Curled Metal Inc. By: Sheetal Gwoala Jisun Hong Jacquiline Njiraine Gabriela Silva Betel Solomon

Deciding the price of the CMI cushioning pads Problem Deciding the price of the CMI cushioning pads

Pricing Analysis The percentage of cost to price is approximately 8% to 21% The profit is to be distributed between salaries for the top management and engineers. The profit will also help bridge the gap between the profits of last year and this year.

Alternative Pricing The cost to price percentage is 15% to 40% The profit margin is way less than what it will be if the new equipment is bought This does not bridge the gap between the profit loss from the previous year to this year.

Assumptions Such sophisticated product has never been sold in pile driving industry therefore the price will be based on perceived value Industry leader, will give us competitive advantage Projected cost data based on the manufacture of only one pad size and assumed these numbers would not vary dramatically with a mix of sizes.

Strategy Product differentiation The CMI cushion pads eliminate downtime making them a work-saving tool The CMI cushion pads contain no hazardous materials Significant cost savings while using CMI pads

Conventional pads Vs CMI pads

S.W.O.T analysis Strength Able to manufacture high performance cushion pads that will last longer CMI posses great processing technology It will help companies to save a significant amount of time and lower costs Weakness The ambiguity of pricing and distributing the pads 

S.W.O.T analysis(cont.) Opportunity Little attention to pads give advantage to CMI cushion pad no dominant firm has emerged Approval from professor McCormack will create an awareness and recognition from the pile driving industry Threats  Hesitation from Pile hammer distributing/renting companies since the pads enable a constructor to return the equipment faster. Need industry acceptance for the pads  

The VRIO Framework Costly to Imitate? Exploited by Organization? Competitive Implications Valuable? Rare? Yes Yes Yes Yes Sustained Advantage For value – it will increase revenues Rare – there is no competition No duplicates The firm has the resource and capability to produce the pads

Pricing Solutions Price CMI cushion pad higher than regular cushion pads because it is a work-saving tool and lasts longer CMI should use existing equipment to manufacture cushion pads Using existing equipment to produce cushion pads brings higher profit margin Target contractors who have bigger complex projects and can purchase the pads in a large scale

Recommendations Built a brand name for the CMI cushion pad with the focus on a work saving cushion pad Use construction-oriented manufacturer representatives to sell the product to engineering/construction contractors. Advertise the product in the Oklahoma Contractor magazine Feature the cushion pad in the “Piletalk” seminar Use Professor McCormack approval to boost the brand name