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O-Fold

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Submitted By kylehuffy
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Business Strategy
Case 3 The O-Fold
Kyle Huffman
Olds College
Submission Date: February 14 2013

O-Fold Business Opportunity
Introduction
Alex Richards was a 4.0 GPA student, double majoring in finance and accounting. Before taking a trip to Colorado, Alex was faced with a problem: whether or not to take a suit on the plane, he did not want to wear it on the plane nor pack a suit case due to having the clothing wrinkle. He came up with the idea of the O-Fold, a cylindrical tube that clothes could be wrapped around, secured with straps, packed into tight spaces, and arrive wrinkle free. After completing a preliminary patent search online and finding nothing similar to his idea, Alex had to make a choice whether or not to start a company. He came up with four options, sell the idea, license the idea, outsource production, or use a crawl-walk-run strategy.
External analysis
With more then $5 billion in sales the luggage industry strengthened, as the baby boomer generation reached its peak travel ages (45-54). With profit margins growing from 28.9 percent in 1990 to 45.9 percent in 2000 the industry is looking profitable. As well having around 75 percent of the merchandise imported, this lowers the cost of production and materials. An important trend to look at is the use of handbags or carry on items. With the rising cost of fuel airlines started charging for check baggage, resulting in an increase of people buying carry on/handbags. Handbags sales increased from 3,977.6(million) in 2000 to 6,136.9(million) in 2005. Handbags also accounted for the largest percent of travel goods at 33.7% in 2005.
Strengths
* One of a kind product * Increase sale of handbags and carry on items * Demand for the product in the travel good market * High profit margin
Weakness
* The product is new to the market * Does not have the initial capital to

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