Business Model
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1. Select which business model Alex should pursue and defend your answer.
I believe Alex should pursue the “License the idea” business model. This business model allows Alex to minimize his risk by partnering with Angel investors and allows him to pursue another job while still drawing a royalty check. This business model is also best for his personal situation. His wife is still in school and he is straight out of school so this is not the time to accept a large amount of risk. Alex can license his idea thus making some money off his idea and establishing some business contacts. This experience along with his grades will make his resume very attractive to future employers.
2. Perform a SWOT analysis for the business model you selected.
Strengths-
A patented product
Partnership with established investors that can provide the appropriate funding
Weaknesses-
The O-fold is just one product where the competitors in the luggage industry have several products.
Higher overall key costs compared to competitors
Market opportunities-
Online sales via the internet
Entering into alliances or joint ventures to expand the firms market coverage and boost its competitive capability
Threats-
Loss of sales to substitute products
Inability to enter a joint venture
Change in air travel rules that restrict weight even more
3. As a part of the management team, how would you handle distribution and marketing of the O-Fold?
I would handle distribution and marketing by myself in the crawl phase by the use of a website and local merchants for distribution. Marketing would be focused online ads and ads in travel magazines. Once a partnership with an investor was established, I would maximize their distribution and marketing contacts.
4. What is the exit strategy for your selected business model, how long will it take you, and what key points will signal the time to exit?
The exit strategy would be to make the company successful enough to attract a larger company in the luggage industry that was interested in purchasing our company. I believe a year or two after I partnered with an Angel investor I would have enough historical data to show the growth of this company and this data would make my company attractive to buyers. I believe the key point to selling is gaining the attention of a buyer. Since my company only