CASE STUDY ONE
GIVING LARGE BUSINESS OEMs AN OUTLET FOR QUALIFIED
PRODUCTS/SERVICES SET ASIDE FOR SMALL BUSINESSES
PREDICAMENT
An
OEM categorized as a large business and accredited as a qualified
source for overhauling aircraft components experienced a
considerable loss of revenue when US Government overhaul
requirements were restricted to small business sources.
Further, the Government
practice increased the supplier
base, sending the selling price into a tailspin which the OEM
was incapable of matching even if
there were no restrictions.
REMEDIAL ACTION
Following
the entrustment of the OEM’s product technology
to Federal Industries through the execution
of a licensing agreement, all subsequent US Government small
business restricted solicitations for
overhauling were quoted by Federal Industries. Federal Industries’ low
overhead and highly
motivated technicians proved strategically superior.
OUTCOME
In the
arena where U.S. Government OEM product solicitations set
aside for small businesses are fiercely
contested, Federal Industries’ small business rating
and aggressive pricing prevailed, saving the OEM from
complete loss of revenue. The OEM realized licensing royalties
and income from the sale of OEM produced
components to Federal Industries, compared to no revenue
at all.
CASE STUDY TWO
HELPING OEMs RECAPTURE AFTER MARKET
SHARE THAT THEY ONCE DOMINATED
PREDICAMENT
An F-18 Fuel Control Valve manufacturer found his after market
share being eroded by
a low-cost second source that replicated the device.
REMEDIAL ACTION
Federal
Industries, Inc. met the threat of further erosion head-on:
hardware was produced
at costs unattainable by the manufacturer. Federal Industries’ skillful
technicians applied
their expertise, minimizing assembly & test costs.
OUTCOME
Further
erosion of the manufacturer’s after market
share was arrested. After market share was regained,
matching its former level; a triumphant undertaking sealed
with generous licensing royalties that
augmented the manufacturer’s bottom line.
CASE STUDY THREE
REVERSING
OEM’S MARKET & REVENUE LOSSES
CAUSED BY SECOND SOURCE
PREDICAMENT
An OEM
of fuel & hydraulic components lost F-16 business
when the prime contractor
awarded the business to a second source.
REMEDIAL ACTION
The
prime contractor tapped into Federal Industries’ licensing
relationship with the
OEM thereby capitalizing on Federal Industries’ strengths – low
overhead and
efficient production operations.
OUTCOME
Federal
Industries’ aggressive pricing, on time deliveries
and quality products enabled the
prime contractor to keep its costs down while surpassing
quality and on-time delivery targets.
This venture culminated in a multi year order and substantial
licensing royalties to the OEM.
CASE STUDY FOUR
RETURNING
UNDER PERFORMING PROPRIETARY PRODUCTS TO PROFITABILITY
PREDICAMENT
Due to diminishing volume and increased costs, an OEM was
faced with curtailing
further effort to support U.S. Government procurement of
helicopter hydraulic
components. Moreover, the resources and assets assigned
to produce the components
could have been reassigned to manufacture products that yielded
higher profitability.
REMEDIAL ACTION
Federal
Industries solved this dilemma by producing the OEM’s
helicopter hydraulic
components under a licensing agreement. Federal Industries
also acquired the OEM’s
parts inventory, which would have been valueless if the
product was discontinued.
OUTCOME
It was
multi-faceted: cash from the sale of the inventory went directly
to the OEM’s
bottom line, the transition was accomplished without
sacrificing user goodwill and
brand loyalty, and a competitively priced, quality product
was delivered on time.
Finally, the OEM’s financial statements benefited from
the expense free revenue
derived from the royalty payments.
When it’s all said and done, we call that a win-win-win.
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