O-Fold

Case #3- Discussion #2 / O-Fold

Select the business model Alex should choose.

• Alex should license the idea and pursue an immediate payment and subsequently drawing a royalty from each unit sold. Alex will be in a great position to see financial benefits with minimum risk and capital from this approach. Also, since Alex will not be involved in the production of the O-Fold; he can get a good paying job that would provide financial stability for himself and his fiancée while drawing income from any success realized from the O-Fold product. Another reason he should try to license the idea is that there’s little room for innovation, so sustaining a long-term competitive advantage would be very difficult for a firm specializing in this particular product thus resulting in the possibility of only short-term success, if any at all. Alex should attempt to license this through a well-known luggage manufacturer because they could more effectively market the O-Fold to consumers resulting in immediate demand. Lastly, even though this product is effective at preventing garment wrinkles there are already inexpensive substitutes available which would hinder any above-average sales growth unless it became a “trend”, which too would be short-lived.

1. Perform a SWOT analysis for the business model you selected. (License the Idea)

Strengths

• Minimum risk

• Minimum capital investment

• Possibly generate healthy income with little involvement

• No involvement with marketing and distribution

• Strong product knowledge to help sell the idea to a manufacturer

• Enhance geographic coverage by licensing through a manufacturer

• Promoting the O-Fold through a recognized manufacturer in the industry

Weaknesses

• Little room for product innovation

• Substitutes are readily available

• Limited financial benefit from the idea

• Little involvement in product development and long-term decision-making regarding the O-Fold

• A patent must be purchased without...