Curled Metal Inc Essay
Case: Curled Metal Inc. (CMI)
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 essentially computing an adequate selling price, one that could guarantee the company’s success. The cushion-pads market in the pile-driving industry Despite the importance of cushion pads to the pile-driving process, the market is quite immature, considering that there are no consistent available solutions. The existing cushion pads do not result from a manufacturing process, with different products and competitors, but from ad-hoc solutions resulting from simply cutting pieces of aluminum and micarta with the required dimensions. The most common diameter of the pads is 11 ½ inches, with a direct connection with the usual size of the piles to be driven. From the data provided, it is possible to compute the market size, considering two different scenarios, as follows:
ANNUAL POTENTIAL MARKET (feet driven) Pile hammers owned by pile-driving companies Leased pile hammers (min / max) Total pile hammers in industry (i) Weeks of use per year (ii) Hours of use per week (iii) Standard average actual driving speed (feet/hour) (iv) Total amount of feet of piles driven annually (v)= (i) x (ii) x (iii) x (iv) Pessimistic 13.000 6.500 19.500 25 30 20 292.500.000 Optimistic 13.000 13.000 26.000 25 30 20 390.000.000
As a result of introducing a
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 essentially computing an adequate selling price, one that could guarantee the company’s success. The cushion-pads market in the pile-driving industry Despite the importance of cushion pads to the pile-driving process, the market is quite immature, considering that there are no consistent available solutions. The existing cushion pads do not result from a manufacturing process, with different products and competitors, but from ad-hoc solutions resulting from simply cutting pieces of aluminum and micarta with the required dimensions. The most common diameter of the pads is 11 ½ inches, with a direct connection with the usual size of the piles to be driven. From the data provided, it is possible to compute the market size, considering two different scenarios, as follows:
ANNUAL POTENTIAL MARKET (feet driven) Pile hammers owned by pile-driving companies Leased pile hammers (min / max) Total pile hammers in industry (i) Weeks of use per year (ii) Hours of use per week (iii) Standard average actual driving speed (feet/hour) (iv) Total amount of feet of piles driven annually (v)= (i) x (ii) x (iii) x (iv) Pessimistic 13.000 6.500 19.500 25 30 20 292.500.000 Optimistic 13.000 13.000 26.000 25 30 20 390.000.000
As a result of introducing a