case: CMI
9-580-104
REV: AUGUST 16, 1985
BENSON P. SHAPIRO
JEFFREY J. SHERMAN
Cumberland Metal Industries: Engineered
Products Division, 1980
Robert Minicucci,1 vice president of the Engineered Products Division of Cumberland Metal
Industries (CMI), and Thomas Simpson, group manager of the Mechanical Products Group, had spent the entire Wednesday (January 2, 1980) reviewing a new product CMI was about to introduce.
(See Exhibit 1 for organization charts.) The room was silent, and as he watched the waning rays of the sun filtering through the window, Minicucci pondered all that had been said. Turning toward
Simpson, he paused before speaking.
Curled metal cushion pads seem to have more potential than any product we’ve ever introduced. A successful market introduction could as much as double the sales of this company, as well as compensate for the decline of some existing lines. It almost looks too good to be true.
Simpson responded, “The people at Colerick Foundation Company are pressing us to sell to them.
Since they did the original test, they’ve been anxious to buy more. I promised to contact them by the end of the week.”
“Fair enough,” Minicucci said, “but talk to me before you call them. The way we price this could have a significant impact on everything else we do with it.”
The Company
Cumberland Metal Industries was one of the largest manufacturers of curled metal products in the country, having grown from $250,000 in sales in 1963 to over $18,500,000 by 1979. (Exhibit 2 shows CMI’s income statement.) It originally custom fabricated components for chemical process filtration and other highly technical applications. Company philosophy soon evolved from selling the metal as a finished product to selling products that used it as a raw material.
The company’s big boost came with the introduction of exhaust gas recirculation (EGR) valves on
U.S. automobiles. Both the Ford and Chrysler valve designs required a high temperature seal to hold
REV: AUGUST 16, 1985
BENSON P. SHAPIRO
JEFFREY J. SHERMAN
Cumberland Metal Industries: Engineered
Products Division, 1980
Robert Minicucci,1 vice president of the Engineered Products Division of Cumberland Metal
Industries (CMI), and Thomas Simpson, group manager of the Mechanical Products Group, had spent the entire Wednesday (January 2, 1980) reviewing a new product CMI was about to introduce.
(See Exhibit 1 for organization charts.) The room was silent, and as he watched the waning rays of the sun filtering through the window, Minicucci pondered all that had been said. Turning toward
Simpson, he paused before speaking.
Curled metal cushion pads seem to have more potential than any product we’ve ever introduced. A successful market introduction could as much as double the sales of this company, as well as compensate for the decline of some existing lines. It almost looks too good to be true.
Simpson responded, “The people at Colerick Foundation Company are pressing us to sell to them.
Since they did the original test, they’ve been anxious to buy more. I promised to contact them by the end of the week.”
“Fair enough,” Minicucci said, “but talk to me before you call them. The way we price this could have a significant impact on everything else we do with it.”
The Company
Cumberland Metal Industries was one of the largest manufacturers of curled metal products in the country, having grown from $250,000 in sales in 1963 to over $18,500,000 by 1979. (Exhibit 2 shows CMI’s income statement.) It originally custom fabricated components for chemical process filtration and other highly technical applications. Company philosophy soon evolved from selling the metal as a finished product to selling products that used it as a raw material.
The company’s big boost came with the introduction of exhaust gas recirculation (EGR) valves on
U.S. automobiles. Both the Ford and Chrysler valve designs required a high temperature seal to hold