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Virtual Company

Virtual Company I. INTRODUCTION……..…………………………………….…..2 II. BACKGROUND…………………….…………………………..3 III. MARKET OVERVIEW…………………………………………4 IV. SWOT ANALYSIS……………………………………………...5 V. PROCESS………………………………………………………..5 VI. PRODUCT DIFFERENTIATION………………..……………..8 VII. SUMMARY………………………………….…………………..8 VIII. REFERENCES…………………………………………………...9 With the growing popularity of snowboarding, more companies are coming up with new, innovative ideas to make a profit. Convenience plays a major factor in profit maximization model. If a snowboarder must overcome too much of a task while putting the board on in order to hit the slopes, the product is sure to be flop. Simmons Extreme Sports has developed a state of the art snowboard binding/boot combination that will revolutionize the sport of snowboarding. Snowboard bindings connect to the snowboard with screws. Most are easily adjusted, comfortable and dependable. There are three different types of snowboard bindings presently on the market: Soft, Step-In and Plate. Each type is unique and offers its own benefits as well as drawbacks. Any snowboard can be used with each of the three different types of bindings; however, special boots are required for each specific type of binding. Soft Bindings are the traditional binding. They are comfortable and offer the truest sensation in snowboarding. The soft binding enables you to feel the flex of the board and have the greatest range of motion when riding. They are compatible with any brand of Soft Boot as long as the two correlate in size. Soft Bindings are comparable in weight to the other two types of bindings available. They are almost as convenient as a Step In binding with advances that have been made in the past several years. Finally, Soft Bindings are the most easily manipulated as far as customizing comfort and fit. They are strongly recommended for anyone from entry level to the advanced. The one major drawback of soft bindings is that you have to sit down in order to strap your feet in. This is a major inconvenience when in a hurry to hit the slopes. Step-In Bindings are a bit more convenient and are fast to get into. Step-In bindings are a little more finicky as far as compatibility with boots. A Step-In boot, which is compatible with the Step-In binding selected, must be purchased. All binding and boot compatibility’s are clearly noted in their features and benefits. Step-In bindings lack the ankle support that is available with the Soft bindings. Plate Bindings are to be used with hard boots. A Hard Boot is comparable to the traditional Hard Boot of skiing, but customized for the flex patterns of snowboarding. Hard boots offer the ultimate in support and positive energy transfer from person to board. Yet, they lack the freedom that is traditionally associated with freestyle snowboarding. Hard boots are generally used with Alpine Snowboards. These boards are very stiff and narrow carving machines. Ultimately, a Hard Binding/Boot combination on an alpine board is something that the entry-level rider would not want. They are unforgiving to the unbalanced nature of the entry-level rider. As mentioned in the introduction soft bindings have excellent ankle support. Soft bindings are inconvenient in that one has to sit while strapping the foot in. The step-in binding is more convenient in that it can be attached while standing and with little effort. The downfall of the step-in binding is that there is a lack of ankle support. The hard binding/boot combo is just too cumbersome for most of the snowboarding market. This is where Simmons Extreme Sports slide-in binding/boot combo would be a success on the market. With a slide-in binding/boot combo there would be the convenience of the step-in, and the ankle support of the soft binding. As with the step-in bindings a special boot designed for the binding will have to be used. The binding will be constructed of both aluminum and high impact plastics. The back and side supports will be constructed of hard plastic while the base and attaching bracket will be forged from aluminum. The boots will be constructed using highest quality leather uppers and hard rubber soles. The inserts will be made from foam padding that can easily be molded to the foot. According to the December 31, 1999 issue of USA Today, in 1998 there were 5.46 million participants in snowboarding. A poll of 232 resorts revealed that nearly one-quarter (22.4 percent) of their visitors in the 1997-1998 winter season were snowboarders. Within five years, that figure is expected to increase more than one-third (to 34.8 percent). The group most responsible for the growth in the snowboarding market are teens. Over all, 59 percent of the snowboarding newcomers were teens who said they had “never-ever” been skiing or snowboarding, compared to only 4 percent of those over 20 who “never-ever” tried either sport. Another 26 percent crossed over from skiing compared to 12 percent of people over 20 (American Demographics, 1999). As with any activity, there is competition both directly and indirectly. Direct competition includes people choosing the three types of binding/boot combinations available over what will be offered with the slide-in binding/boot combination. Within the binding/boot market, the major players include (in order of market share): Burton, K2, Airwalk, Ride, Sims, Morrow, Mervin, Salomon, Vans, Lamar, Nitro, Rossignol, Wintersticks, and Oxygen (Sportstyle, 1998). In-direct competition includes people choosing to ski rather than snowboard. In addition, they may choose to participate in other activities such as computers, the Internet, and media entertainment such as television and motion pictures (U.S. Industry & Trade Outlook, 1999).  differentiated from competitors  Will be able to produce cheaper through outsourcing  outsourcing different parts will allow an array of networks  through providing a superior product, competition may tend to slack off with rising recognition  by using the latest technologies in manufacturing the product will be superior  Initially the cost of the product may be high  consumers may be skeptical at first of a new product and buy the competing products  Being a durable good, the product is susceptible to natural movement of the economic cycle.  Specifically targeted to students leaving out a wide range of potential customers.  