oneBook

EduStory, Inc.TIM 105- Fall 2014

Annie LyBryan DangCindy MahEvan SmithIssa Diab

Kenneth LeavensPriscilla Usmani

Table of Contents

EduStory/ Mission Statement-------------------------------------------------------------------PG.2

Management (M)Firm Level Strategy

Five Porter Forces---------------------------------------------------------------PG.3 Competitive Strategy------------------------------------------------------------PG.4 Technology Strategy------------------------------------------------------------PG.5Business Goals---------------------------------------------------------------------------PG.6Developmental Goals-------------------------------------------------------------------PG.7Function Maps

Engineering---------------------------------------------------------------------PG.7Manufacturing------------------------------------------------------------------PG.8

Marketing--------------------------------------------------------------------------------PG.9Revenue map--------------------------------------------------------------------------PG.10High Level HOQ----------------------------------------------------------------------PG.11-18Aggregate Project Plan-------------------------------------------------------------PG.19-23

Development (D)Quality Function Deployment-----------------------------------------------------PG.24Reverse Engineering---------------------------------------------------------------PG.25-28Conceptual Design------------------------------------------------------------------PG.29-36Prototyping Strategy----------------------------------------------------------------PG.37Product Architecture/ Product Strategy----------------------------------------PG.38-40FMEA-----------------------------------------------------------------------------------PG.41

Commercialization (C) Financial Model

Economic/Financial Analysis-------------------------------------------PG.42-44

EduStory. EduStory was founded in 2001 following the massive spike in revenue in the

educational software industry. Primarily consisting of software developers and

engineers, EduStory had the technical means to produce the educational software, but

hardly any of the teaching ability. We originally outsourced the content of our software

to actual teachers, but using an external source as such tends to be costly, and

EduStory had to rework our competitive strategy in the early 2000’s. As we took in more

teachers as actual staff for producing the content, our costs slowly lowered and we had

a more stable infrastructure regarding content production. We enjoyed a successful few

years, but over time the adequacy our instructional content became our biggest failing,

as being a mid-size firm compromised our ability to have a competitive advantage with

larger educational software producers. Coming into present day, we have turned our

focus towards devices that are integrated with our educational software, which creates a

customer need for both our physical product and the software itself. Our goal with our

software has shifted from providing aggregate content related to singular topics, to

instructional support. While our software does provide integrated Khan Academy

lessons, this content is not produced by us and thus adds no cost to our product. The

software is now aimed to provide a conduit for teachers to integrate their lesson plans

into an interactive technology that is fully tailored to the needs of their curriculum. In this

sense, EduStory has eliminated the need for broad content production as consumers

create the content themselves.

Our Mission Statement

EduStory aims to produce solutions for the education field in order to help teachers

reach out and teach to a greater span of students.

Management (M)(Firm Level Strategy)

Industry-market landscape

Five Porter Forces Model Explained❖ F1 Rivalry between the competitors – Some potential competitors that will also distribute cheap

netbooks/tablets to our targeted demographic/audience would be Apple with their iPad line, overseas android netbook/tablet makers, and Samsung with their Galaxy Tab line.

❖ F2 Threat of New Entrants – New entrants that would enter this market would be Motorola and Blackberry. These two entrants are most likely going to try to enter the budget friendly technology market by providing cheaper alternatives.

❖ F3 Threat of Substitute Products – Asides from competitors, there are also substitutes. Since we’re targeting the younger demographic that are still in elementary/middle school, Kurio and their tablet might be a cheap alternative. With Google’s price drop in their Nexus line, they might also be substitutes.

❖ F4 Supplier Power – The main supplier for our product will be the Linux community and other freeware companies such as Open Office and Khan Academy. They will provide the building blocks for our netbook product.

❖ F5 Buyer Power – Our main buy powers will be from Amazon and schools with a big budget. With Amazon, they can roll out a line of kindles that are made specifically for school.

❖ F6 Power to Influence – Our power to influence will be based solely on what software that are loaded into our product.

