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.

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DigiPix

An exciting opportunity in next generation digital picture frames.

Your Name Here

DateThe 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.

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

2. 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.

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.

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.

What is DigiPix?

Concept overview and value proposition

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.

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

Market Overview

Why is this a market we should enter?

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.

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!

The Timing is Right

Laggards

Early Majority

Innovators

LateMajority

EarlyAdopters

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.

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 $150.002011 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 ExpensesTotal 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%

The Competitive Landscape

Have we identified a unique position in the market that is sustainable?

Digital Photo Frame Market

eframeseframes

PhramecoPhrameco

FotodisplayFotodisplay

DigiPixDigiPix

ConnectedUnconnected

IFramesIFrames

FrameConnectivity

Dif

fic

ult

Ea

sy

OK

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.

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.

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.

Opportunity Potential

How much will the company make? What is the ROI?

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.

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 2014Units 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 ExpensesR&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%

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.

Preliminary Go-to-Market Strategy

Does Company have the ability to offset competitor moves and gain fast sales and revenue growth?

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

2. Fast pull through marketing

• Targeted promotions to get traffic into retailers seeking DigiPix

3. 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.

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

Path to 20K Units – 1st Year

3/11 6/11 9/11 12/11

Beta - 7/31/1110 Retailer meetings100 beta users

Launch - 6/1110K into channelLaunch promotion

6 Mo. 9/11Xmas promotion!20K sold into channel

9 Mo. - 12/1/12New Years Promo30K into channel25K 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.

Development Plan Summary

What are we building? How are we building it? And with what?

Product Overview

Attribute

Description Unique Difficulty

Priority

Price Target: $150Cost 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.

Development Starts

Alpha release – Internal testing Product

Launch

Cost Reduced ProductMinor 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.

Summary and Next Steps

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.

Backup Slides

BACKUPMarket Data?

Provide additional proof that there is clear industry data to support your proposed solution

October 3, 2008 34

The iPhone is Changing How Consumers take Pictures

BACKUPWhat Do Customers Say?

Provide additional proof that customers desire your proposed solution

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

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)

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

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