Bobsla: Driving Innovation in the Snowmobile Industry
Bobsla, an electric fun on snow vehicle, is being positioned for success by CEO Sergey Ignatyev. The company aims to differentiate itself in the traditional snowmobile market by focusing on business and entertainment space, targeting a niche market in Northern USA and Canada, and providing aftermarket support. With unique advantages like being emissions-free and noiseless, Bobsla seeks to attract investors and achieve $15 million profit in 5 years. Through focused positioning and strategic recommendations, Bobsla aims to revolutionize snow entertainment.
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Bobsla Electric Fun on Snow Presenting to: Sergey Ignatyev, CEO of Bobsla Asper School of Business Angus Cheung | Sunny Sun | Eden Sorrell | Raymond Franczuk
Understanding the challenge Competitive Product Positioning Financial Stability Viable Business Model Challenges How can Sergey position Bobsla with competitive business model that will attract investors funding? Problem Position Bobsla with competitive advantage Develop sustainable and profitable business model Goals Acquire investors funding Introduction Analysis Recommendation Implementation Conclusion
Our Recommendation Differentiate Bobsla by focusing on the business and entertainment space 2 1 3 Position as Go Kart of the Snow Expand offering to Northern USA and Canada Provide aftermarket Support $15 million profit in 5 yrs Expansion into NA 0.91 ROI
Unique offering from the traditional market Traditional Snowmobiles Bobsla Expensive ($10-25k) Heavy & dangerous Lower costs Roll cage safety Major Pollutant (2-4x) Noisy (90dBa) Emissions-free Zero-noise Unique competitive advantage as a fun in the snow vehicle Introduction Analysis Recommendation Implementation Conclusion
Focused positioning to differentiate from competition Consumer Oriented Polaris / Zero Motorcycles Mattro ROVO DC Aurora E- Sled i-Cat Pro Traditional Snowmobiles Costs Introduction Analysis Recommendation Implementation Conclusion
Focused positioning to differentiate from competition B2C Polaris / Zero Motorcycles Mattro ROVO DC Aurora E- Sled i-Cat Pro Traditional Snowmobiles Bobsla B2B Costs Introduction Analysis Recommendation Implementation Conclusion
Why Bobsla must differentiate from the core snowmobile market Like Harley riders or Jeep owners Utility or transports usages 45 yrs-old Deep snow and mountain riding Enjoys open country riding w/speed Transports to or rides in rural region Average Snowmobiler Avid Range enthusiast Bobsla does not appeal to the same customer demographic as a traditional snowmobile does Exhilarating Speed Bobsla must differentiate its product and focused on a niche market Introduction Analysis Recommendation Implementation Conclusion
Where in the B2B can Bobsla target? Seasonal Can turn existing go- kart tracks into snow kart tracks Go-Karts & Amusement Parks Too large to access Built-in Facilities Fun entertainment National Parks Restricted Can create new snow- kart tracks or use as general transport Ski Resorts Outdoors snow demographic Bobsla should target existing markets where traditional snowmobiles do not have access to Introduction Analysis Recommendation Implementation Conclusion
Why North American market is critical to success Snowmobile Sales in 2020 Over 1.1 million registrations in US Over 600k registrations in Canada Rest of World, 29291 US, 51036 Affinity to snow sports and entertainment Canada, 43535 Bobsla must reach this market with its entertainment- focused product Introduction Analysis Recommendation Implementation Conclusion
Pathway to success for Bobsla Competitive Product Positioning Viable Business Model Financial Stability Introduction Analysis Recommendation Implementation Conclusion
How can Sergey position Bobsla with competitive business model that will attract investors funding?
