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What Is This Presentation?
A sample business case and template for presenting a new opportunity.
The information in this presentation is fictitious and solely meant to provide a framework for building a business case for a new product or market opportunity.
About Planning Innovations
Our mission: Help technology-driven organizations innovate to power growth.
We achieve this by: Enabling clients with effective and practical innovation methods and training innovators to use them skillfully.
• Empowering innovators
worldwide
• Results-focused learning
programs
• Practical, proven methods
based on of real world projects
• Based in Portland, ORLearn more:
www.planninginnovations.com
DigiPix
An exciting opportunity in next generation digital picture frames.
Your Name Here
DateThe information in this
presentation is fictitious and solely
meant to provide a framework for
building a business case for a new
product or market opportunity.
DigiPix Phase 1 Planning Project - Goals
1. Primary project goals
• Develop clear concept and value proposition
• Develop a preliminary 2-yr roadmap
• Develop business model with ROI
• Create preliminary development estimates
• Complete the plan for the next phase by XX/XX
2. This plan also answers some key questions:
• What is the DigiPix value proposition?
• What is the primary target audience?
• What are the primary use cases?
• What is the preliminary go-to-market strategy?
• Will retailers support this new product line?
Project Team Members
• You
• Development?
• Operations?
• Finance?
• Design?
Provide an overview of the project
goals and who developed the
information – as appropriate.
Some audiences won’t care about
this detail.
Business Case Outline
Executive Summary
Concept Overview
• Consumer Value Proposition
Market Overview
• Market Overview and Value Chain
• Industry position and competition
Opportunity Potential
• Sales and Financial Forecast
Execution
• Development plan
• Go-to-Market plan
• Next Steps Recommendations
Your Business Case should answer these four questions: 1)What is the Opportunity? 2)Will it be Valuable?3)Can we Execute?4)Do we want to Pursue it?
The level of detail should be right
for the type of opportunity, the
required investment and the stage
of investigation.
Executive Overview
• DigiPix is the first truly connected digital photo frame• A new opportunity in an fast-growing
market segment
• Strong 5 year growth based on >25% annual growth in digital picture frames
• Strong value-proposition proven by our consumer research
• Core technology in video displays already in place
• Strong distributor relationships to drive adoption
• Pro forma financials show a medium-risk revenue potential of $30M by year 4 with initial investment of $5M and NPV of $22M over 4 years
The executive summary
should sell the
opportunity and highlight
the main reasons the
opportunity you are
presenting it both 1) good
for the market and 2)
good for the company.
What is DigiPix?
Concept overview and value proposition
DigiPix – Share Precious Memories, Not Pictures.
DigiPix is a new product line that allows users to transfer pictures seamlessly to a digital photo frame over any network.
Imagine...
•You can share your son’s first steps with Grandma.. Automatically.
•Your friends Facebook photos appear where you WANT to see them
•Take a digital picture and send it to all your family’s living room in seconds
•Being able to share videos, slideshows, or just your favorite photo on one device
All without fumbling with software with complicated software.
The concept summary
should highlight key use
cases, benefits and value
drivers that you have
discovered. Especially
those that the competition
doesn’t offer and can’t
match.The focus is WHAT
it does for customers, not
how you will do it.
What Customers Say
• Will pay a 30% premium for our new connected features over current products
• “I would send my mom a new photo everyday! She’d be glued to frame waiting for updates.”
• “I’d replace my current photo frames tomorrow. They’re just dead weight”
• “These are like magic. It looks really easy”
• All consumers we listened to found DigiPix to be unique over current offerings
• 50% of customers we talked with wanted to pre-order the photo frames
• Retailers all supported a special kiosk to highlight the new connected features
Your concept should be
supported by actual
customer input. Let them do
your selling for you! New
concepts should use more
qualitative data, more
mature concepts should use
more quantitative data. Use
back up slides for the
details and further support.
Based on four focus groups of our target consumer –
middle class families with children, use Facebook and have
digital cameras
Market Overview
Why is this a market we should enter?
