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Seth Knighton

ENTR 300
Professor Hatten
Chapter 13 Case

Problem
The problem is that Lance Fried has a major company decision to make
in the next few weeks that will affect the direction and health of the
company for years to come. The first option for Lance is to take the
deal with the major retailers, such as Best Buy and Bass Pro Sporting
Goods, to rush a large order of headphones to be on the shelf and
ready for sale by the upcoming holiday shopping season just four
months away. This multi million deal would put Freestyle on the map
and thrust them into competitors with electronic giants such as Apple
and Sony. However, this would involve a huge amount of risk as the up-
front investment would be huge and Lance would have to seek out
additional investors. The second option Lance can take is to hold off on
the large retailers and participate in an independent sports retail trade
show that would show off the product on the local, independent level.
This option is within Freestyles business plan and suites Freestyle
perfectly by starting small and building up only once they have a
foundation built. While the multi million deal sounds flashy, Freestyle
would need to recreate an entire new business plan, as it has always
been Freestyles plan to start small with independent retailers, and
then move up as opposed to quickly jumping up to a major retailer.

Alternatives
Lance and his team could take the deal with the major retailers
and ramp up for the busy holiday shopping season. The
connections the major retailers have will be able to help Lance
obtain more outside financing and investors to help get the
project rolling. While it is risky, a large monetary deal will help
offset any potential risks and failures and taking the deal gets
their product out on the market quickly.
Lance can hold off on the large retailer deal and take his product
to the independent retail trade show. This will allow Freestyle to
grow within its bounds by connecting their product to the
independent retailers and shops that cater to the target market
of hip surfers and snowboarders. By building more slowly and
conservatively, Lance will be able to follow their business plan
and work up to the major retailers only once they are established
in the market.
Lance can attempt to ask the major retailers to hold off on the
deal until the next years holiday shopping season. In the mean
time, Lance can take his product to the independent trade show,
build up his product and company, obtain more capital, and get
into the niche hip market before taking the product to Best
Buys shelves next holiday season.

Recommendation
I think that Lance should attempt to ask the major retailers to delay
the launch until the next holiday season so the product will be ready
and it will be more successful. This will allow Lance to spend more time
to focus on the creation of the product, as a prototype was only just
designed. Additionally, this will help Freestyle to get the product out
into the niche hip target market before the product gets thrust into
the major chain retailers. The success that the product has with the
independent retailers will help Lance to decide if he wants to take it to
the next level. It will also allow Lance to secure more capital and
financing without binding himself with a major retailer without even
knowing if his product is going to sell.