Alternatives Global Patent Licensing Focus on B2B and entertainment Direct B2C Sales Differentiate by focusing on B2B entertainment to leverage unfulfilled opportunities in the market Position Bobsla as a direct-to-consumer product and compete against traditional snowmobiles Patent design and technologies and license to global competitors for low- risk ROI E.g. Low-cost E-Sled E.g. License to Arctic Cat E.g. Niche Go-Kart of the Snow Introduction Analysis Recommendation Implementation Conclusion
Alternatives evaluation Market Growth Potential ROI Funding Availability Differentiation Direct B2C Sales Global Patent Licensing Focus on B2B and entertainment Introduction Analysis Recommendation Implementation Conclusion
Alternatives evaluation Market Growth Potential ROI Funding Availability Differentiation Direct B2C Sales Global Patent Licensing Focus on B2B and entertainment Introduction Analysis Recommendation Implementation Conclusion
Recommendation Differentiate Bobsla by focusing on the business and entertainment space 2 3 1 Position as Go Kart of the Snow Expand offering to Northern USA and Canada Provide Aftermarket Support $16.5 million Estimated Cost
Position as Go Kart of the Snow 1 Target Seasonal Go-Kart Businesses and Ski Resorts Value Driven Marketing & Communication WHAT WHY The need to expand current business model to generate additional revenue Enhanced brand awareness within Canada & US Entering untapped new business opportunities IMPACT Introduction Analysis Recommendation Implementation Conclusion
Target Seasonal Go-Kart Businesses and Ski Resorts 1 Business partner selection criteria Seasonality, current facilities utilization, business volume, target customers groups Seasonal Go-Kart businesses Ex: Niagara Speedway, Downhill Karting, Multi-level Go-Karts Ski Resorts Ex: Aspen Mountain, Sunshine Village Ski and Snowboard Resort 5-20 units depending on business Cost per unit ~$13,480 Introduction Analysis Recommendation Implementation Conclusion
Value Driven Marketing & Communication 1 Value Driven Communication Attend Trade Shows Experiential Tournaments Why Bobsla? The environmental and safety concerns Offset seasonal business models Ongoing communication: Pipedrive $100 USD/m 1 summer + 1 winter Ex: Canada Ski Areas Conference Ski resort industry tradeshows and exhibits World Ski and snowboard festival, whistler Twice a year/ team of 2 employees Partnership with ski resorts Ex: Sunshine Village Education and showcase products Generate Brand Awareness & Connection Value-added Partnership Differentiate Bobsla Introduction Analysis Recommendation Implementation Conclusion
Expand offering to Northern USA and Canada 2 Phase 1 Phase 2 Leverage Existing Suppliers and Focus on Logistics Expand Assembly Capacity WHAT Leveraging current strengths to minimize capital pressures for sustained growth in the North American Market. WHY Timing of Cap Ex with Growth Projections Increased Logistical Flexibility IMPACT Introduction Analysis Recommendation Implementation Conclusion
Phase 1 Leverage Existing Strengths & Focus Efforts on Logistics Details How Why Established Relationships & Known Quality Springboard off Existing Manufacturing Network Opportunity for Growth Less Complexity Outsourcing of Export and Logistical Requirements Minimizes Cap Ex Partner with Freight Forwarder E.g. Daco Logistics Quick to Market Per Order Fulfillment 3rd Party Last Mile Fulfillment E.g. First Class Trucking Introduction Analysis Recommendation Implementation Conclusion
Phase 2 Establishing North American Assembly Plant Perform Final Assembly of Bobsla Facility Details Greater Logistics Flexibility Estimated 1M Cost (Lease, Tooling, equipment) Strategic Central Location Roseau, Minnesota Target Locations Critical Mass of Professionals Near Polaris Manufacturing Campus 20% Growth Rate Scale to Meet Market Demand Positioned for Growth 0.1M/yr in Tooling, Equipment Introduction Analysis Recommendation Implementation Conclusion
Provide Aftermarket Support 3 Training & Empowerment of Local Service Techs Virtual Support Team WHAT WHY Building a positive brand reputation through prompt high quality support. Improved Customer Relationships Minimizing Support Costs Scalable Support Model IMPACT Introduction Analysis Recommendation Implementation Conclusion
Building a Leading Virtual Support Team 3 Train them Well Establish Core- Values & Mission of Business Empowerment Hire support team in Austria Hands on training of Bobsla Products Background in Customer Support & Go-Kart/Ski Environment Understanding of Customer Needs & Communication Obtain Feedback from Customers & Incorporate Hire the Right People Focus on Empowerment Introduction Analysis Recommendation Implementation Conclusion