Competitive Strategy1. Incorporate software (OS) into hardware (laptop)2. Give a discount with the bundled software and hardware3. Acquire and/or develop new applications from existing producers to maximize

benefits of the Onebook4. Maintain customer loyalty and promote brand recognition.5. To maintain a strong lock-in with our customers, we will try to implement a strong

switching cost. This would mean that most of our hardware for the Onebook would be proprietary, so we keep our current customers while blocking out new entrants that want to enter the same market.

6. To deal with current smaller competitors, we will try to buy them out through innovation acquisition, that way we can be the main big company. An example of company we can try to acquire would be OLPC.

7. By establishing a strong competitive strategy, we can dominate the budget-friendly computer market. This would mean that we would pour in a majority of the early revenue into ads and promotional campaigns that would persuade new and competitor customers.

Technology Strategy1. Model Onebook on existing Chromebook to get an competitive edge2. Connect with current education apps’ developers to design a product that will be

attractive to users3. Buying/ licensing of smaller companies to integrate their products/technology for use4. If creating own OS, partner with telephone companies to integrate OS into their

smartphones5. Outsourcing technology6. Invest in cloud technology services for communication 7. invest in servers for websites8. Open source<- using source code so not having to produce from scratch 9. CRM(customer relationship management) - better management of customer data10. Creating products quickly and reducing cost thanks to using third party softwares

Market Strategy1. Advertise product during “Back-to-School” shopping2. Promote companies’ installed applications with use of advertisement (and mentioning

our product) and in return, expect people to consider purchasing our product 3. With ad revenue, coupons can be offered which can entice consumers to “invest” in our

product4. Experiment with guerilla advertising by making a demonstration or infographics of how

expensive education is, even without purchasing the supplies to ensure success5. Create a website and use Google adwords by tailoring keywords which should attract

audiences; use Pay Per Click (PPC) advertising 6. Target an area where there is a lot of schools nearby7. Advertise in local newspapers

(Business Goals)

Our Vision: Technology is becoming more and more a necessity in education, we envision a future where every school adopts to new technology and trains students to use them in their everyday lives.

Our Mission: To bring our technological educational experience to every student and provide the greatest balance of cost and efficiency to tailor to the widest range of students possible by providing schools with the Onebook, a specialized affordable computer geared towards education to enhance the learning experience for all ages.

Our Business Goals/objectives:

● To keep our product affordable, we aim to sell it under $100○ We will minimize variable and fixed costs by ordering in bulk○ Similar products bought in bulk can be purchased well under $100 from overseas

manufacturers (Alibaba.com)● Supplier costs, production costs, and sales and marketing costs must all be built into the

sales price○ Initially product should be sold at a slim profit margin to maximize bulk sales and

get our product into the hands of customers● A year or two of net loss is expected, especially if accounting for developmental costs

○ It will take time to get school districts on board and get them to embrace our technology

■ Major leaps in growth are to be expected with each successful partnership in public school districts

■ As each district sees successful implementation of our product into other schools then more and more will be willing to adopt our vision

● With over 83 million people enrolled in schools in the United States in 2011 and technology adoption on the rise breaking into just a small portion of the market will provide a substantial boost in revenue (www.census.gov)

● First year Annual Sales Revenue is expected to be around $35-40 Million by breaking into merely 0.5% of the market with a sale price of $80

● Growth year over year will be over 100% sometimes as high as 200% until we reach our Target Sales Revenue of $500 Million

● Profit per unit sold will range from $20 to $30 and potentially even greater as production efficiency is maximized and our brand becomes more established so charging higher prices is justified

● Our Profit Margin will range between 20% to 40%● Original developmental costs will be recouped by the end of the second year, but

research and development costs should never end and will continue to be incorporated into the price of each unit sold

(Developmental Goals)

1. Targeting the specific buyers and users (Ex. Will middle schoolers have a smooth transition in using a technology-based educational product?)

