GyroCoaster

Blue Group

Objective

• To create a safe and reliable educational toy, targeting children ages 6-10 years old, in order to save Kids, Inc.

Overview

• Product Description• Business Plan• Future Work

Product Description• The GyroCoaster Concept

– Constructible toy roller coaster• Child constructs a custom track using

track pieces and stanchions• Child can launch the GyroWheel through

the completed track and watch it work

– Educational value• Physical: Hand-eye coordination• Spatial: 3-D sense of space• Logical: Momentum, potential energy,

inertia

– Provides fun and learning for children of all ages

• Expansion sets allow the track to grow with the child

Product Description

Beginner

Product Description

• Stanchion Assembly– Fasten any number of equal height

risers to a base– Add a connector for track connection

Product Description

• Track Assembly– Custom build a track using various

track pieces– Use connectors to fasten track pieces

together and to stanchions

Product Description

• GyroCoaster Advantage

– GyroWheel• More attractive than current

parts

– Magnetism• Counter-acts gravity

– Specialty Pieces• Unique track pieces that only

work with the GyroWheel

Product Description

Intermediate

Product Description

Advanced

Product Description

• Design for Safety– Plastic track with metallic coating– Sleeves on connectors for track assembly– Wider connectors

• Failure Mode and Effects Analysis– Track pieces may shear– Pin at base may shear

Part Severity Occurrence Detection

RPN

Action

  Effects Rating Causes Rating Tests Rating    

Pin at Base Shear 7 Small diameter 4 None 1 28 Sell/Include extra

Rod for Track Shear 6 Small diameter/Poor material 8   1 48 Sell/Include extra

Stanchion Buckling 4 Excess force 2   1 8 None

Sleeve Shear 7 Small thickness 2   1 14 None

Sleeve holder Shear 6 Excess force 1   1 6 None

Business Plan

• The Construction Toy Market– Increasing 21% over the next

4 years– Lego has shown a steady

decrease over the last 3 yearsConstruction Toy Market

Business Plan

• The Roller Coaster Toy Market– Roller Coaster Toy Market is an

expanding portion of the Construction Toy Market

– Roller coaster toys have won numerous educational toy awards in the last 4 years• Scholastic Parent & Child

Teacher's Picks Award (2002)• Great American Toy Test Award

(2003)• Toys ‘R’ Us Ultimate Toy winner

(2004)

Business Plan

Customer Requirements

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Raw 7 8 6 10 10 8 9 6 4 6 5 2 3 8

Weight .08 .09 .07 .11 .11 .09 .10 .07 .04 .07 .05 .02 .03 .09

Co

mp

etito

rs

Skyrail 8 3 4 3 5 5 2 3 7 6 8 8 7 7 5

Marble Works 9 10 6 5 9 1 4 10 1 1 9 8 8 3 5.9

Hot Wheels Tech Trax 5 3 7 5 5 6 8 7 6 9 8 8 7 2 5.8

K’nex Roller Coasters 9 2 5 8 3 5 8 8 2 4 6 8 4 8 5.8

GyroCoaster 9 8 7 5 8 6 8 10 6 9 8 8 7 2 7.1

Competition Comparison (extracted from QFD)

Business Plan

• Our share of the market– Roller coaster toys will gain a large

amount of Lego’s decreasing market share

– GyroCoaster will gain 2.5% of the Construction Toy Market over the next 5 years

Projected Construction Toy Market

Business Plan

Estimated Profit and Losses Statement

Investment Year One Year Two Year Three Year Four Year Five

Sales Revenue  $9,922,500

$12,155,063$14,586,075

$17,229,801

$20,101,435

Returns, etc.   $148,838 $182,326 $218,791 $258,447 $301,522

Materials Cost $3,000,000 $1,686,825 $1,944,810 $2,187,911 $2,412,172 $2,613,186

Manufacturing Cost   $1,686,825 $1,944,810 $2,187,911 $2,412,172 $2,613,186

Depreciation   $496,125 $607,753 $729,304 $861,490 $1,005,072

Gross Profit -$3,000,000 $5,903,888 $7,475,363 $9,262,158 $11,285,520 $13,568,468

R&D $5,000,000 $1,000,000 $500,000 $400,000 $300,000 $200,000

SG&A $2,000,000 $1,475,972 $1,868,841 $2,315,539 $2,821,380 $3,392,117

NEBT -$10,000,000 $3,427,916 $5,106,523 $6,546,618 $8,164,140 $9,976,351

Interest exp.   $342,792 $510,652 $654,662 $816,414 $997,635

Taxes   $1,028,375 $1,531,957 $1,963,985 $2,449,242 $2,992,905

NEAT  $2,056,749

$3,063,914 $3,927,971 $4,898,484 $5,985,811

IRR 23.30%

Business Plan

Net Profit Per Year

Year

Pro

fit

(Mill

ion

s)Break Even Point

Future Work

• Expansion Sets– Includes even more original

and specialty pieces– Attracts return customers

• Enhancements– Lights and Colors– Mechanical Starter– Drive Belt Escalator

Conclusion

• Cutting edge design• Growing market• Open market share

– Capture 2.5% of the market within 5 years

• Profitable Investment– Internal Rate of Return of 23.3%

Questions?

