Embed Size (px)
Citation preview
eMerge Interactive: Sustainability and Success
Jacob AcMoody Michael GundersonWhitney Oliver Peake
2005 American Agricultural Economics Association Graduate Student Case Study Competition
eMerge Interactive
a technology company serving the U.S. beef production industry
Service Line and Product LineCattleLOG™
Individual animal data
collection
VerifEYE™
Improving food safety
with cutting-edgeproducts
CattleLOG™Weaknesses Dependent Tarnished Riveted
Opportunities Branded beef Traceability F2P value chain
Threats Commodity competition Government delays Fragmented industry
Strengths Aligned Reliable Approved
CattleLOG™Strengths Aligned Reliable Approved
Opportunities Branded beef Traceability F2P value chain
Threats Commodity competition Government delays Fragmented industry
Weaknesses Dependent Tarnished Riveted
CattleLOG™Strengths Aligned Reliable Approved
Weaknesses Dependent Tarnished Riveted
Threats Commodity competition Government delays Fragmented industry
Opportunities Branded beef Traceability F2P value chain
CattleLOG™Strengths Aligned Reliable Approved
Weaknesses Dependent Tarnished Riveted
Opportunities Branded beef Traceability F2P value chain
Threats Commodity competition Government delays Fragmented industry
VerifEYE™Weaknesses Unknown Limited Constrained
Opportunities Alliances Hand hygiene International markets
Threats Benefit difficult to
quantify High costs Export slowdown
Strengths Innovative Exclusive Efficient Committed
Strengths Innovative Exclusive Efficient Committed
Opportunities Alliances Hand hygiene International markets
Threats Benefit difficult to
quantify High costs Export slowdown
Weaknesses Unknown Limited Constrained
VerifEYE™
Strengths Innovative Exclusive Efficient Committed
Weaknesses Unknown Limited Constrained
Threats Benefit difficult to
quantify High costs Export slowdown
Opportunities Alliances Hand hygiene International markets
VerifEYE™
Strengths Innovative Exclusive Efficient Committed
Weaknesses Unknown Limited Constrained
Opportunities Alliances Hand hygiene International markets
Threats Benefit difficult to
quantify High costs Export slowdown
VerifEYE™
Quarterly Financials
$0
$100
$200
$300
$400
$500
$600
$700
$800
31-Mar 30-Jun 30-Sep 31-Dec 31-Mar 30-Jun 30-Sep 31-Dec 31-Mar
2003 2004 2005
(in
th
ou
san
ds)
.
Revenue Cost of Revenue
Strategic DirectioneMerge Interactive: a technology company serving the U.S. beef production industry
Strategic DirectioneMerge Interactive: a technology creation company serving the U.S. meat processing industry
Who Is The Target Market?
0%
5%
10%
15%
20%
25%
30%
35%
Perc
ent
Mark
et
Share
Beef Processing Industry
Value of Brand Protection Hudson Foods, Inc. 25 million pounds of beef recalled
Values of Food Safety
Marginal WTP for Traceability = 8%
Marginal WTP for Food Safety = 21%
“Individuals in the US and Canada are willing to pay even more for food safety guarantees than for
traceability alone”
Implementation
establishing sustainability, aiming for long term success
Sell CattleLOG™
No sustainable competitive advantage Existing customer value
ProductDevelopment
eMerge Present and Future
New
Current
MarketDevelopment
Penetration
Unrelated
Diversification
Current New
Products
Market Expansion Grid
Customersor
Markets
Sales Growth of VerifEYE™$200,000 for capital lease$450,000/year for three years
0
10
20
30
40
50
60
70
2004 2005 2006 2007 2008 2009
Cu
mu
lati
ve U
nit
s S
old
.
Pro Forma Financials
millions of
revenues
-$30
-$20
-$10
$0
$10
$20
$30
2004 2005 2006 2007 2008 2009
-$8
-$6
-$4
-$2
$0
$2
$4
$6
$8Revenues
Operating Margin
millions of
operatingmargin
Hand Held VerifEYE™
Sustainable Competitive Advantage Technology development
Early contaminant detection systems
Growth in technology budget
eMerge Interactive Refocusing for sustainability
Using experience to deliver reliable food safety solutions for processors
Enhancing shareholder value by innovating detection technology
Questions?