2. Research on popular applications today and find inexpensive alternatives 3. Plan and forecast multiple solutions to solve the problem of providing educational value

to students by means of a cheap alternative 4. Obtain info or technical specifications and data on parts and create a OS which will

provide an effective means of a solution5. Determine what marketing strategy will help to ensure growth of the company and boost

up the popularity of the product.6. Ensure quality of the product in a timely manner; quantity or mass production of the

product should be adequate to ensure the business has control of the relationship with buyers (analyze past # of purchases with expectations of today’s sales)

(Function Maps)

Engineering

Manufacturing

Marketing

[To compare with Chromebook]

Revenue Map

(High Level HOQ)

Step 1: Make a structured list of customer needs

Customer Needs Importance (out of 10)

Easily accessible ebooks/lectures/notes 5

Have alternative learning materials available 7

Customizable software experience for students 6

Customizable lecture/information delivery methods 8

Light 6

Long lasting all day battery 8

Start up quickly 6

Minimum lag 9

Runs quietly 6

Doesn’t get too hot with extended use 6

Reasonably priced 8

Comfortable keyboard (or whatever method of information input) 9

Nice screen 6

Internet connected 10

Durable 8

Strong multi-tasking capability 8

Step 2: Make a list of technical metrics

Technical Metrics Unit Importance (out of 10)

A hard drive big enough to store the OS and large amount of data

Gigabytes (Gb) 7

An office suite of productivity tools List 9

Open source operating system List 6

Sufficiently powerful processor Ghz 10

Largest possible battery mAH 8

Strong force to damage chassis lb / N 8

Doesn’t overheat degrees (F) 7

Powerful wi-fi capability mb/s 9

High resolution screen ppi 6

Camera Megapixels 3

Fast typing capability WPM 6

Random Access Memory (RAM) (Gb) 8

Step 3: Determine the correlation between the customers needs and the technical matrix using a convenient scale

Step 4:

Step 5: Competitive Benchmarking

a. Assess the competing products from the viewpoint of customers

Laptops Personal-Computers Ratings (out of 100)

Samsung 78

Asus 80

HP 65

Chromebook 57

Dell 88

Lenovo 90

OneBook -

b. Assess the competing products from a technical standpoint

b.

Laptops Personal-Computers Storage: (GB) Battery Life( Ahr)

Resolution(ppi)

Samsung 16 8 135

Asus 16 10 112

HP 16 10 118

Chromebook 16 9 116

Dell 16 10 117

OneBook 16 10 117

Step 6: Use the HOQ to set targets for product developmenta. Target Customer specification b. Target Customer Specification

Customer Needs Tech/ Engineering Perf. Specs./ Metrics

Low Cost (8/10)Appearance (8/10)Ease of Use (9/10)Comfortability (8/10)Durability (10/10)Design (9/10)Memory (7/10)

Battery Usage (10/10)Processor Strength (6/10)Weight of the object (6/10)Durability (10/10)Strong multi-tasking capability (5/10)Comfortable keyboard (6/10Memory (8/10)Easy UI (8/10)

Aggregate Project:

Identify a set of potential projects (P1, P2.. Pn) Potential Products within the context of our development goals, market needs analysis and technology market and competitive strategies:

Project Name Potential Products

P1 Laptop for K-12 Students

P2 Laptop for college students

P3 Tablet for Preschoolers

Step 2: For each Project, Pi (i=1,2,..n) estimate the cost, Ci (i=1,2...n) for doing the project (from historical company data on related projects)

Project Name Potential Products

Costs of Materials and Manufacturing

Similar Products in HP Price of Product in the market

P1 Laptop for

K-12 Students $266.37[1] HP Mini

2133(Education Market)

$500(2008)

P2 Laptop for

college students

$335.09[1]Hp Mini

2140(upgraded ver of 2133) (Education

Market)

$629(2008)

P3 Tablet for Pre-K

$318[2] Hp TouchPad $500(16GB 2011)

[1]http://electronics360.globalspec.com/article/3295/hp-2133-mini-note-pc-notebook-computer-teardown[2]http://www.informationweek.com/mobile/mobile-devices/hp-touchpad-costs-$328-to-manufacture/d/d-id/1098752?

