ANGELICA Case 2A (Mixed Businesses)

When she was an Electrical Technology student, Angelica worked summers for a company that installed burglar alarm systems in new homes during construction. Her job consisted of rough-wiring homes for complete alarm systems.

Her boss, Harry, owned the company and he would make deals with home builders to install the basic wiring in all their units at low cost. The home salesperson would offer the purchaser of the home the option of purchasing an expensive alarm system. If they agreed, the installation would go to Harrys company, which would complete the system after all of the carpentry had been done at a very high profit. The profit would be shared with the home builder, but Harry would also make a commission if the home owner signed up with an alarm monitoring company.

When new home owners declined the installation, Harry would wait until several months after they had moved in and then make a sales call, offering to install the same system at a price far below what the owners would have paid to the home builder. If the deal was made, Harry would install the system at a lower profit, but it would not be shared with the builder. Harry would also have the chance of earning commission by getting the home owner to sign with a monitoring company. These after-market sales were especially easy to make if a few break-ins had occurred in the neighbourhood after the new home owners had moved in.

Harry died. Angelica heard the news on the day she graduated from college. She knew that the four or five largest home builders in the West end of the city would need a new supplier. Buying Harrys company was not really an option because the only real assets were an old truck full of wiring. (Harry purchased all his supplies as required on a daily basis). Harry had no written contracts with the builders (he worked on a hand-shake) and all his employees were casual labour or electrical students working in the summer.

Angela decided to move quickly. She realized that she could borrow start-up money from one of the government-sponsored programs if she could put together a Business Plan.

1. What will Angela identify as her site? Why?

2. Who will she identify as her primary market? Explain.

3. Who will be Angelas direct competition? Indirect competition? Explain.

4. How will Angela go about assessing the market potential? Give details.