Dominion Motors case Essay Example

be more expensive for the company and profits would decrease by $342 per unit. Once the price is reduced, it cannot be increased back to its original value, and customers may be hesitant to use a high HP motor due to penalties imposed by power companies.

Alternative 2 proposes making slight design changes to the 7.5 HP motor in order to reduce torque requirements. Two methods for achieving this alteration are suggested, but neither alternative provides detailed advantages or disadvantages.To increase torque, there are two options. One is to raise surface temperature slightly, while the other is to increase the motor's size. The first option would require a manufacturing cost of $790, and the second would cost $867. Although implementing a new type of motor would be a long-term solution that meets customer demand, it could also suggest that previous motors were faulty, resulting in confusion among buyers and a loss of profit on existing units per sale. Additionally, there may be concerns about a potential torque war and unbalanced designs, as the re-engineered motors may not comply with ENEMA standards. However, creating a pH motor with 10 HP torque could better meet customer requirements at a lower cost while exceeding the torque of any other motor in the same HP bracket.The alternative option would meet and exceed ENEMA standards, giving the company a competitive advantage and potential market share increase of up to 60%. However, it would require an additional investment of $75,000 and new product development from scratch, with a production timeline of 4-5 months. Furthermore, customers who previously purchased from Dominion may be dissatisfied with the new model, and creating special purpose motors

for the Canadian market may not be economically feasible. The total cost of the new option would be $829.97, including fixed costs and the price of PH 571 and 7.PH at $104.5 and $355, respectively.One option is to convince Bridges and Hamilton to reconsider their conclusions and subsequent decisions, which would require no additional investment or modifications to their existing set of motors. However, persuading Bridges, who is a highly influential industry figure, may be difficult and have significant consequences. Additionally, there are insufficient arguments to dissuade either Bridges or Hamilton from utilizing their test results. Furthermore, this approach may not meet the needs of customers, potentially resulting in a loss of both customers and market share for DAM. It also leaves open the possibility that competitors could develop improved products and designs, leading to a loss of revenue and market share for DAM.