Product Description

  Qty. Bulk Plastic Metallic Paint Steel Total Price Per Item

Base 10 $0.24 $0.00 $1.53 $1.77

Riser 16 $5.02 $0.00 $0.00 $5.02

Non-Stanchion Connector 8 $1.25 $0.00 $0.00 $1.25

Horizontal Connector 8 $1.64 $0.00 $0.00 $1.64

Vertical Connector 4 $0.82 $0.00 $0.00 $0.82

Straight Track 20 $0.98 $0.52 $0.00 $1.50

45° Curve Track 10 $0.41 $0.21 $0.00 $0.62

90° Curve Track 10 $0.72 $0.37 $0.00 $1.09

Twisted Track 8 $0.32 $0.17 $0.00 $0.48

Total Price Per Material   $11.39 $1.27 $1.53  

Total $14.19

Base Product Parts and Cost

Product Description

Loop–the-Loop Tornado

Zig - Zag Corkscrew

Specialty Pieces

Product Description

2*

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Failure Modes and Effects Analysis Calculations

V A d l Ft Ft with F.S. of 3

psi inches2 in. inches pounds force pounds force

4290 0.1963 0.50 24 17.54 5.849

9430 0.1963 0.50 24 38.57 12.85

4290 0.0490 0.25 24 4.379 1.459

9430 0.0490 0.25 24 8.758 2.919

Force T will cause the shearing stress

d T

L

Ft

Product Description

Failure Modes and Effects Analysis Calculations

y σ l Fmax[1] Fmax with F.S. (3)

inches psi inches pounds force pounds force

0.1250 9430 14.00 8.265 2.755

0.1500 9430 14.00 14.28 4.761

0.2000 9430 14.00 33.85 11.28

0.2500 9430 14.00 66.12 22.04

0.5000 9430 14.00 529.0 176.341

Fmax

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8

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Business Plan

Skyrail Marble Works

Hot Wheels Tech Trax K’nex Roller Coasters

Competitors

Business Plan

Selling Price Comparison

GyroCoaster $49.99 Skyrail $49.99

Tech Trax $49.98

Marble Works $36.99

K'nex $68.88

Business Plan

• Competitors’ Awards– Skyrail by Quercetti

• Dr. Toy 10 Best Educational Toy Winner (2003)

– Marble Works by Discovery Toys

• Scholastic Parent & Child Teacher's Picks Award (2002)

• Great American Toy Test Award (2003)

– Hot Wheels Tech Trax by Mattel

• Toys ‘R’ Us Ultimate Toy winner (2004)

– Screamin’ Serpent by K’nex

• Toy Of The Year Award Winner (2002)

Business Plan

Investment Year One Year Two Year Three Year Four Year Five

Sales Revenue            

Returns, etc.   1.5% 1.5% 1.5% 1.5% 1.5%

Materials Cost $3,000,000 17% 16% 15% 14% 13%

Manufacturing Cost   17% 16% 15% 14% 13%

Depreciation   5% 5% 5% 5% 5%

Gross Profit            

R&D $5,000,000 $1,000,000 $500,000 $400,000 $300,000 $200,000

SG&A $2,000,000 25% 25% 25% 25% 25%

NEBT            

Interest exp.   10% 10% 10% 10% 10%

Taxes   30% 30% 30% 30% 30%

Neat            

Estimated Profit and Losses Statement Explained

Business Plan

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$5,985,811

1

$4,898,484

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$3,927,971

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$3,063,914

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$2,056,74954321

RRRRR

RforSolve

%3.23233.0 IRRR

Calculating the Internal Rate of Return

Business Plan

References

Euromonitor International. “Business Intelligence, Company Profiles, Strategic Markets Analysis: Euromonitor International. Euromonitor Plc. May 1, 2005.

Http://www.euromonitor.com

Hot Wheels. Mattel, Inc. April 24, 2005. Http://www.hotwheels.com

K’nex. “The World’s Most Creative Construction Toy”. April 29, 2005.

Http://www.knex.com

Riley, William F., Leroy D. Sturges, and Don H. Morris. “Mechanics of Materials”. Fifth Edition. New York: John Wiley & Sons, Inc., 1999.The LEGO group.

“The Official Website of Lego ® Products”. Lucasfilm Ltd. & TM. April 23, 2005. Http://www.lego.com

U.S. Census Bureau. “Census Bureau Homepage”. April 21, 2005.Http://www.census.gov.