Spinnaker Case Writeup - 643 Words

Element of Strategy Strategic Choice Rationale Target market Software in home educational its what the public Marketing segment of microcomp. industry. wants (edu. software), atari/commodore 64; Branding growing industry, little competition in edu. software Distribution direct sales force, sell directly to one of biggest assets, cheaper large retailers than offering 5% commission Manufacturing 13 ppl. full time; 140 ppl over very small cost, does Christmas season, $75K cost overrun only $75k Financial line of credit of 6mil at prime rate; in 1986 the home comp. indust- limit 80% recievables, potential ry will take off?, incredible relaxing pt, want 3-5 mil by†¦show more content†¦Why? The bank could possibly be uncertain of lending the money to Spinnaker because, of the uncertainty this third party development business will bring success wise. However, it does prove great potential with growing technology. PART 2 What are Bowman’s alternatives? Are they mutually exclusive or can some be done in parallel? * atari had asked Spinnaker to handle its whole software busioness, including program development, packaging design, advertising, ans store display * atari would just manufacture it would do it offshore at a low cost and take care of sales and dist. * proposal from Commodore to develop four programs for foreign languages for 350,000 and 12 educational products at 1 mil and pay royalty * proposal from atari to develop 47 products for 8.3 mil * sell part of company to large corporation For each option you should be prepared to speak to: What it will take resource-wise to execute on each option 1. go with atari: will need ability to produce 47 products with limited resources 2. commodore: ability to 4 programs 3. sell part of company: big loss of equity What is the time-frame required to make it happen 1. around a year, because will be releasing new system 2. around a year, becasue will be releasing new system What is the likelihood of success 1. uncertain, could take off with introduction of new system but trends and tech are always changing 2. uncertain, educational trends