R&R

CASE- SUMMARY AND ANALYSIS

Bob Reiss was an entrepreneur. He saw an opportunity in the market to
make a profit and he succeeded. The following describes his market
transactions and whether they were right or wrong.

Reisss first major market transaction was designing the game. He took
this to the market and found a professional inventor, whom he knew.
This was the right decision. This game only needed to be designed once.
The frequency was low. Therefore there was no point in wasting time
and incurring the costs of creating it. Also this product was unique. He
would not have been able to create it as simply as the market, which
had more experience. Since Reiss knew the designer the uncertainty of
him defaulting on the contract was very low. He also knew that the
designer would be motivated to complete the project because he
aligned their interests together through a sales motivated contract.
Next was Reisss responsibility to set up operations to take the game to
market. He didnt have the cash flow to do this. Instead of raising the
money himself he established a partnership to create the firm Trivia Inc
and went to the market to gain the funding. His new partner Kaplan
gave him a line of credit, handled day-to-day details, supervised product
manufacturing and produced all ads. I believe this to be the right
decision. He again aligned the interests of his business partner with his
own, by offering half the equity of the firm. This would motivate Kaplan
considering they both have the same goals now. Reiss knew that finding
money for this venture needed to happen only once. The frequency was
low so he went to the market.
Along with the money Kaplan brought other assets to the table like
securing press time and paper supplies on short notice. Reiss realized it
was a good decision to let the market (Kaplan) take over certain
functions for a price. Considering the workload Kaplan has received; I
believe the economic exchange cost to be quite low in gaining him as a
partner.
Reiss again went to the market for his production, shipping and billing.
This was the right decision. The toy industry has short life cycles.
Investing in a larger firm to handle production, shipping, and billing was
pointless considering he would be on to the next product in a year.
Kaplan proved valuable again and found the company Swiss Colony to
handle it. The only cost to Reiss was the customized computer program.
Although this computer program had no value outside of this operation,
it was acceptable for Trivia Inc. to handle the cost. The computer
program was a specific asset to this job. If Swiss colony owned the
program they could have raised costs to try and take advantage of the
situation. Since Reiss owned the program he had the control.
The final market transaction was financing the account receivables. Reiss
used the firm Heller Factoring to handle this. Reiss realizing he didnt
have the resources for this function so he let the market handle it. The
contract was favorable for Reiss as well. By giving Heller factoring one
percent of sales, they would be profit driven to make sure all sales were
collected. Each sale collected meant more money for both parties. That
lowered the risk that Heller Factoring would default or try to take
advantage of the contract. Again going to the market proved to be the
right decision.
I believe every transaction that Bob Reiss took to the market was the
correct choice. The frequency was very low on every decision due to the
very short life cycles of the toy industry. I think he realized the
opportunity to sell this game was only going to come about once. He
wasnt going to waste his money on building up a firm if it was going to
prove useless once the venture was complete. The TV guide board game
was a unique product and needed specific functions to bring it to
market. Reiss didnt have full knowledge of certain functions so it was
better to let the market handle it. The uncertainty of contracts didnt
play a factor. I would consider Reisss contract negotiations one of his
competitive advantages because of his experience and connections.
Every contract was the optimal decision, which always put him in a
position of control.
The only function Reiss kept in the firm was taking responsibility for
sales force and supervising marketing. This was the right choice. He
realized this was his competitive advantage. This part of the operation
was what he specialized in and was his core competency. He wouldnt
have been able to find anyone to do it better in the market. The whole
reason for this project was to make money and Reiss controlled that part
of the operation through sales. The functions chosen inside the firm
should always be your most advantageous ones. Every contract was
profit driven through sales. In order to please all his partners he would
need to have high sales. This was too sensitive to be left up to the
market. In the end every player got a large piece of the pie because he
was able to organize sales. This really builds up Reisss reputation for
future ventures.

Every opportunity doesnt require a firm. This case proves that idea and
also that reliance can be made entirely on the price mechanism. Reiss
did very little when looking at the scope of the whole project. No real,
lasting firm was created during this venture, yet a solid profit was
created. The contracts Reiss put into place put him in control of the
whole operation and made the goal similar for every player. There is no
sense in building a large firm if the market is more efficient.

There is room for entrepreneurs when reliance can be made entirely on
the price mechanism. Even though the market was used for most of the
venture. It takes a real entrepreneur to be able to even spot this
opportunity and act upon in it. Everyone has ideas but what makes the
difference is having the knowledge and will to take the chance on a
venture like this case. I dont think just any entrepreneur can rely on the
market. You must have great knowledge of the industry as Reiss did.
Reiss was lucky in many ways, but he was able to cash in on that luck.


