QUIZ 3 BUSPLA1

GENERAL INSTRUCTIONS:
Based on the last digit of your ID number, read the assigned case listed below, answer the
following questions using the case and applicable information coming from website and other
sources. Open notes is allowed.

CASE 1 Cereality ID numbers ending with 1
CASE 2 Jingle Networks ID numbers ending with 2
CASE 3 Sundia ID numbers ending with 3
CASE 4 Bones in Motion ID numbers ending with 4
CASE 5 MooBella ID numbers ending with 5
CASE 6 Eclipse Aviation ID numbers ending with 6
CASE 7 StuffBak ID numbers ending with 7
CASE 8 NuRide ID numbers ending with 8
Case 9 No-Cal Soda Pop ID numbers ending with 9
Case 10 Ugobe ID numbers ending with 0

Please email your answer to profsarreal@gmail.com on or before April 3, 11pm in pdf format
since the last day of giving quizzes is on April 3, 2014.

Questions:
1. In your opinion, is it possible for entrepreneurs to overcome the problems that surface
when they lack experience in the industry in which they intend to launch a new
venture? What could the entrepreneurs of your assigned case do to reduce the
negative effect of the lack of industry experience created for their venture? (25 points)
2. Is there any evidence in the case that the founders of your assigned case took steps to
overcome the liabilities of newness that often affect new ventures? If not, what steps
could the founders of your assigned case have taken to address this issue? (25 points)
3. Create the companys vision and mission using the necessary components of an
effective mission statement. (25 points)
4. Create the companys business model using value chain analysis, afterwards identify the
fatal flaws that your business model might have.(25 points)
5. List all references used (books, websites, etc.) (5 points)



- End of quiz -









CASE 1

Cereality
www.cereality.com

Business Idea:

Open a chain of small walk-in restaurants (similar to sub-shop restaurants) that serve
cereal exclusively. Make the process of buying cereal inviting enough that cereal
becomes an alternative to fast-food where Cereality stores are located.

Pitch:

There are many different forms of fast-food, and consumers are tiring of many of them.
In addition, most fast-food restaurants have similar formats and are not fun or appealing
destinations.

To address these shortcomings, and to breathe new life into the fast-food industry,
Cereality will open small restaurants, where consumers will walk up to counters to
purchase their favorite brand of hot or cold cereal. A consumer can order up to two
brands of cereal and a topping, which are mixed together by Cereality employees. The
employees are clad in pajamas to capture the nostalgia associated with cereal. A variety
of milk products are available, include skim, two-percent, whole, and soy. The cereal is
placed in take-out-tyoe containers, for patrons who want to eat on the run or at home.
Several Cereality signature blends of cereal are available to show people that mixing
different brands of cereal and toppings can make for a delicious meal. For example, the
signature blend Burst O Berry is a mixture of Kelloggs Froot Loops, Quakers Capn
Crunch Berries, and a dried mixed berry topping.

Cereality stores are bright, pleasant, and include a wide-selection of cereal from which to
choose. The company currently has three stores. The flagship store is located in the
Memorial Union Building at Arizona State University in Tempe, Arizona. The other
stores are located near the Sears Tower in Chicago and near the University of
Pennsylvania in Philadelphia.

Along with selling bowls of cereal, Cereality sell boxes of cereal, which can be mixed
anyway a customer wants. For example, a box of cereal could include a mixture of
Frosted Flakes, Cheerios, and Cocoa Puffs. The boxes can also be customized and
include a personalized greeting or artwork on the cover. Smoothie-type drinks, made
from common cereal toppings like strawberries, bananas, and yogurt, are also available.

Cereality is considering its options for expanding. The three stores it owns are company-
owned stores. It has had more than 5,000 inquiries for franchise locations. As a result, it
is considering selective franchising as a potential growth strategy.


CASE 2

Jingle Networks
www.jinglenetworks.com

Business Idea:

Launch the first free national directory assistance service.

Pitch:

If you have a Verizon cell phone, it costs $1.25 to place a 411 (directory assistance) call.
If you have a T-Mobile cell phone it costs $1.75. And if MCI is your carrier, you pay
$3.49. Any way you cut it, directory assistance is expensive.

