Micro Fridge

Group 5
Anuran Saha 13P010

Arjun Murthy 13P012
Biswadeep Das 13P015
Divya Yadav 13P020
Ishita Bhatia 13P024
Amol Parab 13P030
The Start
Bob Bennet Masters Degree in Engineering Management
Restless in his present job
Desires to start his own company
His forte - Sales
A unique idea combination of microwave oven + refrigerator
Idea liked by the Housing Director of Boston University
Asks for royalty from GE for this idea. Later, rejects it

MicroFridge

Microwave
Freezer
Refrigerator
About the product
Combination of refrigerator, freezer and microwave unit
Targeted at home away from home segment
Benefits
Would help solve electricity problem in school
Energy efficient
Students could cook safely
Students could purchase food from stores on campus
Parents concerns were addressed
Convenient and easy to use
Very useful for military bases and hotels/motels

The Survey
5000$ spent on market survey
Findings
College students unhappy with current single-door refrigerator models
Wanted a 2-door model with separate freezer compartment
Willing to pay for one (new model) in their room

Conclusion College students are most interested
Awarded a Patent

MicroFridge Inc.
Co- Founded by Bennet in mid-1987
35,000$ - his initial investment (60% ownership)
Raised another 1.2M $ in next 3 years

Japanese Foresight
After initial rejection, Bennet approaches Japanese companies
Samyan shows interest in the product
1987 - Work on 1
st
prototype starts
2
nd
Patent obtained giving equal rights to both parties
Contract signed
Samyan to supply all Microfridge units through July 1995
Samyan cannot sell or license the manufacture of units to anyone else through July
1997
1988 - Samyan completes 1
st
Prototype
Samyan condition 100$/unit to be paid at time of order

MicroFridge Products

Under consideration
Combination of TV/VCR/Stereo

Microfridge unit
Microwave oven - 600W, 0.5
cubic foot storage
Refrigerator - 2.1 cubic feet
storage
Freezer - 0.7 cubic feet
storage
Price 399$
MicroMart
Dry good storage and
display unit
Side by side
refrigerator/freezer
MicroBar
A modern design minibar
for use in hotel rooms
Only refrigerator segment
More energy efficient
Target Market
Home away from Home
Potential market elderly assisted living apartments (over 1 M)

Military Bases
200 military bases
Militarybarracks/
bachelors quarters - 280,000
rooms
25% revenue share
Major success factor
Military sales coordinator

Colleges
1877 schools with housing
1.25M dorm rooms
1994- 55,000 rooms had their unit
55% revenue share
Revenue Model (Sell or rent) :
Campus wide Installation
Campus rental program
Company Rental Program

Hotel/Motel
Over 3 M hotel/ motel rooms
Many of them not having on-
site restaurants
Difficult for guests to find
food service away from hotel
Revenue model
with or without Microfridge in
the room (3$ charge)
Selling food through MicroMart
unit at motel lobby

Sales and Distribution
Initial Failure Distributors
Reason unable to sell MicroFridge units through retail
Success Direct Sales Force
Sales Forecasting

Customer Service
Aimed to deliver 1
st
rate Customer service
Customer feedback every 6 months
Immediate shipment of product within 48 hrs in case of repairs
1 extra replacement unit given free for every 100 units ordered

Competition
Limited degree of competition with retailers selling microwaves and
refrigerators, and leasing companies
15% of colleges on contract with leasing companies
Acquisition of Campus Equipment Company
To run midwestern leasing operations
Got contracts with 16 large colleges
Established relations with 39 schools

Options and Decisions
Options
Set up new distribution channel
Stick with high priced Samyan

Decision
Daewoo (Korean Company) to supply microwave ovens at 83$
Since Samyan did not accept delivery from them, Microfridge decided to use 4 regional warehouses
So, Daewoo microwave shipped to warehouse closest to customer
Samyan microwaves (rented) Went to warehouse
Samyan Microwave (Selling) went directly to costumer

Plan for the future
Focus on new products in home away from home category
Increase entry barriers in the market
Increase sales rapidly

Growth so far
First-mover advantage: Home away from home market
-Technological leadership
- preemption of assets
- buyer switching costs

Strategic Acquisitions

ANSOFF MATRIX

Growth in the future
More products to sell to home away from home market
Internal Corporate Venturing
Autonomous
Strategic Behavior
Induced Strategic
Behavior
-No direct reference to
existing strategic
concept
-Radical innovations
eg iPod
-Implementation of objectives
& measures within the
strategic concept
-Incremental innovations eg
iPhone

Four Models of Corporate
Entrepreneurship
Resource
Authority
Organizational
Ownership
Dedicated
Ad Hoc
Diffused
Focused
THE
ENABLER
Provide funding
and senior
executive attention
to prospective
projects
THE
PRODUCER
Support full service
group with a
mandate for
corporate
entrepreneurship
THE OPPORTUNIST
No deliberate
approach; internal,
external networks
drive concept
selection& resource
allocation
THE
ADVOCATE
Strong
evangelization by
co; business units
primary source of
funding

Advocate Model
Reinvigorate/transform business units; support corporate
entrepreneurship teams
Coach and facilitate business units in pursuing new
opportunities
Well connected corporate veterans with small staff of
business building coaches and CEO imprimatur
New businesses relatively close to business unit core or
significant business unit process efficiencies
STRATEGIC
GOAL
FUNCTION
INPUTS
OUTPUT
Thank you

Micro Fridge

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Group 5

Anuran Saha 13P010

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