Step 3: For each project, Pi (1=1,2,..n) determine the payoff or expected monetary value, (ci i=1,2,..n) for the project ( Six Step Decision Analysis ) 1) The first step is to create the blocks for the decision tree:

2) Time phase for the Decision Tree:

Time 0 Time 1 Time 3Present Tomorrow Later

Choose a Was the Product Profit

product to develop successful

3) Folding back Decision Tree The percentage for the production of the products are based on after the product is made. What is

meant by this is that the percentages shown in the Decision Tree is the failure rate .of the laptops. After production, how likely are the laptops going to break. For HP laptops ( Our company) the failure rate is 25.6% of laptops will more likely break faster than other competitors.http://lifehacker.com/computer-manufacturers-ranked-how-to-pick-a-laptop-tha-1467145338

The percentage for tables are based on the general use of tables after production and how likely they are to break or face problems after continued use. An average of 30% of tablets will face problems. http://www.globalsppec.com/learnmore/industrial_computers_embedded_computer_components/mobile_computing/tablet_pc

4) Choices Choice 1: EMV of P1: ($233.63 * .74 ) + ( -$266.37 * .25 ) = 106.29

Choice 2: EMV of P2: (273.91*.74) +(-$355.09*.256) = 111.79

Choice 3: EMV of P3: ( $182*.70 ) + (-$318*.30 ) = 32

The project best product to develop would be Choice 2: P2 , the laptop for college students.

5) Sensitivity Analysis ? Perform the sensitivity analysis for a 10% change in the EMV’s calculated above, which

you find by determining the decision for the 3 cases.Case 1: EMV+(0.10)EMV = p

($106.29)+(0.10)($106.29) = $116.919 ($111.79)+(0.10)($111.79) = 122.969 ($32)+(0.10)($32) = 35.2

Case 2: EMV => p $116.919 $122.969 $35.2Case 3: EMV-(0.10)EMV = p ($106.29) - (0.10)($106.29) = $95.661 ($111.79) - (0.10)($111.79) = $100.611 ($32) - (0.10)($32) = $28.8As you can see from the calculated values the estimated monetary value doesn't change that much

when experiencing a 10% change in probability and the clear choice for most in returns is still P2. Also that at 10% change it is relatively robust.

Perform the sensitivity analysis for a 20% change in the EMV’s calculated above, which you find by determining the decision for the 3 cases.

Case 1: EMV+(0.10)EMV = p ($106.29)+(0.20)($106.29) = $127.548 ($111.79)+(0.20)($111.79) = $134.148 ($32)+(0.20)($32) = $38.4

Case 2: EMV => p $116.919 $122.969 $35.2Case 3: EMV-(0.10)EMV = p ($106.29) - (0.20)($106.29) = $85.032 ($111.79) - (0.20)($111.79) = $89.432 ($32) - (0.20)($32) = $25.6

With a 20% change in probability the EMV is still fairly robust since the profits are still relatively high but through this sensitivity test you can see how important getting the right probabilities and values for development and research is. Accuracy is key but the top choice still remains P2.

Step 4: Use a Boolean integer variable ai, (i=1,2,..n) to select or reject a project ai=0 if project is reject a projectai = 0 (project is rejected)ai = 1 (project is selected)ai = (0,1): i=1,2,..n

Step 5: Determine the cumulative cost Ct and the cumulative value Vt for performing the projects: The cumulative cost if chosen to make all the projects would be around $919.46

The cumulative monetary value of all the projects is 250.08

Step 6: Pose the optimization problems for selecting the right “mix” of projects

P1 P2 P3

0 0 0

0 0 1

0 1 0

0 1 1

1 0 0

1 0 1

1 1 0

1 1 1

Step 7: Procedure for doing the Table lookup for small n (n<10) Decide on the potential mix of projects, Determine all the possible project combinations

# P1 P2 P3 Costs Monetary Value

1 0 0 0 0 0

2 0 0 1 $318 106.29

3 0 1 0 $335.09 111.79

4 0 1 1 $673.09 218.08

5 1 0 0 $266.37 32

6 1 0 1 $584.37 138.29

7 1 1 0 $601.46 143.79

8 1 1 1 $919.46 250.08

(Development Funnel)

Development (D)

(Quality Function Deployment)

(Reverse Engineering)Reverse EngineeringAcer c720 Chromebook

Screen: Sharp 1366x768 LED Backlit Display 1X HDMI PortProcessor: 1.4 GHz Intel Celeron (Haswell)RAM: 2 GB DDR3L SDRAMStorage: 16 GB Flash MemoryWireless: Acer InviLinkTM NplifyTM 802.11 a/b/g/n Bluetooth 4.0Expansion ports: 1X USB 2.0 1X USB3.0Battery: 3-Cell Li-Polymer Battery (3950 mAh)Weight: 2.8 PoundsOperating System: Chrome

