1. Decision Problem
How to increase market share and maintain rapid growth at the same time, and where.
Duncan Industries sold over 49,000 hoists each year in America. They have two basic types of hoists, in ground and surface which are both service-specific. Typical consumers were automotive outlets that serviced or repaired cars, such as new and used-car dealers, and specialty shops. Additional consumers consist of chains such as Goodyear, Firestone and independent garages. The wheel-alignment market has an 85% of sales the remaining 15% belongs to general mechanical repairs.
There are only 16 companies in the American market, 12 ...view middle of the document...
And once they have this accounts they sell them to individual dealers and operators.
• American wholesalers provides to Duncan Industries with extensive distribution in the US and services its major accounts. However, the Duncan Lift is one of five lifts sold by this wholesaler and was considered a minor product in the total line. It is estimated that the Duncan Lift accounts for less than 20% of the total lift sales of the US wholesaler. DI is concerned the US wholesaler will not want to relinquish additional territory.
• Duncan Industries know there is a unrealized potential for expanded growth into the US market, as studies say market in the US is 10 times bigger than Canadian the opportunity would be an expansion into the US.
• Although it is not a right away priority Duncan Industries realized and keeps an eye on the European market. Research demonstrated a higher number of service repair facilities that require an innovative vehicle hoist such as the Duncan Lift.
• DI developed an information package with product, uses and prices that was distributed to trade shows throughout Canada and the US. It felt that this additional promotional awareness was a key marketing strategy in establishing the Duncan Lift as a global brand.
• Their direct competition coming from AHV and Berne Manufacturing, specially the one coming from AHV because it has an important participation in the market.
• Mete Lift is also a strong competitor because their product is very similar to Duncan Lift and sells it for a lower price. But the main difference is that their product does not include the feature of the safety locking mechanism.
• And another threat that may worry Duncan Industries is that American wholesalers will not relinquish additional US territory.
5. Michael Porter’s 5 Forces Analysis
• European Market
Thanks to the size of the European Market, Duncan Industries may expand and go globally. But still having Canada as a benchmark, if we consider that after-market establishments represent approximately 0.0337% of the total amount of cars on the road. This ratio indicates that approximately 57,000 specialty shops could exist in this market.
• New Office in New York
To open a new office in New York could be very useful because this way Duncan Industries would increase considerably their presence in the eastern part of the states. This is a option that may be appealed because Duncan Industries receives all of their selling price per unit when using...