Lauren Knott, Brian Taylor, Kelsey Baker Duncan Industries Lauren Knott, Brian Taylor, Kelsey Baker

Case Summary Mark Duncan established Duncan Industries in 1990 in Lachine, Quebec Duncan Industries sell surface automotive hoist Hoist lift cars from the ground so that auto mechanics can work on the underside or tires on the car Hoists range from $3,000-$15,000 so it is a serious investment for a business; approximately 49,000 hoists are sold each year in North America alone Duncan is the safest and highest quality automotive hoist on the market; but also one of the most expensive Duncan hoists mostly sold to automotive outlets that service cars, car dealers (new and used), specialty shops, and chain stores Expanded to the United States in 1996; since then sales grew by $3,490,000

Case Summary Continued Sixteen competing companies; four Canadian and twelve United States Firms There are different types of hoists In-ground (only 21% of hoists sold) single-post, multiple post Surface ( 79% of hoists sold) Two-post, Four-post, Scissor Only two competitors produced scissor lifts (pictured in first slide); AHV Lifts sold for 20% less than Duncan but did not provide the extra safety features; the second was a small restricted company, Mete Lifts, who only sold to California and Oregon which sold for 5% less than Duncan Safety is an important feature to businesses purchasing the hoists because when they do malfunction they frequently have serious injuries as an outcome Duncan Industries had developed a good name for themselves by early 2000; they had a strong reputation for good quality and customer service

Case Summary Continued(2) The company saved money by having three types of distributors (a company sales force, Canadian distributors, and a U.S. automotive wholesaler) and only four salespeople plus Pierre (who handles the marketing) Duncan Industries succeeded in the United States and so they started to consider expanding to Europe as well The market for the Duncan Lift hoist depended on the number of vehicles in the country Four countries in Europe consisted of more than 20 million active vehicles There were three options for expanding the company into Europe Licensing- giving Bar Maisse (European company) permission to produce and sell Duncan Hoists for a profit to Duncan Industries Joint Venture- a 50/50 proposal where two companies shared the investments and the profits Direct Investment-Duncan Industries would establish a manufacturing facility alone The decision was left up to Mark Duncan with the advice and help of Pierre and his research

Problem Definition P R O B L E M Should Duncan Industries expand the company to Europe? If so what part of Europe should Duncan Industries expand to? Which investment option should Duncan Industries use?

SWOT Hoists are fully hydraulic Alignment turn plates Strengths Weaknesses Hoists are fully hydraulic Alignment turn plates A leader in automotive lift safety Four patents on the machinery Exchange rate Hoists are a capital expense for most automotive businesses Exchange rate Majority of buyers are not well informed

SWOT Penetrate the European market Expand the North American market Opportunities Threats Penetrate the European market Expand the North American market (Cater to New England and the Mid- Atlantic States) Europeans keep cars longer (More maintenance needed) Majority of hoists sold are surface lifts Competitors sold 60% of all hoists sold last year

Market Information: Consumers

Financial Statistics 1997-1999 1998 1999 Sales $6,218,000 $7,454,000 $9,708,000 Cost of Sales 4,540,000 5,541,000 6,990,000 Contribution 1,678,000 1,913,000 2,718,000 Marketing Expenses 507,000 510,000 530,000 Administrative Expenses 810,000 820,000 840,000 Earnings Before Tax 361,000 583,000 1,348,000 Units Sold 723 847 1,054

Market Information: Competitors North American Competitors AHV Lifts Is the largest U.S. firms Annual sales of $60,000,000 Focus mainly on the In-Ground and Surface hoists 20% less cost than the Duncan Lifts Not as many safety features as the Duncan Lifts Mete Lifts Small regional company; sales only in California and Oregon 5% less cost than the Duncan Lifts

Courses of Action We feel it’s a good idea to do a licensing agreement with Bar Maisse With the licensing agreement we would receive 5% sales and the contract is only for 3 years This would give Duncan Industries a chance to get our feet wet in the European market without a long-term contract So why not direct-investment or joint- venture?

Recommendations Mark Duncan needs to research what Bar Maisse has accomplished in the past and meet with them face to face to discuss the deal in more detail Mark and Pierre should go to a trade show in Europe to research and get more in-depth information about the market for hoists in Europe Go to Europe open-minded, in hopes for other business opportunities