Ride More Innovation Case

1.3.2 “A positions”
The A positions (reference) identified for short, mid and long term are:
Short term: During this phase, the founders including the Innovative Designer and the Marketing Manager, hold the key role in leveraging the firm’s competitive strengths to establish the product brand into the target customer minds.
Midterm: In the midterm, sales are expected to grow and therefore the role of the innovative designer will give way to the Quality Control Manager as the A position. The Marketing Manager still holds the key role to increase the market share in existing markets and to explore new markets.
Long term: In long term, RMI is planning to introduce new products by leveraging the brand image that they developed until mid term.

To succeed in this market, the firm will need to set up a small warehouse, central to the three target countries, from where the products can be shipped to end customers. The firm will need to hire an employee to manage the warehouse and shipping operations. From our research of average rental prices (58 Euros per square meter) for warehouses in Netherlands and minimum wage required (1552 Euros/US $), the ware house expenses is calculated about $24,525.(reference)
Currently, Ride more an innovation has not invested significant funds into marketing. However, to achieve this year’s target sales, our clients are planning to create video content and launch their product in Europe. The costs associated with executing a similar kind of marketing activity has been researched and found that it would cost about $55,153 for such activity.
A breakeven analysis for Ride more innovation has been conducted based on the information in the table below. The current pricing structure allows RMI to charge the shipping costs to the end customer and therefore is not included in the breakeven point analysis.
Data for Break Even

However, given that the manufacturing is designed in a way that each manufacturing line can produce a batch of 1000 units, Ride more innovation can start manufacturing 1000 units initially. This would reduce the initial capital required to $195,734 (cost of manufacturing 1000 units and associated marketing and warehouse costs for first year).
Our clients indicated that they have savings which can cover this initial capital requirement to start the venture. They have also indicated their interest in the possibility of obtaining Canadian grants that are available to expand the business. The grants available are covered in later part of this section of the report.
In the second year, RMI should target to achieve a market share of at least 0.5% in top three countries in terms of bicycling usage- Netherlands, Denmark and Germany. As indicated in Appendix 2, this market share would result in sales of about 3,768 bike seats per year. By applying a percentage of sales into marketing expenses, initial marketing costs per unit of seat sold will be $27.60 (explained in the marketing section). Therefore, the total marketing costs will make the net profit to $9,584, after the owners draw their salaries in par with average market