B2 Team 2 Rachel Bauer, Ryan Beil, Kelsey Cowher, Jose Egui,

Cairin Fay, Brandon Hairston, John Kang Alexine Mathew, Tin Nguyen, Cristal Wang

Agenda

Meet Our FamiliesOur Product and Its Competitio

nMarketing OverviewOperations Costs and Logistics Operations Capacity and Invent

oryOnline and Mobile PresenceInformation Systems OverviewFinance OverviewJoin Our Family

Meet the Jones Family

Trouble Motivating Their Kids

To Do Chores

Frequently Use Their Own Pool

Environmentally

Conscious

Keeping Up With the JonesesNext door at the Smith Family…

Do Not Use Their Own

Pool Frequently

Spend Over $100 on

Pool Toys Each Year

Interest in RC Toys

The AquaFriend

A remote controlled pool toy in the shape of a shark and floats on the surface of a pool to

collect debris through a removable net attached to its bottom. Our product will be

propelled by a small battery-charged motor.

Competitive Advantage

AquaFriend Key Benefit:Unique toy that combines chores and play

Distribution Channel

Marketing Expense Breakdown – Year 3

Push:• 3 Trade Shows

$23,000• 2 monthly

Trade Magazine Ad’s

$12,500

Pull: • 2 Magazines: 4

Print Ads Total$164,953

• Online Ad’s$64,607

• 2 TV Commercials$100,000

• 3 PR Mentions $5,000

• Creative $21,536

Logistics

Material suppliers (China)

Shenzhen Port

Long Beach Port

Fresno Facility

1 Day 18 Days

0.5 Days

Shenzhen Jillion

3PL

Shenzhen Jillion

3PL

Shenzhen Jillion

3PL

Final Assembly

of FG

COGS

Year 1

Year 2

Year 3

Year 4

Year 5

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$17.00

$17.50

$18.00

$18.50

$19.00

$19.50

$20.00

$20.50

$755,999.48

$1,103,912.94

$1,485,938.19

$1,873,742.30

$2,297,060.74

$19.93

$19.04$18.91

$18.66$18.45

Total Cogs Unit COGS

Tota

l C

OG

S

Un

it C

OG

S

Year 1 Year 2 Year 3 Year 4 Year 5

Total COGS $755,999.48 $1,103,912.94 $1,485,938.19 $1,873,742.3 $2,297,060.74

Unit COGS $19.93 $19.04 $18.91 $18.66 $18.45

Capacity

Year 1 Year 2 Year 3 Year 4 Year 5 Total Units 39,131 58,800 78,750 100,104 123,379

Capacity Efficiency

93.17% 87.50% 93.75% 91.67% 97.92%

Year 1 Year 2 Year 3 Year 4 Year 5 0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

80%

84%

88%

92%

96%

100%

39,131

58,80078,750

100,104123,379

93.17%

87.50%

93.75%

91.67%

97.92%Total Units

TO

tal U

nit

s

Cap

aci

ty E

ffici

en

cy

Inventory

Year 1 Year 2 Year 3 Year 4 Year 5

Total Inventory $118,904 $155,761 $197,193 $259,606 $289,765

COGS $755,999.48 $1,103,912.94 $1,485,938.19 $1,873,742.3 $2,297,060.74

Inventory Days 48.8 51.5 48.4 50.6 46.0

Year 1 Year 2 Year 3 Year 4 Year 5 $0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

42

44

46

48

50

52

$118,904

$155,761

$197,193

$259,606

$289,765

48.8

51.5

48.4

50.6

46

Total Inventory

Inventory Days

Tota

l In

ven

tory

Inven

tory

Days

Staying Connected with AquaFriends

Staying Connected with AquaFriends

Mobile Presence

Key Performance Indicators

Conversion Rate

Marketing

IS

Finance

Operations

Safety

IS

Operations

Risk and Mitigation

• Special promotions and benefits for returning customers

Change in purchase intent

• Supplier contracts, employee contracts, machine intensive operations

Increase in variable costs

• Increase Year 0 pre-marketing expenses

Change in awareness

• Increase marketing expenses in Years 0-3 to increase demand and influence retailers

Change in manufacturing selling price

Income Statement

 (US Dollars

)

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Revenue

  1,330,395

2,015,853

2,708,023 3,384,020

4,163,764

Gross Profit

  574,396 911,940 1,222,085 1,510,277

1,866,704

Net Income

(60,026)

(9,271) 134,666 230,877 264,616 407,448

 

Paid In Capital Breakdown

(US dollars) Year 0 Year 1 Year 2

Cumulative Paid-in Capital

105,094 411,934 457,454

Additional Paid-in Capital

105,094 306,840 45,520

Investor Paid-in Capital (75%)

78,820 230,130 34,140

FFM Paid-in Capital (25%)

26,273 76,710 11,380

 

Investor Paid-in-Capital NPV: $284,774

Investor Snapshot

  Ownership NPV IRR

Project   $103,020.95 31%

Investors 70% $53,129.73 29%

FFM 30% $49,891.22 35%

 

Returns

Terminal Value Evaluation:• From Year 5 to Year 6 grows

94%• Product peaks in year 6,

and Cash Flow stays constant in year 7

• Declining at a 20% rate perpetuity

Welcome to the Family!

