Lina Maddah

Duncan Industries

The first issue to be known and clarified is the main issue in the case, i.e. what this case is
about: should the company expand into a potential lucrative foreign market and if so
how,or should it focus on domestic market growth.The company’ name is Duncan
Indutries and the product is ‘Duncan Lift’ – a surface automotive hoist used by garages,
service stations, and repair shops to lift cars for servicing. The key players in this case are
the President and founder Mark Duncan, the Marketing Manager Pierre Gagnon, and the
Marketing Manager at Bar Maisse Phillipe Beaupre, the company’s history I as follows: in
1990, the company was formed in Quebec, Canada. A year after, the company sol 23 hoists
in Quebec and Ontario markets. In 1994 the company expanded to mor canadian markets
via distributors. Two years later, the company expanded into US through a large
wholesaler. And in 1999 the company sold 1,054 hoists with 60% of sales in US and 40% in
canada.

1. Decision Problem

  How to increase market share and maintain rapid growth at the same time, and
where.Duncan Industries has to choose between further expansion of the North
American market, or new entry into the European market. In addition, the
possibility of European expansion should be evaluated based on variety of entry
options including licensing, joint venture or direct investment. Duncan Industries
faces another problem related to the lack of information about the European
market.In North America Duncan Industries positions its product uniquely. Duncan
Lift is a quality, safety product offered at higher price fulfilling the needs of specific
market segment - wheel alignment service centers. Duncan Lift competes based on
its features rather than price. The company is not a market share leader in the
industry; however the diverse nature of the industry allows Duncan Lift to be the
leader in its market segment of scissor lifts. Duncan Industries faces limited direct
competition (only two other competitors offer scissor lifts with features of lesser
value by those of Duncan Lift) allowing the company to exploit the segment
completely leaving no or limited opportunities for the new entrants. In addition, the
company uses wide variety of distribution methods (sales force, distributors,
wholesaler) reflecting the needs of its customers and allowing Duncan Industries to
establish a solid reputation for good service. Due to the fact that Duncan Industries
has the necessary know-how, traditions, reputation, technology and distribution
network, future expansion in the U.S. market is likely to help company maintain its
growth and increase its market share.

2. Overview

  Duncan Industries sold over 49,000 hoists each year in America. They have two
basic types of hoists, in ground and surface which are both service-specific. Typical
consumers were automotive outlets that serviced or repaired cars, such as new and
 used-car dealers, and specialty shops. Additional consumers consist of chains such
as Goodyear, Firestone and independent garages. The wheel-alignment market has
an 85% of sales the remaining 15% belongs to general mechanical repairs.

  3. Competition

  There are only 16 companies in the American market, 12 national and 4 Canadian.
The American companies have 21% of the total sales, 78% of the total sales where
Surface lifts, due to mobility and easy install.  Basically Berne Manufacturing and
AHV have the 60% of the market. The biggest company is AVH with the 40% of the
market share and had annual sales of 60 million dollars. AHV produces in ground
and surface lifts. These two companies are market leaders thanks to they know their
customers and have large brand awareness, also they have a very effective sales
force.

3. We study first the five interrelated processes pf strategic marketing management:

we start first by defining the organization’s business, mission and goals (cutomer or
market perspective i.e. the business should be defined by the type of customers it
wishes to serve through answering the question What Business Are We In? the
business definition for Duncan industrie is: Duncin industry sells hoists to
automotive outlets that service cars. To design and manufacture the Duncan Lift
that remains a leader in the automotive (hoists) aftermarket industry in terms of
design quality and safety.
As for the business mission: that underscores the scope of an organization’s
operations apparent in its business definition and reflects management’s vision of
what the organization seeks to do : Duncan Industry produces superior product
targeted to the needs of specific customers. The company’s success is dependent on
continual product improvements, quality workmanship and good service. As for the
business goals : they are the objectives that convert the organization’s mission into
tangible actions and results that are to be achieved, often within a specific time
frame. : Duncan industry’s goal is to continue to grow its sales. As for identifying
and framing the organizational growth opportunities, we study what are the
environmental opportunities? The opportunity analysis consists of three
interrelated activities:opportunity identification, opportunity-organization
matching and opportunity evaluation. In the opportunity identification we discuss
the following: what is the economic,regulatory or legal situation(exchange rates,
trade barriers, recession..), what is the product( types of hoists, important product
features, cost and lifetime), who are our competitors( in North America, European
Union, and the competitor’s strengths) and finally we shed light on what is the
market (market share, and the predtions of market size). The products are of two
kinds:
1- Surface hoists: can be installed on concrete base and can be moves, accumulate 79%
( Duncan Lift,surface four-post hoist)
2- Inground hoists: that require a pit and are permanent, accumulate 21% of sales
( In-ground single-post hoist)
As for the market segmentaion analysis depending on the North American Auto Lift
Unit sales:

