Sales Manager
Curled Metal Incorporated has declining sales, but has developed a new product (curled metal pile driver pads) that, in field tests, deliver customer benefits that are many times CMI's manufacturing costs. Joseph Fernandez and Rajiv Sanwal of CMI's Engineered Products Division are responsible for formulating a strategy for the new product. A key issue is the price to charge for the pads. The case raises issues of analyzing market potential, aligning price with business strategy, and the implications of a price on development and execution of integrated strategic options.
Learning Objective:
To calculate customer benefits and examine other factors that affect willingness to pay and the implications for pricing. To allow students to develop and debate integrated strategic options based on different pricing possibilities. To illustrate the interdependent nature of elements across the value chain in developing and implementing strategy for a new product.
Subjects Covered:
Competitive advantage; Distribution; Pricing; Product introduction; Strategic planning; Strategy; Valuation
Executive Summary
1. We see the company considering the penetration to the new market with a new product. After testing, their prototype cushion pads, consisting of curled metal, performed superiorly to asbestos pads, which are currently the industry standard compliment product to pile drivers.
2. Despite the fact that there's no such a product on the market at the moment. The company is likely to face competition from the asbestos pads market (a substitute product)
3. The potential market demand for pads could range between 174,000 to 234,000 per year
4. The traditional distribution structure for asbestos cushion pads is not well established. The company must be aware a key characteristic CMI of market players and influencers in order to tailor their marketing strategy.
5. The critical issues that company shall prepare a sound solutions for relate to product
Learning Objective:
To calculate customer benefits and examine other factors that affect willingness to pay and the implications for pricing. To allow students to develop and debate integrated strategic options based on different pricing possibilities. To illustrate the interdependent nature of elements across the value chain in developing and implementing strategy for a new product.
Subjects Covered:
Competitive advantage; Distribution; Pricing; Product introduction; Strategic planning; Strategy; Valuation
Executive Summary
1. We see the company considering the penetration to the new market with a new product. After testing, their prototype cushion pads, consisting of curled metal, performed superiorly to asbestos pads, which are currently the industry standard compliment product to pile drivers.
2. Despite the fact that there's no such a product on the market at the moment. The company is likely to face competition from the asbestos pads market (a substitute product)
3. The potential market demand for pads could range between 174,000 to 234,000 per year
4. The traditional distribution structure for asbestos cushion pads is not well established. The company must be aware a key characteristic CMI of market players and influencers in order to tailor their marketing strategy.
5. The critical issues that company shall prepare a sound solutions for relate to product