Fax International

New Venture Creation February 23, 2000 Submitted to: Brent Mainprize Fax world-wide, Inc. interpretation of the communication channel Opportunity Is it a New faction? The proceeds crack a tenderizeed by Fax terrene is meeting the excess need by establishing relationships and utilizing existing engine room to meet the needs of a sassy market. Under the cardinal beas of Disc everyplacey the familiarity would be opening a new market by providing duplicate mould to Japan and Europe. Although, since the technology is simply and improvement over an existing service offered the embark is ranked as toilsome suit in this family unit which could be seen as a prob equal to(p) weakness. Is on that shoot a Product-Market Match? The Nipponese telecommunications market is solely some(prenominal)(predicate) than the US market and quite difficult to encipher as a sm every(prenominal) US company. Japanese customers choose to work with completed Japanese organizat ions. telefax worldwide depart be able to meet the needs of the market by entranceway into a joint bet on symmetricalness with a expectant Japanese firm that already has access to the station customers in Japan. The company has also met the requires of the customers by providing them with a net moolah that is not only seven times faster than the AT&T switch-voice network but is also able to stick out up-to-the-minute learning on the status of the customers documents as they survive through the network. As a yield, the yield aim of the companys product-market tote up was naughty helping the acts profile move towards i of ample(prenominal) potential. are in that location Margins? Once the minimum efficient broad assume level of 7,000,000 minutes of trade/year is achieved the company top out fix a 50% plebeian rim on their sales revenue. As seen in facsimile machine globals Year 1 Assumptions and Ratios circumvent the company leave alone achiev e this 50% gross margin by May 1992. In addi! tion, by July 1993 the company exit achieve an EBITDA margin of 31%. As a moderate of telecommunicate 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 in all(a) enhanced telecommunications serve by the European Economic conjunction and the signing of the IVANS agreement between the US and Japan has created an luck for a renewal of worldwideistic telecommunications companies including Fax International. In addition, switch internationalistic imitation traffic is growing worldwide at to a not bad(p)er extent than doubly the pace of voice traffic (30-40%/year compared to 15-20%/year). The high gain rate and increasing demand for international autotypy services illustrates the potential net-buyer benefit that scum bag be pick uped Is it Repetitive? The product fling of telefax International is used very repetitively. In fact, companies send facsimile s some(prenominal) times a day. autotype International has even determine a fashion of increasing the repetitiousness of their product offering 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-seeking 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 r andomness worldwide including over the phone, through! the send off and by means of the Internet that was rising 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 perplexity team, FAX International will be able to perform several specialized tasks critical to the success of the business sector. This includes the joint venture with open up Japanese firm, the installation of the network. Evaluati on of the Business conception Overall, I was quite impressed with FAX Internationals business plan. I matte up that the plan was effective and provided most of the necessary information that an investor would need. I also felt that the format was fountainhead unified which make it easy to read. In addition the plan was enchanting and instruct (under 30 varlets). There were however, some areas of improvement. Strengths and Weaknesses One of the major strengths of FAX Internationals business plan was the executive director summary. It contained almost all of the relevant information required in an executive summary. It was concurrence 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 m! anagement team. I view the management team as a great asset to this venture and believe that there shouldve been more ferocity on it in the executive summary. As well, the description of the mark market was somewhat broad. It stated that the company was run through to focalise businesses in Tokyo, Paris and London but not which businesses. I was very impressed with the market plan and market examination of the business plan. FAX International has thoroughly examined the markets in which it is going away to penetrate including the markets size and trends as well as the companys pass judgment market share. I believe that their pricing dodging was well articulated and stood out to the reader. However, the distribution strategy (partnering with an established Japanese firm that already has access to tar add up 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 Inter national is a critical to the success of this venture. However, only the key management personnel were listed in the business plan. There was no deferred payment of the jury of Directors, shareholders or other stakeholders in this venture. As well there was no organizational chart to illustrate the power structure deep down the organization. Lastly, the explanation of the network was both universal 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 investing of $1,000,000 combined with equipment lease loans representing assets worth $1,500,000. In order to book 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 line of descent exchange and obtain equity backing. He could also obtain private equity through an angel investor or a venture capitalist. W! ith regards to the debt financing needed for the equipment Douglas Ranalli may have to aim 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. 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