Establish product as first type in market.  Exceptional sales lead to profit.  Gain new customers for future products  Product can fail due to low adoption.  Costs could be too high for some of the targeted market.  Competitors could copy the product quickly enough to gain competitive market share as well as with time, more competitors will enter the market.  Any type of patent will be battled and if not settled could lead to legal fees and public relations.  Loss of market share or failure to gain share with this product will mean a loss of research and development, advertising, and promotional money spent on creation and campaign.  a bad customer rapport could be established if the product fails thus hindering future success The Simmons Extreme Sports slide-in binding/boot combination will be available for any array of snowboards. This will be made possible through a standardization process. The specifications will be designed accordingly thus making the slide-in binding/boot combo a huge success. This biding/boot combo will be marketed to a specific set of individuals that include males between the ages of 16 and 22 years old with a substantial portion of their disposable income coming from their parents. At first the Simmons Extreme Sports slide-in binding/boot combo will be available at local sporting goods stores that carry snowboarding merchandise, that is assuming they have agreed to carry the line. Moreover, Simmons Extreme Sports will introduce an Internet site that will offer the slide-in binding/boot combo. Once the name and product has been established with good market exceptance, contracts will be made with the necessary major retailers in order to make the purchase of the product convenient and hassle free. In order to achieve the lowest possible selling price, a virtual company will be used. Rather than sinking the cost in a manufacturing facility, several manufactures will be used to aid in retail price minimization. With respect to the bindings, four essential elements will require manufacturing. An aluminum base will be required as well as a plastic backing and sides. Foam insulator pads will also be required, as will the screws to assemble the binding. The boots will be manufactured as a complete entity by a well-known boot manufacturer then bearing the virtual company’s label. The players involved with the manufacturing process are: Mid-West Screw Products, Inc., ALMAG Micro Mur Aluminum Extrusion Inc., Scientific Molding Corporation, and Covac Co., LTD., DaleBoot USA, and Vans. Mid-West Screw Products, Inc. will manufacture the screws and nuts that hold the binding assembly together. Mid-West has experienced continued growth as they have expanded and adapted the equipment to the latest industry standards. Zero-defect manufacturing, Statistical Process Control (SPC), as well as TQM and the newest Just-in- Time (JIT) manufacturing techniques, the entire Mid-West team is striving towards ISO compliance. Their primary goal is to have total customer service and satisfaction. Mid-West Screw Products is located in Chicago, IL. Micro Mur Aluminum Extrusion Inc. will manufacture the base of the binding assembly that every other piece will be mounted. Micro Mur is an affiliate of ALMAG Aluminum Inc. specializing in the production of precision aluminum extrusions. Utilizing the management and organizational strengths of ALMAG, Micro Mur will design, produce, and ship on-time, high quality aluminum extrusions. In addition, they share an excellent trained workforce with ALMAG and implementing similar quality procedures as those used at ALMAG, an ISO 9002 certified facility in Ontario Canada. Scientific Molding Corporation will manufacture the plastic back and upper supports of the binding. Scientific Molding Corporation has a goal to revolutionize turnaround times in the injection molding industry. Their facilities are filled with dedicated personnel, with decades of molding experience, and equipped with the latest tools and technologies. SMC insist on delivering the best quality, fastest turnaround, and unmatched cost-effectiveness with every project. SMC exceeds ISO 9000 requirements and houses state-of-the-art molding, quality assurance, and control systems. Scientific Molding Corporation is locate in Somerset, WI Covac Co., LTD. will manufacture the foam pads for the base and back of the bindings. Covac Co. is located in Tokyo and specializes in silicon and rubber products. They have an exceptional quality program and are ISO 9001 certified and are locate in Tokyo. For the manufacturing of the boots, Vans Inc. has been chosen. Van’s is a leader in “extreme sports” equipment manufacturing. Van’s is a $200 million maker of active footwear located in Santa Fe Springs. All snowboard boots must be worn with an insert. The inserts will be manufactured by DaleBoot USA, Salt Lake City, Utah. The Simmons Extreme Sports snowboard binding/boot combo is one of a kind that has several positioning strategies. First, Simmons has a competitive advantage in that the slide-in binding/boot combo will better serve the customer while simultaneously outperforming the bindings already available on the market. Second, Simmons will be able to offer a superior product with minimal cost. This is done through the outsourcing of the manufacturing of the specified components. Finally, the buyers will be getting a unique product that is far superior to that of the competition. Simmons Extreme Sports snowboard binding/boot combination was developed to cater to a generation of extreme sports activist while at the same time maximizing profits. This being done through the outsourcing of the individual components involved. Knowing first hand of the problems with the existing binding/boot combinations on the market gives better insight to the engineering of a more user friendly binding/boot combination, which has the consumer in mind. One can not forget that the underlying factor is, of course, to make a profit. Bibliography: USA Today. (December 31, 1999). Inline skating picks up while hoops lag. Maquite, Tom. (1999). Snowboarding Reaches Critical Mass at Slopes. American Demographics, Feb1999, Vol. 21 Issue 2, p12, 2p. Market Share Reporter. (1999). Largest Snowboard Equipment Makers- 1997.p256. U.S. Industry & Trade Outlook. (1999). Sporting and Athletic Equipment. P39-6,1p.

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