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Curled Metal Inc.

Autor:   •  December 8, 2018  •  Case Study  •  1,355 Words (6 Pages)  •  73 Views

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Summary: Curled Metal Inc. (CMI) has opted to branch into the cushioned pads market of the pile- driving industry as a means to diversify the company’s existing product portfolio. Their product, while providing significant value to customers through cost-savings, is juxtaposed with the existing pads that have never delivered any additive value to customers. CMI must thus communicate the value of the new product while simultaneously not scaring customers due to comparative high price/unit. The recommended strategy is to price their pads at $3K/set or $500/pad, an amount at the lower end of what customers already pay to complete the same amount of drilling work and increase the price in following years once the demand for their superior product been established.

Company: CMI has a proven history of delivering quality metal products regardless of the industry that they cater to. Originally producing goods for chemical filtration in 1991, CMI successfully pivoted products to the auto industry with their signature Slip-Seal product, achieving an 80% market share by 2007. Slip-Seal is a “cash cow” in decline as from 2006-2007 CMI experienced declining revenues and net income, demonstrating the current necessity for CMI to diversify products. CMI’s core strengths lie with its ability to engineer a single, dominating product and maintain market share for a significant amount of time. Another strength is their financial stability to chase a new product and industry through the curled metal cushion pads; this is to say they have sufficient funds to “weather the storm” of entering a new industry for which they have not historically competed. While having experience entering unfamiliar industries, a distinct weakness of CMI is that they must once again market a product to an unfamiliar industry (construction) for which their existing brand’s strength does not resonate.

Competition: Competition for cushion pads in the pile-driving industry is fragmented and limited. CMI’s competitive advantage lies in this fragmentation, particularly given that no competitors “had shown a strong interest or competitive in technical, market, or product development” regarding CMI cushion pads. There is significant opportunity for CMI if their competitors fail to produce competing products before CMI can achieve patent protection. Conventional pads were primarily unbranded with no established market leader and furthermore were only considered a necessary part of pile-driving rather than a work- saving tool. CMI cushion pads have the competitive advantage over conventional pads in that they offer significant efficiencies in reducing overall time for pile-driving jobs, generating cost-savings. This is simultaneously a weakness for CMI: their product has significant implicit value through cost-savings, however the cost-savings cannot be readily realized by the purchaser until after they have used the product. Substitution from objectively cheaper

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