FAST: Acer

Hp Stream 11

Screen: Sharp 1366x768 LED Backlit Display 1X HDMI PortProcessor: 2.16 GHz Intel Celeron (Haswell)RAM: 2 GB DDR3L SDRAMStorage: 32 GB HDDWireless: HP 802.11 a/b/g/n Bluetooth 4.0Expansion ports: 1X USB 2.0 1X USB3.0Battery: 3-Cell Li-Polymer Battery (3950 mAh)Weight: 2.74 PoundsOperating System: Windows 8.1

FAST: HPMicrosoft Surface RT Tablet

Screen: Sharp 1366x768 LED Backlit Display 1X HDMI PortProcessor: 1400.0 MHz (nVidia Tegra 3)RAM: 2048 MBStorage: 32GB, 64GBExpansion ports: USB 2.0Available Interfaces: 1x HDMI Digital Audio/Video Out, BluetoothBattery: 31.5 watt-hoursWeight: 1.49 lbs.Operating System: Microsoft Windows RT

FAST: MicrosoftStep 3: Establish customer needs & technical metrics/performance specifications for the intended new product

Customer Needs Importance (out of 10)

Fast processor 9

Durable 10

Lightweight 9

Lots of RAM 8

Better hard drive 10

Great productivity “apps” 10

Good webcam to promote collaboration 8

Good graphics/imagery 7

Technical Metrics/performance Importance (out of 10)

Fast Processor 9

Tough and elemental resistant armor 10

Multiple productivity-promoting apps 10

Good graphics card 8

Doesn’t overheat 7

Lightweight (lbs) 8

(Conceptual Design)

Step 5: (i) for each sub-function generate alt. solution principle (SPs) for realizing that sub-function (ii) Organize solution principles (SPs) in a morphological matrix (MM)

SP1 SP2 SP3

SF1 (battery) removable battery non-removable battery Best lithium-ion battery

SF2 (screen/type) IPS screen AMOLED screen OLED screen

SF3 (architecture) ARM chip architecture x86 chip architecture Intel chip architecture

SF4 (processor) Qual processor Nvidia processor Intel processor

SF4 (armor) water resistant spill resistant sleek and fashionable

Step 6: Generate 6-10 alts. concepts by suitably combining the SPs in the MM

Concept 1: This concept will have a removable battery over a non-removable battery because it more effective to replace the battery if the laptop requires IT. An IPS screen will be implemented because they provide better color compared to LED/LCD screens. The ARM chip architecture is more preferable because they are inexpensive. Qual processor may be useful once innovations are made. Spill resistant is an important element for a laptop because spills are common accidents.

Concept 2: This concept will also have a removable battery because it is more efficient for the students to replace the battery rather than buy a new OneBook. An IPS screen will also be implemented and the ARM chip architecture will be used. Nvidia processor will be used instead of Qual as it is a more effective processor in getting work done. Often, students would like a laptop that looks “fashionable” to compliment their attire.

Concept 3: This concept will have a removable battery, so students and/or staff will have the option of just replacing the battery if anything goes wrong instead of the whole unit. This laptop will have an expensive IPS panel screen providing vivid colors for the students and will have an x86 Chip architecture and NVidia processor for computing and processing. The whole thing will be housed in a sleek and fashionable housing that will surely attract anyone.

Concept 4: This concept will have a non-removable battery, AMOLED screen and an ARM architecture, but it will have a dedicated GPU by Qual. This way, graphics and videos will be rendered at best resolutions for the laptop. This will also be housed in the same housing as concept 3, however it will be water resistant so the hardware is coated with water resistant spray before assembly.

Concept 5: This concept will not have a removable battery. It will have a beautiful AMOLED screen along with a budget friendly ARM processor. It will feature a Qual processor for graphics. This makes the whole laptop bare minimum reflecting its price. One of the key feature to this laptop is that it will be spill resistant; meaning it will have multiple channels for water to drip out of if there were to be an accident. This would most likely have the target audience of all students under elementary school.

