Running Head: INDIVIDUAL PROJECT FEASIBILITY ANALYSIS

Individual Project Feasibility Analysis

Lon Peless
Davenport University
BUSN303 Business Research
Gail Hoskyns-Long, Ph.D., Instructor
10/1/2011

INDIVIDUAL FEASIBILITY ANALYSIS

Abstract
This paper explores the option of Cascade Engineering introducing additional office furniture to
its capabilities, as a way of expanding the company. Cascade Engineering does not currently
manufacture office furniture to be directly sold to the end customer, but does manufacture subassembly components of office furniture for its customers, including Herman Miller. The paper
the standard outline for a feasibility analysis including the following:

Company information, including key milestones and core competencies

Industry, including growth trends, potential barriers, major players

Market/Customer, including potential/targeted markets, customer profile/demand

Product, including features and benefits, developments, competitors

Management team, including experience/expertise or lack thereof

Financials, including start-up/working capital, break-even points and projections

All research will be performed online utilizing company websites and other websites that provide
related industry reports and statistics. Results of the research indicate that Cascade Engineering
should add the new office furniture, utilizing recycled plastic, to its product line. The company
is already implanted in the office furniture industry and would benefit from growing its product
line with this more affordable office furniture.

INDIVIDUAL FEASIBILITY ANALYSIS

Research Findings
I.

Company Information
Cascade Engineering is a manufacturer and marketer supporting multiple brands. It

manufactures for and market to a variety of industries such as automotive, commercial truck &
bus, solid waste & recycling, furniture, material handling and renewable energy. Its broad
portfolio of offerings includes manufacturing products for OEMs, marketing branded products,
and providing consulting services. The common thread weaving our businesses together is an
expertise in large part injection molding (About, 2011).
Since its founding in 1973, Cascade Engineering has grown to become a leading provider
of engineered plastics systems and components and a growing array of sustainability-focused
products and services that derive from our unique corporate experience. Today, as a global
company with more than 1,000 employees and 14 facilities worldwide, Cascades entire business
strategy is centered on growing the tangible expressions of its sustainability learning and
expertise. Sustainability principles are driving its longstanding plastics operations, and the
evolution of new business units, products and services (Company History, 2011).
II.

Industry Information
The major world-wide competitors in plastic office furniture production include

Steelcase, Inc., Herman Miller, Inc., and Haworth, Inc. These three manufacturing companies
are some of the largest contributors to the world-wide office furniture industry and, like Cascade
Engineering, are headquartered in Michigan. They would all be direct competitors to Cascade
Engineerings new product line.
Known since 1984 as "The Office Environment Company," Steelcase, Inc. is the world's
leading designer and manufacturer of office furniture. The company, launched in 1912 with a

INDIVIDUAL FEASIBILITY ANALYSIS

single product and 15 employees, supplies thousands of products worldwide produced in over 20
million square feet of manufacturing, shipping, and administrative facilities. A network of more
than 650 independent dealers sells Steelcase metal and wood office furniture, systems furniture,
seating, computer support furniture, desks, tables, credenzas, filing cabinets, and office lighting
(Steelcase, 2006).
Herman Miller, Inc. is one of the leading manufacturers of office furniture and furniture
systems, second only to Steelcase in sales. Ranked since 1986 among the top ten
in Fortune magazine's annual list of the 500 most admired companies, Herman Miller is
esteemed as an innovator in furniture design, as well as for its unique commitment to employee
relations and the environment. The company maintains operations in 35 countries (Herman
Miller, Inc., 2006).
Haworth Inc. is a global leader in the design and manufacturing of organic workspaces,
including raised floors, movable walls, systems furniture, seating, storage and wood case goods.
Family-owned and privately held, Haworth is headquartered in Holland, Michigan, and serves
markets in more than 120 countries through a global network of more than 600 dealers. The
company had net sales of US $1.11 billion in 2009 (Haworth, 2010).
III.

Market/Customer Information
There are many potential markets that are available to Cascade Engineering to market

their new plastic office furniture line. Cascade Engineering could market its new product line to
medical facilities, school districts and municipalities. The largest market open to sales of the new
products are small businesses. Small businesses represent 99.7 percent of all employer firms,
employ just over half of all private sector employees, pay 44 percent of total U.S. private payroll,
and have generated 64 percent of net new jobs over the past 15 years (SBA, 2007).

INDIVIDUAL FEASIBILITY ANALYSIS

IV.

Product Information
Cascade Engineering currently manufactures office furniture components which it

supplies to top office furniture manufacturers. The new product line would include the
manufacture of office furniture manufactured from recycled plastic that is currently generated
from its other operations. Being that the material has no cost, the product could be discounted to
the customer and be much more appealing to smaller businesses. This will also add to the
companys persona of being a green company, as the furniture would be using material that
would normally end up in a landfill.
V.

