Scribd
Upload
856 views

Microfridge Case

This document discusses Microfridge, a 3-in-1 device that functions as a refrigerator, freezer, and microwave. It was targeted at college dorm rooms to help address electricity and safety concerns. The business analyzed various revenue models like campus installations and rentals. It saw most of its 1994 revenue from colleges and motels. The document outlines Microfridge's sales and distribution strategy, market forecasts, industry analysis, and strategic choices around renting vs selling and managing competition.

Uploaded by

agarhemant
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
856 views

Microfridge Case

This document discusses Microfridge, a 3-in-1 device that functions as a refrigerator, freezer, and microwave. It was targeted at college dorm rooms to help address electricity and safety concerns. The business analyzed various revenue models like campus installations and rentals. It saw most of its 1994 revenue from colleges and motels. The document outlines Microfridge's sales and distribution strategy, market forecasts, industry analysis, and strategic choices around renting vs selling and managing competition.

Uploaded by

agarhemant
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 10

MICROFRIDGE

SEC B
DISKHA MAHAJAN 14P077
NIDHI KUMAR 14P091
PRANATI GOSWAMI 14P092
SHWETA AGARWAL 14P109
PALLAVI MISHRA 14P112
VARUN DAVE 14P118

WHAT IS MICROFRIDGE?
A 3 IN 1 DEVICE FULFILLING ALL 3 FUNCTIONS OF A REFRIGERATOR, FREEZER, AND MICROWAVE UNIT
TARGETED AT THE GROWING A HOME AWAY FROM HOME SEGMENT
EXPECTED TO BE PRESENT 10% OF ALL SUCH ROOMS
RESTLESS IN HIS PRESENT JOB
DESIRES TO START HIS OWN COMPANY
HIS FORTE - SALES
A UNIQUE IDEA COMBINATION OF MICROWAVE OVEN + REFRIGERATOR

VALUE PROPOSITION

HELPED TO SOLVE THE ELECTRICITY PROBLEM IN SCHOOLS. SAVED COSTS.

STUDENTS USING MICROFRIDGE COULD COOK SAFELY IN THEIR ROOMS

STUDENTS WOULD PURCHASE FOOD FROM CONVENIENCE STORES ON CAMPUS FOR


THEIR MICROFRIDGE UNITS, THUS SAVING COSTS

THE CONCERNS OF STUDENTS PARENTS WERE ADDRESSED

THE MICROFRIDGE BUSINESS


Target
Market

School Hostel Rooms


Military Bases
Assisted Living apartments
Small Motels with limited dining facilities

Revenue
Models

Campus Installation College purchased directly


Campus Rentals College rented based on students forms
Company Rentals Rental program directly by Co.

Product
Portfolio

Basic MicroFridge Unit


MicroMart
MicroBar

CATEGORY REVENUE SHARES


Revenue (1994)

18%

Colleges
Military

2%

Motels
55%

Assisted Living
Apartments

25%

Colleges
Campus
wide
installation
Campus rental program
The rental price was
$110 and students were
charged $130 as rent
Selling and Renting

Motels/Hotels

Other Markets

3 million in the US
out of which 2
million had no
restaurant space
Microfridge ideal for
budget hotels and
small town motels

Small Individual
apartments
1 million in the
US,
numbers
expected to grow

Company Rental Program

Run
by
Microfridge
All
operations
carried out by
Microfridge
Yearly rental fee
was $160

SALES AND DISTRIBUTION


Independent Distributors
Felt left out due to emergence of superstores
Much more motivated and dedicated as they carried
only Microfridge
Easier to train
Higher bargaining power for the company
What went wrong?
Inventory overstocked
Retail channel not suitable
Possible price mismatch due to sale in discount stores
Direct Sales Force alongside distributors
Easier to sell
Inventory managed by distributors

MARKET AND DEMAND FORECASTS


THE FIELD SALES FORCE ALLOWED DIRECT CONTACT WITH THE POTENTIAL
CUSTOMERS

THEY ALSO PROVIDED ALL THE REQUIRED MARKET INFORMATION NEEDED FOR
THE SUCCESSFUL FORECASTS

FOR EXAMPLE THE FORECASTS FOR COLLEGES CONSIDERED ALL FACTORS SUCH
AS NUMBER OF ROOMS, NUMBER OF STUDENTS, TERMS OF CONTRACT, SURVEYS
ETC.

SIMILARLY FOR ARMY/MILITARY BASES AND MOTELS ADEQUATE CARE WAS TAKEN
TO FORECAST SALES AND PROVIDE QUALITY AND PROMPT SERVICE TO EACH OF
THEM

ALSO THEY OFFERED THE FLEXIBILITY OF DIRECT PURCHASE OR RENTALS TO ALL


THEIR CUSTOMERS

THEY EVEN WIDENED THEIR PORTFOLIO TO BRING IN PRODUCTS SUCH AS THE


MICROMART TO BE PLACED IN THE MOTEL LOBBY

REMARKABLE CUSTOMER CARE WITH SPECIAL CARE FOR LARGE ACCOUNTS

INDUSTRY ATTRACTIVENESS
Threat of new entrants: Medium
No product difference
Patent Sharing
Non compete Agreement Getting expired in 3 years
No strategic advantage in distribution network
Profitable industry with high Market potential
Threat of substitutes: Medium
Price differential between stand alone components(fridge and oven) and
Microfridge
Refrigerator leasing companies with regional presence
Low innovation
Bargaining
power oflevel
customers: Low
Few alternatives
High Switching Cost
Bargaining power of supplier: Low
Low product differential
No switching cost for Microfridge
Intensity of competitive Rivalry: Low
No competitor due to patent protection

STRATEGIC CHOICES
SELL OR RENT?

IMMEDIATE FUTURE SUGGESTED SELL


LOOKING AT THE FUTURE SUGGESTED RENTING AS A BETTER STRATEGIC CHOICE

SINGLE SUPPLIER OR MULTIPLE?

ELIMINATED NEED FOR OWN DISTRIBUTION CENTER


MULTIPLE SUPPLIERS ENSURED MINIMUM DEPENDENCY (SUPPLY AND PRICE)

MITIGATION OF COMPETITION THROUGH ACQUISITIONS


CREATE BARRIERS TO ENTRY AND GAIN COMPETITIVE ADVANTAGE

THROUGH STRUCTURE WHICH CANT BE REPLICATED EVEN IF THE PRODUCT


GETS CLONED

RESTRUCTURING DISTRIBUTION FROM TIME TO TIME BASED ON MARKET


SCENARIO

WAY AHEAD

U
O
Y
K
N
A
TH

You might also like