Not anymore. Jingle Networks, through a service aptly named 1-800-FREE-411, is
pioneering the first free-to-the-consumer national directory assistance service. There are
currently six billion 411 calls made every year in the U.S., which represents an $8 billion
market. What Jingle Networks has done is taken Googles advertising model and moved
it to the telephone. The attractive thing about Googles advertising model is that it directs
ads to people at the point-of-sale. So, if you type the word pizza into the Google
search engine, youll see text ads for pizza restaurants in your area to the right of the
search results.

To demonstrate how 1-800-FREE-411 works, heres a transcript of a 411 call you might
place through the service. This short example illustrates how the service works for both
the consumer and the company.

1-800-FREE-411: Welcome to 1-800-FREE-411. What city and state please?

You: Chapel Hill, North Carolina.

1-800-FREE-411: Are you looking for a business, government, or
residential listing?

You: Business.

1-800-FREE-411: O.K. What listing?

You: Papa Johns Pizza.

1-800-FREE-411: While we search for your listing, Id like to tell you about
a great offer from Dominos. Connect now and you get three medium one-
topping pizzas for just $5 each. To get connected to Dominos free of charge,
press 1, to hear the number you originally requested, press 2.

Jingle Networks calls this short ad a switch pitch. In early tests, callers have taken the
switch pitch offer 6.2 percent of the time. In the cases where a caller asks for the name of
a business and there arent any 1-800-FREE-411 advertisers in the area to build a switch
pitch around, the caller is put through to the business, free of charge, with a slight twist.
When the call is connected, the person answering the phone hears a brief message that
says, You are receiving a call from 1-800-FREE-411. After the call is completed,
someone from Jingle Networks telesales group calls the business to explain how the
service works. In early trials, 13 percent of businesses that received a directory
assistance call through the 1-800-FREE-411 service, and were then contacted by Jingle
Networks, eventually become advertisers on the network.

So take a few seconds right now and program 1-800-FREE-411 into your cellphone and
give the service a try. You never have to pay for directory assistance again.



CASE 3

Sundia
www.sundiacorp.com

Business Idea:

Produce and sell the first branded watermelons and watermelon juice.

Pitch:

Many people enjoy watermelon but find shopping for watermelons to be a frustrating
experience. There is no branded watermelon available to ensure consistent quality, like
Sunkist provides for oranges and Chiquita has done for bananas. Surprisingly, there is
also no premier watermelon juice available. Watermelon juice is extremely healthy. It is
fat- and cholesterolfree, and is high in many essential nutrients and vitamins. Lycopene,
the pigment that gives watermelon its red color, has been linked to a lower risk of many
types of cancer, heart disease, and even cataracts.

Sundia aims to fill this gap in the market. The company has started selling a Sundia-
branded watermelon, and is aggressively signing up watermelon growers to achieve
national distribution and brand awareness. The company employs strict standards for its
watermelons, which will each feature a removable label, similar to the labels found on
Chiquita bananas. In addition to its watermelons, Sundia has formulated and developed a
patented watermelon juice. The juice, which will be sold in attractive single-serve
containers, has a sweet taste and a pulpy consistency, and has faired extremely well in
taste tests. The market for watermelon juice is promising. According to recent study by
Euromonitor, sales of traditional fruit juice, like orange, apple, and cranberry, have
declined in recent years, while sales of other flavors have increased. Watermelon juice,
which enjoys immense popularity in other countries, particularly Asia, falls squarely in
the other flavors category. In addition, the sales of a juice are typically two to 10 times
higher than the sales of their corresponding fruit. Watermelon sales in the U.S. topped
$700 million last year, which could translate into impressive sales for Sundias
watermelon juice in the future.



CASE 4

Bones in Motion
www.bonesinmotion.com

Business Idea:
Turn nearly any cellphone into an automatic journal that allows walkers, runners, and
bikers to record their activities, and benefit to from the motivational aspects of keeping
track of their progress.

