Curled Metal - Case Study

Other strategy might be focusing on the distributors which might add value by the convenience of availability and delivery and it would be a nice incentive for the distributor to get rid of conventional type pads instead foster the sales of CMI product with higher price and for use with higher absolute margin. I would recommend the second as most sustainable and successful way of placing the product into market.

Thirdly, option is to strategically adjust the prices of their products because consumers are often very price sensitive. By doing so the company can either create more value that defines the quality and quantity of the product.

Introduction Curled Metal Inc. originally sold metal as a finished good but has later developed its business concept to transforming metals into high value added manufactured products. Early in 2008, the company was about to launch a new product, which could revolutionize its business, setting a new standard in the pile-driving market: CMI cushion pads. However, this product launch poses key strategic issues to the company, ranging from assessing manufacturing capacity to defining the product value proposition. In the roadmap to the launch CMI has also to consider how to approach the market, identifying key customers or/and influencers, positioning its new product, assessing distribution alternatives and

The Decisions the company needs to take are what price should be charged for it, and how to market it to the costumers (channels).

Curled Metal Inc. (CMI) specializes in selling metal-based products to various markets. With over $55 million in annual sales (FY 2007, Exhibit A), they’ve managed to capture 80% of the automobile industry’s market share by developing and selling a highly specialized product, Slip Seal, designed just for auto manufacturers. They’ve seen a recent slip in sales (a loss of nearly 10% from 2006 to 2007, Exhibit 2), and the pressure is on them to diversify their product line and decrease dependence on the auto industry. They’ve recently developed a new product that aims to revolutionize the pile-driving industry. The introduction of the CMI Cushion

Cumberland Metal Industries (CMI) was a company which sold metal as raw material in other products. After the company had developed the product – Slip Seal that could meet the demanding specification of the automakers, it had grown rapidly over the past decade. The sales increased from $750,000 in 1991 to over $55 million in 2007. However, the sales decreased from 61 million in 2006 to 55 million in 2007, a net decrease of 9.5%, the net profit decreased from 5.7 million in 2006 to 3.5 million in 2007, a net decrease of 38.7%. The company was under the pressure to diversity its products in order to increase the sales and the net profit. CMI had developed new product, curled metal

Curled Metal Inc (CMI) is a company whose strategy evolves selling products that used certain types of metal as a raw material. CMI rapidly grow in the last decade due to Slip-Seal, a product that meet the demanding specification of the automaker imposed by US strict environment legislation. In order to diversify offer from auto industry, CMI’s management decided to examine a new application for curled metal technology.

There is certainly a market for this product. It is the market that is currently dominated by asbestos pad and micarta slab users, and is comprised of uneducated (about cushion pads) and price-sensitive customers. Prior to CMI’s involvement, “the pile-driving industry had paid very little attention to cushion pads.” There was no dominant manufacturer, little-to-no branding, and ambiguous distribution channels.

Owens & Minor is a distributor of surgical and medical supplies to hospitals and other health care facilities. Due to changing demand from customers, the company is facing increased operating costs, which has resulted in lower profit margins and even losses. In 1993, O&M recorded an $18 million profit, which was reduced to a loss of $11 million in 1995. The entire industry is experiencing similar difficulties. In an effort to resume profitability, O&M is evaluating alternatives to “cost-plus pricing”. Cost-plus pricing does not reflect the true cost of the services provided by O&M. Customers are demanding more of O&M while

Littlefield Technologies (LT) has developed another DSS product. The new product is manufactured using the same process as the product in the assignment “Capacity Management at Littlefield Technologies” — neither the process sequence nor the process time distributions at each tool have changed. The LT factory began production by investing most of its cash into capacity and inventory. Specifically, on day 0, the factory began operations with three stuffers, two testers, and one tuner, and a raw materials inventory of 9600 kits. This left the factory with zero cash on hand. Customer demand

CGC had to be on the leading edge of the latest technology and also exceed the customer’s expectations. Research and development was a critical part of its success and future success that CGC had to place major focus on. They had to maintain their market edge plus solidify their hold as the market leader by consistently releasing new models that differentiated it from competitor’s products and CGC’s own products as well. If a product stayed in the market too long, the sales would eventually peak and then start a downward trend, so getting out at the peak is the key.

We encourage CMI to identify the top contractors and dispatch sales representatives to educate these companies on the benefits of the new CMI metal cushion pad in comparison to what is currently being offered in the market (asbestos pads). The sales representatives can use the results from the Colerick and Fazio tests to demonstrate the advantages of switching to CMI metal pads. Allowing them to test the product before paying will only improve brand reputation and overcome price objections. We know they are very interested in making money, thus we can assume they are interested in saving as much time and money as possible throughout each pile driving job. Contractors bid on job contracts by estimating the amount of time it would take to drive the specified piles the distance required, and by utilizing the new CMI metal pads and simultaneously minimizing the associated time per job, these contractors can win more jobs and produce more efficient work overall. Once independent pile-driving companies such as Colerick and Fazio try the product and see the unique value and advantages that CMI pads offer, they can promote the product through word of mouth and by exemplary job execution which will in turn help aid in making CMI pads the new industry standard and most well-known pile-driving pad brand.

As CMI’s pads are a new product and that the pile-driving industry has paid little attention to cushion pads prior to CMI’s involvement, there is no other manufacturer that dominates the industry and therefore there is major room for growth. The product seems to be capable of generating a recurring revenue stream. There do not seem to be any barriers. Once CMI becomes the first and therefore, preferred provider of these pads, there is little reason for a customer to switch to a

In order to execute successfully on his growth plan, Rountree would need to re-assess Ohmeda’s marketing channel strategy. In 1985, 43% of equipment sales ($41M out of $95M) were booked through dealers. Dealers provided increased coverage, but also carried significant

The strategy for setting a product’s price often has to be changed when the product is part of a product mix. In this case, the firm looks for a set of prices that maximizes its profits on the total product mix. Pricing is difficult because the various products have related demand and costs and face different degrees of competition.