aem 222.1 - Dominion Case Problem: John Bridges of Hamilton...

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Dominion Case Problem: John Bridges of Hamilton Oil Tests has concluded from his tests the Dominion motor is the least efficient of three high profile motors to be used in the conditions found in Canada. If Bridges comes out with his findings to Hamilton’s top management not only would Hamilton most likely not purchase Dominion motors but so will many other Canadian oil companies. Alternative One: Reducing price of 10-hp motor to price of 7.5 hp motor. This solution would be a temporary one that would in essence solve their short term problems. Having a 10-hp motor would give Dominion a competitive advantage to their product. Companies would find this price movement attractive and would be inclined to buy their product. Yet, this is only a short-term solution. So short-term that if Dominion lowered the prices before Bridges published his results, other companies might respond and lower their prices even before Bridges comes out with his results. Additionally, if they lower it after he comes out with the results other companies could just follow the actions of Dominion. Not only that, by lowering their prices, Dominion is almost admitting their product is not as efficient as the other two. Alternative Two: Make a product that would be equal or greater than that of
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This note was uploaded on 09/17/2008 for the course AEM 2220 taught by Professor Perez,p.d. during the Spring '06 term at Cornell University (Engineering School).

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aem 222.1 - Dominion Case Problem: John Bridges of Hamilton...

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