Powerdrive Motors At the time Tom Cross took over as managing director at Powerdrive Motors in South

Powerdrive Motors

At_the_time_Tom_Cross_took_over_as_managing_director_at_Powerdrive_Motors_in_South_
Africa,_the_company_was_an_established_manufacturer_of_small_electric_motors_with_a_strong_
reputation_for_product_reliability_and_technical_leadership._On_the_downside,_it_was_also_
regarded_in_the_trade_as_having_high_prices_and_variable_delivery._Toms_first_task_was_to_
tackle_the_huge_product_variety_on_offer._He_saw_this_as_the_major_problem_in_addressing_
the_negative_views_in_the_marketplace,_and_also_saw_opportunities_in_streamlining_design_
and_production._The_product_range_was

Powerdrive Motors

At_the_time_Tom_Cross_took_over_as_managing_director_at_Powerdrive_Motors_in_South_
Africa,_the_company_was_an_established_manufacturer_of_small_electric_motors_with_a_strong_
reputation_for_product_reliability_and_technical_leadership._On_the_downside,_it_was_also_
regarded_in_the_trade_as_having_high_prices_and_variable_delivery._Toms_first_task_was_to_
tackle_the_huge_product_variety_on_offer._He_saw_this_as_the_major_problem_in_addressing_
the_negative_views_in_the_marketplace,_and_also_saw_opportunities_in_streamlining_design_
and_production._The_product_range_was_replaced_with_a_new_generation_of_designs_based_
on_a_few_hundred_modules,_which_could_be_assembled_in_many_different_combinations_
to_give_variety_ at_low_cost._ This_meant_
the_loss_of_ some_customers_who_had_gone_
toPowerdrive_because_they_could_rely_on_the_companys_technical_leadership_to_produce_
designs_that_suited_their_particular_needs._This_was_not_considered_important_because_the_
combined_sales_volume_of_such_customers_was_under_5_per_cent.
Using_ the_ new_ designs,_ Tom_ was_ now_
able_ to_ reorganise_ the_ factory_ into_
cells_ that_ produced_ major_ subassemblies_ such_
as_ rotors_ and_ stators._ The_ work_ flow_
was_ transformed,_and_manufacturing_throughput_time_was_reduced_from_six_weeks_to_just_
four_days._Cost_improvements_meant_that_average_price_reductions_of_between_10_and_
15_per_cent_could_be_offered. Powerdrives_
customer_ service_ policy_ was_ redrafted_ to_
offer_ quotations_ within_ a_ maximum_of_one_hour_of_any_enquiry,_and_for_deliveries_of_finished_product_to_be_made_
within_one_week_anywhere_in_northern_Europe._This_new_policy_was_explained_to_internal_
sales_staff,_and_to_sales_representatives_and_agents_employed_by_the_organisation._If_old_
customers_wanted_special_designs_that_were_no_longer_in_the_range,_the_sales_staff_were_
instructed_to_explain_Powerdrives_new_policy_and_politely_decline_the_order.
At_ first,_ business_ soared._ Impressed_ by_
the_ lower_ prices_ and_ short_ delivery_
times,_ customers_flocked_to_Powerdrive_and_sales_jumped_by_50_per_cent._But_then_things_began_
to_go_sour._First,_the_factory_could_no_longer_cope_with_the_demands_being_placed_on_
it._The_addition_of_a_large_order_for_lawnmower_motors_blocked_out_a_lot_of_production_
capacity_from_January_to_June._Order_lead_times_during_this_period_in_particular_slid_back_
to_former_levels._Second,_a_Brazilian_supplier_spotted_the_opportunity_to_enter_the_market_
with_prices_ that_ undercut_ Powerdrive_by_
20_per_cent._Whilst_ only_half_ of_
the_product_ range_ was_ covered_ by_ this_
new_ entrant,_ it_ was_ the_ high_ volume_
products_ that_ were_ especially_ threatened._
Further,_ the_ new_ competitor_offered_ three-day_
lead_ times_from_ stock_ that_had_been_
established_in_ the_country._Third,_ some_of_
the_former_customers,_ who_could_no_longer_obtain_their_bespoke_designs_from_Powerdrive,_were_complaining_
within_the_industry_that_Powerdrives_technical_leadership_had_been_sacrificed._Although_
small_in_number,_such_customers_were_influential_at_trade_fairs_and_conferences.

Questions

1 Characterise_the_changes_in_the_market_segments_using_the_concept_of_order_winners_
and_qualifiers.

2 Evaluate_the_changes_that_took_place_in_the_marketing_mix_and_how_this_impacted_on_the_
fulfilment_of_different_market_segments_needs_(in_terms_of_OWC_and_QC)_by_logistics.