Purpose: To produce Definitive

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