THERMA®

PRODUCT LINE EXPANSION STUDY AND PROPOSALBY

TEAM LAMBDALIN GIRALT

PROGRAM LEADER

“DE UNUM, PLURIBUS”

The Challenge

■ Take a fictional company with one product, in this case a thermos bottle that regulates itself to hot or cold, depending on the setting, and propose an expansion strategy.

■ The challenge is to develop a portfolio of products and then detail two of them

■ Challenge accepted!

■ Read On…

The Current Product: Therma ® liquid container

■ The Therma® liquid carrier is an innovative design which has a cooling system and a heating system incorporated to permit liquids to stay at the desired temperature. One qt to one gallon sizes are available. Multicolored wraparound outside protectors can be bought according to the owner’s fashion tastes to individualize the carrier. A Thermameter® strip lines the inside of the container, connected to the temperature control mechanism and temperature setting gauge on the bottom. Current temperature readouts are possible via an LED screen in the top of the carrier; desired temperatures are set via a knob at the bottom, although future models plan to incorporate an LED based screen control at the top.

■ The cooling system is based on the principle of gas expansion which creates cooling. Working on a consumable gas cartridge (non toxic gas) the control mechanism releases a tiny amount of gas into the tubes that line the inside of the carrier. Upon expanding, a cooling effect is created. Once used, the gas is expended into the outside and it is harmless.

■ Heating is done by electrical strips or coils inside the carrier. A rechargeable battery in the bottom of the unit powers the cables to heat the liquid once it falls below the target temperature.

■ These functional items are important because they are the technical levers upon which a new product can be developed.

Therma ® liquid carrier Overall concept existing design

Screw on top for individual drinking or pouring/filling w/o topFlat top and sides have solar cells for energy generation

Main receptacle for holding contents; could be in 1 qt-1 gallon sizes

Screw on base for thermal control and power unit

Temperature reading LED screen

Therma ® liquid carrier Existing Main Receptacle Design

Main receptacle for holding contents; can be in 1 qt-1 gallon sizes

Insulation inside

External multi-color coverLike cell phone protectors(Can be accessorized and sold separately)

Hollow rods forCooling tubes or Heating

Strips from Thermal Control Unit

Liquid Content

CROSS SECTION

VERTICAL SECTION

Thermometer Strip in wall “Thermameter”

Screw onfor top

a

b

a

b

Screw infor bottom

Connector Plate for gas tubes (cooling) and electrical strips (heating) – connects to bottom

Cooling/HeatingElements inside

Therma ® liquid carrier Thermal Control Unit

Main receptacle for holding contents; comes in 1 qt to 1 gallon sizes

Screw onInto main unit

a

VERTICAL SECTION

PLAN BLOW UP (High Level)

Connector Plate for gas tubes (cooling) and electrical strips (heating) – connects to top

Rechargeable battery for heating, recharging cord plugs into base

Consumible gas canister for cooling (similar to B-B guns)

Cooling and heating connections

Temperature control chip (and valve)Control knob is below

Control coupling and power harness

Gas and electrical raceway

Temp control knob into temp control chip

Current company capabilities based on current product,

value chain and Go-To-Market proposition

R&D Suppliers and Manufacturing

InboundLogistics

Distribution

Sales and Marketin

g

TargetMarkets

Financial and

Corporate

In House Capabilities in product design and minituarizationof temperature systems, energy management, temperature controls and electronics are our key capabilities

Component suppliers are managed in houseQualityAssurance is done in house

Overall coordinationfor shipping to US is done in house

Thermamanages and coordinates Logistics, Product Stocking and delivery to clients

Thermahas sales force to handle key accounts and manage distributorsMarketing and promotions are handled in house for the entire value chain

Key targetmarket defined as young, female, with a positive self image, interested in physical well being and self growthMale and older markets are being considered for growth and development

Financial strength and internalprocesses andcontrols to fund design teams, R&D efforts, production tooling and S&M investment

Current company capabilities… (2)

R&D Suppliers and Manufacturing

InboundLogistics

Distribution

Sales and Marketin

g

TargetMarkets

Financial and

Corporate

Outsourced Insulation and materials development outsourced to various suppliers

Manufacturing,tooling design and final process and assembly is outsourced to Mexico

Transport to Thermawarehouse is handled by third parties

Transport to clients done by third parties

Non keyaccounts are handled by distributors under Thermareview

Surveys, product tracking and market research are outsourced via one supplier

Thermaoutsources Administration and Human Resources via a third party

Our understanding of capabilities included analyzing product features

Feature Core Capabilities Leverage Points Leverage Areas to explore

Liquid

receptacle per

se. as a product

Economic

manufacturing

Quality Control

Logistics

infrastructure

Manufacturing

design and

process

abilities

.

Quality

Assurance

points, specs

and process

Product

throughput

capabilities

through

pipeline

What other products can be designed and manufactured using

our capabilities? For containing Hot and Cold temperatures in

Liquid and Solid foods.

In what other products or product lines are our Quality

Assurance process and capabilities of value?