Concept 6: This concept will have the best lithium-ion battery and an OLED display. It will have some of the same specifications as concept 5, but this one will feature spill resistance. It will be slightly elevated above the surface it is on making the spills go right under it. The hardware will be coated in a water resistance coating, meaning if water was to enter the system, it would have a reduced time of drying off.

Concept 7: This concept will have the best lithium-ion battery meaning it will last far longer than the other two concepts. By using an OLED screen, power consumption is reduced while display is on par with the AMOLED screen and subpar compared to the IPS screen in some colors. This will all be powered by an x86 architecture processor along with an Nvidia Tegra processor. Again, this will feature the water resistant technology found in concept 5.

Concept 8: This concept will be like concept 7, however instead of a generic x86 architecture, it will be powered by an Intel processor, most likely a Celeron or Atom series processor for budget

awareness. It will have a simple OLED screen and the graphics on this will be powered on-board by the Nvidia processor which provides adequate graphics for schoolwork. Instead of being sleek and fashionable, it will have the same armor feature as concept 6 and 7.

Utility Function :

1) What are the criterias that are need for the OneBook in the form of a hierarchy?

Criterias for the OneBook

The main product is the Onebook, The primary functions of the Onebook is to be low cost, ease of use and durable.** The criterias under Secondary and Tertiary are based on the customer needs of our product.

Weights For OneBook Criterias

** Percentages are based on the rankings of each of the customer needs and our own

3) At each level, compute and calculate the absolute weight for each selection criteria.

Utility Function of the Onebook

Testing: At any level it should equal to 100%

0.16+0.24+0.07+0.21+0.048+.072+0.0175 + 0.028 + 0.0245 + 0.026 + 0.104 = 1

Use the utility function to compute the cumulative utility of each concept and then select concepts with the highest Cumulative Utility

Cumulative Utility (Selection Criteria )Used on a scale of 1-5.(best)

The concept with the highest utility is then chosen. In this case concept 2 is chosen.

(Prototyping Strategy)

(Product Architecture/ Product Strategy)

1. Define the underlying elements of the product platform: core and supporting elements.

Core Product Supporting Technology

Graphics Processing Unit Hard drive

Power Processor Power Source

Software Package Display and Audio

Operating Systems Disk Drive

RAM

WIFI connectors

2. Segment market based on the competitive and market strategy and then prioritize the market segments for the product.

Market Description Priority

K-12

Product 1

The main intent of our product is to dive into this market. The users in this market segment will want to use our product for

education support in their learning process. The will want the ability to

access the internet for tutorials of how to understand certain topics. They will also

make use of our operating system to help their teachers reduce the cost of

paper supplies. They can use our product to collect their notes or to create

them. This is an expanding market segment that has an increasing demand for a low cost product similar to our own. Familiarizing the youth with computing

systems and tutorials expands their capabilities and since their needs aren’t

too complex we look to tap into this market segment first and fully.

1

College This is the next step for our product. We seek to launch a more complex product

2

Product 2that can meet the average college

students demands. They want a fast operating system that will allow them to

interact efficiently with the internet in multiple ways. Our product will also help colleges go paperless since they will be able to collect notes and syllabus on our

platform. We will also have the interactive tutorials that supplement the learning process to meet their demands. This market segment is harder to tap into

since college students will have very specific needs but we seek to sneak into those needs by capturing a large section of the market segment before this stage

which is K-12.

Establish product lines to address the different target market segments

As you can see in the diagram above we look to launch our first product in 2016 for the K-12 market segment. We look to secure a significant amount of revenue and market space in this specific segment based on our strength of business strategies, marketing/advertising, and our overall product. In the process of maintaining and improving our original product line we will begin planning our second product line which is aimed at capturing a significant portion of the College market. Since this segment is more specific and demanding we chose to launch this product second. We believe that once we have a general and high functioning structure it will simplify the transition to the other market. Overall we seek to become a big player in both markets and we feel that over time our product will wind up a big success.

(FMEA)1. Create a FAST diagram for the product to identify the key subsystems and components of the product, and understand the key-sub-functions of the sub-systems.

