MGMT Valencia College Business Exit Strategy Plan Discussion This week your Team will discuss & develop an exit strategy. Remember that your exit strategy

MGMT Valencia College Business Exit Strategy Plan Discussion This week your Team will discuss & develop an exit strategy. Remember that your exit strategy is not so much for you, the entrepreneur-founders, but is essential for any outside investors you may need to fund your business. You may want to go public, but remember that is a rare possibility. It is more likely you will sell to a larger, more established company, or even sell to your initial investors (especially if they have a track record in your industry).

Step 1: Conduct your own online research on possible exit strategies, including IPO; sale to a competitor; sale to a corporate partner; and sale to individual buyers (possibly your early angel investors).

Step 2: Discuss with your Team which approach (or approaches) might make sense for your business, in your industry, at this time in the marketplace. Consider the size of your business, its potential profitability, and amount of outside investment you must repay. If you decide to continue the business as a lifestyle business, show how & why your investors (if any) will be happy with this approach.

Step 3. Appoint a reporter to summarize your recommendations in no more than one page.

Please check the business idea attached bellow Business Idea:
Gym towel with built-in cellphone holder – this is for guys and girls who frequent the gym and
hate having to carry their cellphones in their pockets. Most pants for guys offer pockets that are
not big enough for phones, especially if you consider the size of the new iPhone Pro Max or
Samsung Note. Girls have even less options, as they just started making gym pants with built-in
pockets for phones. But, in the end, the size of the pocket remains a problem. Since everyone
takes their phone to the gym to listen to music and most people at the gym carry around a
towel to wipe down equipment (one of the first rules every gym goer learns in their first years
at the gym), combining the two would make sense. The pouch for the phone would be similar
to those armbands you see people wearing at the gym, allowing users to make any input
selection without having to remove the phone from the pouch. The towel would be machinewashable to make it as easy as possible to customers to wash and dry it.
Swot Analysis:
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Strengths
Small capital requirement for the startup.
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Easy referrals by the customers to grow the •
customer base.
Strong customer relationship and partnership.•
Observance of success culture and business
ethics.
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Weaknesses
Small profit margins.
Being a new product, perfectionism limits the
output.
Internal disorganization as this is a new
venture.
The employees cannot understand the actual
expectations of the target buyers.
Opportunities
Potential for growth via social media
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platforms and referrals.
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Growing interests due to locally available raw
materials.
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Efforts to increase customer retention.
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Quick understanding of customer purchasing•
habits.
Occasional tweaks for enhancing the culture.
Exploring various geographical areas.
Threat
Uncertain economic environment.
Dissatisfied customers can easily depart
without the organization’s knowledge.
The new product rollout is uncertain.
Instability of customer support department.
Staff member departures.
Target Market
The gym towel with built-in cellphone holder target all the gym-going enthusiast between the
age of 10 and 35. Due to health issues and concerns, people of this age across the world tend to
work-out as a way of maintaining good physiques and relaxing from their busy schedules.
Again, the product respects that this age tends to be inseparable from their smartphones. Some
work-outs come in the form of apps that are easy to follow. As such, this product is a perfect
choice for gym lovers who heavily rely on their phones for entertainment and other forms of
guidance. Also, the product traverses all the ethnic backgrounds without any prejudice because
the gym is a universal engagement. One of the most exciting factors about the product is that it
does not tend to breach any moral and ethical values of any society. Also, it does not have any
discrimination on who should use it based on marital status. Its sole purpose is to provide the
service of phone protection and to chip in if the tracks and other gym gears lack sufficient
pockets. The product is pocket-friendly. The cost per piece is affordable to every willing buyer
without stretching the pockets so much. As such, the product targets all gym lovers virtually.
Lean Canvas
Key Partners Key Activities
Key Partners:
Smartphone
companies
such as Apple
Incorporation,
Samsung
Incorporation
Market research
Distribution
to
shopping centres ,
around the various
gymnasiums,
and
online marketing.
Key
Good
customer
Suppliers:
relationships.
Cotton Cloth
producers
Transaction-based
revenue
Key
Resources:
Cotton cloth,
tablet
and
smartphone
dimensions
Partners Key
Activities:
Producing
tablets,
smartphones,
gym services,
producing
cotton cloths
Value
Proposition
Value to the
customer:
Products
in
strategic locations
such as shopping
centres
and
gymnasiums.
Customers’
problem:
Inconveniences of
lacking carriages
for big phones and
tablets.
Gym towels with
built-in cellphone
holder.
Customer need:
Convenience of
carrying
big
phones
and
tablets.
Customer
Relations
Market research
to establish the
exact wants of the
customers.
Customer
acquisition
retention.
Transactional-based
revenue
Gym enthusiast
who
are
inseparable from
their smartphones
and
All ages, all
gender,
all
customer income levels
The
relations
determine
the
success of the
entire
venture
hence priority.
Customer
retention needs a
cheap effort of
providing them
with their exact
expectations.
Key Resources
Channels
Efficient
human MVP:
Direct selling and
GTWBICH (Gym selling through
resource
Towel With Builtintermediaries
Effective distribution in Cellphone
Holder)
channels
Other companies
utilize
social
Distribution
media platforms.
channels:
direct
selling and selling
Social
media
through
platforms work
intermediaries.
better.
Good
customer
relationships.
Customer
Segment
Gym enthusiasts.
Social
media
platforms
are
more
costefficient.
Direct selling and
selling through
intermediaries are
integrated into the
customers’
routine
by
availing
the
