Outline for designing business strategy to attract investors and potential partners. Presentation made in Moscow, Russia.

1. Moscow, Russia
Presentation 2006
Strategy and Capital for New
Companies and Technologies
By: Juan Ramon Zarco
Magellan International
Jrzarco2001@yahoo.com
Magellan International
U.S.: 1- 703-376-4893

2. Public
Macro Economics Environment
Micro Economics
Financials
EVA
SWOT ADDRESSABLE
Milestones
MARKET
Product/Service
Strategies
Advertising/PR
Strategy/Tactics
Company
Competitive Environment
Environment
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3. Strategies and Capital
• Situational Analysis
• Strategies
• Financials
• Valuations
• Capital
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4. Situational Analysis
Macro Environment, SWOT, Task
Environment, Competitive
Environment, Regulatory
Environment, Technology,
Marketing Objectives, Alternatives,
Branding

5. Macro Environment
• Population
• G.D.P., Purchasing Power
• Demographic
• Economic trends – incremental growth per annum
• Energy costs
• Inflation
• Addressable Market
Is the Macro Environment growing fast
enough and is the Addressable Market
attractive? jrzarco2001@yahoo.com 5
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6. Company Environment
• SWOT
– Strengths
– Weaknesses
– Opportunities
– Threats
• Management Team: experience and
background; example, Quantum Photonics
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7. Task Environment
• Suppliers
• Distribution Channels
– Direct
– Resellers
– Relabeled (Branding, Stronger Distribution),
Original Equipment Manufacturing Supplier
• Customers – Profile. Who is the final
Customer? Example: Linguateq
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8. Competitive Environment
• Generic Competitors: Product Form, Enterprise
• Direct Competitors
• Current Market Position, Current Direct
Competitors, Future Market Analysis
• Successful/Unsuccessful Market entrants, their
marketing methods
• How to identify, out maneuver, reposition
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9. Regulatory Environment
• Government policy, rules and regulations,
e.g., Antitrust – Sherman, F.D.A., F.C.C.
• Impact on marketing
• Political ambiance
• Community
• Press
• Public Relations
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10. Technology
• Incremental costs and benefits
• Source and origination
• Pain to resolve
• Barriers to Entry
– Patents
– Copyrights
– Trade secrets
• Regulatory environment pitfalls
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11. Marketing Objectives
• Specific and Measurable and Achievable!
• Market share or niche?
• Sales in units or dollar amounts
• Leadership position in the addressable market
• Resolve a “pain” and satisfy an urgent need -
Polaroid
• Example: Achieve sales of US$47 mill. through
shipments in five (5) years, 5% of Addressable
Market.
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12. Alternative Strategy
• Alternative secondary strategy
– Second choice
– Different tactic
• Achieve main objective in leadership
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13. Brand and Positioning
• How is product placed in the competitive
environment
• Highest quality at lowest price?
• Branding and differentiation
– E.g., Hertz, Avis, Enterprise Rent a Car
• Consumer’s perspective
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14. Strategies
and
Tactics

15. Implementation Strategies Phase
Strategies must flow from the
Situational Analysis and must be
geared to achieve the marketing
objectives. The strategies must focus
to take advantage of the
opportunities and set up a defense
against threats, to exploit the
company’s strengths and
background, and compensate for its
weaknesses. SWOT.

16. Define Strategies
• Product strategies • Advertising/Promotion
– 4 Ps-product, pricing, • Public Relations
positioning, promotion • Distribution - logistics
• Service strategies • Testing/Research
– Maintenance, • Product line extensions –
guarantees One trick pony,
• Ad Spending Continuity and Exhaustion
• Personal selling
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17. Milestones-Action Programs
• Tactics, Time tables, GANTT Charts
• Month to month
• Week by week
• Sales Forecasts
• Market share analysis
• Controls and Variance analysis
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18. Valuations and Financials

