Dominion Motors & Controls, Ltd (DMC) had acquired 50% of the oil well pumping market in the northern Canadian oil fields since they were started in 1973. DMC offered a line of motors ranging from small fractional horsepower (hp) units to large 2,000 hp motors. It also produced motor control and panel board units. By 1984, there were approximately 5,500 producing wells in the fields. According to industry estimates, an average of 1,000 new wells would enter production each year for the next five years. Sales to this market were seasonal; over 80% were made between April and September.
DMC's competition consisted of other well-known Canadian Motor manufacturers and a number of foreign competitors. All the Canadian manufacturers maintained closely competitive pricing structures, while foreign competitors usually sold 10% to 20% below Canadian established prices.
Tags: Analysis of Dominion motors, Dominion motors strategy, Dominion motors case study, Case of Dominion motors
[...] The former flat rate, charged regardless of the horsepower of motors on a pumping installation, was replaced with a graduated schedule based on connected horsepower of an installation Power companies demanded that customers stop over motoring and improve the ‘power factors' of the installations. Hamilton's Field Test: John Bridges, Hamilton's chief electrical engineer, initiated field test on oil well pumping motors with an objective to define the specifications of a motor, which could be used most economically. Bridges had determined the following- 1. [...]
[...] Alternative Undertaking design of a definite purpose motor: Many executives felt designing a definite purpose motor was the only way to regain effective product leadership. The Hamilton's tests indicated that the specific motor desired would have the running characteristics and rating of a 5 hp unit but the starting torque of a 10 hp motor. They also believed that the first manufacturer to offer a definite purpose motor, tailored to the needs of the market, would have an advantage over competitors. This motor would exceed minimum NEMA specifications. [...]
[...] DMC personnel were extremely concerned about the probable effect that Hamilton's endorsement of the Spartan and Universal motors would have on Dominion's market standing. Bridges was known to be very influential in establishing Hamilton's purchasing policy, and his recommendations would probably carry great weight in the entire industry. So executives of DMC had to decide what action, if any, the company could take to maintain its share of the oil well pumping market. Possible Solutions: Alternative 1. Reducing the price of DMC's 10 hp motor; Some executives advocated reducing the price of DMC's 10 hp motor to the level of its 7.5 hp motor as a quick initial way to meet the problem. [...]
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