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Generico Inc An Example of a Complete Business Plan
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Generico Inc,An Example of a Complete Business Plan. Executive Summary 1,The Company 4,The Market 5,q Industry Trends 6. q Market Segments 8,q The Competition 9,q The Customers 14. Marketing and Sales 15,q Marketing Strategy 15,q Sales Plan 16. Products 17,q Automaton 10 17,q Future Products 18.
Development Plan 18,Implementation Plan 21,q Inventory 22. q Staffing Requirements 22,q Facilities 22,Management 23. Financial 25,Generico Inc,An Example of a Complete Business Plan. EXECUTIVE SUMMARY, Generico Inc was formed in August 1997 to develop manufacture and market a flexible. product line of highly cost effective assembly robots Generico s initial product the Automaton. 10 will be directed specifically at printed circuit board manufacturers While a prototype has yet. to be built the design and specifications of the product are substantially complete. Generico s robotics products whether addressing the electronics industry or other light. assembly manufacturing applications all share a common goal production flexibility and cost. reduction for end users Current and future Generico products encompass proprietary designs. which yield substantial benefits over competitive products as follows. q Simplicity Manifested in ease of use and maintenance in addition to lower cost of. manufacture, q Performance Capacity Six axis movement ranging from 30 inches per second IPS at 30.
grams or less to 20 IPS at four kilograms maximum capacity in the Automaton 10. q Precision Limitless repetition to an accuracy of 001 inch. q Flexibility Smaller size reduces space requirements and allows either permanent ceiling. or floor mounting or portable applications, q Price Performance Significant savings to end users through state of the art performance. at highly competitive price performance ratios,Generico Inc. An Example of a Complete Business Plan, As domestic labor costs continue to increase and the logistics of foreign production become ever. more burdensome the demand for robotics solutions to these problems becomes more and more. evident The robotics market has grown substantially from a base of approximately 20 million. in 1988 to an estimated 320 million in 1996 Both DATAASK and the Rebel Group predict the. domestic market to reach 1 7 billion by 2000 As foreign labor costs continue their inevitable. rise the global market for robotics is expected to approach 3 5 billion by 2000 Generico. believes it can realistically capture 3 of the domestic market or 54 million by its fifth year of. operations, Underlying the phenomenal growth anticipated for the robotics industry is an equal or faster. growth in competition among manufacturers of a wide range of products requiring a flexible. process as products change These manufacturers must find ways to achieve manufacturing. flexibility while containing costs Generico s products address this issue by incorporating. reprogrammability which reduces the need for additional capital equipment and worker. retraining To the extent the assembly process is labor intensive as labor costs rise Generico s. products can also reduce the average hourly cost of assembly. Generico is seeking 2 5 million in first round financing The funding will enable the company. to build its product line to implement aggressive sales and marketing plans and to establish an. initial manufacturing facility The company anticipates that the initial round will be sufficient to. carry it to profitability and to allow building assets to a level where outside debt financing can. be obtained to fund further growth, Initial revenues are expected in the second half of 1998 The company is anticipated to become.
profitable during 1999 Revenue and profit information for the first five years is summarized. Year 1 Year 2 Year 3 Year 4 Year 5,millions 0 7 8 2 18 4 36 2 54 0. Net Income,millions 1 0 0 4 1 2 3 8 6 1,Generico Inc. An Example of a Complete Business Plan,Management, The ultimate success of Generico will be dependent upon management s ability to develop an. innovative product line and to cost effectively deliver the line to a large and receptive market. Generico s founding executives comprise the following high calibre professionals whose. experience will create immense synergy for the company. Vincent Losciallo CEO Former CEO and founder of MIME Inc a multimillion dollar. manufacturer of robot welders and painters acquired by Major Motors in 1993. Stephen Daniels V P of Marketing Twelve years of industrial marketing experience. culminating as a divisional marketing director for a Fortune 500 manufacturer of capital. Harold Ginjeans V P of Engineering Former design engineer at MIME Inc Ginjeans. was a major contributor to the MIME 1982 the company s largest selling product to date. Priscilla Sproviero Controller Seven years of Big Six accounting experience the last. two of which were consulting to start up businesses Stanford MBA. George Forrester Director of Manufacturing Former director of manufacturing at Acme. Inc a 100 million producer of audio visual equipment and microwave ovens. Each of the founders has contributed substantially to the company in the form of sweat equity. and capital Management believes that it is addressing a market destined to grow substantially. with a well conceived line of products It is confident that both market share and revenue. projections will at a minimum be achieved in the projected time frame. Generico Inc,An Example of a Complete Business Plan. THE COMPANY, Generico Inc was founded in the summer of 1997 to address one of the major problems facing.
