ECONOMIC ANALYSIS

“CyberGlove”

Maxim Laura - Calc IV

Morar Andrei-Bogdan - AIA IV
Cioba Cosmin - AIA IV
Vultur Dorel - AIA IV
Motto:

“Making the workspace better, by using a more hands-on approach”

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General description of the product:

We want to develop a product which will act as a substitute to the mouse and keyboard. By using
the piezoresistive effect, we want to try and implement this method to capture the motions of the
hand and the individual fingers and translate these motions into data, which can be interpreted and
converted by our algorithms into gestures equal to the mouse and keyboard.

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 Vision: Collins-Porras Vision Framework

Core Values:

Innovation – changing the world, one transistor at a time

Quality – offering the best and unmatched results
Risk Taking – encouraging self and others to take risks for a brighter future

Purpose:

Our purpose is to change the way the world interacts with technology and the way technology
interacts with the world

Strategic intent:

Crush any competitors that are foolish enough to take us on.

Getting bought by a huge company for over 1 billion US dollars in just 2 years time.

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 Macroenvironment – PEST Analysis

Economic factors:

Global recession
Being that the global recession is an important factor for the consumer shift, making people more
sensitive to price, the company would take precautions by firstly making the product more
accessible, more cost effective and thirdly, investing more in brand and product awareness.

Ecological factors:

Going green
Our company’s standpoint on the ecological matter is: “We love green and green loves us”. We use
only alternative energy sources to power our offices and production lines and we use biodegradable
materials to develop our products.

Cultural factors:

People are always looking for the next new thing in technology, and we try to offer it to them. The
new revolutionary way of interacting with ones home PC is sure to captivate even the least
technologically savvy person. Consumers want to have more control over their devices and with
CyberGlove we try and solve this problem for them.

Technology factors:

As changes in technology keep occurring we try and keep up with these changes. Raw materials
and components needed for development become cheaper and smaller every couple of months, thus
offering us the possibility to envision a transition from our current product form, to one less power
consuming and less bulky with less fabric, making it a more hands on approach.
Technological substitutes which might replace our product would be the method of using infrared
cameras to capture the movements, whereas our product does this by using the piezoresistive effect.
Optical motion capture has yet to be used for interaction with a home PC thus creating a market
niche which we try and take advantage of.

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 Competitive Environment - Porter’s Five Forces

Industry competitors – Inter rivalry

As there isn’t a company which already supplies similar products for this marketplace, there is a
huge opportunity for us to assert our dominance over the market niche as soon as possible,
gathering as much market shares as possible. Although, there is an already established rivalry
between these companies which might grow to encompass us as well.

Potential Entrants
The potential entrants for this marketplace could start from companies which already research and
develop these types of gloves to huge organizations like Microsoft and Intel. The threat of the latter
would be great but it would also come late in the products life giving us a small but crucial time
advantage.

Substitutes
The most likely substitutes would be the company’s which already produce this type of digital
gloves but market them for other applications, different from home PC use. These are the ones who
could very easily extend their products capabilities to act as potential substitutes.

Suppliers
Being that there’s already an existing market for this type of gloves, the suppliers have become
numerous thus lowering their bargaining power, not considerably, but enough to ease our
admittance into this marketplace.

Buyers
Initially, being the only organization that produces this product for this type of use, with a
monopoly, the bargaining power of the buyers would be very limited. With time, as other
company’s will try and enter this marketplace and as the number of buyers increase, their influence
will grow accordingly.
Our scope is to make it so people will rate our company high, regarding product quality, services
and fees, to establish dominant grounds from the beginning.

