(6 pages of text)
After working together on a university business plan, two entrepreneurs worked for three years to develop their venture: Shutout Solutions Inc. Their start-up venture was established in response to an issue familiar to most hockey players: notoriously smelly equipment. While their familiarity with hockey equipment helped them identify a specific problem, subsequent research revealed a much broader issue: the need to clean products made of micro-fibre. Utilizing a technology that addressed the micro-fibre odour issue, they believed they had a five-year opportunity window to develop and profit from the business before it was imitated or superseded. As they considered their options, they realized that they might have to choose to focus their resources on a single product line rather than continue to develop their current portfolio of a detergent, body wash, and spray. They also questioned whether they were using the right channel - gyms and sporting goods stores - to reach customers. The opportunity to pursue bulk institutional sales was also intriguing, though it would require a different sales, pricing, and distribution strategy. Also, they considered how they might respond to an offer to sell the company in its current form.
The case is intended for use in undergraduate or graduate courses in entrepreneurship, including opportunity recognition, new venture creation, and entrepreneurial marketing. Students are challenged to identify the key value drivers in the business, the risks faced by the founding entrepreneurs, and the opportunities that should be pursued. Given the early stage of the company, resources are constrained and trade-off decisions are required. The related issue of company value is also raised, and students should consider what the firm is worth at present as well as how the entrepreneurs might make use of additional financial resources if they bring on additional equity partners.
Canada, Korea, Small, 2011
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