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Business case template
1. What Is This Presentation?
A sample business case and
template for presenting a new
opportunity.
The information in this presentation is
fictitious and solely meant to provide a
framework for building a business case
for a new product or market opportunity.
2. About Planning Innovations
Our mission: Help technology-driven organizations innovate to
power growth.
We achieve this by: Enabling clients with effective and practical
innovation methods and training innovators to use them
skillfully.
• Empowering innovators worldwide
• Results-focused learning
programs
• Practical, proven methods based
on of real world projects
• Based in Portland, OR
Learn more:
www.planninginnovations.com
3. DigiPix
An exciting opportunity in next generation
digital picture frames.
Your Name Here
Date
The information in this
presentation is fictitious and solely
meant to provide a framework for
building a business case for a new
product or market opportunity.
4. DigiPix Phase 1 Planning Project - Goals
1. Primary project goals
• Develop clear concept and value proposition
• Develop a preliminary 2-yr roadmap
• Develop business model with ROI
• Create preliminary development estimates
• Complete the plan for the next phase by XX/XX
1. This plan also answers some key questions:
• What is the DigiPix value proposition?
• What is the primary target audience?
• What are the primary use cases?
• What is the preliminary go-to-market strategy?
• Will retailers support this new product line?
Project Team Members
• You
• Development?
• Operations?
• Finance?
• Design?
Provide an overview of the project
goals and who developed the
information – as appropriate.
Some audiences won’t care about
this detail.
5. Business Case Outline
Executive Summary
Concept Overview
• Consumer Value Proposition
Market Overview
• Market Overview and Value Chain
• Industry position and competition
Opportunity Potential
• Sales and Financial Forecast
Execution
• Development plan
• Go-to-Market plan
• Next Steps Recommendations
Your Business Case
should answer these four
questions:
1)What is the Opportunity?
2)Will it be Valuable?
3)Can we Execute?
4)Do we want to Pursue it?
The level of detail should be right
for the type of opportunity, the
required investment and the stage
of investigation.
6. Executive Overview
• DigiPix is the first truly connected digital photo
frame
• A new opportunity in an fast-growing market
segment
• Strong 5 year growth based on >25% annual
growth in digital picture frames
• Strong value-proposition proven by our
consumer research
• Core technology in video displays already in
place
• Strong distributor relationships to drive adoption
• Pro forma financials show a medium-risk
revenue potential of $30M by year 4 with initial
investment of $5M and NPV of $22M over 4
years
The executive summary
should sell the
opportunity and highlight
the main reasons the
opportunity you are
presenting it both 1) good
for the market and 2)
good for the company.
8. DigiPix – Share Precious Memories, Not Pictures.
DigiPix is a new product line that allows
users to transfer pictures seamlessly to
a digital photo frame over any network.
Imagine...
•You can share your son’s first steps with
Grandma.. Automatically.
•Your friends Facebook photos appear where
you WANT to see them
•Take a digital picture and send it to all your
family’s living room in seconds
•Being able to share videos, slideshows, or just
your favorite photo on one device
All without fumbling with software with
complicated software.
The concept summary
should highlight key use
cases, benefits and value
drivers that you have
discovered. Especially
those that the competition
doesn’t offer and can’t
match.The focus is WHAT
it does for customers, not
how you will do it.
9. What Customers Say
• Will pay a 30% premium for our new connected
features over current products
• “I would send my mom a new photo everyday!
She’d be glued to frame waiting for updates.”
• “I’d replace my current photo frames tomorrow.
They’re just dead weight”
• “These are like magic. It looks really easy”
• All consumers we listened to found DigiPix to be
unique over current offerings
• 50% of customers we talked with wanted to pre-
order the photo frames
• Retailers all supported a special kiosk to highlight
the new connected features
Your concept should be
supported by actual
customer input. Let them do
your selling for you! New
concepts should use more
qualitative data, more
mature concepts should use
more quantitative data. Use
back up slides for the
details and further support.
