In the popular mid-range horizontal directional drill class, 20,000 lbs. – 50,000 lbs., Ditch Witch drills machine price average 10-20% higher than their sole domestic competitor. Purchased components are critical to the success of drill and historically account for nearly 50% of the unit cost. While sales of drills remain at a high level, at nearly 1,980 units per year from 2014 to 2016, the market characteristic of being an oligopoly allows competition to emphasize any difference where they excel, such as lower upfront cost of ownership. As with all products in today’s competitive purchasing environment, cost matters and with rising machine costs year over year due to purchased parts, even the most Ditch Witch loyal customers may possibly switch brands, which reduces sales, decreases market share and compromises the ability to win over customers from the other competitor. …show more content…
Currently, horizontal directional drills contribute to approximately 50% of Ditch Witch’s overall sales. From 2014-2016, the drill product line contributed an average of 54.3% of revenue to the organization, totaling nearly $453 million. While considered acceptable, the most recent drill project completed came in over $2,900 over the initial cost target. With an estimated annual production of 100 units, an approximate savings of $300,000 could be realized if the target could would have been met. With three new projects in the design pipeline and using the same percentage of target cost overage, an additional $521,000 could be
Stirling Bridge had been a thriving power tool business for over 100 years. The company had sold and distributed power tools and equipment all over the U.S., Europe, and third world countries. Recently one of Stirling Bridge’s top selling products, the Braveheart power tool line, came under attack when consumer agencies conducted research and found many consumers who purchased the power tools were experiencing significant harm and personal injury after use. Stirling Bridge (STIRLING BRIDGE) had identified potential safety concerns with their power tools and hired an independent research company to investigate why consumers were being injured using their power tools, well before the company came under the attack of public agencies.
The current market is divided between a few powerful competitors that can relatively easily attract customers from one another as the switching costs are low and practical absence of product differentiation contributes to the easy loss of market share.
Rivalry among established firms is fierce. There are several factors that illustrate this: established market players (6.1). The product is highly standardized and the switching costs of the customers are low. Players are aggressive (6.2)
A price skimming strategy is recommended for Genicone for Brazilian market to minimize the payback time investment and to thwart other foreign players from entering the market. Market entry mode for Genicon should be licensing or joint venture rather than exporting. This is because licensing and joint venture provides much more control of the operations which is essential in healthcare equipment industry. A global product strategy should be adopted because international standards are similar for surgical instruments. Marketing strategy should be sales promotion for Genicon because this industry is characterized by push-factors of distribution channel, rather than pull-factors of demand. It is anticipated that Genicon will be able to capture a significant market share in a short period of time by following above mentioned strategies and tactics.
Basically, I find it as a good fit for light to medium-duty hammering missions, and can surely perform impressively during asphalt cutting, rock demolition, and sidewalk
Current drilling technology was unable to penetrate the thick rock of southwest Texas and oilmen could only extract the surface layers of oil, unable to tap the vast resources that lay far below. Big Howard came up with the idea for a rolling bit, with 166 cutting edges and invented a method to keep the bit lubricated as it tore away at the rock. Later that year, Big Howard produced a model and went into business with his leasing partner, Walter B. Sharp, forming the Sharp-Hughes Tool Company. Rather than sell the bits to oil drillers, Hughes and Sharp decided to lease the bits out on a job basis, for the tidy sum of $30,000 per well. With no competitor able to duplicate this new technology, Sharp- Hughes Tool possessed a profitable monopoly over oil extraction. So quickly was the invention successful that in late 1908, the partners built a factory on a seventy-acr...
...drilling is not merely something that farmers desire, but it is imperative that they implement it in order to rid the economic struggles that burden rural counties. “A lot of agriculture is hanging on by its fingernails and people end up selling the farms because they can't afford to farm anymore," Roba, the farmer from North Abington Township, said. "At the very least, this makes life easier (Haggerty).”