Other aspects of the competitive environment

Markets
The global market is in a perpetual growth, but this stage in the evolution is the most appropriate
for releasing our product, leaving us quite much time to evolve and develop. The product life cycle,
if it manages to become a widely used instrument, is predicted to be at least two decades.
Potential Entrants
Microsoft, Intel,
Logitech, Lexmark

medium but late Buyers

Suppliers
Affinity of buyers
Existing market medium low to new and unique
for components bargaining Non existent bargaining
(at the moment) gadgets.
power power

high

Substitues
Extending the 6
capabilities of
similar products
 Resource Audit

Physical Resources
- a new 3 story office building situated in Orange County, NY
- 10.000 square meters of space for the production line adjacent to the office building
- 1000 square meters warehouse also adjacent to the office building
- new age machinery and equipment for developing the CyberGlove

Human
- 4 PhD’s in the research department
- 2 Masters in the research department
- warehouse workers
- tailors
- 1 CEO and 4 board members
- 1 accountant

Financial
- capital 300.000 US dollars
- 100.000 US dollars non refundable credit from the Bank of EU

Intangible assets
• legally protected
- patents for the basic structure of the glove
- CyberGlove is a registered brand name
- copyrighted manuals
- registered design of the glove
- ownership over the web domains www.cyberglove.com .org .inc .net
• not legally protected
- confidential algorithms
Intangible resources
• functional skills
- employee know-how
- trade secrets

• cultural capabilities
- strong ability to innovate

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 Value Chain Analysis

PRIMARY VALUE ACTIVITIES

Inbound Logistics
- shipping of primary materials is free, courtesy of the suppliers
- material handling, warehousing and inventory control is structured and divided among the
warehouse workers
- possible returns are handled by the supplying companies in collaboration with the
warehouse floor staff
Operations
This is our primary activity and our strong suite. We will strive to become the best at what we do
and what we produce. We want to assert ourselves as having the best possible quality there is.
Investing in the R&D department will even more increase even this trait.
- fabrication of some of the gloves components and assembly of these parts is done by the
automated machinery on the fabrication line
- fabric manufacturing is done by hired tailors with help from the precise equipment
- testing is scrupulously done onsite, keeping to the motto “If we can’t make it 99% perfect
then it’s no use in making it”

Outbound Logistics
- finished products are stored in the warehouse and then packaged and delivered through fast
couriers to affiliated distribution units nation and worldwide

Marketing and sales

- advertising and promotion of the product is outsourced to a trusted company with years of
experience and know-how

Service
- repair and product adjustment is done by trusted third party members worldwide
- part replacement is done with the third party members or directly with the customers
through an online form or by phone via a 24 hour customer support system
- we offer 2 years guarantee for each product

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 The Base of Competitive Advantage

VALUE ADDED through Differentiation

The way we want to differentiate ourselves from other products is by creating a strong brand,
seeing that we will be the only ones with this product on the market for some time. We want to
make the phrase “interaction with the PC” to be synonymous with CyberGlove. We think that
CyberGlove is best name for this product. We also want to add value to our product by making the
shipping costs as low as possible, even considering shipping our products free.

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 Portfolio Analysis - BCG’s Growth Share Matrix

We categorize the initial stage in the life cycle of our product as being a “problem child”, because
the product we are trying to release onto the public is a new and unique product and it might take
some time until buyers will discover it. We will try and have an aggressive marketing strategy to
get the markets to adopt this product as soon as possible.

If the product catches the eye of the public, (this will certainly happed very quickly, being a new
gadget on the market ) it might pass to the “star” stage in the cycle. At this stage we are ready to
start investing in the brand name and in the product itself, to win back the market shares lost to
possible competitors which might arise. We will try and limit the possible competition by patenting
and trademarking as many components, methods, designs and algorithms in as many countries as
possible.

If we manage to keep our market share, the market will eventually mature and the product will
likely grow into a “cash cow” where if competitive advantage will be achieved, there will be
generated a lot of cash flow, thus we will need to invest into supporting infrastructure to improve
efficiency and increase cash flow even more. We will try and maintain our product at this stage by
investing in the R&D department and coming up with new upgrades for the product, also, every
now and again, coming up with new tweaks and changes to the product just so we remain ahead of
our competition.

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 SWOT Analysis

STRENGHTS WEAKNESSES
- quality products - weak marketing and sales
- high technological skills department
- creating a new marketplace and
owning all market shares
(monopoly)

OPPORTUNITIES
- changing customer tastes and
needs
- possibility of creating a strong
brand name from the start
THREATS
- giant competitors like
Microsoft, Intel, Lexmark,
Logitech
- using optical motion to get the
same effect for the product

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