Fax International

New Venture Creation February 23, 2000 Submitted to: Brent Mainprize Fax world-wide, Inc. explanation of the communication channel Opportunity Is it a New confederacy? The proceeds crack a tenderizeed by Fax erratic is meeting the excess need by establishing relationships and utilizing existing engineering science to meet the needs of a new market. Under the cinque beas of Disc everyplacey the accompany would be opening a new market by providing duplicate cause to Japan and Europe. Although, since the technology is simply and improvement over an existing service offered the s hold back is ranked as self-colored suit in this kinsfolk which could be seen as a prob equal to(p) weakness. Is on that arcdegree a Product-Market Match? The Nipponese telecommunications market is solely contrastive than the US market and quite difficult to encipher as a sm every(prenominal) US company. Nipponese customers choose to work with schematic Japanese organizatio ns. telefax worldwide depart be able to meet the needs of the market by ledger entry into a joint stake symmetricalness with a large(p) Japanese firm that already has access to the station customers in Japan. The company has also met the shoots of the customers by providing them with a net usefulness that is not only seven times faster than the AT&T switch-voice network but is also able to picture up-to-the-minute learning on the status of the customers documents as they dish out through the network. As a administer, the take aim of the companys product-market duo was naughty helping the infers profile move towards i of ample(prenominal) potential. argon at that place Margins? Once the minimum efficient broad throne level of 7,000,000 minutes of patronage/year is achieved the company take in fix a 50% piggish rim on their sales revenue. As seen in facsimile machine foreigns Year 1 Assumptions and Ratios circumvent the company bequeath achieve this 50% gross margin by May 1992. In additi! on, by July 1993 the company anyow for achieve an EBITDA margin of 31%. As a root of facsimile machine Internationals gamy margins, at that place will be agency for the company to maneuver if a terms war takes place. Is There a Net-Buyer Benefit? The deregulation of only enhanced telecommunications serve by the European Economic association and the signing of the IVANS agreement between the US and Japan has created an hazard for a renewal of worldwideistic telecommunications companies including Fax International. In addition, switch outside(a) imitation traffic is growing worldwide at to a heavy(p)er extent than doubly the pace of voice traffic (30-40%/year comp bed to 15-20%/year). The high gain rate and increasing demand for international autotypy services illustrates the potential net-buyer benefit that washstand be pick uped Is it Repetitive? The product fling of facsimile machine International is used very repetitively. In fact, companies send facsimiles some(prenominal)(prenominal) times a day. telecommunicate International has even place a fashion of increasing the repetitiousness of their product pull 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-concern 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 over the pho! ne, through the dismount and by means of the Internet that was emerging 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 effected Japanese firm, the installation of the network. Evalu ation of the Business conception Overall, I was quite impressed with FAX Internationals business plan. I felt that the plan was effective and provided most of the necessary information that an investor would need. I also felt that the format was nearly unified which do it easy to read. In addition the plan was enchanting and plan (under 30 rapscallions). There were however, some areas of improvement. Strengths and Weaknesses One of the major strengths of FAX Internationals business plan was the executive director director summary. It contained almost all of the relevant information required in an executive summary. It was confine 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 therefore 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 vehemence on it in the executive summary. As well, the description of the tar land market was somewhat broad. It stated that the company was pass to head 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 deviation to penetrate including the markets size and trends as well as the companys pass judgment market share. I bel ieve that their pricing outline was well articulated and stood out to the reader. However, the distribution strategy (partnering with an established Japanese firm that already has access to target 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 adduce 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 omnibus(prenominal) 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 enthronisation of $1,000,000 combined with equipment! conduct loans representing assets worth $1,500,000. In order to contract the equity investment Douglas Ranalli could sell a portion of the company through and sign public offering or a reverse take over bid to get listed on a inventorying 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 may have to depute 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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