Thank You for Your Time

Back Up Slides

oMarketingoOperations ManagementoInformation SystemoFinance

Marketing Back Up Slides

o Segmentation Treeo Profile of the Retail Enviro

nmento SWOT o Sales Reps vs. Sales Forceo Segment 1 Demand Charto Segment 2 Demand Chart

o Magazineso Adso Base Caseo Optimistic Caseo Pessimistic Case

Segmentation Tree

Profile of the Retail Environment

SWOT Analysis

Sales Reps vs. Sales Force

Our max units sold to independent retailers is 23,604We never go past the point of indifference

Great-White Guppies: Demand Chart

Hammerhead Homies: Demand Chart

Magazine

● Regional● Circulation Size: 2 million ● 65% in our target market● CPM

o Years 1-2: $36.07o Years 3-5: $53.10

Magazine

● National● Circulation Size: 1.1 million ● 70% in our target market● CPM○ Years 1-5: $197.29

Family Circle Ad

National Geographic Ad

CSR Ad

Guerilla Marketing

Marketing Base Case: Great White Guppies

Marketing Base Case: Hammerhead Homies

Marketing Optimistic Case: Great White Guppies

Marketing Optimistic Case: Hammerhead Homies

Marketing Pessimistic Case: Great White Guppies

Marketing Pessimistic Case: Hammerhead Homies

Operations Back Up Slides

o House of Qualitieso Original Design vs Final

Designo BOMo Supplier Listo Make or Buy Decisiono Facility Location: Factor

Ratingo Facility Location: Center

of Gravity

o Fresno Facility Informationo Facility Layouto Five Year Aggregate Pl

anningo Process Designo Capacityo Five Year Organization

al Structureo Units Sold Comparison

for 3 Scenarios

House of Quality

Original Design v. Final Design

Bill of Materials

Supplier List

Supplier List

Make-or-Buy Decision (Motor)

Make-or-Buy Decision (Casing)

Facility Location: Factor Rating

Average X = 17/5 = 3.4Average Y = 19.5 = 3.9

Facility Location: Center of Gravity

● 260 Fulton Street, Fresno, California● 13,237 square foot warehouse (120 feet

by 110 feet)○ 50 feet by 110 feet: office space○ 70 feet by 70 feet: inventory

storage○ 70 feet by 40 feet: process area

● Costs $47,653.20 per year

Fresno Facility Information

Facility Layout

Aggregate Planning Year 1

Aggregate Planning Year 2

Aggregate Planning Year 3

Aggregate Planning Year 4

Aggregate Planning Year 5

Process Design

Efficiency

Capacity

Organizational Structure Year 1

Organizational Structure Year 2

Organizational Structure Year 3

Organizational Structure Year 4

Organizational Structure Year 5

Units Sold Comparison for 3 Scenarios

IS Back Up Slides

o Year 1-5 Investments

Category Cost

Hardware $2,332

Applications $2,135.1

Data Management and Storage $12,000

IT Security $453

Networking & Telecommunications $7,284.87

Website Development $66,570

Consulting $17,930

Total $108,704.97

Year 1 Investment

Category Cost

Operating System $0

IT Security $453.26

Data Management and Storage $12,000

Networking & Telecommunications $1,359.66

Website Development $40,010

Consulting $17,929.6

Total $71,752.52

Year 2 Investment

Category Cost

Hardware $3,169

Applications $1,167.6

Data Management and Storage $12,000

IT Security $453.26

Networking & Telecommunications $2,102.9

Website Development $50,010

Consulting $17,929.3

Total $86,832.36

Year 3 Investment

Category Cost

Data Management and Storage $12,000

IT Security $453.26

Networking & Telecommunications $1,359.66

Website Development $50,010

Consulting $35,859.2

Total $99,682.12

Year 4 Investment

Category Cost

Data Management and Storage $12,000

IT Security $453.26

Networking & Telecommunications $1,359.66

Website Development $60,010

Consulting $35,859.2

Total $109,682.12

Year 5 Investment

Finance Back Up Slides

o Income Statemento Cash Flow Projection o COGS and SG&A Compa

rableo Balance Sheet Ratioso Breakeven Analysiso Sensitivity Analysiso Project Weighted NPVo Investor Weighted NPV

o Scenario Analysiso Pessimistic Analysiso Optimistic Analysiso Product Life Cycle & Ter

minal Value

Finance: Income StatementYear 0 Year 1 Year 2 Year 3 Year 4 Year 5

Revenue 1,330,395 2,015,853 2,708,023 3,384,020 4,163,764

Total COGS 755,999 1,103,913 1,485,938 1,873,742 2,297,061

Gross Profit 574,396 911,940 1,222,085 1,510,277 1,866,704

Operating Expenses 60,026 580,343 684,174 833,333 1,065,293 1,180,902

Depreciation - 11,985 11,985 12,619 12,619 15,383

Earnings Before Taxes

- 86,313 150,453 172,946 268,167

Taxes - 86,313 150,453 172,946 268,167

Net Income (60,026) (17,933) 129,469 225,680 259,419 402,251

Finance: Cash Flow Projection Table

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5

Cash Flow

-$105,094

-$350,152

-$42,055

$31,963

$84,927

$205,944

Growth

- -2.33% 0.88% 1.76% 1.66% 1.42%

Finance COGS and SG&A Comparable

Finance: Balance Sheet Ratios

Finance: Breakeven Analysis

Finance: Sensitivity Analysis

Finance: Project Weighted NPV

Finance: Investor Weighted NPV

Finance: Scenario Analysis

Pessimistic Base Optimistic

NPV -$183,374.68

$103,020.95 $1,291,768.37

IRR 13% 31% 71%

Finance: Scenario Analysis Pessimistic

Finance: Scenario Analysis Optimistic

Product Life Cycle and Terminal Value

0 1 2 3 4 5 6 7 8 9 10

-105094 -306841 -45520 28498 81462 202479 392810 392810 314248 251398 201119

Terminal Value:$1,200,000