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Applied Research Tech

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by

Haley Gratz

on 25 April 2014

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Transcript of Applied Research Tech

Company Background
Major Divisions of ART
Healthy Team Culture
Sales and Profit Forecast
The Dilemma
Applied Research Technologies (ART)- diversified technology company which has used its entrepreneurial culture and encouragement of innovation as an ongoing competitive advantage.
Grew greatly from mergers and acquisitions of many technologically based companies acquired in LBO buyout waves.
By 2006, ART equated to 60 business units
Corporate revenue in 2006 reached up to 11 billion dollars.

Healthcare
Industrial Automation
Energy
HVAC
Air conditioning
"We aim to change the world through innovation and to grow our place in it through entrepreneurship."

ART was dedicated to supporting innovation not only with funding but also in practices.
"Experimenting" with CEO David Hall
Knowledge sharing and dissemination
To go ahead with RIMOS or not?
Yes:
-Team was convinced it would succeed
-Sales Forecast, over $40 million in sales over 5 years
-They have a plan to succeed
No:
-It has failed twice before
-Too much is at risk
-Initial $2 million to launch
Global Innovation Challenges
Haley Gratz
Jeremie Musa
Alex Nikolas
Jay Perera
Caleb Loge
Applied Research Tech
Objectives and Priorities
Divisions were expected to deliver 10% sales growth, 15% pre-tax margins, and 20% return on invested capital
Shorter life cycle between a new technology's conception and commercialization
"Innovation and entrepreneurship know no national boundaries."
-CEO David Hall
Time for a Decision
Based on the information collected for the sales forecast as well as the risk analysis, it is safe to say they should go ahead with the product
Phase 3: Business Plan
Designing product specifications
Misunderstandings of team members in India and the United States
'HVAC' and 'Healthcare' Division experts support the development team
Risk Analysis and Mitigation
Most difficult phase
Certain future options were not included in the 'Current Forecasts' or 'Business Plan'
Risk Analysis and Risk Management
Phase2: Technological Specifications and Prototype
Filtration Business Unit
Acquired in 1996 from a gas and oil Company as a par of a business ART.
Core product line focused on mobile water treatment and gas oxidation
Main goal: Transforming waste water to potable water
Scarcity of potable water:
Rate of population growth was disproportionate to water supplies.
Filtration Business Unit
Small Oxidation Unit
Small oxidation project set aside because of increased cost
Market Analysis:
Promising project with the capacity to process approximately 2,000 liters of unhygienic water
Only 2.5% pure water was available in the world and most of them was frozen
1.1 billion suffered due to unavailability of pure water
3.1 Million (90% children) people had been died in 2002 as a result of diarrheal diseases.
Vyas, a 32 year-old manager hired in charge of conducting the study of filtration Unit in 2001
Filtration Unit had been working with ITC (Indian Technology Center)
Developed as a potential solution to the widespread Third-world problem of obtaining clean water in remote regions.

Generations Product
First Generation:
- Developing countries: Studies failed because of significant smell was still found out in the purified water.
Second Generation: Overcome the odor problem
- Military and disaster relief NGO’s
Third Generation:
- Two consecutive failures and made up a new plan

Data
Palmer Drought Index from April of 2006 said 26% of the U.S. was considered in moderate to extreme drought conditions
Western and Southeastern regions had it worst
Government-imposed water restrictions often led to severe limitations or outright bans of water used residential landscape irrigation.

Average Cost for Home Lawn
Decision
It came down to having to choose one of the two systems
Give cost considerations, they chose the RIMOS product
Phase 1: General Product Concept Market Analysis
Six person team consisting of representatives from various function located in the U.S. and India was put together.
Their job was to come up with a strategy for the company's third launch attempt
Janice Wagner leaded the team
First Requirement
“To develop a general product concept supported by market research”
Strategy was to focus additional research on U.S. data that seemed to indicate strong potential for a residential purification system
Price
Domestic water-treatment equipment generated sales of over a billion for the U.S. water industry
Water filters that reduce sediment, rust, and chlorine odor:$50
Comprehensive household water purification:$1500 to $3000
In-ground sprinkler systems: $1800 and $4000
Given these factors, team decided retail price for both their residential irrigation mini-oxidation system (RIMOS) and agriculture irrigation large oxidation system (AILOS)
RIMOS: $2,000 ($1,000 wholesale)
AILOS: TBD based upon number of acres
Full transcript