What other products, products types or lines of products can be

sent through my logistics value chain?

What products/types of products are manufactured or

distributed where my logistics value chain has touch points, ie.

China, Mexico, East Asia.?

Our understanding of capabilities (2)Feature Core Capabilities Leverage Points Leverage Areas to explore

Temperature

controls and

energy

management

Strong R&D

capabilities in this

area

Insulation material

capability (outsourced)

Ability to maintain

temperature (hot/cold)

Energy management

to enable dynamic

temperature controls

Ability to set

and control

temperatures

within a

container

Control

mechanism

Efficient

energy

conversion

Other need areas where ability to set and control

temperatures within space and weight restrictions

is important

Areas where energy is scarce or must be self-

generated or self-contained

Attractive and

functional product

design

Durable, leakproof and

breakproof materials

and composition

(outsourced)

Light and

transportable products

Goods that are

fashionable and

attractive to users

Ability to

provide impact

resistance and

durability

Ability to be

carried

Attractive to

youth and

style centered

consumers

Needs of those with active lifestyle

Socialization and Individual needs

Filling niches where style and functionality are

values (Airstream Camper)

Our understanding of capabilities also extended to non product related areas

Feature Core Capabilities Leverage Points Leverage Areas to explore

Distributio

n footprint

/ Sales

channels

Sales through yoga salons, gyms and exercise

locales, especially national chains as Key

Accounts.

Non Key Accounts managed by six regional

distributors

Ability to expand this into broader

channels

Online sales, broad market

penetration; Home Shopping

Clubs

Branding/

Image/

Sales and

Marketing

Ability to create passion and fidelity among

core group of customers

Target market skews young, female and with

strong sense of design accompanied by

functionality

Nevertheless, there is penetration and market

awareness among other groups as well

Ability to expand communication

skills into a broader audience

Grow the passion into new

audiences

Have message expand

universally

Financial

capability

to Go to

Market

Financial strength to fund design teams, R&D

efforts, production tooling and S&M

investment

Product expansion has capabilities

and clear tracks, but needs to justify

investments vs risks

Understand where key

cost/benefit ratios lie in

determining which of the

capabilities to leverage for

expansion

Evaluation of current capabilities showed potential, but many gaps

■ R&D strength, focused on minituarization of cooling and heating systems, controls and energy management is the Company’s key asset

■ Sales and Marketing capabilities were also strong, although limited to one product

■ The Company is well funded and administered, able to support growth programs

■ Supply and Manufacturing and Inbound Logistics were outsourced, not a key leverage item

■ Distribution strength could potentially be an asset, but the limited distribution in place made that only a potential future asset

■ A Key Challenge is to expand beyond current client base of young, female Yoga enthusiasts and grow into a broader public base

Our value chain extension analysis forms goalposts for product expansion

Capability Close Extension Capability

Medium Extension Capability

Remote Extension Capability

■ R&D (temperature maintenance and energy management)

Into similar food and beverage containerproducts

Into non food and beverage containers

Other non container areas

■ Suppliers and Manufacturing

Into food and beverage containers

Into non food and beverage containers

Other non container areas

■ Inbound Logistics Products sourced from Mexico

Products sourced from other emerging markets

Products sourced globally

■ Distribution Distribution through other related distribution channels(food and beverage)North and South American Distribution

Distribution through non related distribution channels (non food and beverage)Global Distribution

Other distribution opportunities

Our value chain extension… (2)

Capability Close Extension Capability

Medium Extension Capability

Remote Extension Capability

■ Sales and Marketing S&M of new products into current channels

S&M into related distribution channelsDevelop North and South American markets

Develop global markets and S&M capabilities into other markets

■ Target Markets Current base is young, female; expand into male and older markets

Other markets more encompassing in terms of age and lifestyle keeping core temperature preservation value

Expanding into B2B from B2C market

■ Financial and Corporate

Support expansion into F&B markets

Support expansion into Non F&B markets

Support expansion into B2B markets

We can summarize the expansion potential and usefulness of capabilities

Current situation Close Extension Medium Extension Remote Extension

Beverage container Food and Beverage Containers in different sizes and for different uses

Non Food and Beverage Containers

Apply technology to B2B areas as well as B2C

Value chain Factor Usefulness per Stage

■ R&D (temperature maintenance and energy management)

Directly useful to a greatextent

Useful, but needs strengthening

Needs exploration as to usefulness

■ Suppliers and Manufacturing

Starting point only Slightly useful Not Useful

■ Inbound Logistics Starting point only Slightly useful Not Useful

■ Distribution Needs strengthening Not useful Not Useful

■ Sales and Marketing Directly useful to a moderate extent

Useful, but needs strengthening

Needs exploration as to usefulness

■ Target Markets Starting point only Slightly useful Not Useful

■ Financial and Corporate Useful Useful Useful

Current Product“Therma-Tron” ®1Qt- 1 Gal thermal bottle

Potential Products

Portable Food and Beverage Containers

Therma Lunch Tote

(1 gal size)

Therma Picnic Basket

(2-4 gal size)

Therma Party Carrier

(5-10 gal size)

Therma Portable Industrial Food Container

(3’x 5’x3’)

Portable Containers (Non Food and Beverages)

Therma Small Medical Products Containers (eliminating Dry Ice)

Therma Medium Industrial Products Containers (maintainingquality in shipment)

Therma Large Products Containers (improving quality in shipment and storage in areas where power is uncertain)Could have military uses in frontline zones w/o power supply or in disaster zones.

