DOMINION MOTORS

& CONTROLS, LTD.

BY GROUP-A14

SITUATION ANALYSIS

1973 DMC was founded

Over years, DMC acquired a market share of over 50% in oil well
pumping motors in Canada

1984 - Two major announcements were made by power

companies serving the oil fields

1. Changes in Schedule of power rates

2. Demanded their customers to stop over-motoring and to

improve power factors of their installations

1985 Rated 3rd in Torque generation in a test conducted by

Hamilton Oil Company

DMC came up with 4 alternatives to tackle the damages

POSSIBLE ALTERNATIVES

Reduce the price of DMCs 10 hp motor to that of the 7 hp

motor

Profit/unit = $ 292.2

Over-motoring still persists

Oil companies may be risk-averse and may not go for this option

Reengineer DMCs present 7 hp motor to increase starting

torque

Modify internal components and keep the same frame size to increase
starting torque to 105 pounds-feet

Temperature rise is greater than NEMA standards

Profit/unit = $ 359.51

Use a larger motor frame which violates NEMA mounting dimensions for
its rating

May instigate a torque war leading to unbalanced motor designs

POSSIBLE ALTERNATIVES

Undertake design of a definite-purpose motor

Profit/unit = $ 329.51

4-5 months for the production to begin

Investment of $ 75000 required Break-even occurs after 228

units

Attempt to persuade Bridges and Hamilton executives

Bridges may not easily accept that the test conclusions were not
accurate

If Bridges gets convinced to wait and use the same 7 hp

motor, Profit/unit = $ 486

RECOMMENDATION

Try to convince Bridges to buy the current 7 hp, which can

generate higher starting torque than NEMA standards

After 4-5 months, launch definite-purpose motor in the market

According to estimates, a market share of 60% is possible.

PREVENTIVE MEASURES

The power companies demanded that their customers stop overmotoring and improve the power factors

DMC should have anticipated that oil majors like Hamilton would
require a modified motor design

An instant initiation of redesigning the motors after consulting

the oil companies wouldnt have resulted in the current situation.