Question 1: Evaluate the different market opportunities available to Peter, taking the financiers’ perspective. What would be your recommendations as a business angel? The success of the flow binding shows that people are looking for a better solution than the now available bindings. Hereby, it is clearly very important to keep the soft boots, as they provide the snowboarders the necessary comfort, together with the ease of the step-in bindings. However, attention need to be taken into account to avoid the disadvantages of the flow bindings. As a business angel I would trust Peter on this matter, as he has been a semi-professional snowboarder. He knows the important characteristics the bindings must have in order to be the most user-friendly and the most efficient. Next to that he has experience as product developer, which makes him the perfect person to develop the best product. Both the necessary features as the design should be of a good quality in this case. Moreover, multiple opportunities are provided within the market. Each will be discussed in more detail. •
A great opportunity is the fact that the product first can be tested by professionals before commercializing it. This provides you with the opportunity to be sure that the binding is better than the existing ones at the moment and can give you some tips to fully optimize it. These people are fully aware of the advantages and disadvantages. However, some attention need to be given to the fact that they are most of the time sponsored and thereby can be biased towards their gear at the moment. •
Once it is completely ready, you can first test the sales on a smaller market, Europe, before the need of fully globalizing to the US, Japan and Canada. This opportunity is not negligible as this can give you a view on the sales volume and periods. •
Moreover, the different fairs can provide you with the opportunity to convince a lot of people in a short time period, if you deliver a good promotion. Here, you can also have a good estimate of the attractiveness of your product and it depends on yourself if you promote it good. A lot of uncertainty can be eliminated on these fairs by making large sales contracts. This gives a clear view on the demand for your product. •
The fact that the market is completely fragmented provides you with the opportunity to enter it quite easily and to position yourself without strong entry barriers. However, a threat is of course the high buyer power. Shops need to be really convinced to sell your product in their shop, to give it shelf space. Therefore, the sales talk on the fair should be well prepared and back-uped by strong evidence. •
People’s willingness to pay for hybrid bindings is higher than for standard bindings. An average hybrid binding sells for €200, compared to a standard binding €165. This makes him able to ask a higher price for the bindings and thus sell them with a premium. •
Next to the growth in the bindings market by 7% since 2004, it is expected that the step-binding will lose market share to the hybrid binding. These two arguments show the strong growth opportunities. •
Snowboarding is more than just a sport, it is a lifestyle. Image building is therefore key. Using top snowboarders to promote your binding by using it, is a great marketing tool. Furthermore, the reason that this sector is easily influenced by the possibilities of building a complete brand around it, provides you with extensive growth possibilities. This is very positive towards the future. Once your brand is known, you can really exploit it by offering different products. Question 2: what key weakness (es) and strength(s) do you find in this business?
Pieter van Riet has been a semi professional snowboarder and has a lot of feeling with the snowboarding market. He knows what snowboarder need and/or would like. He has the knowledge b.
Abilities to do the design the model himself.
Ability to attract people to complement his...
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