Technology is Key to the Virtual Support & Empowerment Strategy Support Technologies Video Support Interactive Training and Guides Directly Support Troubleshooting via Video Chat Offer virtual training sessions to empower on-site maintenance staff Investigate AR&VR Solutions to improve interaction Comprehensive Troubleshooting and Support Guides Customer Empowerment is Key to Sustained Growth Introduction Analysis Recommendation Implementation Conclusion
Bringing it all together Differentiate Bobsla by focusing on the business and entertainment space 2 3 1 Position as Go Kart of the Snow Expand offering to Northern USA and Canada Provide Aftermarket Support Build the Brand Meet the Need Establish Reputation Introduction Analysis Recommendation Implementation Conclusion
Timeline Year 2021 2022 2023 2024 2025 2026 Quarter 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Position as Go Kart of the Snow Establish Brand Positioning and Target Businesses Attend Trade Shows Experiential Tournaments Expand to Northern USA and Canada Identify Preferred Logistics Partner Lease Assembly Plant Location Hiring and Launch of Assembly Plant Provide After Market Support Hiring of Virtual Support Team Establishing Training Guides & Tools Empowerment of Local Service Technicians
Fundamental Assumptions Supply Chain does not get significantly worse 1M Assembly Plant 0.1M -- Annual Upgrades USD $13,480 per Bobsla Market will respond favourably to go kart concept 30% of 175 US Go-Kart tracks 5-20 Units per location Introduction Analysis Recommendation Implementation Conclusion
Total 5Yr Revenue $ 31.5 M Projected Revenue 5 Year Revenue 12,000 Existing Capacity 150 Units/Year 10,000 USD Thousands 8,000 2023 Capacity (Add Plant) 450 Units / Year 6,000 9,831 4,000 7,954 6,435 5,207 USD $13,480 / Unit 2,000 2,022 - 2022 2023 2024 2025 2026 Bobsla Sales Introduction Analysis Recommendation Implementation Conclusion
Total 5Yr Cost $ 16.5 M Project Specific Costs 5 Year Costs COGS $3.4M 5,000 Assembly Plant ($1M) Main Cost Drivers Production: $ 11.5 M (total) Assembly Plant $ 1M 4,500 4,000 3,500 USD Thousands 3,000 2,500 Unit Cost Decreases $7000 -> $5600 (2023) $5191 (2026) 2,000 1,500 1,000 500 Gross Margin 48% (2021) to 60% (2023) 66% (2025) - 2022 2023 2024 2025 2026 Bobsla COGS Shipping Maintenance & Warranty Sales & Marketing Staff Tradeshow & Tournaments North American Assembly Plant Introduction Analysis Recommendation Implementation Conclusion
Total 5Yr Profit $ 15 M Profit Summary Project Profit 12,000 10,000 8,000 Quantitative: Funding Needed: $ .56 M ROI: .91X USD Thousands 6,000 4,000 2,000 Qualitative: Challenged by COVID - (2,000) 2022 2,022 (561) 2023 5,207 2,324 2024 6,435 3,340 2025 7,954 4,353 2026 9,831 5,529 Project Revenue Project Profit Project Revenue Project Profit Introduction Analysis Recommendation Implementation Conclusion
Scenario Analysis Baseline Vs 2 Scenarios 7000 6000 5000 USD Thousands Best Case 4000 Project Profit: $19 Million 3000 2000 Worst Case 1000 Project Profit: $11 Million 0 2022 2023 2024 2025 2026 -1000 -2000 Baseline Operating Profit Scenario Project Profit Pessimistic Profit Optimistic Profit Introduction Analysis Recommendation Implementation Conclusion
KPIs KPI 2022 2023 2024 2025 2026 # of NEW B2B customers 15 37 45 54 65 On-time delivery 75% 80% 90% 95% 95% Aftermarket Support Customer Satisfaction 90% 95% 96% 97% 98% Introduction Analysis Recommendation Implementation Conclusion
Risks Management Risks Mitigation 1 Implement safety bumpers like go-karts and consumer usage waivers Safety concerns from Go- Karting usage 2 COVID-19 continues to impact global entertainment and travel industry Develop virtual sales channels and market to semi-local (European) regions 1 Impact 2 3 3 Inadequate maintenance skills set by businesses Provide value-added in-field maintenance servicing Probability Introduction Analysis Recommendation Implementation Conclusion
Looking to the future 2026 Year 5+ Post-pandemic with assembly capacity on 2 continents Established brand in major markets Supported by Redbull 2021 Today Financially unstable Unclear business model
Conclusion Problem How can Sergey position Bobsla with competitive business model that will attract investors funding? Differentiate Bobsla by focusing on the business and entertainment space Solution 2 3 1 Position as Go Kart of the Snow Expand offering to Northern USA and Canada Provide Aftermarket Support Components $15 million profit in 5 yrs Expansion into NA Impacts 0.91 ROI Introduction Analysis Recommendation Implementation Conclusion
Appendix A 2022 2023 2024 2025 2026 Trend SUM Revenue Bobsla Sales Total Project Revenue 2 2 5 5 6 6 8 8 10 10 31 31 Cost of Sales Bobsla Sales Total Cost of Sales (1) (1) (2) (2) (2) (2) (3) (3) (3) (3) (12) (12) Opex Shipping Maintenance & Warranty Sales & Marketing Staff CRM Tradeshow & Tournaments Total Opex (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (0) (1) (0) (2) (0) - - - - - - USE THIS FOR PPT APPENDIX (0) (1) (1) (1) (1) (3) - Capex North American Assembly Plant Total Capex -1 (1) -0.1 (0) -0.103 -0.10609 -0.109273 (1) (1) (0) (0) (0) Project Profit (0) 2 3 5 6 16 Introduction Analysis Recommendation Implementation Conclusion
