Dominion Motors

Dominion Motor & Controls, Limited (1980)

Problem/issue: DMC’s potential loss of significant market share in the near and long term if DMC doesn’t respond quickly and effectively to the report concluding from the tests performed by the Hamilton Oil Company.

Evaluation of alternatives available:

1) Alternative 1 (short term) -

a) Dominion produces a motor which is very expensive, it costs more than the others in terms of energy and it is leads to over-motoring practice; this means that the product is not convenient for the purchasers.

b) The only way to sell these motors again is to cut their prices at the same level of the 7.5-hp; because companies don’t care about little savings on energy in the short period, and because the torque of the 10-hp is higher than the 7.5-hp’s. That makes these motors still convenient in the short term.

c) Although the margin will be reduced the sales volume would grow, also considering that this period is the most prosperous (80% of sales).

2) Alternative 2 (Medium term) –

a) This motor would have the same size as the existing 7.5-hp motor, but its temperature rise would be greater than NEMA standards. According to DMC personnel, safety standards will be respected by using special high temperature insulation.

b) Another alternative is to use a larger motor frame, again meeting or exceeding NEMA’s standard performance specifications, but not meeting NEMA mounting dimension for its rating.

c) 3 months to reengineer the existing 7.5-hp motor (missing the best period for sales)

d) Risk of a torque “war” which could lead to unbalanced motor design.

3) Alternative 3 (Long term) –

a) This alternative represents the only way to produce exactly what market needs. This solution has the energy costs of a 5-hp motor with the performances of a 10-hp, and could be priced below the 7.5-hp motor.

b) But thanks to its attractiveness could be priced just a little bit more expensive than the...