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Case Study Number 1

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Submitted By cami311
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1. The changes in the Canadian market for oil pump motors are based around the new pricing of electricity, which now depends on motor size. This has a big impact on oil companies. Not only will they be more likely to purchase lower horse powered motors, but also they will be able to save a vast amount of money by doing this. If a company now decides to buy a 7.5-hp motor as oppose to a 10-hp motor, then they will be saving $38.75 per month and in just 19 months the company will recoup the cost of a new motor. Additionally if the company decides to buy a 5-hp motor as oppose to a 10-hp motor, then the oil company will be able to save $75 per month, and in just 8 months, they will be able to recoup the cost of a new motor. If an oil company were looking to purchase brand new motors then they would be looking at a price of $1,045 per 5-hp motor, $1,200 per 7.5-hp motor, or $1,580 for a 10-hp motor.
I would say that this has a hammer affect on the industry for multiple reasons. First of all, this would encourage oil companies like Hamilton to purchase motors with lower horse powers rather than higher power motors (10-hp) not only because of how much savings they will have as listed previously above, but because of the penalization for having over-motoring motors. In addition this could affect the situation going on with Dominion and Hamilton because some of Dominion’s solution alternatives require boosting the starting torque, which could potentially increase the horsepower of the motor, hence increasing the charge per month.

2. Through Bridges’ test results, Hamilton is aiming at knocking Dominion motors off the high horse and reduce some of their market share. They are giving DMC reasons to doubt their current line of products and publicize their so-called ‘inferiority’ in product compared to the products of their major competitors. This may have

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