Dominion Motors Ltd

Case Analysis
BBM, NMP Term III

Group 4
Argha 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 Hamiltons

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.
Engineers Love of Margins.

Timelines:

It took Bridges 5 months to submit study to Hamiltons 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.