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  • Dominion Motors and Controls LTD

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    Ravinder Kumar
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    Dominion Motors and Controls is assessing alternatives to deal with a new electricity tariff that will increase Hamilton's costs for a 10 hp motor by $253,500 over 10 years. Alternative 1 of selling a 10 hp motor for a lower profit is not a long term solution and provides no advantage over competitors. Alternative 2 of modifying motor size or temperature also does not comply with standards and is not long term. Alternative 3 of developing a 7.5 hp motor with high torque has long term potential to increase DMC's market share to 60% while addressing customer needs. The recommendations are for DMC to form a short term alliance with Spartan and in the long term implement Alternative 3 to position itself as meeting customer needs sustainably.

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    Dominion Motors and Controls Ltd

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    Dominion Motors and Controls Ltd

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    Dominion Motors and Controls is assessing alternatives to deal with a new electricity tariff that will increase Hamilton's costs for a 10 hp motor by $253,500 over 10 years. Alternative 1 of selling a 10 hp motor for a lower profit is not a long term solution and provides no advantage over competitors. Alternative 2 of modifying motor size or temperature also does not comply with standards and is not long term. Alternative 3 of developing a 7.5 hp motor with high torque has long term potential to increase DMC's market share to 60% while addressing customer needs. The recommendations are for DMC to form a short term alliance with Spartan and in the long term implement Alternative 3 to position itself as meeting customer needs sustainably.

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    366 views7 pages

    Dominion Motors and Controls LTD

    Uploaded by

    Ravinder Kumar
    Dominion Motors and Controls is assessing alternatives to deal with a new electricity tariff that will increase Hamilton's costs for a 10 hp motor by $253,500 over 10 years. Alternative 1 of selling a 10 hp motor for a lower profit is not a long term solution and provides no advantage over competitors. Alternative 2 of modifying motor size or temperature also does not comply with standards and is not long term. Alternative 3 of developing a 7.5 hp motor with high torque has long term potential to increase DMC's market share to 60% while addressing customer needs. The recommendations are for DMC to form a short term alliance with Spartan and in the long term implement Alternative 3 to position itself as meeting customer needs sustainably.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 7

    Dominion Motors and Controls Ltd.

    GROUP B 07
    Objective and Issues
    Objective
    To assess the implications of alternatives available to Dominion motors
    and control & ltd
    To make short term and long term recommendations in dealing Hamilton

    Issues
    Power companies linking of tariff schedule to motor horsepower
    Projected electricity charges for Hamilton under new tariff regime =
    $139,500
    Total excess amount Hamilton would shell out for a 10 hp motor =
    $253,500
    Point of Differentiation: Spartans and Universals 7.5 hp models have a
    higher torque compared to Dominions

    Assessment of Alternative 1
    Implication for DMC
    Sell 10 hp motor for $1200
    Cost to DMC = $1027.8; Selling Price = $1200
    Profit per motor declines by 66.56%
    Implication for Hamilton
    Has to shell out excess electricity charge
    Assessment
    Not a long term solution
    No advantage with respect to competition

    Assessment of Alternative 2
    Implication for DMC
    Same frame, higher operating temperature
    Total cost to DMC = $960.49
    Profit per motor = $239.51
    Larger frame size, same operating temperature
    Total cost to DMC = $1037.49
    Profit per motor = $162.51
    Assessment
    Reluctance of use by rig owners on account of exceeding NEMAs
    operating temperature standards
    Not a long term solution
    Assessment of Alternative 3
    Implication for DMC
    Selling price = $1045
    Total Cost = $829.17, Profit per motor unit = $215.83
    Selling price = $1200
    Total Cost = $835.49, Profit per motor unit = $364.51
    Assessment
    Long term strategy
    Has the potential to increase market share to 60%
    Alternative 4

    Bridges is a vital cog in the buying centre of Hamilton

    Approaching VP while subverting his authority could
    hurt DMCs chances of finding favour with Hamilton
    Recommendations
    Short Term
    Recommends an alliance with Spartan where it can
    recommend the sales of the control units manufactured
    by DMC. Thus, covering the loss in sales of the motors.
    Long Term
    Implement alternative 3
    Would address the need of a low hp motor with high
    torque
    DMC can position itself as being in tune with
    customer needs
    A sustainable PoD over competition

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