Question

Discuss SPC's growth strategy. What additional market(s) would you recommend pursuing? Please answer this question with Jim Poss case.

Answer 1

Discuss SPC’s growth strategy. What additional market(s) would you recommend it pursue?

Jim’s strategy for Seahorse Power is to start off slower in hopes of eventually mass producing his product to meet the demand they hope to see. His use of viral marketing through word-of-mouth accounts of the capabilities of SPC will attract further investments, taking SPC closer to Jim’s goal of $700,000-$1million in B-round investments. SPC also planned to decrease cost of goods sold in order to lower the selling price. They already had to trim cost of materials by 75%, to around 2,500 per unit, and decided to sell them for $5,000 per unit, which was on the assumption from the buyer that they will pay for themselves in ongoing cost collection. SPC had future intent to reduce selling price to $3,000, a much more reasonable and competitive price in the industry. In addition to lowering costs, SPC works closely with their patent attorneys, to include any updates and future innovations under the protection of their patent, while being careful not to become too broad and lose in court filings from competitors. With these innovations and cost reductions, the SPC’s market share is bound to grow and Jim Poss will be able to nurture a successful, sustainable, company.

Some other recommendations of markets we believe Jim would consider moving into are: apartment buildings, construction/renovation sites (replacing the dumpsters/shipping containers), venues such as music festivals, high traffic beaches, and our previous suggestion of Brownfield Cleanup Sites. Each of these potential markets/sites provide SPC an opportunity for exposure and growth, as they will be able to flaunt their capabilities in these high-volume areas. A more portable model of the “Sunpack” compactors allow for expansion into many companies that are mobile, and may not have as large of an operation.