manufacturers of electronic components and systems today achieving flexible manufacturing. while containing costs, As competition within the electronic component peripheral and system markets continues to. flourish pricing pressures push margins lower and lower Ultimately only those companies. manufacturing at the peak of efficiency will survive Generico has been formed by a team of. experienced executives to design a line of products whose sole purpose is to provide. manufacturing flexibility and cost efficiency by,q Providing reprogrammability for assembly tasks. q Increasing manufacturing productivity,q Enhancing accuracy. q Reducing supervisory and other indirect labor costs. q Substantially converting what was previously a variable cost labor into a fixed cost. capital equipment thus increasing profit margins at volume production and allowing. process changes to be made without adding new or additional capital equipment. During its first two years of operation Generico will focus only on U S and Canadian markets. Beginning with its third year the company will pursue foreign markets concentrating on. European users Potential major customers with whom Generico s marketing and product. design personnel have already spoken include MBI Inc Board Technologies Pear Computers. Inc Hillhatch Peripherals and Fullsiz Computer Corp The aggregate revenues of these five. companies surpass 15 billion The response to the design summaries has been extremely. Generico s guiding corporate philosophy will encompass high quality innovative products. unparalleled service and competitive prices,Generico Inc. An Example of a Complete Business Plan,THE MARKET, Two years ago assembly robotics manufacturers were seen as some of the most attractive.
prospects by the investment community Unfortunately the market growth projections have not. materialized in the earlier anticipated time frame. Notwithstanding the disappointing performance over the short term Generico management. remains convinced that the commodity priced nature of the electronics industry makes achieving. manufacturing flexibility while containing costs the key issue in the management of such. companies Coupling that with growing trade protectionism foreign instability currency. exposure and other business risks endemic to foreign production leads to the conclusion that. robotics assembly of products will become increasingly more important in the future Thus the. growth curve has not flattened but merely been pushed out on the time axis by two to. three years, According to Robots on Parade ROP a major trade group the total domestic market for. robotics products grew from 63 million in 1994 to 320 million in 1996 a compounded growth. rate of greater than 50 Using the same figure and extrapolating to 2000 results in an annual. domestic market of over 2 billion Industry and trade group estimates on growth rates for the. industry are for a compounded growth rate of 30 35 for the period from 1997 2000. Generico Inc,An Example of a Complete Business Plan. Table 1 below shows actual domestic growth within the industry for the past eight years and. projected growth to 2000,U S ROBOTICS MARKET,DATAASK 1996. Year Units ASP Sales MM in Sales,1989 650 55 000 36 N A. 1990 1 050 60 000 63 75,1991 1 850 63 000 117 86,1992 2 075 62 000 129 10.
1993 2 760 63 000 175 36,1994 5 120 63 000 320 83,1995 7 000 66 000 465 45. 1996 9 500 61 000 580 25,1997 13 300 60 000 800 38. 1998 17 600 59 000 1 040 30,1999 23 000 59 000 1 350 30. 2000 30 000 58 000 1 750 30,Industry Trends, As competitive pressures from both domestic and international sources continue to rise. managers are being forced to closely scrutinize their product cost The problems are. particularly acute in the electronics industry where volume production and heated competition. have resulted in extremely thin margined commodity pricing. Industry managers are now compelled to increase productivity maintain or improve quality. and reduce labor costs Otherwise they will suffer the same consequences U S manufacturers. of televisions did in the 1960 s and 1970 s i e slowly wither away as a result of foreign. competition,Generico Inc,An Example of a Complete Business Plan.