Pitch:

Most people know that they need to exercise to stay healthy. But simply buying a pair of
running shoes or a bicycle is rarely the answer. People must be motivated to stay
committed to an exercise plan. One thing that sports psychologists have found helps
people stay committed is to keep track of their daily progress. Its also very motivating
to people to graphically see the results of their exercise efforts and to be able to share
their progress with their family and friends.

Bones in Motion was created to fit this exact need. In the first of what it hopes will be
many outdoor applications, the company has turned the ordinary cellphone into a virtual
coach using a software application called BiMActive. BiMActive is an online service,
which is currently available to Sprint and Nextel cellphone customers, at a cost of $9.99
per month. Bones in Motion is negotiating with other cellphone service providers and
hopes to have more signed up soon.

Heres how the service works. When you start the application, you have to wait for a few
seconds for it to hone in on your GPS location (you do need a GPS-equipped cell phone).
For the GPS to work, you need to be outdoors with a view of the sky. Once you start to
run, walk, or bike, it records your distance, speed, pace, location, elevation, and estimated
amount of calories burned. All you need to do is keep your cellphone with you. Once
finished, your workout data is wirelessly uploaded to a Web page with the route you just
covered superimposed on a Google map. A complete set of stats for your workout is
available, including the distance covered, splits, and estimated calories burned. You can
also keep track of the distance youve covered by week, month, or year.

If youre community-minded you can share your results with other BiMActive members.
You can also post the route you just covered for other BiMActive members to see. The
difficulty of the route is rated by BiMActive based on topography, changes in evaluation,
and other data. You can also look at the routes that other BiMActive members have
posted.

BiMActive is just the first in a series of mobile lifestyle applications planned by Bones in
Motion.


CASE 5

MooBella
www.moobella.com

Business Idea:

Use patented new technologies to produce fresh, made-to-order scoops of ice cream that
are dispensed from a vending machine in 45 seconds.

Pitch:

MooBella is pioneering a new and exciting sales channel for fresh, made-to-order ice
cream. The ice cream is dispensed through attractive, state-of-the art vending machines
that are suitable for any location. The companys technologies enable the machines to
make ice cream right the spot. The customer orders by choosing from 12 flavors and
three kinds of mix, to create one of 96 possible combinations of ice cream and mix. The
combinations include Low Fat Vanilla With Walnuts and Premium Strawberry With
Chocolate Chips. The ice cream is made right on the spot, through a combination of
patented technologies that interact, aerate, flavor, mix, and flash freeze the ingredients
just inside the vending machine. While the ice cream is being made, the customer is kept
abreast of the process through a checklist shown on the front of the machine. Each of the
following steps illuminates when the customers scoop is passing through the step:

Adding ice cream
Adding flavor
Adding mix
Forming scoop

This approach gives the machines an entertainment value, as customers watch and
imagine how their ice cream is being made. The ice cream is dispensed in roughly 40
seconds.

Each MooBella machine is equipped with Internet wireless capabilities that allow the
machines to track sales data, monitor inventory, and issue maintenance alerts. As part of
the companys branding campaign, each vending machine and ice cream cup prominently
displays the companys tagline, which captures the essence of the MooBella experience:

Quick. Fresh. Now. Wow!

MooBellas vending machines should be attractive to host locations because the premium
price charged increases margins for both MooBella and its hosts. The company is rolling
out its first machines in the Boston area and will go nationwide after its pilot testing is
completed.


CASE 6

Eclipse Aviation
www.eclipseaviation.com

Business Idea:

Build a jet airplane that is so small and inexpensive to operate that a new class of air taxi
services will emerge to make private jet travel accessible to middle-class individuals and
companies.

