5. Assumptions
Such sophisticated product has never been sold in pile
driving industry therefore the price will be based on
perceived value
Industry leader, will give us competitive advantage
Projected cost data based on the manufacture of only one
pad size and assumed these numbers would not vary
dramatically with a mix of sizes.
6. Strategy
Product differentiation
The CMI cushion pads eliminate downtime making them a
work-saving tool
The CMI cushion pads contain no hazardous materials
Significant cost savings while using CMI pads
8. S.W.O.T analysis
Strength
Able to manufacture high performance cushion
pads that will last longer
CMI posses great processing technology
It will help companies to save a significant amount
of time and lower costs
Weakness
The ambiguity of pricing and distributing the pads
9. S.W.O.T analysis(cont.)
Opportunity
Little attention to pads give advantage to CMI cushion pad
no dominant firm has emerged
Approval from professor McCormack will create an awareness and
recognition from the pile driving industry
Threats
Hesitation from Pile hammer distributing/renting companies since
the pads enable a constructor to return the equipment faster.
Need industry acceptance for the pads
10. The VRIO Framework
Valuable? Rare?
Costly to
Imitate?
Exploited by
Organization?
Competitive
Implications
Yes Yes Yes Yes Sustained
Advantage
11. Pricing Solutions
Price CMI cushion pad higher than regular cushion pads
because it is a work-saving tool and lasts longer
CMI should use existing equipment to manufacture cushion
pads
Using existing equipment to produce cushion pads brings
higher profit margin
Target contractors who have bigger complex projects and
can purchase the pads in a large scale
12. Recommendations
Built a brand name for the CMI cushion pad with the focus on a
work saving cushion pad
Use construction-oriented manufacturer representatives to sell
the product to engineering/construction contractors.
Advertise the product in the Oklahoma Contractor magazine
Feature the cushion pad in the “Piletalk” seminar
Use Professor McCormack approval to boost the brand name
Notes de l'éditeur
The percentage of cost to price is approximately 8% to 21%
The profit is to be distributed between salaries for the top management and engineers.
The profit will also help bridge the gap between the profits of last year and this year.
The cost to price percentage is 15% to 40%
The profit margin is way less than what it will be if the new equipment is bought
This does not bridge the gap between the profit loss from the previous year to this year.
For value – it will increase revenues
Rare – there is no competition
No duplicates
The firm has the resource and capability to produce the pads
