O Fold Case Study

1. Select which business model Alex should pursue and defend your answer.

I think that the best choice for Alex to pursue is to license the idea. It seems as if he wants to pursue other endeavors in his career. Selling the idea would be the option with the least long-term involvement, but it will be difficult to sell an idea when it is not patented and does not have a history of sales. If he were to license his idea, Alex could collect money on the sales of the product while using the expertise of others to manufacture the product and run the business.

2. Perform a SWOT analysis for the business model you selected.

Strengths:

Lower startup costs

More time to pursue other interests

Experienced people will be manufacturing and selling the products

Weaknesses:

Less control over the business

Less money for Alex

Need for angel investors

Opportunities:

Product expansion in the future

Large profits with not a lot of work if the product has great sales

Threats:

Competition in the luggage industry

The loss of profits by Alex if the product is very successful

3. What is the exit strategy for your selected business model, how long will it take you, and what key points will signal the time to exit?

The exit strategy for Alex should be to buy out the angel investors at a point when he can afford to give them their agreed-upon payout. At that point, he can collect royalties on the sales of the product without having to pay the investors. I think that the royalties on the product would be a good secondary income to the other business opportunities he pursues. It would be advantageous, if he has children, to continue to hold the license on the product in order to continue to collect royalties. When Alex is ready to retire, he could sell his license on the product to redeem a large sum of money for his retirement. This plan is appropriate if the product sales continue to make him money. If sales begin to diminish, this would also be a good time...