Dr. John’s Products, Ltd. Case Study Lauren Katz 4/26/2016

Qualitative Analysis Customer Value Proposition SpinBrush: low-cost, high-quality, and simple electronic toothbrush Low-cost gives it a huge competitive advantage in the electronic toothbrush space($6 vs. $50) Shortcomings: water damage, wear out of brushes “try-me” packaging and unique power/movement Testing / MVP Interviews with potential customers reveals high-cost objection and desire to maintain traditional way Meijers sells significantly more than competition NACDS2 Trade shows Competitors: Other electronic toothbrushes are too expensive Competing with major brands such as Colgate and Crest that could easily enter this market for low-cost electronic toothbrushes  risky Go-to-Market Plan Global market: $3.3bil, US market: $800mil Plan for direct distribution with large retailers avoid unnecessary costs, have credibility Potential partnership with Crest to gain brand awareness would reduce risk of competition from other big brands Used some guerilla-marketing Handed out free toothbrushes giving people the product was effective “try-me” packaging feature Innovative and effective for sales Technology and Operations Management Patents on the power and packaging Patent will not prevent other companies from developing similar tooth brushes since the patent is specific to angles and motions Outsource Chinese manufacturing partner reliable Seeking computer system to track information Team Small and extremely qualified have credibility Osher not specialized in oral care or big businesses but innovative and successful. Came up with small businesses and selling them Profit Formula $6 through FDM , $5 through retail giants

Quantitative Analysis Revenues= 6000units * $5.50(average of $6 and $5) = $33,000/day$12,045,000/yr Profit margins are attractive and high growth rates are sustainable Reports from testing show that SpinBrush sales were 7/day per store while typical toothbrushes sell 1/week per store In 2000 they were selling 6,000 units per day Economy/stock market is booming $9,274 billion GDP  people are more likely to spend money right now  good for sales  will it be this good later? Global market size: $3.3 billion; US market size: $800million  if they can scale internationally, they would have a huge target market Merger and Acquisition Transactions increased from $831.9billion to $1,480.7billion in just two years Huge jump if they want to sell the company now is a great time VC return/investments  huge increase Procter & Gamble Highest stock prices of selected consumer goods companies Market share: 8.4 low compared to other companies Assets and Investments: 1998: raised $1 million, invested his own $400,000, other managers invested total of $300,000 1999: raise additional $500,000

Recommendations: Sell company: Sell company to Procter & Gamble  have an upcoming meeting with them The extremely high economy/stock market and merger and acquisition transaction make it a perfect time to sell the company for a great return Osher has no experience running a big business or in the oral care industry the huge companies he is hold great market share and have the technology to reproduce his weakly patented toothbrush  too risky Osher has been successful in the past building companies and selling them for a high profit Appeal to the fact that P&G needs SpinBrush since they are not in the electronic toothbrush market yet, and this will advance their comparatively low market share Other Recommendations (Especially if P&G sale does not work): Fix the water damage issue increase consumer retention rate Patent any and all new features keep competition out for as long as possible Alternative options are less promising: Build a new company known for innovative products  Unlike his experience with baby toys, there is little innovation potential in the toothbrush industry and bigger companies would continue to keep up with their new innovations.