Upload
apurv-goyal
View
318
Download
2
Embed Size (px)
Citation preview
Segway Human Transporter
Segway Final PresentationSegway Final Presentation“Can Segway Enter the Tornado?”“Can Segway Enter the Tornado?”
Management 266AManagement 266AProduct Strategy in the Digital EconomyProduct Strategy in the Digital Economy
Charles Chen
Miro Curac
Antonio Gomez
Dwight Huang
Len Tiso
Segway Human Transporter
Presentation Overview Introduction Strategic Assessment: Moore Framework Stakeholders Critical Issues Analysis Bayesian Network Analysis Strategic Implications and
Recommendations
Segway Human Transporter
Introduction Motor-scooter like device Powered by electric motors Movement by shifting
weight, turning wrist Turning radius of zero Designed by inventor Dean
Kamen (150 patents)
Segway Human Transporter
3 Product Models e series - Expeditor (cargo) i series - Industrial (business) p series - Personal (consumer) Commercial models faster, longer
range, heavier Max speed 10.0 - 12.5 mph Maximum distance 14 - 17 miles
(single charge) Device weighs 69 - 95 lbs.
Segway Human Transporter
Strategic Assessment: Crossing the Chasm Segway in infancy stage of TALC Discontinuous innovation
Substitute for walking Value proposition (business and consumer)
Technology enthusiasts Amazon.com auction - $100,000 bids
Visionaries Amazon.com - first customer
Segway Human Transporter
Strategic Assessment: In the Bowling Alley Whole product solutions to niche segments
Pick on someone your own size Enlist the support of the economic buyer
Government services Post office, police departments
Businesses with warehouses Amazon.com, Michelin, GE Plastics
Segway Human Transporter
Strategic Assessment: Inside the Tornado Hypergrowth stage years away Consumers are ultimate target market
Production capacity 40,000 units/month Need to lower price point from $3,000/unit
Media coverage is a double edged sword Builds awareness Overhype sets unrealistic expectations
(e.g. artificial intelligence industry)
Segway Human Transporter
Stakeholders Consumers Businesses Government Services Regulatory Authorities Environmental Interests Electric Industry Petroleum Industry Manufacturing Partners
Segway Human Transporter
Stakeholders: Consumers & Businesses
Stakeholder Groups Parties InterestsConsumers Individuals
Urban commutersLocal shoppersRecreational users
PleasureIncreased mobilitySocial acceptance
Businesses WarehousesPlantsManufacturing facilities
Increased productivity
Segway Human Transporter
Stakeholders: Government and Regulation
Stakeholder Groups Parties InterestsGovernment Services Post office
Police departmentsPark service
Better public serviceIncreased productivity
Regulatory Authorities Federal, state and municipal authoritiesDepartment of Motor Vehicles
Public safety
Segway Human Transporter
Stakeholders: Environmental and Electric Industries
Stakeholder Groups Parties InterestsEnvironmental Interests Environmental Protection Agency
Environmental interest groupsEnvironmental preservation
Electric Industry Battery manufacturersPublic utilitiesElectric vehicle manufacturers
Market demand for electricityTechnological advancement ofelectric products
Segway Human Transporter
Stakeholders: Petroleum and Manufacturing
Stakeholder Groups Parties InterestsPetroleum Industry Automobile, motorcycle and scooter
manufacturersPetroleum exporters
Market demand for petroleumproducts
Manufacturing Partners Suppliers of Segway Corporate profitability
Segway Human Transporter
Critical Issues Analysis
Highlight key issue for each area Political - Regulatory approval Behavioral - Consumer utility Economic - Segmentation Social - Fad or revolution? Technological - Segway imitators
Segway Human Transporter
Bayesian Network
Segway Human Transporter
Bayesian Network Analysis
Base scenario Tornado viability = 12.10% Reasons for low percentage
Harder to enter Tornado than Bowling Alley Regulatory hurdles Consumer value key Ability to supply Competitive threats
Segway Human Transporter
Sensitivity Analysis: Primary Branch Nodes
Market Demand Probability Viability DifferenceBase Scenario – High Demand 20.81% 12.10%Sensitivity Analysis – High Demand 100.00% 46.50% 34.40%Sensitivity Analysis – High Demand 0.00% 3.06% -9.04%
Ability to SupplyBase Scenario – Adequate Supply 56.60% 12.10%Sensitivity Analysis – Adequate Supply 100.00% 16.27% 4.17%Sensitivity Analysis – Adequate Supply 0.00% 6.67% -5.43%
Competitive ThreatsBase Scenario – Low Competition 46.51% 12.10%Sensitivity Analysis – Low Competition 100.00% 16.58% 4.48%Sensitivity Analysis – Low Competition 0.00% 8.20% -3.90%
Segway Human Transporter