Target Market - US
DigiPix has two large and growing segments:
1 – DigiPix Purchasers = 38 M digital picture enthusiasts who share photos with family members
• Young professionals 28-45 with children
• Digital camera owner – moving to smart phone cameras
• Share photos on a monthly or greater basis
• Size based on Omnigraph research – 3/11
2 – DigiPix Viewers = >75M family members that desired photo updates and have pictures in their homes
• A much wider market audience – this drives our gift and sharing market
Provide clear information on
WHO you are targeting and
why you are targeting them.
This information is critical to
justify your forecasts later in
the business case.
Market Trends Support DigiPix Potential• Tremendous growth in digital picture taking as
driven by mobile phones
• 35% of mobile Facebook users share photos with friends at least once a week- ephotoweekly 2/11
• Emailing of digital photos has increased an average of 17%/year since 2006 - ephotoweekly 2/11
• Digital photo frames are growing at 5%/year, but connected frames are estimated to grow at 20% in 2012. etrends- 8/10 Provide the most relevant
possible industry data to
support the trends you are
using to justify the
opportunity. If you can’t
show growth in the
underlying drivers, success
is more difficult. Include the
source for all data!
The Timing is Right
Laggards
Early Majority
Innovators
LateMajority
EarlyAdopters
Digital Photo FramesConnected digital picture frames
Facebook integrated picture frames
Digital Photo Frame Market Maturity*
*Estimated maturity based on internal research and strengths of competitors
Use appropriate tools
and graphs to support
your case. In this case
the question of “are we
late? Are we early?”
needed to be addressed.
A market maturity curve
helped address this.
What questions will you
need to address?
Consider these as
objections to your case
that must be removed.
Digital Photo Market Summary
• Industry estimates based on average of two analysts forecasts – eweekly 4/11, iconnect 5/11
• Costs/margins based on internal knowledge
Provide industry forecasts to
show the potential for the
overall industry segment (as
appropriate). Include sources!
Average Frame MRSP $150.002011 2012 2013 2014
Units Sold 1,200,000 1,800,000 2,700,000 3,510,000 ASP $67.50 $63.00 $58.50 $52.50
Manufactuer Revenue $81,000,000 $113,400,000 $157,950,000 $184,275,000
Unit COGS $38.00 $36.00 $34.20 $32.58
Total COGS $45,600,000 $64,800,000 $92,340,000 $114,355,800
Gross Income 35,400,000$ 48,600,000$ 65,610,000$ 69,919,200$ Gross Margin (GI/Rev) 44% 43% 42% 38%
Operating ExpensesTotal Op Ex 11,340,000$ 15,876,000$ 22,113,000$ 25,798,500$
Operating Income 24,060,000$ 32,724,000$ 43,497,000$ 44,120,700$ Op Margin (OI/Rev) 30% 29% 28% 24%
The Competitive Landscape
Have we identified a unique position in the market that is sustainable?
Digital Photo Frame Market
eframeseframes
PhramecoPhrameco
FotodisplayFotodisplay
DigiPixDigiPix
ConnectedUnconnected
IFramesIFrames
FrameConnectivity
Dif
fic
ult
Ea
sy
OK
Ease of Transferring
Photos
- Auto sync with Facebook
- Web-based frame management
- Facebook- Wifi or mobile
- Physical offload only
- Dedicated software
WebframesWebframes
- Wifi only
Limited
An industry positioning
framework helps
provide context for
your market position as
well as clarifies your
key competitors. Use
appropriate axes that
customers would agree
with and shows your
unique position and
value drivers.
Competitor Comparison Matrix
Focus competitive
analysis on the
value drivers
you’ve determined
customers really
value and any other
factors that are
important to your
analysis.
Put detailed
competitor
overviews in
backup slides.
DigiPix Connected frames provide key features that give them a clear advantage for the next 18 months.