Pitch:

Private jet service is safe and convenient but is also very expensive. To remedy this
problem, Eclipse Aviation, a startup in Albuquerque, New Mexico, has designed and
constructed a six-passenger jet that has been successfully flown and tested. Eclipse plans
to sell the jet for about $1 million, which is about one-fourth the cost of the least
expensive corporate jet on the market. And its engineered to be very cheap to operate:
less than $1 per mile, which is one-third to one-fifth what it costs to fly other small jets.
Eclipses first jet is dubbed the Eclipse 500 Very Light Jet (VLJ). Eclipse hopes to sell
the jet to individuals, corporations, and regional airlines or taxi services that will use it
to shuttle individuals to and from municipal airports. An advantage of the Eclipse 500 is
that it can land on a runway as short as 3,000 feet, compared to 4,000 to 5,000 feet
needed by the smallest jets now in service. This advantage will allow the Eclipse 500 to
service many of the small airports that currently cant accommodate jet service. The
Eclipse 500 is expected to be certified for commercial flight by the FAA in the near
future.

The way the Eclipse is able to keep the sale price of the Eclipse 500 so low is through
ultra-efficient manufacturing techniques that lower costs and allow for high-volume
manufacturing. An individual jet is made in five days and can be delivered 10 days later.

As an added bonus, the Eclipse 500 will boast an optional safety feature no jetliner can
match: a parachute big enough to float the plane gently down to the ground. The
parachute is made by Ballistic Parachute Systems (www.brsparachutes.com), which is a
company that develops and deploys parachute systems for small aircraft.



CASE 7

StuffBak
www.stuffbak.com

Business Idea:

Create a service that allows the owners of lost items to get their stuff back.

Pitch:

Every day, thousands of portable devices are inadvertently left behind in airports,
taxicabs, restaurants, hotels, and other public venues. Unfortunately, many of the devices
are lost forever. Anyone who has ever lost a cellphone, digital camera, or PDA knows
how frustrating the experience can be. The loss of data is often more agonizing than the
time and money it takes to buy a replacement device and reenter the information.

StuffBak has an answer to this problem. The company sells personal identification
stickers that help consumers recover lost items. Heres how it works. A consumer buys a
pack of StuffBak labels. The labels include an identification number, Stuffbaks toll-free
phone number, and an offer of a reward if the item is found. The service makes it easy
for Good Samaritans, lost & found personnel, and police departments to return lost or
stolen items to their rightful owners. Stuffbak immediately notifies the owner when their
lost item is found and coordinates the recover process between finder and owner. Strict
confidentiality is maintained for both parties. The owner pays $14.95 plus a shipping fee
to get an item back. The person that found the item gets $20 worth of StuffBak labels
and often a reward from the owner.

StuffBak claims that its clients get their lost items back approximately 70 percent of the
time. This claim is supported by a Readers Digest experiment in which 1,000 wallets
were lost worldwide to test StuffBaks service. Seventy percent were returned.



CASE 8

NuRide
www.nuride.com

Business Idea:

Reduce traffic congestion, air pollution caused by cars, and wear-and-tear on the nations
highways by paying people to carpool.

Pitch:

Many of us live in areas where traffic congestion is a way of life. Not only is congestion
stressful, but it causes air pollution and takes a toll on our nations highways.

Now, one company is doing something about it. NuRide, located in Washington D.C., is
pioneering the concept of a ride-sharing program. The service is currently being tested in
Washington D.C., parts of New York, and Houston, Texas. For commuters in these
areas, heres how the service works. A commuter logs onto the NuRide Web site to sign
up for the service. You must have a business or a university e-mail address to participate,
to give your fellow riders some level of confidence that you are who you say you are.
You then specify where you want to go, and where you are coming from, just like you do
when you buy airline tickets online. NuRide then matches riders up. Riders usually meet
at a location close to all of their points of departure, and then share rides to and from
work.

The best part is that along with saving money on gas and wear-and-tear on your car,
NuRide pays you to participate. For each one-way trip, you get 100 NuRide points,
which is equivalent to $1. If you share rides to and from work for a week, totaling 10
rides, you would get 1,000 points, or the equivalent of $10. The NuRide points can be
redeemed for gift cards at participating merchants, which include Old Navy, Home
Depot, XM Satellite Radio, Shell Oil, and Starbucks. A rider can redeem up to $500
worth of NuRide points per year.