19. Financials
• 3 to 5 Year Projections
• Pro Forma
• Operational Budgets
• Profit and Loss – Will the Product make money?
• Sources and Uses of Funds
• Week to week, Month to month, Year to Year
• Week to Month to Year to 5 Year Projections
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20. Valuation of Strategy
• EVA
• ROI
• NPV
• Exit strategies – liquidity of investments
• Minimum Hurdle Rates, Vested Management
Capital
• Risks- International, Management, Environments
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21. Capital
• Private Equity – Venture Capital, Angel, Tranche capital, L.B.O.
– Advantages
– Disadvantages, ROI 25-30%
• IPO
– Sabarnes Oxley (SOX)
– Accounting standards
– S.E.C.
– Blue Sky laws
• High Yield Debt
– Junk bonds
• Bank debt
• Joint Ventures, Licensing
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22. The Meaning of Valuation
against Milestones
60
50
40
Valuation
30
Milestones
20
10
0
1st 2nd 3rd 4th 5th
Year Year Year Year Year
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23. Valuation of Intellectual Property
• Licensing
• Present Valuation – Barrier to Entry?
• Duration
– Competitive environment
– Market demand and elasticity
• Patent – the meaning of filing, examination
and due diligence. Example: Azygo
• Distribution and Marketing Costs
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24. Business Plan Sample
Business Plan
Mozoom, Inc.
“Financial Empowerment and Self Improvement
Digital Tools for Generation Y”
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25. Sample Financials
Mozoom, Inc. 2005
August September October November December
TITLE Annual Starting
Salary ('000's)
USA-Head EXECUTIVE STAFF
CEO $ 175 1 1 1 1 1
COO 150 1 1 1 1 1
CTO 140 0 0 0 0 0
CFO 150 0 0 0 0 0
VP Operations 120 0 0 0 0 0
VP Marketing 140 0 0 0 0 0
VP Finance 100 0 0 0 0 0
VP Controller 90 0 0 0 0 0
Sub total Executive Count 2 2 2 2 2
MARKETING/SALES STAFF
Salesmen $ 100 0 0 0 0 0
Customer Relations 65 0 0 0 0 0
Media Buyers 65 0 0 0 0 0
Business Development 100 0 0 0 0 1
Account Executives 71 0 0 0 0 0
Distribution Channel Manager 105 0 0 0 0 0
Partner Manager 95 0 0 0 0 0
Content Specialist 60 0 0 0 0 0
eCommerce Sales Director 130 0 0 0 0 0
Sub total Marketing/Sales Count 0 0 0 0 1
MIDDLE MANAGERS
Billing Manager $ 56 0 0 0 0 0
Bookkeeper-General Ledger 39 0 0 0 0 0
Public Relations Manager 95 0 0 0 0 0
Content Manager 105 0 0 0 0 0
Instructor Manager 95 0 0 0 0 0
Online Traffic Coordinator 35 0 0 0 0 0
Audio Editors 53 0 0 0 1 1
Accountants - Costs 46 0 0 0 0 0
Sub total Middle Managers 0 0 0 1 1
TECHNICAL STAFF
Software Aggregation Engineer $ 75 0 0 0 0 0
MS/Unix Support Specialist 51 0 0 0 0 0
Online Software Systems Engineer 75 0 0 0 0 0
System Architect Programmer 110 0 0 0 0 0
Database Architect and Administrator 96 0 0 0 0 0
Data Security Analyst 68 0 0 0 0 0
Sub total Technical Staff 0 0 0 0 0
CUSTOMER SUPPORT STAFF
Customer Support specialist $ 55 0 0 0 0 0
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26. Conclusions
• Marketing Strategy and Situational Analysis
• Financials
• Valuations
• Capitalization
• Exit Strategy
• PriceWaterhouseCoopers Moneytree
– Investment Trends
– Capital Sources
jrzarco2001@yahoo.com 26
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27. Thank you!
jrzarco2001@yahoo.com
Juan Ramon Zarco
Magellan International
Washington, D.C., U.S.A.