products to the
shopping centres
for the buyers’
conveniences.
Cost Structure
Revenue Streams
Target customers are willing to pay for the value of tablet
Most Important Cost: Cost of the raw and smartphone carriage.
material.
Currently, the customers are paying for the gym towel
alone.
Most expensive key resources: Ad-based revenue model.
premises, tax, distribution channels.
Value-based pricing tactic.
Distribution across the globe
Market Survey:
While most of our interviews were done at the gym, we also made sure to
interview non-gym goers. This helped us decide if our market resides solely within
the fitness industry or not. Overall, all of us received positive feedback from the
people we spoke to, many of them noting our product is unique, being able to
combine hygiene and convenience. Two different personal trainers backed up our
idea, saying how they would even recommend it to their clients – something we
failed to recognize as a potential source of advertising when first discussing how to
get the word out.
The concerns expressed during the interviews centered mostly around the
quality of the product, price, and how heavy it would be. Our hardest decision will
be weighing cost versus quality, as we want to manufacture a high-quality product
that can be produced inexpensively and sold for a profit, but not expensive enough
to turn potential customers away.
During the interviews, we came to realize that our product can be sold to nongym goers as well. One person noticed how this is something someone can even
take it to go grocery shopping, as our product can also serve to store keys, credit
cards, or money. This lets us know that our market is even bigger than first believed
during initial discussions.
Competitors:
The gym towel with a built-in cellphone holder is a unique product; however there are
other competitors who are in the business of making gym towels. The top competitors include;
Towel Manufacturers USA, Oasis Towels, and Thomas Net. Among the three manufacturers, the
most competitive is Towel Manufacturers USA.
Towel Manufacturers USA
They are innovative, coming up with different and unique designs of towels. The multiple
designs make them competitive and preferred by most customers. They also have a strong brand.
They also use a variety of fabric and make custom made towels. The company enjoys a huge
capital base, which makes them a strong player in the industry.
Oasis Towels
Oasis Towels have been in the business for the last 20 years. They custom make towels
according to age and other tastes. They also brand towels, which also makes them competitive in
the industry. Mostly they manufacture their towels from cotton.
Thomas Net Towels
Thomas Net Towels is a strong player in the industry. Thomas Net Towels come in
multiple colors and are mostly manufactured out of cotton and microfiber. They also come in
different sizes, which is a feature that has enabled them to do well in the market. The towels also
have hemmed edges, which also positions them as a strong force.
Blue Ocean Analysis
According to Mauborgne & Kim (2005), the blue ocean strategy aims at finding ways to
differentiate businesses by opening up new markets and creating new demand. It entails creating
and capturing the markets which are uncontested, thus making the competitors irrelevant. The
blue analysis is the opposite of the red ocean, which focuses on the existing industries today and
ways to make them stand the competition. For the analysis, Towel Manufacturers USA will be
used since they are in existence and use the traditional model.
Blue Ocean Curve
The curve will involve our company with the new idea and Towel Manufacturers USA.
Blue Ocean represents the new idea, while the Red Ocean represents Towel Manufacturers USA.
Offering Level
High
Blue Ocean
Red Ocean
Low
Durability
Convenience
Design
Pricing
Utility
Competing Factors
Note; The competing factors include durability, convenience, design, pricing and utility.
Competitive Landscape Map
Affordable
High
Towel
Manufacturers
USA
New
Business
Idea
High
Low
Oasis
Towels
Thomas Net Towels
Thomas
Net Towels
Low
Fundraising
Utility
Gym Towel with a Built-in Cellphone Holder: Fundraising Plan
Type of Investor
Angel Investor
Amount of Investment
Needed
$1,000,000
Venture Capitalist
$2,500,000
Crowdfunding
$100,000
Family & Friends
$50,000
Small Business Grant
$25,000
Local Gyms Partnership
$10,000
Restaurant Fundraiser
$10,000
Total: $3,675,000
Explanation
Individual who provides capital for business start-ups,
usually in exchange for convertible debt or ownership
equity.
A private equity investor that provides capital to
companies in exchange for an equity stake.
Funding of a project by raising small amounts of money
from a large number of people via the Internet. Tier
options created for different levels of investments*
FFF round for close family and friends who have shown
interest in our product, have faith that we will succeed,
understand our plan and are clear about the risks.
Money that is given to a person, business or corporation
from federal, state, county or local governments, or
private business or corporations (FedEx, NASE Growth,
IdeaCafe).
For every person that signs-up for a long-term gym
membership, we will receive a percentage of the
membership due at signing.
Social events targeting restaurants that promote healthy
eating. A percentage of all profits will be used as
Crowdfunding Strategy:
Tier 1 – $10,000+
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First to receive our product, before it is even mass-distributed
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Feedback considered into making the final product
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Everything included in Tier 2, Tier 3, and Tier 4
Tier 2 – $5,000 – $10,000
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Second to receive our product, but before retailers are able to sell it
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Personalized gym towel with your choice of embroidery
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Everything included in Tier 3 and Tier 4
Tier 3 – $1,000 – $4,999
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Product shipped two-weeks before available for purchase in stores
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Special edition gym-towel and water-bottle
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Access to future products before public
Tier 4 – $100 – $999
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Product shipped when ready for mass distribution
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T-shirt
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(2) Gym-towels in your preferred color

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