-according to product category, as I mentioned above, the inground sales accumulate

21% and is split into single post(5518) and multiple post(5075) and the surface sales
accumulate 79% and are classified into two post(28,923), four
post(3,745),scissor(2,316----1054 45% among can distributors)) and others (3,695) to
form a total of 49,272

- according to geographical approach: USA accumulates 60% (632) and Canada

40%(422)

-according to customers approach: non specialty accumulates 15% (158) ans wheel
alignment specialty shops(85% 896)

-according to competitors( total 16) : Berne Manufacturing (20%)-AHV LIFTS (40%) –

Mete Lifts( 19709 hoists—926 scissor =40% of scissor market---- 14.5% = 336)

-according to distribution channels: -direct 100% -can distributors 80% - U.S.

wholesaler 78%.

As for the opportunity-organization matching: what is Duncan Industrys Distictive

Competency?

-safety locking mechanism

-alignment turn plates perfect for wheel alignment jobs

-quality of workmanship

-easy access for the mechanic

-required little mechanic

-easy movable

-5 year warranty

SWOT ANALYSIS: Duncan Industries can greatly benefit from a SWOT analysis.  
The SWOT analysis identifies strengths, weaknesses, opportunities, and threats to
provide a solid foundation as a springboard to identify subsequent actions in the
marketing plan.

1- Strengths:     • Duncan Industries is already a well known company; they also have a
reputation of being superior thanks to their designs, quality workmanship, safety
features, ease of installation, and five-year warranty.
     • Duncan Industries have made important investments in high-technology which
gave them important benefits such as:

  1. High mechanic accuracy and can be installed in less than a day.

  2. It is fully hydraulic and requires minimal maintenance .

  3. Safety locking mechanism that only Duncan Industries holds the patents to.
the product has low maintenance costs and five year warranty, IP protection on
design (four patents), reputation for a quality product backed by good service,
knowledgeable sales force, product is well suited for wheel alignment service, and
product development innovation and creativity.
2- Weknesses: limited product line, limited distribution geographically, prices are 5-
20% higher than competitive products, sales force only accounted for 25% of unit
sales each year, reliant on wholesaler for majority of sales.
3- Opportunities: product is not sols in Europe or Asia, North American market is
large and diverse and current market share is small, surface lifts account for 79
percent of total lift sales.
4- Threats: Mete lift has similar product at lower cost, Berne Manufacturing could
enter Scissor hoist leading to severely increased competition, and third the majority
of sales was denominated in a foreign currency (US$ canadian company)

As for the produst Market strategies:

Market penetration: where the organization or company seeks to gain greater

dominance in a market in which it already has an offering , it is usually more effective
in a growth market, considers competitive reaction and asks the availability of new
buyers

Product development: organization creates new offerings for already existing markets,
and it is of three categories: product innovation : develop totally new offering, product
augmentation: enhave the value of existing product to customers, product line
extension: broadens the existing line of offerings by adding different sizes and forms,
etc.

Market development( the case of Duncan Industries): organization introduce its

existing offerings to market other than those it is currently serving(including
international expansion), requires modification of the basic offering, and requires
modification of the basic offering, different distribution outlets, or a change in
advertising and sales effort.

The alternatives are the following:

-US growth: get wholesaler to puch the Duncan lift

 -open regional sales office in NY

-EU expansion: -export using EU distributor or wholesaler

-license Duncan lift to Bar Maisse

-Joint Ventur with Bar Maisse

-Direct investment in a plant in EU

-No Market Expansion: -product-line extenxion, NPD

As for the strategy selection: organizations have to adapt their product market
strategies beacause of political actions(deregulation), economic fluctuations( income
shifts and changes in disposable personal income), sociodemographic trends(increasing
racial and ethnic diversity, aging society), attitudes(value consciousness), technological
advances( growth of the internet) and population shifts.

Product Market strategies: Market Development :

1- Exporting: +ve: minimal capital investment, easy to initiate