Financials Information

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Individual Feasibility Analysis
Recommendation

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References
About. (2011). Cascade Engineering. Retrieved October 1, 2011, from
http://www.cascadeng.com/about/index.htm
Company History. (2011). Cascade Engineering. Retrieved October 1, 2011, from
http://www.cascadeng.com/about/history.htm
EthoSource. (2011). The green office furniture toolbox. EthoSource Office Furniture. Retrieved
October 4, 2011, from http://www.ethosource.com/the-green-office-furnituretoolbox.html
Haworth, (2010). About Us. Retrieved October 2, 2011, from http://www.haworth.com/enus/About-Us/Documents/Haworth-Corporate-One-Page.pdf
Herman Miller, Inc. Company History. (2006). Funding Universe. Retrieved October 2, 2011,
from http://www.fundinguniverse.com/company-histories/Herman-Miller-Inc-companyHistory.html
Kuhn, B., (2010). Business model innovation for 2011. Office Furniture Dealers Association.
Retrieved October 2, 2011, from http://www.ofdanet.org/OFDealer-May-2011---IndustryInsight
Ownership Benefits. (2011). The benefits of choosing recycled plastic furniture. Retrieved
October 3, 2011, from
http://epsplasticlumber.com/index.cfm/page/p_benefits/benefits.cfm
Robins, L., (2010, January, 5). Copyright protection in the furniture industry. Furniture World.
Retrieved October 5, 2011, from
http://www.finnegan.com/resources/articles/articlesdetail.aspx?news=49d6ed57-7b6f4d23-8f25-02f2043cf770

INDIVIDUAL FEASIBILITY ANALYSIS

SBA. (2007). How important are small businesses to the U.S. economy? U.S. Small Business
Administration. Retrieved October 2, 2011, from
http://www.sba.gov/advocacy/7495/8420
Steelcase, Inc. Company History. (2006). Funding Universe. Retrieved October 3, 2011, from
http://www.fundinguniverse.com/company-histories/Steelcase-Inc-company-History.html

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BUSN303 Group Feasibility Analysis Template

The feasibility analysis will aid the researcher in deciding whether a business idea is viable. The data gathered for this analysis will provide enough information
to decide whether to go further with an idea or to abandon it. A well-done feasibility study will determine whether the product, market or business expansion plan
has a market of sufficient size to make a profit.
Use the table below and the assigned text to guide the process for the analysis. Be sure to include a separate References page, using correct APA citation
format. In-text citations for Facts We Know are also expected. Remember that this is primarily a fact-finding assignment; you may enter highlights of the
supporting data directly into the appropriate area of the template. When using this template for the Group Feasibility Analysis assignment, it will be followed
with making and presenting a fact-based solution to the business scenario at hand. When using this template for the Individual Feasibility Analysis assignment
(RAA), research findings and the recommended decision/solution will be summarized in a 5-7 page (excluding graphs, charts and other graphics) narrative
report, supplemented with a References page and Appendix containing the completed Feasibility Analysis template and any other supporting content.
Key Areas to
be Analyzed
Industry

Key Questions to be Analyzed

What are the dollar size, growth

trends, and life-cycle stage of the
industry?

Are there any barriers to entry? If

so, what are they?

Facts We Know (obtained from research)

Implications of Research Results

The value of the office furniture market hit its

peak in 2000, then slowly declined through
2003, and came back slowly until 2008:

It is difficult to predict the future of the market

due to the current fluctuations in the
economy. With the large positive change to
the market in 2010, it may be a sign of
better things to come for the office furniture
Value of U.S. Office Furniture Market (U.S. Prod.)
industry.
Year U.S. Production % Change
2010 $8,300
5.8%
2009 $7,845
-29.7%
2008 $11,160
-2.3%
2007 $11,420
5.5%
2006 $10,820
7.4%
2005 $10,070
12.7%
2004 $8,935
5.1%
2003 $8,505
-4.3%
2002 $8,890
-19.0%
2001 $10,975
-17.4%
2000 $13,285
8.5%
Barriers to entry are low (some safety and
performance standards must be met), and
anyone could easily start up an office furniture
design house with the right amount of capital
and expertise, both of which are in abundant

Competition is brutal, with several larger

competitors and countless smaller ones. For
many office buyers, price is the main
concern, which limits the amount of extra
profit that can be wrung from good design.

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supply.

Market/
Customer

What is the status of technology and Technology advancements and R&D continues to
R&D expenditures?
exist within the large industry players as they
try and develop new and innovative products.

Competitors can easily copy any new designs

that Herman Miller's labs produce, and at lower
cost because they do not have to pay for the
R&D to create them.

What are typical profit margins in

the industry?

According to a Steelcase colleague, typical profit

margins for the office furniture industry are
30% - 35%.

By using recycled plastic generated from the

scrap created by Cascade Engineerings current
manufacturing process, the profit margins
would be much higher.

