DUNCAN INDUSTRIES
Lauren Knott, Brian Taylor, Kelsey Baker
Case Summary
Mark Duncan established Duncan Industries in 1990 in Lachine, Quebec
Duncan Industries sell surface automotive hoist
Hoist lift cars from the ground so that auto mechanics can work on the
underside or tires on the car
Hoists range from $3,000-$15,000 so it is a serious investment for a
business; approximately 49,000 hoists are sold each year in North America
alone
Duncan is the safest and highest quality automotive hoist on the market; but
also one of the most expensive
Duncan hoists mostly sold to automotive outlets that service cars, car dealers
(new and used), specialty shops, and chain stores
Expanded to the United States in 1996; since then sales grew by
$3,490,000

Case Summary Continued
Sixteen competing companies; four Canadian and twelve United States Firms


There are different types of hoists

In-ground (only 21% of hoists sold)

single-post, multiple post

Surface ( 79% of hoists sold)

Two-post, Four-post, Scissor
Only two competitors produced scissor lifts (pictured in first slide); AHV Lifts sold for
20% less than Duncan but did not provide the extra safety features; the second was
a small restricted company, Mete Lifts, who only sold to California and Oregon which
sold for 5% less than Duncan
Safety is an important feature to businesses purchasing the hoists because when they
do malfunction they frequently have serious injuries as an outcome
Duncan Industries had developed a good name for themselves by early 2000; they
had a strong reputation for good quality and customer service

Case Summary Continued(2)
The company saved money by having three types of distributors (a company sales
force, Canadian distributors, and a U.S. automotive wholesaler) and only four
salespeople plus Pierre (who handles the marketing)

Duncan Industries succeeded in the United States and so they started to consider
expanding to Europe as well

The market for the Duncan Lift hoist depended on the number of vehicles in the
country


Four countries in Europe consisted of more than 20 million active vehicles
There were three options for expanding the company into Europe


Licensing- giving Bar Maisse (European company) permission to produce and sell Duncan Hoists for a
profit to Duncan Industries

Joint Venture- a 50/50 proposal where two companies shared the investments and the profits

Direct Investment-Duncan Industries would establish a manufacturing facility alone
The decision was left up to Mark Duncan with the advice and help of Pierre and his
research

Problem Definition



Should Duncan Industries expand the
company to Europe?
If so what part of Europe should Duncan
Industries expand to?
Which investment option should Duncan
Industries use?
SWOT
Strengths





Hoists are fully
hydraulic
Alignment turn plates
A leader in automotive
lift safety
Four patents on the
machinery
Exchange rate
Weaknesses



Hoists are a capital
expense for most
automotive businesses
Exchange rate
Majority of buyers are
not well informed
SWOT
Opportunities


Penetrate the
European market
Expand the North
American market


(Cater to New England and the MidAtlantic States)
Europeans keep cars
longer

(More maintenance needed)
Threats


Majority of hoists sold
are surface lifts
Competitors sold 60%
of all hoists sold last
year
Market Information: Consumers
Financial Statistics 1997-1999
1997
1998
1999
Sales
$6,218,000
$7,454,000
$9,708,000
Cost of Sales
4,540,000
5,541,000
6,990,000
Contribution
1,678,000
1,913,000
2,718,000
Marketing Expenses 507,000
510,000
530,000
Administrative
Expenses
810,000
820,000
840,000
Earnings Before Tax 361,000
583,000
1,348,000
Units Sold
847
1,054
723
Market Information: Competitors
North American Competitors



AHV Lifts

Is the largest U.S. firms

Annual sales of $60,000,000

Focus mainly on the In-Ground and Surface hoists

20% less cost than the Duncan Lifts

Not as many safety features as the Duncan Lifts
Mete Lifts

Small regional company; sales only in California and Oregon

5% less cost than the Duncan Lifts

Not as many safety features as the Duncan Lifts
Courses of Action




We feel it’s a good idea to do a licensing
agreement with Bar Maisse
With the licensing agreement we would
receive 5% sales and the contract is only
for 3 years
This would give Duncan Industries a chance
to get our feet wet in the European market
without a long-term contract
So why not direct-investment or jointventure?
Recommendations
Mark Duncan needs to research what Bar
Maisse has accomplished in the past and meet
with them face to face to discuss the deal in
more detail
Mark and Pierre should go to a trade show in
Europe to research and get more in-depth
information about the market for hoists in Europe
Go to Europe open-minded, in hopes for other
business opportunities