Competitors – The Bottom Line
• DigiPix has several attributes that make it a unique product
• No one is currently approaching connected photo frames in a meaningful way
• Competitors have not taken a clear market position to enable connected frames
• Competitors still have difficult to manage connections to update frames
• No one is optimized frames for sharing with Facebook
• We believe we will have an 18 month advantage in a high-growth category
Summary important
sections to clarify
and drive home key
points. Avoid just
sharing a bunch of
information with no
clear conclusions.
Opportunity Potential
How much will the company make? What is the ROI?
DigiPix Financial Assumptions
• We used some of the following assumptions in calculating DigiPix pro forma P&L: • DigiPix will capture similar market
share as our current products after year 2, but higher in year 1 based on our uniquely identified features
• Development will be completed in-house
• COGS estimated based on expected BOM and using standard costs
• Discount rate for NPV calculations of 13%
Provide clear
assumptions
focusing on the top
3-4 that have a
material impact on
your financial
estimates.
P&L Summary
Provide a P&L
summary in your
presentation.
Provide detailed
financials as
handouts and
backup slides. I.e.
don’t display an
“eyechart” that is
unreadable in a
conference room.
Average Frame MRSP $150.00
2010 2011 2012 2013 2014Units Sold 20,000 40,000 60,000 75,000
ASP $67.50 $63.00 $58.50 $52.50
Manufactuer Revenue $1,350,000 $2,520,000 $3,510,000 $3,937,500
Unit COGS $38.00 $36.00 $34.20 $32.58
Total COGS $760,000 $1,440,000 $2,052,000 $2,443,500
Gross Income 590,000$ 1,080,000$ 1,458,000$ 1,494,000$ Gross Margin (GI/Rev) 44% 43% 42% 38%
Operating ExpensesR&D 850,000$
Total Op Ex 850,000$ 189,000$ 352,800$ 491,400$ 551,250$
Operating Income (850,000)$ 401,000$ 727,200$ 966,600$ 942,750$ Op Margin (OI/Rev) 30% 29% 28% 24%
NPV 2,454,902$ IRR 65%
Revenue Upside/Downside Potential
Upside Potential•Going to key internal regions will provide substantial upside
• Europe and Japan can increase forecasts by 50%-75% by year 4
•Product extensions and accessories can provide an additional 70-80% revenue after year 2
Downside Potential
•It’s possible key competitors will be more aggressive than we believe
• Revenue could be off by as much as 50% if this happens
•Consumers may not embrace truly connected frames
• Our research shows they will, however, research is not infallible.
General focus on
“realistic”
forecasts, but
provide additional
upside or
downside
information to
show either
increased or
decreased risk for
the investment.
Preliminary Go-to-Market Strategy
Does Company have the ability to offset competitor moves and gain fast sales and revenue growth?
Key Market Strategic Tactics
• DigiPix success depends on two inter-related activities
1. Fast adoption of DigiPix with our key electronics retailers
• Educate sales people and managers
• Provide clear displays and POS information
2. Fast pull through marketing
• Targeted promotions to get traffic into retailers seeking DigiPix
3. Viral campaigns
• Provide incentives for people with one DigiPix photo frame to supply their whole family with a DigiPix frame.
Provide a summary of
key tactics – not the
entire marketing plan –
unless more details are
required. This is
especially critical for
new-to-market products
where you may need to
educate customers, gain
trials, etc.
Launch Strategy to Drive Rapid Sales
Primary goals: 20,000 units to key retailers in first 6 months after launch
Strategy Goals Tactics Budget
Retailer adoption
100 units/retail location at launch X 100 locations= 10K
• CES launch• Roadshow• Market funds
$150K
Drive pull through
10 units/location on 1st day of launch
• Upgrade campaign• Circular ads• Mail to targeted lists
$300K
Viral sales 30% of purchasers buy at least 1 more
• Email incentives• In-store bundles –
buy 2 get discount
$100K
Other 20% through web sales
• Increase SEO and ecommerce distribution
$30K
Total Launch budget $480K
Path to 20K Units – 1st Year
3/11 6/11 9/11 12/11
Beta - 7/31/1110 Retailer meetings100 beta users
Launch - 6/1110K into channelLaunch promotion
6 Mo. 9/11Xmas promotion!20K sold into channel
9 Mo. - 12/1/12New Years Promo30K into channel25K sold through
Cumulative Sales (Into channel)
0K
20K
10K
10
30K
Tradeshow Launch!
