Explain three generic strategies analysis
Bloomberg Business week runs a yearly article featuring the top five American entrepreneurs under 25 years old. With between 200 and 300 applications each year, choosing 5 is difficult. To help ensure fair competition, the magazine narrows it down to 25 and then asks its readers to decide which 5 have the greatest potential. Below are the top five winners from 2011.
1: SCOREASCORE Founder: Jordan Passman, 24 Revenue: $250,000
Growing up in Los Angeles, Jordan Passman knew the ins and outs of the music business where his father worked as a high-profile music attorney. Passman, wanting to follow in his father’s footsteps, was working for the American Society of Composers when he noticed an unmet need in the marketplace- music buyers in the film, commercial, and television market looking for music composers. An idea was born and Passman began working on a website that connected music buyers with music composers. “People were still scrounging Craigslist for composers, and I knew there were so many composers out there that didn’t have representation,” says Passman. ScoreAscore links music buyers who are looking for scores for film, commercials, video games, or other productions with 100 select professional music composers represented by Passman, who charges 20 to 40 percent as a fee for each transaction. Passman aspires to be the go-to for YouTube filmmakers!
2: THINKLITE Founders: Dinesh Wadhwani, 21; Enrico Palmerino, 22 Revenue: $3,500,000 In 2009, Babson College students Dinesh Wadhwani and Enrico Palmerino were reading an article about energy-efficient lightbulbs when their own lightbulbs went off! The roommates began collaborating on how they could build a business with the primary competitive advantage of saving money with energyefficient lights, instead of focusing solely on saving the environment as most of the current manufacturers in the market were focusing on as their product niche. ThinkLite’s mission is to help companies reduce electric bills through energy-efficient lighting. The pair began ThinkLite by licensing technologies from private companies in Germany, coupled with parts from Korea, and designs from Boston, with final production occurring in China. Clients, such as AT&T and Kodak, boast lighting bill reductions ranging from 50 percent to 80 percent, a significant savings for big business! ThinkLite now has over 100 clients and is looking to expand into smaller markets such as restaurants and stores.
3: DELTA PRODUCE Founders: Kosta Dionisopoulos, 24; Christos Marafatsos, 24 Revenue: $2,600,000 The supply chain of food distribution is a tough business, and getting the right perishable goods to the correct location at the perfect time is more an art form than analytics and logistics. Kosta Dionisopoulos was driving a van delivering produce while attending the University of Maryland when Christos Marafatsos saw an opportunity to start a unique produce delivery business. Delta Produce not only delivers food, but also provides online marketing, allowing customers to reduce costs by buying in bulk or in groups. Delta Produce now has 18 employees and its customers include restaurants, grocery stores, and wholesalers. “Both my partner and I are young, so interacting online is something we’re accustomed to doing,” says Marafatsos.
4: APPLETON LEARNING Founder: Glenn Clayton, 25 Revenue: $4,200,000 Glenn Clayton found himself looking for ways to earn extra money while attending the University of Alabama, so he began tutoring local high school students. Clayton soon recognized a need in the market and launched Appleton Learning, which matches college tutors with high school students. Clayton began hiring friends to help meet the tutoring needs, and by the end of his sophomore year he was spending over 60 hours each week managing Appleton Learning. “I realized if people were leaving big name tutoring companies to come to some college kid working out of a broom closet, there was a need in the market not being met,” Clayton says. Appleton Learning has found sales doubling yearly, and Clayton has built a unique website that matches students with tutors based on their individual learning needs and styles. Appleton Learning has over 1,000 tutors, including college students, professionals, and retirees, serving over 6,000 high school students. Appleton Learning is looking to expand opening 20 new branches across the Southeast over the next few years.
5: DESMOS Founder: Eli Luberoff, 24 Revenue: $200,000 While taking a year off from Yale, Eli Luberoff noticed a problem in the education arena-software compatibility issues. Luberoff decided to create software that would overcome these issues and allow teachers and students to collaborate regardless of the systems they were using or their location. Luberoff launched his company, Desmos, by testing software from several large publishers, including McGraw-Hill, Houghton Mifflin Harcourt, and Pearson just to name a few. Luberoff’s strategy for making money is to provide the software for free while charging licensing fees to publishers.
1. If you had $1 million to invest in one of the five above-mentioned start-ups, which one would you choose and why? Be sure to justify your answer using Porter’s Five Forces Model and three generic strategies analysis.
2. Choose one of the above businesses and explain why data, information, business intelligence, and knowledge are important to successfully running the business over the next few years. Be sure to list examples of the different types of data, information, business intelligence, and knowledge you might find in this company.
3. Review Bloomberg Businessweek ‘s most current top five under 25. Choose one of the companies and perform a detailed analysis of the company using the strategies discussed in this chapter. Determine a few ways the company can improve its business by creating competitive advantages using the ideas and methods discussed throughout this chapter