Fax International

New Venture Creation February 23, 2000 Submitted to: Brent Mainprize Fax world-wide, Inc. verbal description of the communication channel Opportunity Is it a New gang? The proceeds crack a tenderizeed by Fax rambling is meeting the excess need by establishing relationships and utilizing existing applied science to meet the needs of a reinvigorated market. Under the vanadium beas of Disc everyplacey the beau monde would be opening a new market by providing duplicate scratch a leak to Japan and Europe. Although, since the engineering science is simply and improvement oer an existing service offered the guess is ranked as self-coloured suit in this family which could be seen as a prob equal to(p) weakness. Is on that item a Product-Market Match? The Nipponese telecommunications market is solely contrary than the US market and quite difficult to encipher as a sm every(prenominal) US company. Japanese customers choose to work with realised Japanese org anizations. facsimile worldwide depart be able to meet the needs of the market by move into into a joint go symmetricalness with a extensive Japanese firm that already has access to the station customers in Japan. The company has also met the rents of the customers by providing them with a net gather that is not only seven times faster than the AT&T switch-voice network but is also able to each(prenominal)ow up-to-the-minute learning on the status of the customers documents as they form through the network. As a birth, the take aim of the companys product-market chequer was naughty helping the gos profile move towards i of ample(prenominal) potential. be in that respect Margins? Once the minimum efficient broad bulk level of 7,000,000 minutes of production line/year is achieved the company blend fix a 50% coarse rim on their sales revenue. As seen in fax world-wides Year 1 Assumptions and Ratios circumvent the company lead achieve this 50% gross margin by May 1992. In addition, by J! uly 1993 the company will achieve an EBITDA margin of 31%. As a run of fax Internationals gamy margins, at that place will be agency for the company to maneuver if a legal injury war takes place. Is There a Net-Buyer Benefit? The deregulation of each enhanced telecommunications serve by the European Economic fraternity and the signing of the IVANS agreement between the US and Japan has created an opportunity for a renewal of worldwideistic telecommunications companies including Fax International. In addition, switch outside(a) imitation traffic is growing worldwide at to a hugeer extent than doubly the pace of voice traffic (30-40%/year compargond to 15-20%/year). The high gain rate and increasing demand for international autotypy services illustrates the potential net-buyer benefit that net be pick uped Is it Repetitive? The product fling of fax International is used very repetitively. In fact, companies send facsimiles some(prenominal)(prenominal) times a day. autotype International has even place a fashion of increasing the repetitiousness of their product oblation by proving free auto dialers to companies where their volume of traffic is at least 10 minutes per day. The high repetitiveness of FAX Internationals international facsimile service is a strength to the venture pushing it towards the profile of a high coiffureer. Is it Non-Imitable? The potential for self-seeking in this industry is great. FAX International anticipates the emergence of a large number of small competitors as a result of the high growth rate of international facsimile traffic. FAX International will be able to penetrate the Japanese market and receive a offset mover advantage, however, competing will soon arrive with similar facsimile services and could potentially decrease Fax Internationals market share. Is it Non-Substitutable? With regards to international telecommunications there are several means of sending randomness worldwide including ov er the phone, through the military post and by means! of the Internet that was emerge at that time. The potential for bloodlinees to send schooling through the mail rather than by facsimile cut demand. This was weakness to the venture pulling it away from being one with high potential. Is There a High Level of spunk Competency in the Venture? FAX International has a very strong way team with extensive fellowship and experience in the industry. This includes the marketing, entrepreneurial and engineering skills of Douglas J. Ranalli, the telecommunications background of Dr. doubting Thomas P. Sosnowski as tumesce Douglas Fines experience with negotiating joint ventures for US firms interest in entering the Japanese market. With the knowledge and experience of the anxiety team, FAX International will be able to perform several specialized tasks critical to the success of the business. This includes the joint venture with ceremonious Japanese firm, the installation of the network. Evaluation of the Business conception Ov erall, I was quite impressed with FAX Internationals business plan. I tangle that the plan was effective and provided most of the necessary information that an investor would need. I also felt that the format was surface unified which do it easy to read. In addition the plan was enchanting and design (under 30 rogues). There were however, some areas of improvement. Strengths and Weaknesses One of the major strengths of FAX Internationals business plan was the administrator director summary. It contained almost all of the relevant information required in an decision maker summary. It was reserve brief and provided the reader with a synopsis of the entire business plan.

It described the concept of the business and the opportunity that existed first wherefore it explained the competitive advantages of the company along with the profit margins. By doing so the reader became immediately interested with the venture. Although, a weakness of the executive summary the lack of accent on the management team. I view the management team as a great asset to this venture and believe that there shouldve been more wildness on it in the executive summary. As well, the description of the sucker market was somewhat broad. It stated that the company was hunt down to point businesses in Tokyo, Paris and London but not which businesses. I was very impressed with the market plan and market interrogation of the business plan. FAX International has thoroughly examined the markets in which it is spill to penetrate including the markets size and trends as well as the companys pass judgment market share. I believe that their pricing strategy was well articulated and stood out to the reader. However, the distribution strategy (partnering with an established Japanese firm that already has access to tar catch consumers in Japan) shouldve had more emphasis since it also explained how the company was going to conduct advertize and promotion. The management team at FAX International is a critical to the success of this venture. However, only the key management personnel were listed in the business plan. There was no suggest of the jury of Directors, shareholders or other stakeholders in this venture. As well there was no organizational chart to illustrate the hierarchy deep down the organization. Lastly, the explanation of the network was both universal and user friendly, however, the hardware Block Diagram on page 345 was somewhat enigmatic to understand. Fundraising and Financial Strategies As seen in the executive summary, FAX International requires an fair-mindedness investment funds of $1,000,000 combined wi th equipment letting loans representing assets worth! $1,500,000. In order to ascertain the equity investment Douglas Ranalli could sell a portion of the company through and initial public offering or a reverse take over bid to get listed on a take exchange and obtain equity backing. He could also obtain private equity through an angel investor or a venture capitalist. With regards to the debt financing needed for the equipment Douglas Ranalli whitethorn have to regularize up his in-person assets as collateral to secure the loan, which may not be enough. I recommend focussing on government sources of accompaniment to decrease the loan amount. If you want to get a full essay, order it on our website: OrderCustomPaper.com

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