TRACK-O-MAT

Christian BjornliDennis LyRohit NavaleCarla Marcorio

Track-O-Mat

• Circular sticker attached to objects which reflects radio waves• Made of foil aerials with

integrated chemical substances• Software supporting device

Track-O-Mat Usage

• Private usage–Software supporting device

• Logistics–Tracking in real-time basis–Satellite –Globalized service

Market Analysis

• Canada• Over 34 million people• Strong household consumption• High-tech industrial society• Focus on mobility

Strategic Entry

• Advertisement through:–Internet (Wired.com & Business

week)–Social media (Facebook, Twitter)–Offer as a freeware for selected

companies–Blogs

Risks

• Economic risk–Limited partnership

• Political risk–Stable political environment–Democratic country–Safe business environment

• Legal risk–Legal administration affect distribution–Common law country

Benefits and Costs

• Costs–Legal costs–Distribution

• Benefits–Enhance customer satisfaction for

logistic companies–Patent rights–Outsourcing potential

SWOT Analysis

• Strength– Price competitive– Late mover advantage

• Weaknesses– Limited marketing budget– Industry with strong technological firms

• Opportunities– Increase in smart phones– Expansion through available e-shopping

• Threat– Infringement– Already established brand firms

Pricing

• Pricing Factors–Opportunity cost–Similar products

• Differentiating or Cost – strategy–Possibility to differentiate–Existing competition

Financial Evaluation& Assumptions

– Product cost given approximated industry markup 10% - 20%.

– Including 5% corruption of merchandise.

– R&D and After Purchase service tech support

– Financing 50/50 equity and Debt

• Year 1•

• Production• Number of units 50 000,00• Cost per unit 60,00• cost of product - 3 000 000• R&D - 50 000 • service - 90 000,00• Total production cost -3 140 000,00• Financing• Amount of Debt @ 13% 1 570 000,00• Equity 1 570 000,00• Interest expense 204 100,00•

• Earning • Sales Price 72,00• Estimated sale 50 000,00• Total income + 3 600 000,00• Total cost ink debt cost -3 344 100,00• return on Equity 255 900,00•

• Return on Equity % 16,30 %

Relevant discount rate: 10Y Canadian Government bond with 3,23 % coupon

 

Years 0 1 2 3 4 5 6

Investment -$1  

Cash flow 16,3 % 17,0 % 18,0 % 18,9 % 19,7 % 20,7 %

NPV (3,23 % discount rate) $1

 

 

Payback in year 6 when adjusted for opportunity cost of risk free investment;  

 

Cash flow   16,3 % 17,0 % 18,0 % 18,9 % 19,7 % 20,7 %

Accumulated cash flow in absolutes exceeding investment of $1 -0,84 -0,67 -0,49 -0,30 -0,10 0,11

Payback period in absolutes is between 5 and 6 years (5,2)