Lindsey McDonald – Editing, Introduction and Conclusion Matt Reec – SWOT Analysis Kyle Fischer – Qualitative Analysis Dustin Rodgers – Quantitative Analysis

Feasibility Analysis

Our group is working with Alex and his company called SHELTOWEE, who makes

insulated hammocks, that he started a year and a half ago. The insulation is at the bottom of the

hammock and can be removed to cool off. Alex’s idea is innovative for camping equipment due

to the fact that the insulation is in the bottom of the hammock, and not compressed, which allows

the body heat to remain inside. The hammock also comes with straps to hang from trees to

prevent them from being harmed too severely.

Since Alex has started, he has already sold 60 units of his product. He is looking for help

in the manufacturing department currently; all of his sales have been hand-made himself and

have taken 8 hours to produce one hammock. Alex plans on hiring employees to make the

product or he plans on finding an independent contractor. He is also looking into creating a

pamphlet that comes with hammocks that include graphics to help customers with their

assembly. Eventually, Alex wants to move to retail, but as of now his target market place is the

Internet where you can find video instructions on the hammock setup. His customer reviews so

far have been positive, with statements of easy set-up and take-down as well as low prices.

Lindsey McDonald – Editing, Introduction and Conclusion Matt Reec – SWOT Analysis Kyle Fischer – Qualitative Analysis Dustin Rodgers – Quantitative Analysis

Sheltowee’s SWOT Analysis shows a couple major problems as well as a couple strong

points. Under the strengths column we see that Alex has a good quality product and cheaper

prices than other competitors. With a high demand in the hammock market, selling a good

quality product that is easy to use at cheaper prices than competitors, Alex’s company’s sales

should go off the charts. However, under the weaknesses column, we see that Sheltowee needs

some major improvements in marketing and production. Without mass production and proper

marketing, Sheltowee will not be able to reach the high sales they hope for. Alex also has some

threats such as low funding for startup costs and no current investors to help expand the company

financially. On the bright side, Sheltowee has many opportunities for improvement. Alex can

easily use his networking skills to find new investors or even switch his business location to a

place better suited for the sale of hammocks such as The Red River Gorge.

Lindsey McDonald – Editing, Introduction and Conclusion Matt Reec – SWOT Analysis Kyle Fischer – Qualitative Analysis Dustin Rodgers – Quantitative Analysis

When it comes to the interview with the management team we learned a great deal more

about Alex and his company SHELTOWEE. He does not have experience in this industry other

than when he goes hiking, however he can influence his existing contacts to network and expand

his business. The only way he is able to sell the hammocks currently is through his website, but

he is planning on renting a space to set-up a store.

Alex does not have very good marketing and I think he can improve that by using social

medial and also by putting up flyers or pamphlets in lodges across the country. He is looking to

budget $25,000 for marketing purposes. He has a link on his website to help with customer

service which includes a video on how to set-up the hammocks since he hasn’t made an

instruction pamphlet to include with the purchase yet.

Alex does not have any sales at the moment to expand his manufacturing, and he does

not have enough finances to hire a staff. When he is able to hire, however, he plans on paying his

employees minimum wage to $10 an hour. Alex’s production to make one hammock is 8 hours

and he also says he can make colored hammocks but currently does not have any in stock. His

startup cost is $15,000, but will be looking for help from his grandparents and as well as taking

out loans. He does not have a 1-5 year projection.

Lindsey McDonald – Editing, Introduction and Conclusion Matt Reec – SWOT Analysis Kyle Fischer – Qualitative Analysis Dustin Rodgers – Quantitative Analysis

The VOS Indicator ™ POTENTIAL ATTRACTIVENESS

FACTOR CATEGORIES HIGH AVERAGE LOW Industry/Market Market size potential 2 Venture growth rate 1 Market share (Year 3) 1 Entry barriers 1 Pricing/Profitability Gross Margins 1 After-tax margins 1 Asset intensity 1 Return on assets 1 Financial/Harvest Cash flow breakeven 1 Rate of return - - - IPO potential 1 Founder's control 3 Management Team Experience/expertise 1 Functional areas 1 Flexibility/adaptability 2 Entrepreneurial focus 2 Total points by ranking 3 6 10

Overall total points (OTP) 19

Average score (OTP/16) 1.1875

Lindsey McDonald – Editing, Introduction and Conclusion Matt Reec – SWOT Analysis Kyle Fischer – Qualitative Analysis Dustin Rodgers – Quantitative Analysis

The VOS indicator displays how attractive the Sheltowee hammock company is. There

are 4 categories covered Industry/Market, Pricing/Profitability, Financial/Harvest, and

Management Team. Each area is ranked between 1-3 on potential, 1 being low, 2 average, and 3

high in potential. Sheltowees Hammock was ranked really low potential with a VOS indicator

score of 1.1875. The reason for this companies score being so low is for the lack of sales, which

comes from very little marketing of the product. Until the product is more known to the public

through better marketing techniques, his business will be in debt for a substantial time period. He

must sell over 140 products a year to break even. If he sold 140 units he would make $36,260 in

revenue, he would have to pay 15% of those revenues for rental expenses which would be

$5,439, and cost of goods sold would be $5600, and Alex also wants to spend $25,000 on

production and marketing, therefore leaving him with $221. There are also very few barriers to

the industry, which leads to more competition, and less market share for him to obtain. He also

does not have much experience in this industry which is has led to little marketing of the product,

so networking with people familiar with the industry would substantially help him with learning

how this market works.

    There are also a couple areas that he scored high or average on which were the control he has

over the business, adaptability, and the size of the market as a whole. With Alex having total

control of the business he can determine which way he wants to branch out. From having this

control it is very easy for him to adapt to the changes the come from the demands in the industry.

The market size is pretty large because the demand for this product is becoming more and more

Lindsey McDonald – Editing, Introduction and Conclusion Matt Reec – SWOT Analysis Kyle Fischer – Qualitative Analysis Dustin Rodgers – Quantitative Analysis

popular, so if he can overcome the obstacles of marketing he has a chance at being a successful

company.