To make its service appealing, NuRide has taken a number of steps to ensure the safety
and compatibility of its drivers. For example, riders can request to ride with men or
women, smokers or non-smokers, and so on. The company also asks riders to rate the
drivers that they ride with. Each driver then receives a certain number of stars, which are
posted on NuRides Web site, similar to the way sellers are rated on eBay.

NuRide makes money by contracting with state and local governments to deploy its
service in their area. The potential upside for governmental agencies is tremendous. The
U.S. Department of Transportation estimates that a 10 percent increase in ride-sharing
has the potential to decrease congestion by 50 percent in a given area.

Case 9

No-Cal Soda Pop
www.no-calsoda.com

Business Idea:

Create a fun, fresh, and clearly differentiated new entry into the diet soda industry.

Pitch:

No-Cal was originally launched in 1952 as the first zero-calorie soft drink in America.
The brand disappeared from the market in the 1960s, unable to compete with emerging
diet drinks offered by Coke, Pepsi, and others. No-Cal is now back, and is being
positioned as a nostalgic, fun, and fresh new beverage in the diet soda category. Diet
soda is one area of the beverage industry that is still growing, and No-Cal is an almost
perfect descriptive name. No-Cal will sport four innovative and fun flavors: cherry lime,
chocolate, vanilla crme and clementine. No-Cal will be packaged in 12-ounce glass
longneck bottles for $1.50 per bottle, or $3.99 for a four-pack carrier. The bottles are
stylish and vaguely reminiscent of the original brand.

To promote a sense of adventure and fun, each No-Cal flavor has its own cartoon
character, with a little story that will be told through the flavors advertising and
promotional activities. For example, Gilbert the Jazz Player is shown playing his
saxophone on the vanilla cream soda bottle, while Sullivan the Cop is the clementine-
flavored character. One thing No-Cal prides itself on, and will reinforce in its branding,
is that it is strictly a diet soda, and focuses all of its efforts on its diet soda flavors. Diet
Pepsi, Diet Coke, and the majority of other diet sodas are stepchildren of their parent
brands (Coke, Pepsi, etc.), and often dont taste as good as the original beverage.


CASE 10

Ugobe
www.ugobe.com

Business Idea:

Create sophisticated robotic toys that relate to humans through a wide range of simulated
emotions, and relate to their environments in very human-like ways.

Pitch:

Ugobe is a robotics company that is dedicated to making unique robotic products. The
companys first product, a toy named Pleo, is designed to resemble a one-week-old, long-
neck dinosaura sauropod. If you type Pleo into Google or Yahoo!, you can quickly
find pictures and streaming videos of Pleo demonstrations.

It is a treat to watch Pleo move about, and youll find yourself showing Pleo to others.
Rather than having lots of functions and features, whats unique about Pleo is his ability
to emulate human emotion. If Pleo walks to the side of a table, hell peek over the side,
and back up a step to avoid falling off. If you call out Pleos name, hell turn in the
direction of your voice. If you play with Pleo, he will play back. And if you quit playing
with Pleo, in a few minutes he will act sad because he has no one to play with.

Ugobe took five years to design Pleo, and solicited input from robotics experts,
animators, scientists, biologists, and computer programmers. Inside his body, Pleo has
40 sensors to detect light, motion, touch, and sound. The sensors feed information about
Pleos environment to processors that can collectively handle 60 million calculations per
second. A complex computer program then determines how Pleo behaves. Ugobe has
two target markets for Pleo. The first is kids ages six to 12 who will treat Pleo like a pet.
The second is adults who are interested in customizing and adding to the base emotions
of their Pleos. The company says Pleo will learn and adapt to certain behaviors of its
owner. As time goes on, the owner can also alter Pleos personality by buying upgrades
to the operating system, known as personality modules. The upgrades will be sold
through a SD memory card expansion, or using a standard USB connection to download
updates from the Internet. Pleo will initially sell for around $200.

Ugobe has other products on the drawing board. It says that all of its products must obey
three laws. They must simulate the feeling and displaying of emotion, they must be
aware of themselves and their environment, and they must be able to evolve over time
(through upgrades). Making all of its products upgradeable is an important part of
Ugobes business model. This tactic will provide the company with recurring revenue
from people who purchase its robotics products.