Based on four focus groups of our target consumer –
middle class families with children, use Facebook and have
digital cameras
11. Target Market - US
DigiPix has two large and growing segments:
1 – DigiPix Purchasers = 38 M digital picture
enthusiasts who share photos with family
members
• Young professionals 28-45 with children
• Digital camera owner – moving to smart
phone cameras
• Share photos on a monthly or greater basis
• Size based on Omnigraph research – 3/11
2 – DigiPix Viewers = >75M family members
that desired photo updates and have pictures in
their homes
• A much wider market audience – this drives
our gift and sharing market
Provide clear information on
WHO you are targeting and
why you are targeting them.
This information is critical to
justify your forecasts later in
the business case.
12. Market Trends Support DigiPix Potential
• Tremendous growth in digital picture taking as driven by
mobile phones
• 35% of mobile Facebook users share photos with friends
at least once a week- ephotoweekly 2/11
• Emailing of digital photos has increased an average of
17%/year since 2006 - ephotoweekly 2/11
• Digital photo frames are growing at 5%/year, but
connected frames are estimated to grow at 20% in 2012.
etrends- 8/10 Provide the most relevant
possible industry data to
support the trends you are
using to justify the
opportunity. If you can’t
show growth in the
underlying drivers, success
is more difficult. Include the
source for all data!
13. The Timing is Right
Laggards
Early
Majority
Innovators
Late
Majority
Early
Adopters
Digital Photo FramesConnected digital
picture frames
Facebook integrated
picture frames
Digital Photo Frame Market Maturity*
*Estimated maturity based on internal research and strengths of competitors
Use appropriate tools
and graphs to support
your case. In this case
the question of “are we
late? Are we early?”
needed to be addressed.
A market maturity curve
helped address this.
What questions will you
need to address?
Consider these as
objections to your case
that must be removed.
14. Digital Photo Market Summary
• Industry estimates based on average of two
analysts forecasts – eweekly 4/11, iconnect
5/11
• Costs/margins based on internal knowledge
Provide industry forecasts to
show the potential for the
overall industry segment (as
appropriate). Include sources!
Average Frame MRSP $150.00
2011 2012 2013 2014
Units Sold 1,200,000 1,800,000 2,700,000 3,510,000
ASP $67.50 $63.00 $58.50 $52.50
Manufactuer Revenue $81,000,000 $113,400,000 $157,950,000 $184,275,000
Unit COGS $38.00 $36.00 $34.20 $32.58
Total COGS $45,600,000 $64,800,000 $92,340,000 $114,355,800
Gross Income 35,400,000$ 48,600,000$ 65,610,000$ 69,919,200$
Gross Margin (GI/Rev) 44% 43% 42% 38%
Operating Expenses
Total Op Ex 11,340,000$ 15,876,000$ 22,113,000$ 25,798,500$
Operating Income 24,060,000$ 32,724,000$ 43,497,000$ 44,120,700$
Op Margin (OI/Rev) 30% 29% 28% 24%
16. Digital Photo Frame Market
eframeseframes
PhramecoPhrameco
FotodisplayFotodisplay
DigiPixDigiPix
ConnectedUnconnected
IFramesIFrames
Frame
ConnectivityDifficultEasyOK
Ease of
Transferring
Photos
- Auto sync with
Facebook
- Web-based frame
management
- Facebook
- Wifi or mobile
- Physical offload
only
- Dedicated
software
WebframesWebframes
- Wifi only
Limited
An industry positioning
framework helps
provide context for
your market position as
well as clarifies your
key competitors. Use
appropriate axes that
customers would agree
with and shows your
unique position and
value drivers.
17. Competitor Comparison Matrix
Focus competitive
analysis on the
value drivers you’ve
determined
customers really
value and any other
factors that are
important to your
analysis.
Put detailed
competitor
overviews in
backup slides.
DigiPix Connected frames provide key features that give
them a clear advantage for the next 18 months.