Sensitivity Analysis: Regulatory IssuesRegulatory Issues Probability Viability DifferenceBase Scenario - Favorable Regulations 26.74% 12.10%Sensitivity Analysis - Favorable Regulations 100.00% 20.12% 8.02%Sensitivity Analysis - Favorable Regulations 0.00% 9.17% -2.93%
Federal ApprovalBase Scenario - Expedited Approval 95.00% 12.10%Sensitivity Analysis - Expedited Approval 100.00% 12.20% 0.10%Sensitivity Analysis - Expedited Approval 0.00% 10.23% -1.87%
State ApprovalBase Scenario - Expedited Approval 60.00% 12.10%Sensitivity Analysis - Expedited Approval 100.00% 13.68% 1.58%Sensitivity Analysis - Expedited Approval 0.00% 9.73% -2.37%
Municipal ApprovalBase Scenario - Expedited Approval 40.00% 12.10%Sensitivity Analysis - Expedited Approval 100.00% 15.88% 3.78%Sensitivity Analysis - Expedited Approval 0.00% 9.58% -2.52%
Segway Human Transporter
Sensitivity Analysis: Customer Value
Customer Value Probability Viability DifferenceBase Scenario - High Customer Value 39.62% 12.10%Sensitivity Analysis – High Customer Value 100.00% 19.64% 7.54%Sensitivity Analysis – High Customer Value 0.00% 7.15% -4.95%
Consumer ValueBase Scenario - High Consumer Value 66.68% 12.10%Sensitivity Analysis – High Consumer Value 100.00% 14.15% 2.05%Sensitivity Analysis – High Consumer Value 0.00% 8.01% -4.09%
Segway Human Transporter
Sensitivity Analysis: Ability to Supply
Distribution Channels Probability Viability DifferenceBase Scenario – Sufficient Channels 60.00% 12.10%Sensitivity Analysis – Sufficient Channels 100.00% 13.33% 1.23%Sensitivity Analysis – Sufficient Channels 0.00% 10.25% -1.85%
Production CapacityBase Scenario – Adequate Capacity 68.36% 12.10%Sensitivity Analysis – Adequate Capacity 100.00% 13.77% 1.67%Sensitivity Analysis – Adequate Capacity 0.00% 8.48% -3.62%
Segway Human Transporter
Sensitivity Analysis: Competitive Threats
Existing Transportation Probability Viability DifferenceBase Scenario - Effective Substitute 20.00% 12.10%Sensitivity Analysis - Effective Substitute 100.00% 11.30% -0.80%Sensitivity Analysis - Effective Substitute 0.00% 12.30% 0.20%
Alternative Electric TransportationBase Scenario - High Threat 62.22% 12.10%Sensitivity Analysis - High Threat 100.00% 10.55% -1.55%Sensitivity Analysis - High Threat 0.00% 14.65% 2.55%
Segway Human Transporter
Market Valuation (all units in ‘000s)Comparable Industry: Motorcycle and Bicycle Manufacturing Tornado
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7Unit Sales Price (000s) $3.0 $2.5 $2.0 $1.5 $1.0 $0.3 $0.3% of Target Production 2% 10% 30% 40% 100% 500% 5000%Units Produced per Year (000s) 9.6 48 144 192 480 2,400 24,000
Revenue 28,800$ 120,000$ 288,000$ 288,000$ 480,000$ 720,000$ 7,200,000$ COGS 19,987$ 83,280$ 199,872$ 199,872$ 333,120$ 499,680$ 4,996,800$ Gross Margin 8,813$ 36,720$ 88,128$ 88,128$ 146,880$ 220,320$ 2,203,200$ Operating Expenses 6,624$ 27,600$ 66,240$ 66,240$ 110,400$ 165,600$ 1,656,000$ Operating Income/EBITDA 2,189$ 9,120$ 21,888$ 21,888$ 36,480$ 54,720$ 547,200$ Depreciation/Amortization -$ 500$ 1,100$ 1,820$ 2,684$ 3,721$ 4,965$ EBIT 2,189$ 8,620$ 20,788$ 20,068$ 33,796$ 50,999$ 542,235$ Interest Expense -$ -$ -$ -$ -$ -$ -$ EBT 2,189$ 8,620$ 20,788$ 20,068$ 33,796$ 50,999$ 542,235$ Income Taxes 766$ 3,017$ 7,276$ 7,024$ 11,829$ 17,850$ 189,782$ Net Income 1,423$ 5,603$ 13,512$ 13,044$ 21,967$ 33,149$ 352,453$
Capital Expenditures 5,000$ 6,000$ 7,200$ 8,640$ 10,368$ 12,442$ 14,930$
FCF (3,577)$ 103$ 7,412$ 6,224$ 14,283$ 24,429$ 342,488$ Discounted FCF (3,111)$ 78$ 4,874$ 3,559$ 7,101$ 10,561$ 128,754$
Preliminary Valuation $2,984,401
Segway Human Transporter
Sensitivity Analysis - Expected Valuation
Probability ExpectedScenario of Viability Valuation ($M)Base case 12.10% 361$ Hi Market Demand 46.50% 1,387$ Lo Market Demand 3.06% 91$ Adequate Ability to Supply 16.27% 485$ Inadequate Ability to Supply 6.67% 199$ Weak Competition 16.58% 494$ Strong Competition 8.20% 245$
Preliminary valuation = $2.98 billion
Segway Human Transporter
Strategic Implications and Recommendations
Prioritize regulatory approval efforts Municipal approval is key Beta testing with government services
Consider international consumer market first Less automobile oriented urban infrastructure, but less
Segway friendly infrastructure More receptive to cheaper transportation technology
(higher customer value)
Segway Human Transporter
Strategic Implications and Recommendations
Continue expanding production capacity Hypergrowth demands rapid scalability
Continue conservative patent protection policy Barrier to entry in a new market Alternative electric transportation threat
Segway Human Transporter
The Future?
Segway Human Transporter
Segway Videos
Link: http://www.segway.com/connect/multimedia.html