Beta Launch
A graph of sales and
major marketing and/or
development milestones
can pull the whole story
together.
Development Plan Summary
What are we building? How are we building it? And with what?
Product Overview
Attribute
Description Unique Difficulty
Priority
Price Target: $150Cost target: $65
n/a Medium High
LED Our 1st LED frame – provides highest resolution and brightness in industry
No High High
Mobile support
Provide connectivity to frames where wifi is not available.
Yes High High
Facebook integration
Pull photos from Facebook friends Yes Medium High
iTunes integration
Allow user to move videos from iTunes and sync with photo frame
Yes High Medium
Focus any product descriptions on
key differentiators (as supported by
your customer insight). Detailed
specs or features should be available
as backup. Provide priorities and risk
to show credibility.
Development Starts
Alpha release – Internal testing Product
Launch
Cost Reduced ProductMinor enhancements
1-Year Road Map
8/10 1/11 3/11
Beta release – External testing
6/11 12/11
5/11 7/11 9/11 11/11
Provide a clear timeline with
major milestones. Put details
into backup or provide more
details in the main body for a
technical audience.
Summary and Next Steps
DigiPix Conclusion
• DigiPix has the potential to be a significant opportunity for Company
• An exciting, emerging market with clear supporting trends
• Significant revenue with limited commercial risk
• Clear strategic fit with existing products
• A clear, leveraged development path with low technology risk
• We recommend moving forward immediately with the investment of $50K to fund the market validation of this opportunity.
Wrap up with a strong
conclusion that summarizes
your key selling points for
the business case. Ensure
you have a strong
recommendation!
Focus on funding for next
steps rather than full
investment.
Backup Slides
BACKUPMarket Data?
Provide additional proof that there is clear industry data to support your proposed solution
October 3, 2008 34
The iPhone is Changing How Consumers take Pictures
BACKUPWhat Do Customers Say?
Provide additional proof that customers desire your proposed solution
Exploratory Customer Research
As part of developing the DigiPix business case, we initiated exploratory research to:
1. Clarify the target market and value
2. Identify most likely use cases
3. Gain early feedback on concept
Research activities included:
• Eight one-on-one interviews - 11/20 to 12/1
• Four focus groups - Two groups on 12/2
• Retailer discussions – 11/20
Target Profile• Heavy digital picture
users
• Have shared photos with family at least once a month50/50 male/female
• 28 to 45 year old
• 50% own homes
Customer Comments
• "That's cool! I like that it's so easy. Seems too hard now, that's why I don't it.”
• “I could totally see myself using this.”
• “I really like the ability to send photos remotely to my family”
• "This product is sweet!”
• “What’s your timeline? Can I participate in the Beta?”
• Participants were ask to rank on 1-10 rating, “What is your photo frame experience before and after being presented DigiPix”
• Before DigiPix: 6 (range of 3-8)
• With DigiPix: 8 (range of 6-10)
New Product Success Checklist
A study showed a new product has a high chance of success if it meets eight criteria.
We believe DigiPix can achieve all of these:
A unique, superior, and differentiated product with good value-for-money
A strong market orientation - Voice of the Customer built-in
Sharp, early, fact-based definition before development begins
True cross-functional teams: empowered, accountable, resourced
The project builds on core technology and marketing competencies
A growing, attractive market
A high quality launch effort – well planned and resourced
High quality execution for technological activities
Dr. Robert Cooper NewProd studies of over 2000 products, Winning at New Products 2001
Want To Learn More?