Portable Shelters and Tents (Non Food and Beverages)

Therma Pet House(Dog or Cat)

Therma Sleeping Bag

(1-2 people)

Therma Tent

(2-4 people)

Therma Hut

(4-6 people)

Therma Technologyand Business Solutions and Services(for other Mfg’s)

ThermaTempera-tureand EnergyControls

Therma Consumer Packaging,Branding and Design

Therma Solar and Micro Energy

Therma Insulationand Materials (with partners)

SMALL - MEDIUM - LARGE

Product Line Expansion Ideas

Discussion of the ideas proposedThese are quick hits from existing technology. Require larger scale and slightly different functions. Industrial food container would be for outdoor events and functions where food and beverages are sold

Moving into non F&B business may present challenges as Medical and Industrial requirements may differ from F&B

Moving into Shelters is a leap in scale. Micro electronics R&D capabilities could be an advantage to leverage

Finally, Therma may be able to enter the B2B sector by selling its expertise to other firms in different areas

(5’x4’x’ 3)

Team Lambda formed a group of three professionals with complementary skills to develop a few of the ideas further into prototypes

Team Member

■ Lin Giralt, M.Arch/MBA, Program Manager, Costing and Feasibility

■ Marcella Fuller, M.Eng., Engineering and Technical Designer

■ Bucky Breuer, M.F.A., Product and Industrial Designer

Work path followed

■ Evaluated design proposals in terms of cost and market requirements

■ Developed technical specs and manufacturing feasibility

■ Designed product and integrated components

The work was done in one week1 2 3 4 5 6 7

Selection of alternatives from initial Menu

Initial Specs vs Customer Needs

Strawman design 1

Evaluation of Strawman

Modifications into Second Design Proposal

Engineering and Tech Design

Product and Assembly Design

Final Design

Cost Evaluation

Final Evaluation

The worksteps were intense, exhaustive and exhausting!

Steps included

Selection of alternatives from initial Menu Preparation of initial menu of options from brainstorming session by all participants

Initial Specs vs Customer Needs Development of market needs from market research and team discussions; Comparison of available consumer options

Strawman design 1 Marcella and Bucky prepare a strawman each contributing their skill set; Lin does fieldwork and cost research

Evaluation of Strawman Team evaluates various initial ideas; Best features are kept, others are dropped

Modifications into Second Design Proposal Marcella and Bucky prepare specs for second design

Engineering and Tech Design Marcella does detailed design from second proposal

Product and Assembly Design Bucky does product design in more detail

Final Design Both integrate their designs infor a Final Design

Cost Evaluation Lin uses the cost evaluation information to cost out design and compare to alternatives in the market

Final Evaluation Team gathers with selected buyers representing allies in the industry to get feedback and suggestions

Therma Lunch Tote• Has similar functionality from current product • Has adjustable interior partition to separate hot/cold

sections (if wanted)• Power supply at bottom, clip on instead of screw on• LED temperature indicator on top• Temperature controls on top • Color personalization via wraparound protector for

midsection• Larger surface permits better use of solar panels for energy

as well as rechargeable battery• Current competitor retail prices range from USD 20-50; • Estimated manufacturing cost at USD 6-15• Our Manufacturing cost = USD 20• Estimated sales price = USD 55• Comes with internal food trays and sealed off bins• Additional food trays can be sold separately• Packs 1 Qt Bottle Unit directly

Therma Industrial Food Container• Has similar functionality from current product (see Appendix A)• Has see through top to permit display of food items below; part

of top hinges away to access food, remaining part is fixed for controls and LED’s

• Great for outside food courts and mobile food and beverage stands

• May also be used in beaches and countryside where power supply is uncertain

• Power supply at bottom, clip on latches instead of screw on• LED temperature indicator on top• Temperature controls on top • Midsection may have advertisement or product information• Larger surface permits better use of solar panels for energy as

well as rechargeable battery• Current competitor retail prices range from USD 1000-3000; • Estimated manufacturing cost at USD 600-1750• Our Manufacturing cost = USD 1500• Estimated sales price = USD 3500

Your Organic Foodies Here

5 feet

3 feet

4 feet

In conclusion, both products passed the Final Evaluation, although the Lunch Tote scored higherConcept Lunch Tote Industrial Food Container

Design 5 5

Functionality 5 5

Cost/Benefit 5 5

Market Attractiveness 5 4

Buildability 4 5

Fit with current capabilities 5 4

Overall Evaluation 5 4.5

5=High; 1=Low