What are distributors,

manufacturers, and suppliers saying
about the industry?

Who are the major players in the

industry?

What potential markets are available

to the business?

BIFMA is now forecasting 2011 orders to increase

by 9%, shipments by 14%. The majority in an
industry poll believe that is a too robust a
forecast, but the industry is looking better. The
opportunity is here and the time is now;
however, it appears that it is still survival of the
fittest. Capturing that opportunity in a timely
fashion will require an innovative business
model (Kuhn, 2010).

Steelcase, Inc.
Herman Miller, Inc.
Hayworth Corp.
Commercial business/manufacturers
Medical facilities
School districts
Municipalities
Home offices

It sounds as if the distributors are saying the

industry is looking good and it would be a good
time to enter, if a company is innovative.

There are a few large contributors to the

industry and many small contributors. The
possible downside is the fact that all three
major contributors are located in the same area
as Cascade Engineering.
The target market are people who want to have
simple furniture with the latest in technology,
combined with an old fashioned sense of fine
furniture. These people can be in corporate
offices, small-to-medium business, or in a
home office.

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Product or
Service

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What are the demographics and

psychographics of the target
market?

What is the profile of the first

Company executives
customer? What is the pain that is
School administrators
being cured with the businesss
Medical administrators
product or service?
The product allows for the target customers to
receive quality product at a lower cost.

What is the customer demand for

the product or service? How will
you triangulate that demand figure
to arrive at the best estimate of
demand?

What are the features and benefits of The advantages of recycled plastic furniture:
the product or service?

Will not rot, crack, chip, peel, or splinter

Minimal maintenance

Guaranteed to last for at least 50 years

Stain resistant

Impervious to insects and bacteria

Not affected by exposure to cleaning

products, chemicals, or intense sunlight

Cascade Engineering will focus on small

businesses because small business:
Represent 99.7 percent of all employer firms.
Employ just over half of all private sector
employees.
Pay 44 percent of total U.S. private payroll.
Have generated 64 percent of net new jobs over
the past 15 years (SBA, 2007).

Driven by the customer demand, most office

furniture manufacturers and dealers are hearing
the call for eco friendly materials and are rising
to the challenge by adding to their offerings.
Polyester, wood fiber and resin are all examples
of recycled raw materials that are finding their
way into the design of office environments.
While it might take a little research, ecofriendly products are becoming an increasingly
sought-after option (EthoSource, 2011).

The common bond amongst the people in the

demographics is the appreciation of quality
without paying the high prices.

The appeal of a quality product presented at a

lower cost will be a positive selling point to
those with purchasing power.

Using recycled materials will be saving the

scrap material from going to the landfill. Ecofriendly companies and organizations will
choose to buy eco-friendly products.

The product will appeal to people for the ease

of cleaning and low maintenance.

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Easy to clean
Mold and mildew resistant (Ownership,
2011)
What product development tasks
Design
must be undertaken, and what is the
Develop
timeline for completion?
Testing

Which intellectual property rights

can be acquired?

How are these products or services

differentiated from others in the
market?

Who are your competitors, and how

Steelcase, Inc. Cost
are you differentiated from them?
Herman Miller, Inc. Cost
Hayworth Corp. Cost

What are your competitors core

competencies? Do they have the
ability to move into your
competitive space?

Competitors core competencies are solely in the

manufacture and distribution of office furniture.

Which distribution channel

alternatives are available to your
business, and which customers will
they serve?

Distributors All customers

Wholesalers All customers
On-line sales All customers

Intellectual property law offers the furniture

designer the opportunity to carve out a unique
niche in the marketplace. The law protects nonfunctional design only (Robins, 2010).
Cost will be the biggest differentiation from others
in the market.

The typical length of time taken to launch a

plastics product through the design and testing
stage is approximately 14 months.
If Cascade Engineering designs its own office
furniture, it will be able to copyright the
design.

The cost of producing the office furniture with

reclaimed material will be much lower than the
competition, which will result in a lower cost to
the consumer.
The lower bill of materials cost, along with the
money saved in landfill costs, will keep
Cascade Engineering highly competitive in the
industry.
Cascade Engineering would be the only
manufacturer in the industry with the ability to
use its scrap plastics as the base material of its
products. Cascade Engineering already has
core competencies that provide scrap material
for this new product idea.

There are several ways to market the new

products and introduce them to the prospective
buyer.

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Founding (or
Managing)
Team

Financials

What experience and expertise does

the founding (or managing) team
bring to the business?

What gaps do they have in

experience or expertise?

How should those gaps be filled?

What are the start-up capital

requirements?

What are the working capital

requirements?

What are the fixed-cost

requirements?

How long will it take to achieve a

positive cash flow?

What is the break-even point for the

business?

What are the detailed assumptions

or explanations for the numbers you
are projecting?

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