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Harvard Case - The Pre-Venture Feasibility Analysis: The Andrea Kaneb Case

"The Pre-Venture Feasibility Analysis: The Andrea Kaneb Case" Harvard business case study is written by Mark Rice. It deals with the challenges in the field of Entrepreneurship. The case study is 18 page(s) long and it was first published on : Sep 1, 2016

At Fern Fort University, we recommend Andrea Kaneb proceed with developing her "SmartSoles" concept. The potential for disruption in the footwear industry, coupled with the growing demand for personalized health and fitness solutions, makes this a promising venture. However, we urge her to prioritize a strategic approach focused on market validation, lean development, and securing the necessary funding to navigate the challenges of launching a tech-enabled product in a competitive market.

2. Background

This case study revolves around Andrea Kaneb, a recent graduate with a background in biomedical engineering and a passion for health and wellness. She has identified a gap in the market for personalized footwear that can track and analyze biomechanical data, providing valuable insights for improving athletic performance and preventing injuries. Her proposed solution, ?SmartSoles,? involves integrating sensors and microprocessors into shoe insoles to capture real-time data on gait, pressure distribution, and other relevant metrics.

The case study explores the initial stages of Kaneb?s entrepreneurial journey, focusing on her pre-venture feasibility analysis. She is grappling with key decisions regarding product development, market validation, funding options, and potential partnerships.

3. Analysis of the Case Study

The case study can be analyzed through the lens of the Business Model Canvas, a framework that helps entrepreneurs define and validate their business model.

Key Components of Kaneb?s Business Model:

  • Value Proposition: SmartSoles offer a unique value proposition by providing personalized biomechanical data to athletes, fitness enthusiasts, and healthcare professionals. This data can be used to improve performance, prevent injuries, and personalize training programs.
  • Customer Segments: Kaneb?s target market includes athletes, fitness enthusiasts, and healthcare professionals. This segmentation allows her to tailor her marketing efforts and product features to specific customer needs.
  • Channels: Kaneb plans to reach her target market through online channels, partnerships with athletic retailers and healthcare providers, and potentially through direct-to-consumer sales.
  • Customer Relationships: Kaneb aims to build strong customer relationships through personalized data insights, online support, and community engagement.
  • Revenue Streams: Kaneb envisions generating revenue through the sale of SmartSoles, subscription-based data analytics services, and partnerships with fitness apps and healthcare providers.
  • Key Resources: Kaneb?s key resources include her technical expertise, the sensor technology, software development capabilities, and manufacturing partnerships.
  • Key Activities: Kaneb?s key activities include product development, software development, marketing, sales, and customer support.
  • Key Partnerships: Kaneb will need to forge strategic partnerships with sensor manufacturers, software developers, athletic retailers, and healthcare providers.
  • Cost Structure: Kaneb?s cost structure includes R&D, manufacturing, marketing, sales, and customer support.

Challenges and Opportunities:

  • Market Validation: Kaneb needs to validate the market demand for SmartSoles and understand the willingness of customers to pay for personalized biomechanical data.
  • Competition: The footwear industry is highly competitive, with established players like Nike and Adidas. Kaneb needs to differentiate her product and develop a compelling value proposition.
  • Technology Development: Developing a reliable and accurate sensor technology, coupled with user-friendly software, is crucial for the success of SmartSoles.
  • Funding: Securing sufficient funding for product development, marketing, and initial operations is essential.
  • Manufacturing and Scalability: Kaneb needs to develop a robust manufacturing process that can scale with demand.