18. Competitors – The Bottom Line
• DigiPix has several attributes that make it a
unique product
• No one is currently approaching connected
photo frames in a meaningful way
• Competitors have not taken a clear market
position to enable connected frames
• Competitors still have difficult to manage
connections to update frames
• No one is optimized frames for sharing with
Facebook
• We believe we will have an 18 month
advantage in a high-growth category
Summary important
sections to clarify
and drive home key
points. Avoid just
sharing a bunch of
information with no
clear conclusions.
20. DigiPix Financial Assumptions
• We used some of the following
assumptions in calculating DigiPix pro
forma P&L:
• DigiPix will capture similar market share
as our current products after year 2, but
higher in year 1 based on our uniquely
identified features
• Development will be completed in-house
• COGS estimated based on expected
BOM and using standard costs
• Discount rate for NPV calculations of
13%
Provide clear
assumptions
focusing on the top
3-4 that have a
material impact on
your financial
estimates.
21. P&L Summary
Provide a P&L
summary in your
presentation.
Provide detailed
financials as
handouts and
backup slides. I.e.
don’t display an
“eyechart” that is
unreadable in a
conference room.
Average Frame MRSP $150.00
2010 2011 2012 2013 2014
Units Sold 20,000 40,000 60,000 75,000
ASP $67.50 $63.00 $58.50 $52.50
Manufactuer Revenue $1,350,000 $2,520,000 $3,510,000 $3,937,500
Unit COGS $38.00 $36.00 $34.20 $32.58
Total COGS $760,000 $1,440,000 $2,052,000 $2,443,500
Gross Income 590,000$ 1,080,000$ 1,458,000$ 1,494,000$
Gross Margin (GI/Rev) 44% 43% 42% 38%
Operating Expenses
R&D 850,000$
Total Op Ex 850,000$ 189,000$ 352,800$ 491,400$ 551,250$
Operating Income (850,000)$ 401,000$ 727,200$ 966,600$ 942,750$
Op Margin (OI/Rev) 30% 29% 28% 24%
NPV 2,454,902$
IRR 65%
22. Revenue Upside/Downside Potential
Upside Potential
•Going to key internal regions will provide substantial
upside
• Europe and Japan can increase forecasts by 50%-
75% by year 4
•Product extensions and accessories can provide an
additional 70-80% revenue after year 2
Downside Potential
•It’s possible key competitors will be more aggressive
than we believe
• Revenue could be off by as much as 50% if this
happens
•Consumers may not embrace truly connected frames
• Our research shows they will, however, research is
not infallible.
General focus on
“realistic”
forecasts, but
provide additional
upside or
downside
information to
show either
increased or
decreased risk for
the investment.
24. Key Market Strategic Tactics
• DigiPix success depends on two inter-
related activities
1. Fast adoption of DigiPix with our key
electronics retailers
• Educate sales people and managers
• Provide clear displays and POS
information
1. Fast pull through marketing
• Targeted promotions to get traffic
into retailers seeking DigiPix
1. Viral campaigns
• Provide incentives for people with
one DigiPix photo frame to supply
their whole family with a DigiPix
frame.
Provide a summary of
key tactics – not the
entire marketing plan –
unless more details are
required. This is
especially critical for
new-to-market products
where you may need to
educate customers, gain
trials, etc.
25. Launch Strategy to Drive Rapid Sales
Primary goals: 20,000 units to key retailers in first 6 months after launch
Strategy Goals Tactics Budget
Retailer adoption 100 units/retail location
at launch X 100
locations= 10K
• CES launch
• Roadshow
• Market funds
$150K
Drive pull through 10 units/location on 1st
day of launch
• Upgrade campaign
• Circular ads
• Mail to targeted lists
$300K
Viral sales 30% of purchasers buy
at least 1 more
• Email incentives
• In-store bundles – buy 2
get discount
$100K
Other 20% through web
sales
• Increase SEO and
ecommerce distribution
$30K
Total Launch budget $480K
26. Path to 20K Units – 1st
Year
3/11 6/11 9/11 12/11
Beta - 7/31/11
10 Retailer meetings
100 beta users
Launch - 6/11
10K into channel
Launch promotion
6 Mo. 9/11
Xmas promotion!