Many industrial experts including Wanda Fleming of the Industrial Group Inc and George. Davis of McBan Co a major industry consultant feel the competitive realities facing U S. manufacturers of electronic products will result in near explosive growth in the domestic. assembly robotics market during the next decade The reason for the expected growth is that. robotics address the competition head on by allowing manufacturers to. q Increase productivity while maintaining or improving quality. q Tie in with long term strategies to out perform foreign competitors. q Cost effectively utilize the innovations within the industry. q Reduce labor costs, Supporting the data above is the unavoidable fact that the growth rate of U S industrial. productivity in both heavy and light industries has decreased substantially over the past. decade The year to year increase in 1984 was 4 2 In 1996 it was 8 The most alarming. aspect of the figures is that increases in foreign productivity have been astronomical over the. same period Japan for instance went from 2 8 to 5 3. At the same time U S producers of automobiles and electronic products have yielded a. substantial domestic market share to foreign competition as evidenced by the following table. PRODUCERS MARKET SHARE,DATAASK 1996,1982 1988 1996. Domestic 87 79 63,Foreign 13 21 37,Non consumer Electronic. Domestic 97 91 82,Foreign 3 9 18,Consumer Electronic. Domestic 89 72 57,Foreign 11 28 43,Generico Inc,An Example of a Complete Business Plan.
In 1996 Japan had 50 000 industrial robots in place in a work force of approximately 10 million. The U S however had about 15 500 robots in place out of its workforce of about 19 5 million. Perhaps more importantly some 85 of U S robots were applied in heavier utilization. welding painting etc In Japan the split between heavy and light applications i e electronic. assembly was approximately 50 50 Clearly Japan the number one competitor for U S market. share of electronic products has established robotics production as a priority in its long term. Market Segments, The domestic market for robotics spreads across five major and distinct industries The. automotive industry has been by far the largest consumer of robotics products using them. primarily in painting and welding operations The other industries include foundry and heavy. manufacturing aerospace and defense electronic assembly consumer products and other. While the automotive industry has shown the most impressive growth in robotics applications. to date it is the electronics assembly market that will be the growth sector of the future This is. the market which Generico will be addressing, Electronic American in its 1996 issue featuring robotics products by market segment projected. the installed base of robotics products in the U S to be as follows. PROJECTED INSTALLED BASE BY INDUSTRY,1997 1999 2001 2003. Auto 12 000 18 000 25 000 35 000,Foundry 3 000 5 000 7 000 7 000. Aerospace and defense 2 000 6 000 8 500 10 500,Consumer products 3 000 6 000 7 000 11 000.
Electronics assembly 8 500 14 500 23 000 40 000,Other 2 500 5 500 6 500 7 500. Total installed,base units 31 000 55 000 77 000 111 000. Generico Inc,An Example of a Complete Business Plan. As the U S economy continues to move away from smokestack industries it becomes apparent. that the exciting growth will occur in industry areas where substantially higher value is added. through both technical product design and state of the art production methods As clearly. evident in the previous table electronics including aerospace automotives and consumer. products will experience high growth, Generico s target market then is demand driven The company s products will fill an urgent. and dissatisfied need within the market,The Competition.
Currently there is a wide spectrum of roughly 30 companies addressing the robotics market. They range from the multibillion dollar MBI Inc to the four or five startups concentrated on. the West Coast, As Generico s strategy is to address the light manufacturing and electronics markets this plan. does not address manufacturers focusing on other markets In addition Generico management. is convinced that those companies addressing the automobile and foundry industries such as. Muscle Machines Inc Ergoarms Corp Koniyoki Heavy Industries and Veblen Ltd do not. represent a competitive threat to the company, Approximately 20 manufacturers focus on the same markets as Generico and shared the 320. million market in 1996 in the following distribution Rebel Group statistics. Revenues Net Income,Percent in 000 s in 000 s,Mississippi Micron 32 102 000 8 300. Digitizer Corp 25 80 000 5 700,Robox Inc 16 50 000 N A. Manoforms Corp 9 29 500 N A,Smartarms Inc 9 29 000 N A.
