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Curled Metal Inc.—Engineered Products Division Case Solution & Answer

Curled Metal Inc.—Engineered Products Division Case Study Solution

CASE OVERVIEW

Curled Metal Inc. is the leading company that provides raw materials to the outside vendors. The company flattens and curls material for cushion pad. Moreover, the freelancer uses the cushion pads to constrain the piles. The biggest problem that the company is the decline of sales which is due to the change pricing strategy. It is also considered that how the company would manage the sales of the company which is decreasing due to the impact of changing pricing decision. Joseph Fernandez is the vice president of the Curled Metal Inc, and Jivaro Sandal is the group manager of the Mechanical products group. They both spend lots of time in reviewing the ideas and strategies of a new product which they are interested in launching in the market in order to boost its sales of the company as well as generate the maximum profits from the market.

The Vice President of the company, Joseph Fernandez stated that the product which the company is going to launch in the market have more potential than any other products that the company produces in the past years. He is also expected that through this launch the company would double the sales as well as reimburse the turn down of various existing lines. However, the company focuses more on implementing the new marketing and strategic methods that would help the company in generating more sales and profit in the organization. Both Rajiv and Joseph are responsible for managing and formulating the new strategy for its latest products. The primary concern is the price to charge for the cushion pad. This case highlighted the main issues that the company faced in order to achieve its steady business growth. As a result, the company put significant efforts in analyzing the business strategies for its products as well as align price with these strategies.

PROBLEM STATEMENT

The main problem that the company faced is deciding the prices of the Curdle Metal Inc cushioning products. To launch the new product in the market, Curdle Metal need to evaluate the variety of marketing decisions that would help the company in achieving the steady business growth in the market. The first thing that the company needs to consider is its pricing strategy for its new metal products. Secondly, the company also needs to consider which marketing channels that the company needs to cater in order to achieve its steady business growth. Thirdly, the company also needs to consider that how much investment company required installing its new manufacturing equipment. Moreover, based on its pricing strategies, the company makes the decision of implementing its marketing and decision-making process for its products. The company also faced issues in recognizing the benefits that the company needs in order to achieve its strategic goals and objectives.

ANALYSIS

Cushion pad is the product which both Fernandez and Sanwal discussed in order to achieve the strategic goals of the company. The cushion pads are the part of the process of driving piles. The pads transmit the energy from the hammers to the piles. The main quality of this cushion pads is that they transfer the force from the pad without creating heat, and always remain resilient enough to prevent shock. In this case, we will discuss and analyze the pricing decisions of the company which it makes in order to maintain the sales of the company. If the company need to maintain the pricing strategies and marketing channels of the company than it is necessary for the company to analyze the safety and efficiency of its products. The following factors companies need to consider before implementing the pricing strategy for its new product.

As compared to conventional pads, the cushion pads are much safer. The workers handle the super heated pads that are risky for the workers as they have the possibility of being burned. As compared to tartaric pads, the cushion pads are less heavy and have less chance of being back or injured. The main advantage of this cushion pads is that reduces the chance of being injured due to the heat and less heavy than other pads. The cushion pads have several efficiency advantages which include cost reduction, purchasing influence, and market penetration. As per the analysis of the performance of all pads, it is evaluated that cushion pads drive approximately 33% efficacy rather than other pads. It is further evaluated that cushion pads increase the efficiency of the pads five times as well as increase the 20% pads efficiency in the driving piles.

Kendrick foundation company
  Conventional pads CMI Pad
piles Required 300 300
Feet per piles 50 50
Total Feet per job 15000 15000
Total Hour per job 100 75
Cost per hour as given in case $714 $714
Total cost per job excluding pads $71,400 $53,550
Number of sets Required 20 1
Cost per set $150 $1,199.94
total cost of pads per job $3,000 $1,199.94
Total cost per job $74,400 $54,749.94
Total cost per foot $4.96 $3.65
Total cost of foot $248.00 $182.50
Total Cost included 20%Profit margin $297.60 $219.00
Sales Price   $219.00

It is expected that the demand of the conventional pads was decreasing continuously due to which the management of the company was concerned about the financial position of the company. However, CMI pads are incurring low manufacturing cost as compared to the conventional pads as it was $ 4.96 earlier now it is expected to be $3.65 per foot due to which total price would be $219. Hence, the customers would be ready to pay above $219 but if the price involved greater profit margin then it would be difficult for customers to purchase CMI pads.

Corey company
  Conventional pads CMI Pad
piles Required 300 300
Feet per piles 40 40
Total Feet per job 12000 12000
Feet driven per hour 160 200
total hours per job 75 60
cost per hour $714 $714
Total cost per job excluding pads $53,550 $42,840
Number of sets Required 50 1
Cost per set $120 $1,199.94
total cost of pads per job $6,000 $1,199.94
Total cost per job $59,550.00 $44,039.94
Total cost per foot $4.96 $3.67
Total cost of foot $198.50 $146.80
total cost included 20% profit margin $238.20 $176.16
Sales price   $176.16

 

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