DOMINION MOTORS AND

CONTROL LTD.
GROUP 7 :
 JOTIRMOY MAJUMDER

INDIAN INSTITUTE OF MANAGEMENT, JAMMU

CASE BACKGROUND

 Dominion motors & Controls Ltd. (DMC) Had a 50%

market share of oil well pumping motors in the
northern Canadian oil fields.
 Early in 1985, the tests performed by the Hamilton Oil
company, threatened the market of DMC.

► DMC’s motors was categorised as the third

preferred motor behind those of Spartan
Motors and Universal Motor Company of
Canada.
SITUATIONAL ANALYSIS

 DMC offers a line of motors ranging from small fractional horsepower (hp) units to large 2,000-
horsepower motors along with motor control and panel-board units, which would automatically control and
protect a motor.

 Extremely first growing oil fields in northern Canada, with an estimate to have 1000 new wells to be
introduced for production every year for the next five years.

 Competitors : other well-known Canadian motor manufacturers and a number of foreign competitors
(particularly British, German, and Japanese firms).

 Approximately 80% of the motors sold for oil well pumping applications since 1973 had been 10-hp
NEMA2 design C (high starting torque, low starting current), totally enclosed, fan- cooled units with
moisture-resisting insulation
CONTD..

Factors such as drilling depth, oil viscosity, water content of

pumped fluid, underground pressure, and the government-
controlled production allowable in the northern Canadian fields
determines the type of motor best suited for this area.

During1984 power companies serving the oil fields made two

announcements :
 their schedule of power rates was changed.
 Demanded that their consumers stop overmotoring and
improve the “power factors” of their installations.
 IDENTIFYING THE PROBLEM

 The test by the Hamilton Oil Company determined the following :

 Fluid-lifting requirements dictated a 3 to 5 hp motor
 Starting torques in excess of 70 pounds-feet would energize the pumping units at temperatures as low as
-50EF.
 This starting torque requirement would necessitate a 7½-hp motor
 Because the Spartan 7½-hp motor had the highest starting torque of the motors tested and the Universal 7½-hp
motor had the second-highest, these should be his company's first and second choices in the future. Dominion's
7½-hp motor would be the third choice.

► PROBLEM : The probable effect that Hamilton's endorsement of the Spartan and Universal motors would have on
Dominion's market standing.
CATEGORY WISE COST OF DMC
MOTORS
POSSIBLE SOLUTIONS AND
PROFITABILITY ANALYSIS
 Reduce the price of DMC's 10-hp motor to that of the 7½-hp motor.
 Profitability Analysis :
 The Profit of the firm associated with the sale of each 10hp motor will go down by 49.18%.
 The sales of 7½-hp motors will go down drastically.

 Reengineer DMC's present 7½-hp motor to make its starting torque at least equal to that of the Spartan 7½-hp unit.
 Profitability Analysis :
 If the temperature does not meet the NEMA Standard : The profit of the firm associated with the sale of 7½-hp motor
will go down by 19.95%
 If the mounting dimensions does not meet the NEMA Standard : The profit of the firm associated with the sale
of 7½-hp motor will go down by 32.09%
 The demand for the 10hp motors produced by DMC will go down drastically.
CONTD…

 Undertake design of a definite-purpose motor for the oil well pumping market. This ideally would be a
basic 5-hp motor with the starting torque of a 10-hp unit.
 Profitability Analysis :
 Maximum Profit can be obtained as there is a possibility of a considerable increase of about 10% in the market share of
DMC.
 The cost associated with the process of starting a new production is also low.

 Attempt to persuade Bridges and Hamilton executives that the conclusions reached from their test results
unduly emphasized obtaining the MAXIMUM starting torque available.
 Profitability Analysis :
 The profit of the firm will continue to remain same.
BEST ALTERNATIVE

 The best alternative for DMC at present is to undertake design of a definite-

purpose motor for the oil well pumping market
PRODUCT DESIGN CONSIDERATION

 Definite Purpose of Motor

 Consider Market Requirement and Needs of the competitive product with horse power, torque requirement
and Meet Industry Standards NEMA.

 Industry shift from general motors to special purpose motors will be a problem for all Canadian motor
manufacturer.

 Supporting and maintaining NEMA standards.

 Engineers love Big margins.

 DMC’S FUTURE PLAN

 Emphasize on Over motoring.

 Approaching NEMA to conduct study independently.

 Work on 5 hp model and 10hp model.

 Approach Hamilton and bridges to work further on the study.

 Work on marketing and promotion strategy.

MAKETING ACTIVITIES
ENHANCEMENT
 The first and foremost thing to do by DMC is to promote their product and make their customers realize the value of the
new product by advertising and salesforce.

 Since the actual market need will be tailored by the new product, DMC should focus more on advertising apart from the
salesforce with can boost their sales significantly.

 Its high time for DMC to shift from catalogues to pamphlets.

 Using the announcements by the power companies as the triumph card for its new product to get noticed by its
customers.

 Using the results of the tests conducted by the Hamilton oil company to influence the customer to prefer the newly
launched product of DMC over the existing products of spartans and universal oil company.
THANK YOU