MBI Inc Robotics only 3 10 000 250,Other 6 19 000 N A. Generico Inc,An Example of a Complete Business Plan. The following is Generico s analysis of each company s strengths and weaknesses. q Mississippi Micron Inc MMI, A publicly traded company based in Natchez Mississippi MMI is the granddaddy of the. robotics industry having installed its first product in a foundry application in 1953 MMI s. reputation in heavy industry robotics is unparalleled However its attempts to enter the. light manufacturing markets have been met with lukewarm reviews The company is. continuing to experience excessive product downtime accuracy problems and service. demands it has been unable to meet Notwithstanding the difficulties MMI has the. potential to be formidable in the light assembly market. q Pros w well capitalized,w strong name awareness,w good design team. q Cons w unreliable products in this market,w ineffective service support contracted service.
q Digitizer Corp, Second in Generico s target market this publicly traded Boston company has established a. reputation for quality and reliability for its robots Over the past seven years Digitizer has. grown to roughly 80 million in sales in 1996 However the company s product line is not. perceived as a future market force due to the utilization of an archaic operating system at. the controller level making re programming the robots extremely difficult. q Pros w strong quality reputation in hardware,w particularly successful marketing. w fast and accurate robotics arms,q Cons w expensive at the market s top end. w weak software a current problem but it can be overcome. w limited 4 axis movement,w complex components,q Robox Inc. This privately held start up was formed in late 1993 in Milpitas California Its founders. came from MBI where they had been directly involved in the development of its robotics. line Little is known of Robox except that its first product has been well received in the. market and it was funded by Viewridge Ventures a mid level venture firm located in. q Pros w highly skilled design team,q Cons w products may be late to market.
Generico Inc,An Example of a Complete Business Plan. q Manoforms Inc, Privately held based in Wheatridge Illinois Manoforms is about four years old and has. enjoyed reasonable success in its market niche of disk drive assembly It has apparently. been somewhat restricted in its marketing efforts by Tendon Corp a major disk drive. manufacturer and shareholder in the company,q Pros w relationship with Tendon Corp. w well capitalized,w relatively strong product acceptance. q Cons w relationship with Tendon Corp,w narrow market focus.
w expensive,w weak price performance measures,q Smartarms Inc. Private two year old company based in Seattle Washington Smartarms is potentially. Generico s strongest competitor Both companies have developed low weight 6 axis. robotics products and are expected to be priced similarly Smartarms is not particularly. well funded so its major weakness is vulnerability to development production delays. q Pros w strong hardware and software design,w good price performance grades. w competitively priced anticipated,w experienced marketing team. q Cons w cash shortages, w reliance on Cantel 700177 microprocessor could easily result in. production delays,Generico Inc,An Example of a Complete Business Plan.
New York based publicly traded firm with approximately 7 billion in revenues. q Pros w extremely well capitalized,w captive market of MBI plants. w premium sales team,w strong management,w strong service support. q Cons w perceived as inflexible to external market needs. w low strength to weight ratios in product line,w limited 4 axis flexibility of arm. A price performance matrix is shown below comparing Generico s Automaton 10 to its. primary competition,Unit System,Price Movement Load Software Weight. Company in 000 s Accuracy Speed Axis Capacity Simplicity in lb s. Generico 40 001 18 IPS 6 8 lbs easy 125,MMI 40 001 20 IPS 4 6 lbs moderate 250.
Digitizer 46 001 20 IPS 5 10 lbs difficult 170,Robox 38 001 17 IPS 5 8 lbs moderate 500. Smartarms 34 001 17 IPS 6 8 lbs easy 150,MBI 41 001 19 IPS 4 9 lbs moderate 250. With load weight of 56 grams,Generico Inc,An Example of a Complete Business Plan. Generico management has developed exhaustive files on its publicly traded competition but. has had difficulty in gathering details relating to non traded companies Conversations with. end users of competing products product brochures industry publications and trade. associations have been the primary source for intelligence on the latter group of companies. Generico management believes that none of its competitors enjoy a broad enough installed base. to establish insurmountable loyalty By interviewing manufacturing managers and purchasing. directors at six potential customers who are current users of robotics products Generico has. determined that purchasing decisions are currently based in descending order on the. following factors,q Product reliability,q Ease of operation. q Performance specifications, Generico is convinced that the noted purchase factors will ultimately determine which suppliers.


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