Lit Motors/New Power Case Slides by Matt Dillabough, Chris Zhou, - PowerPoint PPT Presentation

Lit Motors/New Power Case Slides by Matt Dillabough, Chris Zhou, Wandi Che, and Jillian Lowey By submitting this deck of case slides, the members of our team affirm that we all participated in the analysis of the case and the creation of this document

A New Power in Personal Transport: Sinclair’s pre existing name recognition and connections allowed him to create alliances with established manufacturers to develop an incredibly cheap, safe, and practical vehicle that has no competition in the UK Overall Business Model Product Value Proposition Go To Market Plan - Take advantage of the largely untapped - Runs on an electric battery which is more economic - Use partnership with Hoover to take advantage electric vehicle market in Britain (only 175K than a petrol vehicle (at least twice as efficient) and of their large scale manufacturing facilities electric vehicles of which 90% are milk entices environmentally concerned customers - Take advantage of Sinclair’s strong name transportation vehicles) and aggressively - The vehicle is incredibly cheap (£399) and does not recognition to quickly build brand recognition and take over the sector require a license, insurance, or a helmet so almost any trust - British laws strongly encourage the demographic can drive the vehicle - Extravagant launch to inspire investors and Strengths manufacture of electric vehicles and will - British laws give the vehicle many benefits which do not customers while showcasing all of the features make the product viable for a huge exist for petrol cars (it is not taxed, does not need to - Launch a massive ad mail-order campaign to population of possible customers abide by car parking laws, etc.) raise awareness for the C5 - Majority of the research and production is - Extremely safe design that performs well in the - Initial mail-order campaign makes purchasing a conducted in house which will reduce costs elements and encourages purchase for urban customers C5 much easier than going to a dealer to in these areas concerned about this aspect (families, kids, etc.) purchase another competing vehicle - Multiple Hoover service centers will allow customers to easily acquire new batteries, chargers, and maintenance - Being the sole owner of the company - The C5 is not weather proof on its own and requires - Many crazy rumors surrounding the C5 existed makes it difficult to raise huge sums of other velcro covers to protect it against rain. before the launch so it is possible that customers money (for company expansion, research & - No indication of how long the vehicle battery lasts for or investors had unrealistic expectations for what Weaknesses development, paying down debt, etc.) - As the most controversial newcomer to Britain’s road, the actual product would be and therefore not be because investors are less likely to give Sinclair is being labelled a toy interested in acquiring the actual product money without a share of the company - Vulnerability in traffic: Transportation needs to - The marketing plan seems general: Having - Less targeted advertising: the £3M guarantee the safety of its passengers, but the C5 seems both online channel and retail channel give more advertising campaign on press and TV to be no more safe than an average motorcycle people access to the product; however, without commercials seem to be very general and - Very little specific details provided about the product so enough careful market research, their plan to get not cost-effective. To achieve more targeted it is hard to know what exactly a customer is purchasing into the market may not be the most cost-efficient customers, they need to conduct market way, given the fierce competition research and specify the target

Lit Motors: through resource-efficient prototyping and market analysis, Lit Motors was able to develop an attractive, economical, and practical product (with a stellar brand perception) that outperforms competing vehicles Overall Business Model Product Value Proposition Go To Market Plan - Clear focus on disruptive personal - Saves time and improves safety compared to competitors. - Effective product branding through informational transport innovations which has the potential Both are huge pains for automobile drivers and open air videos, apparel, and design made the C-1 an attractive to revolutionize the industry motor riders respectively product that appealed to the masses (not just a niche - Professional design and engineering - Clear customer segmentation: Generation Jones and population like its competitors) Strengths support teams young urban professionals looking for 2nd car - Giving units to popular companies (like Zipcar) and - Partnerships to address sales and services - Easily demonstrable cost savings compared to petrol car celebrities made the product fashionable which for startup with limited resources will allow from their running cost comparison chart strengthened their brand perception Lit Motors to focus on their strengths - Sleek design makes the product appealing and desirable - Sleek (but not masculine) design ensured that the C-1 (innovative design and effective marketing) to a large population of possible customers would appeal to both sexes - Strategic and effective branding garners - Appeals to environmentally concerned customers due to - Possible partnership with an established manufacturer customer interest despite a high initial price electric battery would allow Lit Motors to focus on product development point ($24K) - Operating costs ($2.4K + charging) are much cheaper and marketing (the area they most differentiated - Once critical mass for product adoption than an electric car ($17K + charging) and certainly cheaper themselves from competition) has been reached, the economy of scale will than a petrol car - Lit Motors has a strong social media presence to allow Lit Motors to produce and sell the C-1 - If economy of scale is achieved, price can drop to $12K connect and create interest with a large population of at an unparalleled price point and then $6K (similar and then below competition price) possible early adopters (also allows them to receive which could yield a net income of $100M+ feedback and make necessary changes in the future) - Highly dependent on suppliers to keep - First “innovative vehicle” to arrive on the market. Value - If partnership with manufacturer falls through, Lit production costs low due to the may be hard to grasp for prospective customers, even when Motors would need to dedicate more resources to capital-intensive process of bringing a it solves the pains they experience establishing a supply chain and selling the product Weaknesses vehicle to market - May run into gap between early adopters and mass - The C-1 is a unique and divergent product so they need - Currently lacks brand awareness and any market to convince customers it is safe and practical while giving slip up in the branding process could - Daniel wants virality, but in reality it will be hard to achieve it a stylish design destroy the future of the product (similar to with the low volume he starts off with. 70 vehicles - Before achieving an economy of scale and reaching a how Segways never became mainstream distributed across many target cities will have difficulty critical mass of early adopters, Lit Motors would need to due to their “geeky” perception) gaining traction take on a period of financial losses (costs $30K to - $6M burn rate with only $280K cash on - Initial price of $24K is very steep and will make reaching produce a C-1 and sell for $24K which is net -$6K) hand means the company needs to become critical mass for product adoption hard to achieve profitable or raise additional funds very soon