Yeshiva of Greater Washington - Fall of 2006

Year One Results:

All four companies have seemingly distinct visions for their company and are implementing equally distinct strategies to fulfill their corporate goals. The defining two words of Year One were “product shortages”. Three of the four companies ran out of heart rate monitors before the completion of this first year. Healthy Heart and Monitoring the World were hit the hardest by the stock-out while My Day Inc. benefited and Heart Smart benefited enormously.

Monitoring the World Inc. (Franco, Sragg, Silbiger, Sassoon) added some technology to their heart rate monitor which allows the consumer to not only read their heart rate on their wrist, but, alternatively, they can also listen to it on a wireless headset. Numerous market segments loved this tech feature. This tech feature combined with a rock-bottom price and targeted marketing resulted in an explosion of sales. Monitoring the World sold all 60,000 products they produced and then stocked-out. They had revenues of $3 million, earnings of -$1.325 million, and an ROA (Return on Assets) of -67.8%.

Healthy Heart (Schafer, Waxman, Goodman, Silverman) focused on their distribution in Year One. This includes offering a competitive price for their heart rate monitors to the largest health clubs in Japan. The agreements with these health clubs included exclusivity and a five year contract. Over half of the health clubs agreed to these terms. Much like Monitroing the World, Healthy Heart had a huge influx of sales and they sold all the heart rate monitors that they produced: 75,000 heart rate monitors. They had revenues of $3.675 million, Net Earnings of -$1.150 million, and an ROA (Return on Assets) of -61.3%.

My Day Inc. (Y. Katz, Hillman, Kates, Pensak, Y. Cohen) added numerous features and functions to their product and coordinated several detailed advertising campaigns. This combined with Monitoring the World and Healthy Heart stocking-out resulted in My Day inc. also stocking-out. They sold all 65,000 of the products that they produced, had revenues of $2.925 million, earnings of -$1.367 million, and an ROA (Return on Assets) of -78.1%.

Heart Smart (M. Katz, L. Cohen, Bates, Fink, Oxman) was by far the greatest benefactor of the increase in demand and drop in supply within the Japanese heart rate monitor market. While Heart Smart added numerous features and functions to their product, the $80 price tag was $30 more than their competitors including Monitoring the World’s high tech Rapid Track 365. None the less Japanese consumers were willing to pay this price premium when the other companies ran out of product stock. Heart Smart finished Year One with revenues of $3.2million, Net Earnings of -$450,000, and an ROA (Return on Assets) of -15%. This was the best ROA for the year. Heart Smart is currently the top-performing company within the Japanese Heart Rate Monitor Market.