Duncan Industries Sample

Manufacture:Surface automotive hoists (product used by garage, service station & other repair shops to lift cars for servicing.

Marketing Manager:Pierre Gagnon prepared a feasibility report which outlines Market opportunities in the European Union & entry options available.

Mark Duncan thought process:1.Not sure if his company is ready for this move.2.Believed with more effort sales in US can be increased.3.Doubtful about success in Europe although believed there were some positive aspects to the European Idea.

Duncan Industries:Mark Duncan was a design engineer who worked for a Canadian subsidiary of a US automotive hoist manufacturer. In 1990, Mark left the company to start his own business with the purpose of designing & manufacturing the hoist. Marks employer had no objections to Mark’s plan to start a new business.

Over the next Mark obtained financing from a venture capital firm, opened a plant in Lachine, Quebec, & began manufacturing & marketing the hoist, called the DUNCAN LIFT.

Information about the product:1.The original design included a scissor lift and a safety locking mechanism that allowed the hoist to be raised to any level & locked in place. 2.The scissor lift offered easy access to the mechanic to work on the raised vehicle. 3.The hoist was fully hydraulic & had no chains or pulleys, it required little maintenance. 4.Another key feature was the alignment turn plates that were an integral part of the lift.

The turn plates meant that mechanics could accurately & easily perform wheel alignment jobs. 5.Because it was a surface lift, it could be installed in a garage in less than a day. 6.Mark continually made improvements to the product, including adding more safety features.

Purpose of a hoist:To lift an automobile into a position where a mechanic or service person could easily work on the car.

Customer view of the product:Duncan Lift developed a reputation in the industry as the “MERCEDES” of hoists; the unit was judged by many as superior to competitive offerings because 1.Of its design2.The quality of workmanship3.Safety features4.Ease of Installation5.Five year warranty

Growth of Duncan Industries:1991: Units sold: 23 units; Sales: $172,500Majority of the sales were the independent services station & garages specializing in wheel alignment in the Quebec & Ontario market, most of the units were sold by Pierre, who was hired in 1992 to handle the marketing side of the operation.

1994: Pierre began using distributors to sell the hoist to a wider geographic market in Canada. 1996: He signed an agreement with a large automotive wholesaler to represent Duncan industries in the US market. 1999: The Company had sold 1054 hoists & had sales of $9,708,000 (60% of sales from US & rest 40% from Canada)

Industry:Firms purchasing hoists were part of an industry called the Automobile after-market. This industry was involved in supplying parts & services for new & used cars& was worth more than $54 billion at retail in 1999 whileserving approx. 14 million cars on the road in Canada. Hoist is a capital expense for most businesses.

Approx. 49,000 hoists were sold each year in North America. Hoists were typically purchased by any automotive outlet that serviced or repaired car, including new-car dealers, used car dealers, specialty shops (eg. Muffler repair, transmission repair, wheel alignment), chains (eg., Firestone, Goodyear, Canadian tire), & independent garages. Approx. 30% of all units sold in a year were purchased by new-car dealers.

Pierre estimated that 85% of company sales were to the wheel alignment market in service centers like Firestone, Goodyear, & Canadian Tire, & independent garages that specialized in wheel alignment. About 15% of sales were made to customers who used the hoist for general mechanical repairs.