Josiah Doncaster Ltd
Revised 11/03/2010
Josiah Doncaster Ltd
On the 4th of March, the Board of Josiah Doncaster met for the second time in three weeks. The main item on the agenda, as before, was what decision to take on the proposed New Product Strategy, which arose out of the Consultant’s Report commissioned by the Marketing Director. Established in 1740, the company had built up a world-wide reputation for fine household china. Its management was paternalistic, very conservative financially, and committed to preserving company traditions. Yet over the last 10 years the company had extended its product range into industrial porcelains for high-voltage insulation, and it had been very successful. Bill Hawkins, the newly-appointed Marketing Director, opened the meeting with an aggressive presentation. At 35, he was a good 20 years younger than anyone else on the board; and with a Harvard MBA, he was the only member of the board with formal management training. “I hope that certain members of the board have reconsidered their positions since our last meeting. As far as I am concerned, my recommendations of three weeks ago still stand. Let’s go through them once again, shall we? What are the main facts from the Consultant’s report? Let’s take them one by one, shall we? a) b) c) d) e) f) g) h) At a £45 selling price per filter unit, and a market size of 1 million units, the present market size is £45 million. One company, Western Ltd., has an estimated 85% market share. The market does not like working under a monopoly, and especially as Western Ltd. do not give volume discounts. The number of buying points is estimated at 20,000, of which 220 in Birmingham, 150 in London, and 70 in Manchester, take 55% of the total. There are 35 manufacturers of equipment powered by compressed air, who dominate the market; and 15 major suppliers of air compressors. Western’s don’t make a thing themselves -- they assemble bought-in parts. So could we. There is no technical barrier to our entry into
Josiah Doncaster Ltd
On the 4th of March, the Board of Josiah Doncaster met for the second time in three weeks. The main item on the agenda, as before, was what decision to take on the proposed New Product Strategy, which arose out of the Consultant’s Report commissioned by the Marketing Director. Established in 1740, the company had built up a world-wide reputation for fine household china. Its management was paternalistic, very conservative financially, and committed to preserving company traditions. Yet over the last 10 years the company had extended its product range into industrial porcelains for high-voltage insulation, and it had been very successful. Bill Hawkins, the newly-appointed Marketing Director, opened the meeting with an aggressive presentation. At 35, he was a good 20 years younger than anyone else on the board; and with a Harvard MBA, he was the only member of the board with formal management training. “I hope that certain members of the board have reconsidered their positions since our last meeting. As far as I am concerned, my recommendations of three weeks ago still stand. Let’s go through them once again, shall we? What are the main facts from the Consultant’s report? Let’s take them one by one, shall we? a) b) c) d) e) f) g) h) At a £45 selling price per filter unit, and a market size of 1 million units, the present market size is £45 million. One company, Western Ltd., has an estimated 85% market share. The market does not like working under a monopoly, and especially as Western Ltd. do not give volume discounts. The number of buying points is estimated at 20,000, of which 220 in Birmingham, 150 in London, and 70 in Manchester, take 55% of the total. There are 35 manufacturers of equipment powered by compressed air, who dominate the market; and 15 major suppliers of air compressors. Western’s don’t make a thing themselves -- they assemble bought-in parts. So could we. There is no technical barrier to our entry into