How would you describe the trivia opportunity? What are the
distinguishing characteristics?

Having a prior work experience in the games industry working as a
consultant Bob Reiss had the ability to understand the nuances of the
business
With his capabilities, he had increased the sales up to $12000000
within three years
He could easily foresee the rise of Trivial Pursuit in Canada and its
potential market and thus success in the US market (US market had
approx. 10 times the sales of Canada)
TV guide thought of involving themselves because of the monetary gain
that the venture assured and supported the idea of working with a
small company instead of a big one
Apart from the this Bob due to his earlier network had come up with an
amazing idea of coming up with a TV board game
As an average American spent 7 hours on an average watching TV and
thus the theme had chances of being enormously successful (The
success of Trivia)
Kaplan had ample experience to be a good business advisor and guide
Lastly, an association with Kaplan brought Reiss in contact with Swiss
Colony and Hellen Factoring who were the other partners in Trivia


What are the strengths of Bob Reiss as an entrepreneur? Was he suited to
pursing the trivia opportunity?

Reiss set up a game manufacturing and ran it for that company,
building a sales of $12,000,000 in the three years.
He was able to gain an excellent understanding of the market and by
1959 could start on his own as an independent manufacturer
representative in the same industry.
The largest one, toy RUs for example, hag a 14%share of the entire
market in 1984 and the success of the product was based on less than
dozen Retailers.
Trivial pursuit in Canada spilled over to the US the large games
companies would eventually produce and market their own similar
products.
In 1983, sales were exceptionally strong, especially for the product that
had been promoted through WOM. (word of mouth)
Reiss discussed theme idea with his some closest friends in the
manufactured representative business he realized that he could add
strength and interest in his project by team up with the publishers of
TV Guide magazine.
The magazine in which the Add of trivia games was publishing was
approaches to 18 million copies sold per week.
Reiss know it very well because he did a job in stationary industry and
most of the market owners and storekeepers knew him very well.
He communicated with the T.V guide magazine authorities and with
venture capitalist Kaplan on 50% royalty on per game sold and he even
convinced them on his idea.

How did Bob Reiss go about implementing the trivia venture? How
would you describe his strategy?

Reiss had a low risk strategy for the trivia venture, He had started
networking with the proper players in the gaming industry, he also
devised a market oriented pricing strategy for his venture. He set the
price of his board game below trivial pursuits.


How did Bob go about putting together the resources he needed to
implement his strategy? What are the things that he did which you find
quite interesting?

Reisss first major market transaction was designing the game. He took
this to the market and found a professional inventor, whom he knew.
He got the TV Guide to license the game.
Next was Reisss responsibility to set up operations to take the game to
market. He didnt have the cash flow to do this. Instead of raising the
money himself he established a partnership to create the firm Trivia Inc
and went to the market to gain the funding.
His new partner Kaplan gave him a line of credit, handled day-to-day
details, supervised product manufacturing and produced all ads.
Reiss again went to the market for his production, shipping and billing
(Swiss Colony). The toy industry has short life cycles. Investing in a
larger firm to handle production, shipping, and billing was pointless
considering he would be on to the next product in a year.
The final market transaction was financing the account receivables.
Reiss used the firm Heller Factoring to handle this. Reiss realizing he
didnt have the resources for this function so he let the market handle
it.
The most interesting fact of the case was that the only function Reiss
kept in the firm was taking responsibility for sales force and supervising
marketing. This was the right choice. He realized this was his
competitive advantage.

How was Bob rewarded? Is that a fair reward for his effort?

Measuring the success of Bob Reiss by his income statement reveals
that he owns 50% of Trivia Inc., i.e. $1,157,250. Adding 13%
commission to this, shows that Mr. Reiss earned $2,099,750. Reasons
of Mr. Reiss success are: a price lower than Trivial Pursuit, free media
publicity and low production costs.
By the February, 1984 Toy Fair, most of the major manufacturers
offered trivia games, which was projected to be the hottest category
for the year.
Bad debts for Trivia Inc. were about $30,000 on approximately
$7,000,000 billings, with hope of recovering $15,000. Losses from
final inventory disposal (it was decided to close-out the game) were
less than $100,000. TV Guide was extremely pleased with the royalty
collected from the venture. Kaplan, through his 50% ownership in
Trivia Inc., made over $1,000,000 net. The total cost of designing and
launching the product had been $50,000