20K sold into channel
9 Mo. - 12/1/12
New Years Promo
30K into channel
25K sold through
Cumulative Sales
(Into channel)
0K
20K
10K
10
30K
Tradeshow Launch!
Beta Launch
A graph of sales and
major marketing and/or
development milestones
can pull the whole story
together.
28. Product Overview
Attribute Description Unique Difficulty Priority
Price Target: $150
Cost target: $65
n/a Medium High
LED Our 1st
LED frame – provides highest
resolution and brightness in industry
No High High
Mobile
support
Provide connectivity to frames where wifi is
not available.
Yes High High
Facebook
integration
Pull photos from Facebook friends Yes Medium High
iTunes
integration
Allow user to move videos from iTunes and
sync with photo frame
Yes High Medium
Focus any product descriptions on
key differentiators (as supported by
your customer insight). Detailed
specs or features should be available
as backup. Provide priorities and risk
to show credibility.
29. Development
Starts
Alpha release –
Internal testing
Product Launch
Cost Reduced Product
Minor enhancements
1-Year Road Map
8/10 1/11 3/11
Beta release –
External testing
6/11 12/11
5/11 7/11 9/11 11/11
Provide a clear timeline with
major milestones. Put details
into backup or provide more
details in the main body for a
technical audience.
31. DigiPix Conclusion
• DigiPix has the potential to be a significant
opportunity for Company
• An exciting, emerging market with clear
supporting trends
• Significant revenue with limited commercial
risk
• Clear strategic fit with existing products
• A clear, leveraged development path with
low technology risk
• We recommend moving forward
immediately with the investment of $50K to
fund the market validation of this
opportunity.
Wrap up with a strong
conclusion that summarizes
your key selling points for
the business case. Ensure
you have a strong
recommendation!
Focus on funding for next
steps rather than full
investment.
34. October 3, 2008 34
The iPhone is Changing
How Consumers take Pictures
35. BACKUP
What Do Customers Say?
Provide additional proof that customers
desire your proposed solution
36. Exploratory Customer Research
As part of developing the DigiPix business
case, we initiated exploratory research to:
1. Clarify the target market and value
2. Identify most likely use cases
3. Gain early feedback on concept
Research activities included:
• Eight one-on-one interviews - 11/20 to
12/1
• Four focus groups - Two groups on 12/2
• Retailer discussions – 11/20
Target Profile
• Heavy digital picture
users
• Have shared photos
with family at least once
a month50/50
male/female
• 28 to 45 year old
• 50% own homes
37. Customer Comments
• "That's cool! I like that it's so easy. Seems too hard now, that's
why I don't it.”
• “I could totally see myself using this.”
• “I really like the ability to send photos remotely to my family”
• "This product is sweet!”
• “What’s your timeline? Can I participate in the Beta?”
• Participants were ask to rank on 1-10 rating, “What is your
photo frame experience before and after being presented
DigiPix”
• Before DigiPix: 6 (range of 3-8)
• With DigiPix: 8 (range of 6-10)
38. New Product Success Checklist
A study showed a new product has a high chance of success if it meets eight
criteria.
We believe DigiPix can achieve all of these:
A unique, superior, and differentiated product with good value-for-money
A strong market orientation - Voice of the Customer built-in
Sharp, early, fact-based definition before development begins
True cross-functional teams: empowered, accountable, resourced
The project builds on core technology and marketing competencies
A growing, attractive market
A high quality launch effort – well planned and resourced
High quality execution for technological activities
Dr. Robert Cooper NewProd studies of over 2000 products, Winning at New Products 2001
Considering these segments on a market maturity curve, live video sharing is ripe for growth and currently has only small players. But trends in social media, smart phone adoption, and video usage all indicate and support this will be a high-growth opportunity
Within this segment, we have identified clear advantages that no one has offered or have seen any plans to offer. Most of this unique offer is on the viewing side (which we’ll describe) but we have also identified advantages on the broadcaster side.