Faculty of Business Studies

Tutor Marked Assignment

BE322: Entrepreneurship and small business management

First Semester 2015 – 2016

What Segway Learned About the Value of Feasibility Analysis the Hard Way

Web:www.segway.com

Introduction

The Segway PT is a two-wheeled, self-balancing transportation device that consists primarily of a set of tall handlebars on top of two disc-like wheels. There are no chains or visible mechanical workings. Riders lean forward to move forward and back to move backward. Turning is done mechanically via hand controls. The device is driven by a quiet, nonpolluting electric motor and can travel up to 10 miles per hour. The name "Segway PT" stands for "Segway Personal Transporter. "

The Segway was built in secrecy and was unveiled on December 3, 2001 , on the ABC program Good Morning America.

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The initial reaction to the Segway PT was enthusiastic. Venture capitalist John Doerr predicted that it would be as important as the Internet. Apple's Steve Jobs predicted that cities would be built around it. To cope with the expected demand for the product, Segway's factory in Bedford, New Hampshire, was designed to build up to 40,000 units per month. Initial sales were targeted at between 10,000 and 50,000 units during the first 12 months. But, after 21 months, only 6,000 units had sold. What went wrong?

Feasibility Analysis

While the Segway was a technological marvel, in retrospect there were fundamental flaws in both its product feasibility analysis and its market feasibility analysis. When reviewing Segway's prelaunch and postlaunch behavior, one has to wonder how so many critical issues seemingly weren't analyzed or were missed. It provides lessons for future entrepreneurs to be more rigorous in their