Ivey Publishing
Northern Drilling Inc.: The Mond Nickel Contract Decision - A Tactical Dilemma in a Growth Strategy
Product Number:
9B12A038
Publication Date:
08/13/2012
Revised Date:
11/08/2012
Length:
9 pages (6 pages of text)
Product Type:
Case (Field)
Source:
Ivey
Northern Drilling Inc., an exploration diamond-drilling contractor, has been asked to tender a bid for a lucrative, highly complex contract with Mond Nickel. Northern has no drills or crew currently available to work on the contract, which requires experienced drillers. Compounding the issue is a shortage of skilled labour in the industry. At the same time, Northern's biggest client, Noranda Nickel, is seeing poor geological results on a job in the same area. Northern's management needs to decide whether to incur additional costs and leave a capacity cushion in an effort to maintain its excellent relationship with its current client, or whether it should instead utilize the drills on the new job. The primary issue facing Northern's management is whether Northern can handle the new contract, both financially and technically, without compromising the current job.
Learning Objective:
The case provides sufficient information for students to analyze the following: (a) The financial implications of the various options. (b) The customer relationship sensitivities. (c) The operational constraints of fulfilling the contract. (d) The strategic implications of not bidding, not winning, or winning and delivering poor performance. (e) The strategic initiatives that might be put in place to mitigate risk.
Issues:
Disciplines:
Marketing,  General Management/Strategy
Industries:
Mining, Quarrying, and Oil and Gas Extraction
Setting:
Canada, Medium, 2011
Intended Audience:
Undergraduate/MBA
Price:
$4.25 CAD / $4.25 USD Printed Copy
$3.75 CAD / $3.75 USD Permissions
$3.75 CAD / $3.75 USD Digital Download
Associated Materials
Translations: Simplified Chinese (9 pages)
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