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.
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