Presentation on theme: "Curled Metal Inc. By: Sheetal Gwoala Jisun Hong Jacquiline Njiraine"— Presentation transcript:
1 Curled Metal Inc. By: Sheetal Gwoala Jisun Hong Jacquiline Njiraine Gabriela SilvaBetel Solomon
2 Deciding the price of the CMI cushioning pads ProblemDeciding the price of the CMI cushioning pads
3 Pricing AnalysisThe 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.
4 Alternative Pricing 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 boughtThis does not bridge the gap between the profit loss from the previous year to this year.
5 AssumptionsSuch sophisticated product has never been sold in pile driving industry therefore the price will be based on perceived valueIndustry leader, will give us competitive advantageProjected 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 toolThe CMI cushion pads contain no hazardous materialsSignificant cost savings while using CMI pads
8 S.W.O.T analysis Strength Able to manufacture high performance cushion pads that will last longerCMI posses great processing technologyIt will help companies to save a significant amount of time and lower costsWeaknessThe ambiguity of pricing and distributing the pads
9 S.W.O.T analysis(cont.) Opportunity Little attention to pads give advantage to CMI cushion padno dominant firm has emergedApproval from professor McCormack will create an awareness and recognition from the pile driving industryThreats 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 Costly to Imitate? Exploited by Organization? CompetitiveImplicationsValuable?Rare?YesYesYesYesSustainedAdvantageFor value – it will increase revenuesRare – there is no competitionNo duplicatesThe firm has the resource and capability to produce the pads
11 Pricing SolutionsPrice CMI cushion pad higher than regular cushion pads because it is a work-saving tool and lasts longerCMI should use existing equipment to manufacture cushion padsUsing existing equipment to produce cushion pads brings higher profit marginTarget contractors who have bigger complex projects and can purchase the pads in a large scale
12 RecommendationsBuilt a brand name for the CMI cushion pad with the focus on a work saving cushion padUse construction-oriented manufacturer representatives to sell the product to engineering/construction contractors.Advertise the product in the Oklahoma Contractor magazineFeature the cushion pad in the “Piletalk” seminarUse Professor McCormack approval to boost the brand name