What is the main problem in this case?? What do you think about the options that are presented? Which would you choose??? Go the the Handbar website at www.avin.ca and think about what new innovations would be in order for this company to begin thinking about to improve its competitiveness.
In the summer of 2002 Ian McKenzie developed a unique tool to help people exit from smaller automobiles. He was employed in new car sales for a Victoria B. C. dealership and had noticed many people, particularly those who were older or had leg injuries or medical issue had a difficult time getting out of the passenger side of smaller vehicles. They would attempt to lever themselves out of the seat by grabbing the door, but that usually added to the difficulty since it would close on them. After some time studying the problem he came up with the idea of inserting a steel bar into the door latch and by using it as a handle they could easily lean on the handle and rise out of the vehicle. (See Figure A)
He was eager to commercialize his new idea and wondered how he could determine the potential for his new invention, for which he had filed a design patent. His consultant offered three possible solutions. Firstly he could do a telephone survey of the lower mainland Vancouver area at a cost of $25,000. Secondly he could do nothing and hope his business plan forecast would be accepted by potential investors. He estimated that everyone buying a new car would be interested in the unit. He had determined that there were over 120 million automobiles in North America and if half of them purchased his product he would be very successful. He estimated the Handybar would sell for over $20.00 each at retail and wholesale at $15.00 from his warehouse. It will cost him about $5.00 each to produce in quantitiy.
Thirdly he could interview a number of retail outlets that sold products to people with mobility problems and obtain a forecast from that source at a cost of about $10,000 to survey 25 outlets.
He had yet to obtain financing although he was confident he would succeed and was prepared to borrow whatever funds were needed from his in-laws and friends.
· What is the problem?
· What are the options?
· What is your solution? Justify this using references