Identify potential failure modes, and characterize these failure modes using a Risk Priority Number

Sub-system Failure Mode

Process and transmit data ● Chip Failure● Slow Processing speed

User Interface ● Cheap easily broken parts● Slow to process and link

commands● Unable to read disks

Internet Connection ● Overloaded with requests and data

Power Source ● Bad battery

Personal or Educational Use ● Damaged speakers

● For each failure mode, assign a numeric value (known as the Risk Priority Number, or RPN) for likelihood of occurrence, likelihood of detection, and severity Our scale is from 1-8

Sub-System Failure Mode

Failure Effects

Likelihood of Occurrence (1-10)

Likelihood of Detection (1-10)

Severity (1-10)

Risk Profile Number (RPN)

Actions to Reduce Occurrence of Failure

Process and transmit data

Chip failure May cause OneBook to malfunction

3 6 8 144 Screen chips before putting them in product

Process and transmit data

Slow processing speed

May freeze up and lag OneBook

3 4 8 96 Have many developers work on improvement

User interface Cheap easily broken parts

Less students will consider OneBook

3 4 6 72 Find cheap yet durable materials/parts

Internet connection

Overloaded with requests and data

Freezes or lags while online

4 5 8 160 Improve processing speed to meet demands

User Interface Slow to Process commands

Many complaints and decreased sales of OneBook

2 5 8 80 Improve link of user interface

Power Source Bad battery Computer dies quickly or needs to be plugged

3 4 4 48 Test and refine battery used to power product

Personal or Educational uses

Damaged speakers

Can't project sound or is garbled

3 4 7 84 Run tests to see how often faulty speakers occurs and why

User Interface Unable to read disks

Can't watch, listen, or read CD’s

3 5 7 105 Check frequency of problem and refine design of product

As you can see in the chart above the top two Failure modes are Chip Failure and Overloading the system with requests and data while online.Having a slow processor is a major problem when creating the OneBook because a fast processor is needed to run applications and programs efficiently. Since the chips are the heart of our product screening and testing in the area are key to our products success.

Commercialization (C)(Financial Model)

Economic/ Financial Analysis

1. Build a base-case financial model2. Perform a sensitivity analysis to understand the relationships between financial success

and the key assumptions and variables of the model3. Use the sensitivity analysis to understand project trade-offs.4. Consider the influence of the qualitative factors on project success.

1. Build a base-case financial modelProjected Cash Flow

Development Cost $1,000,000

Ramp-Up Cost $800,000

Market and Support Cost $350,000

Production Cost $2,200,000

Estimated Sales Revenue $128,857,000

Time Schedule

YR1: Q1

YR2: Q1

YR3: Q1

YR4: Q1

Development ∎ ∎ ∎ ∎

Ramp-up ∎ ∎

Market and Support ∎ ∎ ∎ ∎ ∎ ∎ ∎ ∎ ∎ ∎ ∎ ∎

Production ∎ ∎ ∎ ∎ ∎ ∎ ∎ ∎ ∎ ∎

2. Perform a sensitivity analysis to understand the relationships between financial success and the key assumptions and variables of the model

3. Use the sensitivity analysis to understand project trade-offs.

As you can see in the diagram presented above a 10% change in sales volume would cause a change in our NPV of 11% which is an increase in NPV of $14,007,000. That is a significant change which is worth investing in ramp up costs since could potentially increase sales revenue significantly. Due to the fact that we see a significant rise in the quantity demanded of our product we want to be able to cash in on that rise and according to this chart it is worth increasing our production to raise our overall profit down the line significantly. Once we are in with customers we plan on improving our product over time which will cause consumers to buy from us again later down the line.

4. Consider the influence of the qualitative factors on project success.➢ Interaction between the projects and the firm as a whole

- Externalities and Strategic Fit1. Costs of other (future, current, and past) products2. Benefits of other (future, current, and past) products3. Dependence on available resources4. Follows firm’s current missions and goals 5. Ability to use current strategy or change/adapt to a different one

➢ Interactions between the project and the markets in which the product will be sold - Impacts future product prices and volumes

1. (Future) competitors and their substitute products may play a role 2. Customers’ wants and needs are ever-changing 3. Suppliers have power (may impact design of product) 4. Time vs quality conflict

➢ Interactions between the project and the macro environment- Major economic shifts, Government regulations, Social trends

1. Changes in foreign exchange rates2. Labor costs and/or material costs 3. Environmental friendly interest conflicts