Black & Decker (B&D) is a global manufacturer and the world’s largest producer of power tools, power tool accessories, electric lawn and garden tools, and residential security hardware. The company was a pioneer in innovation and development of power tools and has used that position to build strong brand names that enjoy worldwide recognition. Key Causes for Poor Performance in the Professional-Tradesmen Segment The reason B&D has performed poorly in the professional-tradesmen segment is due to the positioning of the B&D brand in this segment. Poor positioning of the brand has resulted in customer confusion and negatively impacted customer perception of the brand in terms of being a quality product. B&D Performance in the Power Tool Industry Overall Any adjustments to B&D’s strategy in the professional-tradesmen segment must not have an adverse impact on their success in the consumer or professional-industrial segments. Therefore, a thorough understanding of the needs of each segment will be important in building a viable strategy to challenge Makita in the professional-tradesmen segment, while continuing to maintain share in the other two segments. _Consumer _Segment Professional-Tradesmen Segment This category consists of professionals who are buying a product for their own use on a job site. Their livelihood depends on the quality and performance, as well as the reflection on their skills that using a particular tool brings from others on the job site. Since they are purchasing their own tools, this segment needs this high quality performance at a reasonable price. However, since Makita and Milwaukee are both priced higher than B&D and are seeing greater success in this category, tradesmen are clearly willing to pay more for a product they perceive will be more effective for their use. Key needs for this market segment include: Performance and quality - {text:change} does the job needed to be done, doesn’t break down, produces high-quality results and more efficiently gets the job done. Reliability and durability - does the job every time and can be used for an extended period of heavy continual use. Safety Support from the Manufacturer – if the product breaks or performs poorly, access to replacement parts and service will be key in maximizing performance up-time.
We have all been there. We walk into the garage of our mechanic’s shop, taking a quick glance; we see the huge elaborate toolboxes that each mechanic owns. Most of them are from Mac, Matco or Snap-On. Unless you work in the tool industry most people do not realize what the real cost of each of these boxes is.
The fracking companies are still profitable in fracking at a price of $45 per barrel. Established pipelines and other infrastructure is benefitting the drillers in these areas. Wells in the ‘stack’ are among the best performing assets according to Continental Resources Inc. Also the ‘Permian’, a major oil producing area has been reborn as a result of the combination of horizontal drilling and fracking according to the
Drill-Bits success largely depends on the quality of its products. This has been apparent in both the home market and over seas. Its German manufacturer has kept the same standards as in the U.S. which has lead to a licensing agreement that has been completely satisfactory. Drill-Bit must emphasis the importance of this matter in the licensing agreement with Mexico. One problem that can arise is if the Mexican manufacturer does not comply with the integrity of the manufacturing process to maintain quality. This will lead to a gray market. This might happen if the Mexican manufacturer is not able to charge the same premium as in the home market. Since the U.S. licensor might have established such a good reputation of quality in the U.S. market it is able to command a substantial premium for its product there. In the licensing agreement with Mexico Drill-Bit’s should therefore make a provision that if its drill bits are not to standard, it will revoke its licensing agreement with Mexico.
Second, the rapid development of the Home centers such as The Home Depot, with prices 30% less than the traditional hardware store made Black & Decker to lose market share to Makita. As per Exhibit 2 we could notice that in the home center channel that represent 25%of the trades...
This company manufactures tables and cabinets to hold microwave ovens and portable televisions. Looking at the data, it is apparent that there are ways to make this company more efficient in their manufacturing processes while looking at the overtime hours involved in the operations. Most of this companies products follow the very same assembly and production lines with the difference being that the Saturn microwave stand and the Gemini TV stand both contain a part refered to as 3079 which requires a special lathe in the production phase. This lathe requires a highly train...
Slade’s competitive market is metal product market. It can be analyzed with the Porter’s Five Forces Model: risk of entry by potential competitors, rivalry among established companies, the bargaining power of buyers, bargaining power of suppliers, and threat of substitute products. Appendix 1 shows a summary of the five forces. The risk of entry by potential competitors is high. The capital requirement of small metal companies is not high, so building and establishing this kind of company doesn’t need a lot of resources. Also, Brand loyal of the current existence customers is not very strong thus new entrants are able to compete to enter the market.
Woodman, Chester L., Kurt Kuster. ?Small shop, big decision.? American Machinest (Apr. 2001): 78 EBSCOhost. Online. Nov. 2002 .