Introduction
It is imperative to mention that businesses have to deal with numerous issues and complications. The situation is especially problematic when modifications to the products are required, and enterprises were not ready for dramatic changes. It would be reasonable to develop a set of approaches and compare their strengths and weaknesses like in this case.
Discussion
The first suggested alternative is to lower the price of the offered product. The issue is that it would be much more beneficial for enterprises to purchase seven and a half hp motors than ten hp ones because it would allow them to generate $38,25 in savings per every piece bought. Furthermore, the difference is quite significant, and it is especially problematic for large enterprises. Profit margins will be reduced significantly, and it is $292,2 compared to $697,2 before the changes, and such a situation should not be viewed as acceptable (Corey 6). It will be hard to maintain previous numbers because the company would have to sell three or more additional pumps for every oil well. Variable costs could be covered depending on the situation.
The second suggestion was to make modifications to the seven and a half hp motor. The cost of manufacturing is expected to be close to $790 for every piece. Fixed costs also should be considered, and it is $50,49, and the cost of production increases to $840,49 (Corey 7). However, the price needs to be the same if the company wants the product to be competitive, and it is $1200. $359,51 in profits is expected in this case for every product sold. It is much better than the first suggestion, but it is lower than the earnings that the company had while selling an original product without a modification. Moreover, the implementation of other changes may also be quite problematic and would lead to additional expenses.
The third option was to develop a unique product that was based on the requirements of the market. It would have the characteristics of a motor that is rated five. However, the starting torque could be compared to the one of a ten hp product. A $75000 investment should be acknowledged. The cost of production would be $665 and $50,2 in fixed costs, and it is quite similar to a 7,5 motor (Corey 7). Profits for every unit sold are expected to be $330, and it is lower than in other cases. However, this approach has several benefits that should be highlighted. First of all, it meets all the demands of the target market, and a company may get ahead of competitors. Also, five hp motors may be discontinued.
The fourth approach was to influence executives or partner companies and to provide an explanation of why such results may be misinterpreted. However, the issue is that it is likely that they would not listen, and it seems that they are confident in the information received. The enterprise has recognized that it may be beneficial to conduct studies in this area, but it would require additional expenses (Corey 8). Furthermore, it would not be reasonable to focus on this approach, and a second strategy must be prepared.
It would be beneficial if the Dominion Motors & Control Ltd. has devoted attention to a new design, and it is possible to sell the products without reducing the price until a needed motor has been developed. It would not be reasonable to consider the results of the field test because they are questionable, and it was not officially released. New design is needed because the industry has to deal with various changes, and a company needs to maintain its image as one of the leaders (Kotler and Keller 489).
Conclusion
In conclusion, the second option seems to be the most appropriate but is still cannot be viewed as the most efficient approach. Several strategies must be combined to receive the most profits. Overall, the company needs to devote much more attention to research because core information is not studied.
Works Cited
Corey, Raymond E. Dominion Motors & Controls Ltd. Case Study. Boston. Harvard Business Publishing, 1989. Web.
Kotler, Phillip T., and Kevil L. Keller. Marketing Management. 15th ed. New York, NY: Pearson Education, 2015. Print.