Appendix B (Financial Assumptions) Company Baseline Revenue Operating Profit Operating Profit Margin Net Income Net Profit Margin 2019 21 10 48% 2020 2021 24 2022 25.66 12.83 50% 2023 27.43 13.71 50% 2024 29.32 14.66 50% 2025 31.35 15.67 50% 2026 33.51 16.76 50% 23 11 12 48% 50% 0.5 2% 0% 0% Introduction Analysis Recommendation Implementation Conclusion
Distribution of Ski Resorts Worldwide Region % of ski resorts Alps 37% North America 21% Asia & Pacific 19% https://www-statista-com.uml.idm.oclc.org/statistics/801752/distribution-ski-resorts-by-region/ Introduction Analysis Recommendation Implementation Conclusion
Sensitivity Analysis Profit Sensitivity Analysis (+10% Change) -2.5% -1.3% Sensitivity Priorities 1. Stream 1 Revenue 2. Stream 2 Revenue 3. Capex 5 -0.7% 1 0.2% 6.3% 8.0% -10.0% -7.5% -5.0% -2.5% 0.0% 2.5% 5.0% 7.5% 10.0% Capex 5 -Budget driven Cost Driver 2 - Unit driven Cost Driver 1 - Unit driven Revenue by market share Stream 2 Stream 1 Introduction Analysis Recommendation Implementation Conclusion
Why Bobsla must differentiate from the core snowmobile market Snowmobilers are enthusiasts Enjoys range and speed ~30 km/hr ~50 km range Like Harley riders or Jeep owners Dirt bikes & go- karts Bobsla does not appeal to the same customer demographic as a traditional snowmobile does Bobsla must differentiate its product and focused on a niche market Introduction Analysis Recommendation Implementation Conclusion
Key questions 1. 2. Business Model Selling Hardware, organizing events, licensing the patented technology, B2B or B2C and Launch market (Austria, US or Canada) 1. Current positioned as entertainment / profession for use in businesses 2. Allow people to race them at companies payback in 2 years 3. Marketing/Advertising/After Sales service A lot of brand awareness, how to achieve conversion 4. Financing/Investors Limited to local angel investors Could Sergey salvage his startup and finally turn it into the Tesla on Snow ? 5. Number of Subcontractors (20 subs) current capacity is 150 vehicles per year. Pricing is 7k at small scale, and can drop to 5k if critical mass reached. Introduction Analysis Recommendation Implementation Conclusion
Challenges 1. 2. Product Pricing (>$15k can pressure vehicles aimed at the entertainment market) Economies of scale to reach $5000 per vehicle Funding / finding investors Covid Impacts on Ski Tourism and Riding 1. 2. Product Pricing (>$15k can pressure vehicles aimed at the entertainment market) Funding / finding investors Covid Impacts on Ski Tourism and Riding Introduction Analysis Recommendation Implementation Conclusion
Analysis Facts Traditional snowmobiles are expensive, sophisticated/complicated, heavy, dangerous, and heavily polluting. 100 mile (161 km) range 450-650 pounds Up to 90 mph Over 200 deaths and 14,000 injuries in NA 200-600 g/km CO2 emissions 90 dBA Restrictions in US on where it can be used (not in national parks) Global market of $1.4 billion and $1.8 billion between 2020-2027 Growth of 3.5% annually between 2016-2021 US, Canada, Russia largest markets (85% of the global market) Canada & Russia largest growth in the future Market leaders 2020: Arctic Cat, Polaris, Yamaha, Bombardier, and Alpina 123,862 snowmobiles sold worldwide in 2020 (51036 in US and 43535 in Canada)\ Over 1.1 million and 600k registered in US and Canada respectively $26 billion annually in the US and $9.3 billion in Canada and another $5 billion for Europe and Russia. Introduction Analysis Recommendation Implementation Conclusion
Alternatives Differentiate Bobsla by focusing on the Business and Entertainment Space Position as Go Kart of the Snow Expand offering to Northern USA and Canada Provide Aftermarket Support Logistics (Manufacturing, Shipping) Target Seasonal Go-Kart Businesses and Ski Resorts Virtual Support Team Training & Empowerment of Local Service Techs Marketing & Communication Expand Assembly Capacity Introduction Analysis Recommendation Implementation Conclusion
Analysis Facts Average rider is 45 yr-old Rides 1788 km per year in NA Spends $2000-3000 a year Competing Products: i-Cat Pro (Austria) $30k only 50km range and 350+kg Mattro (Austria) -- $39k Joystic Steering, no longer in the market, repositioned as industrial Aurora e-sled (Finland) -- $35k only 50km range and 350+kg (2.5 miles/kWh) Future Entrants: Polaris and Zero Motorcycles 2025 will be entering the market, first vechical by end of 2021 Taiga 130km range, 15k, still in pre-order mode BOBSLA 3.5 miles/kWh Compact, low weight, unique driving pleasure High levels of safety w/roll cage and low center of gravity Introduction Analysis Recommendation Implementation Conclusion
