Microfridge Essay

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A Report on “Microfridge: The Concept” Introduction: Robert Bennett, a 31 year old Master in Engineering, decided to quit his job and start a business with his new concept of the “Microfridge”. This was a design that incorporated a refrigerator, freezer and microwave into a single compact unit. He created a new electronic circuit in which the refrigerator shut down while the microwave operated and vice-versa. Analysing the Microfridge: This 3-in-1 device consumed only 10 amps as opposed to the usual 20 amps while using a refrigerator and microwave simultaneously. This generated less heat and reduced the risk of fire. It was a compact device that occupied less space which was ideal for smaller rooms such as student dorms and motel rooms. The market study conducted by him showed that 90% of the students of a university in Massachusetts were ready to use this device when paying $50 more annually. Also, this would provide a legal and safer way for the students to cook. The response from five college administrators interviewed was not so encouraging initially however when the data regarding students’ disregard to dormitory rules was presented, their attitude softened. The venture capitalists also refuted the idea as they were reluctant to put faith in a non-high tech appliance being promoted by an inexperienced individual. Also the margins in the business were relatively low while the cash flow risks were high. While student dormitories and motel rooms were the primary targets, there were opportunities even through the independent distributor channel to retail stores. The product design was also such that it could easily be replicated by other leading players. Financial feasibility: Sanyo agreed to manufacture the Microfridge units for Bennett at a landing price of $263 per unit. Keeping his profit margin at 15%, he intended to sell these at $309 per unit.

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