Dominion Motors
Dominion Motors
Dominion Motors
and Controls
Group B3 - 2012
Aditi Sholapurkar
Aditya Kumar M.
Ankit Bhageria
Inshul Sahni
Vignesh Mani
Yatin Kamat
Situation analysis
Dominion Motors & Controls
Excellent reputation for product quality
50 % share in oil well pumping motors in north Canadian oil fields
Good sales force
Change in policies
1. Graduated schedule based on connected horsepower
2. Improve power factor of installation
Report by Bridges
Only starting torque considered; Other attributes not given due attention
Evaluation of Alternatives
PROS CONS
No penalty for violation of power factor Willingness of consumers to adopt to
of firms installations new method will be low given limited
long-term benefits and upcoming
regulations
Opportunity to exhaust the inventory Cannibalization of existing products
2 (a). Re-engineer DMCs present 7.5 hp motor to make starting torque >= Spartan 7.5
hp motor by modifying existing internal motor components
Pros Cons
No additional investment in plant and Operating temperature exceeds NEMA
equipment required standards
Frame size retained; No site modification No guarantee of acceptability of new
required product
Additional costs incurred while moving
through product life cycle Advertising
High manufacturing (variable) costs as
compared to alternative 3
Compatibility with existing panels;
Increased starting torque leads to increased
starting current
Evaluation of alternatives
2 (b). Re-engineer DMCs present 7.5 hp motor to make starting torque >= Spartan 7.5
hp motor by using a larger motor frame
Pros Cons
Quicker response to Bridges report Frame size changed; Ensuing modification
in site of existing users
No additional investment in plant and No guarantee of acceptability of new
equipment required product
Additional costs incurred while moving
through product life cycle Advertising
High manufacturing (variable) costs as
compared to alternative 3
Compatibility with existing panels;
Increased starting torque leads to increased
starting current
Evaluation of alternatives
Pros Cons
Exceeds minimum NEMA specifications Time lag in response = 2 3 months
Cost advantage Least variable Late market entry
manufacturing cost
No operational issues because of new Inherent consumer preference for general-
design purpose motor
Increased consumer preference - lower
monthly base charge per motor
At a decreased contribution of 359.2 per unit, the Break Even quantity is a mere 209
units. As the Canadian oil well market adds 1000 new wells every year for next 5
years, the BEP can be achieved quickly.
The new motor will also increase DMCs share of oil well pumping market to 60%
Evaluation of Alternatives
PROS CONS
Continue existing processes with no Unprofessional behavior on part of
change or overhead costs DMC to approach Hamilton for a pro-
active re-consideration
Set a precedent by challenging the It may lead to the creation of ill-will
assumptions, as such tests may increase with Mr. Bridges
over time
Additional costs of hiring and man-
power to account for such tests in the
future
Cost Comparisons
ASSUMPTIONS
In each alternative, the new/revised product only replaces the existing 10 hp motor
The total sale-units of motors is assumed to be X
The cost of advertising and other promotional expenses is assumed to be negligible
Cascading effect of a price change on 7.5 hp motor on other motors is ignored for
comparison purposes