BANGKOK AUTOMOTIVE

CASE SUMMARY AND ANALYSIS

Ruby Edwards grew up with strong math skills and a love of technology.
She attended a prestigious US engineering school earning both an
undergraduate and Masters degree in mechanical engineering, but soon
learned that many technical careers seemed narrow and limiting.
Despite her foreign language studies and a desire to do something
international, Rubys first job after graduation was in a small high-tech
firm where she learned first hand the challenges and excitement of
working in an entrepreneurial environment, Ruby, with her natural out-
going personality found it easy to meet people in Thailand, and she
worked hard to try to learn the local language and appreciate local
customs. However, the two-year project passed quickly and Ruby found
herself, soon facing another career decision. Rubys role seemed to
provide her all of the challenges she was seeking. She was certain that
she made the right move in staying in Thailand, and she felt confident in
her ability to get things done in a country whose language and cultural
challenges often befuddled foreigners. Moreover, Thailands automotive
industry was one of the countrys strategic sectors, and Thailand was
one of the larger automotive markets in the world, and the largest in
Southeast Asia. By 2000, the same automobile brand that Ruby worked
with as a joint-venture company three years earlier was looking to re-
enter the market, this time as a fully owned subsidiary of the American
corporation. One of the first steps of this process was to rebuild a
Bangkok dealer network. This led to the next opportunity for Rubys
company. The automotive company provided Ruby with a planned list of
products they expected to launch in the market. In addition to the
sports-utility vehicles (SUVs), which were the original vehicles that the
company sold before the Asia Crisis, there were also plans to add a
minivan, and passenger cars. The company suggested that Ruby become
a dealer for the companys vehicles. For Ruby, this meant an escalation
of investment and risk. Her company had survived the previous three
years with little debt, except loans that Ruby had provided herself,
mostly money made from consulting projects. To become an automobile
retailer was a completely different challenge. It required more
employees, a much bigger showroom, and a way to finance the vehicles
that were on display. I would need to attract much bigger investors,
and even then I would be doing it on a shoestring, Ruby lamented. Still,
she saw an opportunity in being part of the relaunch of a brand that had
been selling well before disappearing from the market. In thinking
through the opportunity, Ruby was convinced that by being in on the
beginning, her company would be able to rise with the growth of the
brand, and with it her company would reach financial success.
Ruby was forced to reconsider her strategy. Most immediate was the
lack of new models for the brand Rubys company was selling. There was
always long-term hope, but the short-term would be very difficult, and it
was not impossible that the brand might pull out of the Thai market
completely.


Would you characterize ruby as a success or a failure?
Ruby has been a success so far. Right from the state when she had
started running her own company. She overcame every obstacle that
came, which could have hampered her companys existence.
Be it the challenge of getting labor to work for her company, Asian
crisis, and company losses, convincing investors to changing of her
auto brand to Japanese make. She successfully dealt with each and
every situation.
Even when her parent company of her auto brand went bankrupt in
the U.S. she some how managed to keep up with the store in
Thailand, staying the top performer even after incurring losses.
She again tied up with the Japanese carmakers and was ready with
the whole future plan that would help the company gain profits.
Even after so many ups and downs ruby never gave up and managed
to do pretty well for herself and her company throughout.

What are the advantages and disadvantages in being involved in a
franchise business, like and automotive dealership?
Dealers are the participants in a supply channel, the retailers who sell
directly to the public.
In the auto industry, major dealer will carry competing products,
often on the same site, but these are differentiated by being each in
its own building.
Advantages
- There is a higher likelihood of success since a proven business
formula is in place; the products services and business operations
have already been placed.
- Bankers usually look for successful franchise chains as it has a
lower risk of repayment.
- The corporate image and brand awareness is already recognized.
Customers are more comfortable purchasing items they are familiar
with and working with companies they know and trust.
- The main franchise company advertises many times the product
and services at local and national level. This practice helps boost
sales for all franchise.
Disadvantages
- Franchise can be costly to implement
- Many franchises charge ongoing royalties into the profits of
franchises
- Franchisors usually require franchises to follow their operations
in order to ensure consistency. This limits any creativity on the
part of the franchise
- Franchises should be very good at following directions in order
to maintain the image and levels of service already established.
- If the franchisee is not capable of running a quality business or
does not have proper funding, it could curtail success

Is Ruby making the right strategic decision to invest in another
automotive brand? Are there any other options? Think about all the
potential outcomes for ruby and her company at the moment.

Ruby is making the right decision to invest in another automotive
brand. As it is the brand she earlier was working for became
bankrupt.
She has no other option but to leave that brand and leave that brand
and work towards building her company again, make her way
through all the losses to gain profits.

Do you agree with Rubys logic about investing in another brand?
Would you invest your own money with ruby?

I personally would invest my money with Rubys. Rubys since the
beginning has been very clear with respect to her business ideas.
She also has 10 years of experience in this industry, no matter what
and how the situation demands, she has made her company work.