4. Recommendations

  1. Prioritize Market Validation: Kaneb should conduct thorough market research to validate the demand for SmartSoles. This includes conducting customer surveys, focus groups, and pilot tests to gauge customer interest, willingness to pay, and potential use cases.
  2. Develop a Lean MVP: Instead of building a fully featured product, Kaneb should focus on developing a Minimum Viable Product (MVP) with core functionalities. This will allow her to test her assumptions, gather customer feedback, and iterate quickly.
  3. Secure Funding: Kaneb should explore various funding options, including angel investors, venture capitalists, crowdfunding, and bootstrapping. She should develop a compelling pitch deck and business plan to attract investors.
  4. Strategic Partnerships: Kaneb should seek strategic partnerships with sensor manufacturers, software developers, athletic retailers, and healthcare providers. These partnerships can provide access to resources, expertise, and distribution channels.
  5. Build a Strong Team: Kaneb should assemble a skilled and diverse team with expertise in product development, software engineering, marketing, and business operations.
  6. Embrace Agile Development: Kaneb should adopt an agile development methodology to ensure rapid iteration, continuous improvement, and responsiveness to customer feedback.
  7. Focus on Customer Experience: Kaneb should prioritize the customer experience by developing user-friendly software, providing excellent customer support, and building a strong brand identity.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  1. Core Competencies and Mission: Kaneb?s expertise in biomedical engineering and her passion for health and wellness align with the development of SmartSoles.
  2. External Customers and Internal Clients: The recommendations focus on understanding and meeting the needs of the target customer segments, including athletes, fitness enthusiasts, and healthcare professionals.
  3. Competitors: The recommendations acknowledge the competitive landscape of the footwear industry and emphasize the need for differentiation and a compelling value proposition.
  4. Attractiveness: The recommendations consider the potential for SmartSoles to disrupt the footwear industry and create a new market for personalized health and fitness solutions.

6. Conclusion

Andrea Kaneb has a compelling opportunity to disrupt the footwear industry with her innovative SmartSoles concept. By prioritizing market validation, lean development, strategic partnerships, and securing sufficient funding, she can navigate the challenges of launching a tech-enabled product in a competitive market.

7. Discussion

Alternative Options:

  • Licensing the Technology: Kaneb could choose to license her technology to an existing footwear company instead of launching her own brand. This would reduce the risk and financial burden but would also limit her control over the product and its development.
  • Focusing on a Niche Market: Kaneb could initially target a specific niche market, such as professional athletes or individuals with specific health conditions. This would allow her to validate her product and build a strong brand reputation within a focused segment.

Risks and Key Assumptions:

  • Technology Development: The success of SmartSoles hinges on the development of reliable and accurate sensor technology.
  • Market Acceptance: The market may not be ready for personalized biomechanical data, or customers may not be willing to pay for the added value of SmartSoles.
  • Competition: Existing footwear companies could develop similar products or acquire Kaneb?s technology, posing a significant competitive threat.

8. Next Steps

  1. Market Research: Conduct a thorough market research study to validate the demand for SmartSoles and understand customer needs.
  2. Develop MVP: Develop a Minimum Viable Product (MVP) with core functionalities to test assumptions and gather customer feedback.
  3. Secure Funding: Develop a compelling pitch deck and business plan to attract investors and secure funding for product development and initial operations.
  4. Build a Team: Recruit a skilled and diverse team with expertise in product development, software engineering, marketing, and business operations.
  5. Strategic Partnerships: Establish strategic partnerships with sensor manufacturers, software developers, athletic retailers, and healthcare providers.
  6. Launch and Iterate: Launch the MVP and gather customer feedback to continuously improve the product and business model.

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Case Description

Andrea Kaneb had worn hearing aids for thirty years and had extensive first-hand consumer experience with available assistive hearing devices. In her view, the products she had tried were too expensive and underperformed with respect to user needs and desires. From January through August 2015, Kaneb and three of her fellow MBA students completed a two-semester, team-based, capstone project course in their MBA Program, during which they developed and assessed a new venture opportunity; wrote a business plan; and presented it to a panel of experienced entrepreneurs / investors. Kaneb's project team undertook significant primary and secondary research as a basis for analyzing the feasibility of a new venture aimed at commercializing an innovative assistive hearing system that would be superior to competing products. The topics of their feasibility analysis included: (1) The Opportunity; (2) The Micro-Market (customers, particularly initial customers); (3) The Macro-Market; (4) The Macro-Industry (especially competition); (5) The Micro-Industry (sources of competitive advantage); (6) The Business Model; (7) The Entrepreneurial Team; and (8) Projected Financial Performance. In December 2015, she met with her professor to review progress and to discuss next steps in her exploration of the opportunity. She needed to determine the most critical uncertainties that would need to be addressed before she approached investors; to develop alternative approaches for addressing those uncertainties; and to decide which approaches she would implement, and how. The case study is designed to serve as a final exam and / or topic for the case discussion in the final class of an introductory course in entrepreneurship - during which students have explored each of these issues via readings, case discussions and interactions with guest entrepreneurs.

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