Professional Documents
Culture Documents
Agenda
Background and Key Issues Internal/External Analysis Alternatives Assessment and Recommendation Implementation Plan Contingency Plan Conclusion
Background
Chris Jenkins, Stan Uhm, and Talbot McInnis are Engineering students at University of Western Chris and Stan are graduating, Talbot has one more year Project generated interest from the media, investors, and entrepreneurs
Background
Golf is a growing form of recreation (2.5% annual growth) Approx. 21.5% of Canadians golf
Trio must decide on a course of action quickly to protect idea and to earn income
Key Issues
Technology
Need to develop prototype into marketable product
Expertise
Need to ensure expertise in start-up is in place
Risk
Level of acceptable risk for group
Key Issues
Value-chain proposition
Is the product viable and sustainable? Do consumers exist?
Start-up Capital
How much financing is required. Where will it be obtained?
Income
How long will the partners be without income? Will they need another job? How high is the potential income?
Key Issues
Importance Urgency
Low
High
Low
Technology
High
Strengths
Award-winning engineering project
(Ontario and Canadian design competitions)
Interest from media, articles in 2 local newspapers, and interest from investors and entrepreneurs No product in the market that provides the same range of information as the Analyzer at an affordable price
Internal Analysis
Design Features: records time and position, displays measurements, affordable, portable, could be used with or without a ball
Weaknesses
Engineering students with no big capital to invest in a business Limited experience and connections Golf retail industry is highly seasonal Need to obtain patent for Canadian and U.S. jurisdictions Advanced features dependent on computer
Opportunities
Golf is a growing sport Large number of core golfers Baby boomers are primary market Leading sport brand for golf analyzer equipment Indoor golf training so that golf is no longer seasonal Flexible technology with potential for several uses based on software (ie. Simulator)
Threats
Idea could be copied before it is patent protected Better funded competitors Rapid technological advancement Similar technologies exist Patent litigation
Porters 5 Forces
MED HIGH
numerous competitors
cheap to develop new technology
offering wide variety of features and price points for the consumer
LOW
individual component parts are cheap
HIGH
many alternatives
and abundant
HIGH
several similar products exist
1998
(estimated)
Source for Data: Ipsos Reid, The 2006 Golf Participation in Canada Report
17%
15% 2%
57%
Green Fees
Travel
Apparel
Equipment/Accessories
Training Accessories
Competition Analysis
Alternatives
Try to develop and market the analyzer independently Accept offers like Jack Lowes to help grow a company License the analyzer technology to a firm like Sports Simulations Inc. and collect royalties only License the analyzer technology to a firm like Sports Simulations Inc. in exchange for working for them too
Do it independently
Pros Maintain control Largest share of profits Cons Very expensive Inexperienced Riskiest individual venture Need to raise capital No short-term income
Get partners
Pros Maintain most control Large share of profits Attain some expertise Cons Very expensive Inexperienced Risky venture Need to raise capital No short-term income
Criteria
Income
Timeliness and magnitude of compensation
Expertise
How much expertise is required or offered by alternative
Risk
How much risk must be shouldered by trio
Financing
How financially stable is the alternative
Technology
How familiar the alternative is with manufacturing and troubleshooting the technology
Decision Matrix
Criteria Weight Go it Alone 1 1 1 1 Find Partners 1 3 3 3 License Only 3 5 5 5 License & Work 3 5 4 5 Income Expertise Risk Financing 0.25 0.25 0.25 0.15
Technology
TOTAL
0.10
1.0
1
1.0
3
2.5
4
4.4
4
4.15
1 (unfavourable) to 5 (favourable)
Decision
License the technology to a firm such as Sports Simulation Inc. or others for royalty fees. Negotiate a 12 month contract with the company to work/develop final product or else seek employment elsewhere.
Implementation Plan
Date
June 03
Activity
Hire a lawyer. Incorporate numbered company. Sign shareholders agreement.
Responsible
Uhm, Jenkins, McInnis, Lawyer
Cash Flow
($5000)
June 03
$10,000
June 03
Write business plan and prepare a Pro Forma Statement Seek SBL from bank.
July 03
$50,000
July 03
Identify a patent lawyer. Start Patent application process for USA and Canada. Continue refining prototype for development of production specifications.
($20,000)
July 03
($5,000)
Implementation Plan
Date
July 03
Activity
Initiate formal bargaining process between company and Sports Simulation Inc. Conclude negotiations for patent licensing with Sports Simulation Inc. Enter employment negotiations for Uhm and Jenkins with Sports Simulation Inc. McInnis is back to school.
Responsible
Uhm, Jenkins, McInnis, Lawyer Uhm, Jenkins, McInnis, Lawyer Uhm, Jenkins
Cash Flow
($5000)
McInnis
Uhm and Jenkins start employment somewhere at Sports Simulation Inc. Final product to mass manufacture.
Uhm, Jenkins
Feb 03
Uhm, Jenkins
Implementation Plan
Sources of Financing
Family and Friends $10,000 SBL $50,000
Expenses
Legal Fees $30,000 Hardware/Software $5000 Salaries $25,000
Contingency Plan
If negotiations for employment are unsuccessful, Uhm and Jenkins will seek employment elsewhere If unable to license patent, sell patent entirely Failure to find an immediate firm to license the patent to, new companies will be approached
Conclusion
To minimize Risk and maximize potential Income and product Expertise, the product should be patented and licensed to a sports company familiar with the technology and the market. QUESTIONS?
Appendix
7 Ps of Marketing
Product Price Promotion Place Packaging Positioning People
Specialty and Training Equipment 1992 2002 $400 Million $1.7 Billion
Royalty Analysis
Breakeven Analysis
Depending on the proportion of Labor and General expenses that go directly into the pockets of the trio, they will need to sell between 3000 and 8000 units per year to earn $50,000 each.