1. Little Builder Construction Set Jurrens, Witthauer, Huwe, Sheldahl, Pruess, Schultz, Hughes, Garrison, Horak, McGuire, Liu, Lund ME 270 Fall 2004

2. December 15th 2004Little Builder Construction Set ME 270 Sec. C Teal Group How It Works Child builds fort Child builds fort Inspires creativity Inspires creativity Easy assembly Easy assembly Blankets for walls Blankets for walls

3. December 15th 2004Little Builder Construction Set ME 270 Sec. C Teal Group Similar Successful Products Legos Legos Tinker Toys Tinker Toys KNex KNex Erector Set Erector Set Lincoln Logs Lincoln Logs

4. December 15th 2004Little Builder Construction Set ME 270 Sec. C Teal Group Competition Limitations: One-time assembly One-time assembly Space-consuming Space-consuming Expensive Expensive Heavy Heavy Difficult assembly Difficult assembly Shipping costs Shipping costs Kids lose interest Kids lose interest My Playhouse Theater Welcome Home House Little Tikes Log Cabin

5. December 15th 2004Little Builder Construction Set ME 270 Sec. C Teal Group Little Builder : Why Parents Love it Learning toy Learning toy Low cost Low cost Durable Durable Compact storage Compact storage Safe Safe Encourages constructive play Encourages constructive play Appeals to all kids Appeals to all kids Exercises creativity Exercises creativity Unlimited configurations Unlimited configurations

6. December 15th 2004Little Builder Construction Set ME 270 Sec. C Teal Group Toy Market in 2003 Sales exceeded $20 billion Sales exceeded $20 billion Building set sales totaled $625 million Building set sales totaled $625 million 55% of toy sales were from toys developed in the preceding 3 years 55% of toy sales were from toys developed in the preceding 3 years Building Sets were popular Building Sets were popular Lego® was 3 rd highest selling brand for 6-11 year old boys Lego® was 3 rd highest selling brand for 6-11 year old boys

7. December 15th 2004Little Builder Construction Set ME 270 Sec. C Teal Group Competitive Advantage More Creative Freedom More Creative Freedom Easier Assembly Easier Assembly Lower Cost to Consumer Lower Cost to Consumer

8. December 15th 2004Little Builder Construction Set ME 270 Sec. C Teal Group Financial Justification Reach Steady State Sales in 1st year Reach Steady State Sales in 1st year 222,000 units/year 222,000 units/year 1 unit for every 500 households in the nation 1 unit for every 500 households in the nation I o =$5 million I o =$5 million Steady State Profits over $1.8 million Steady State Profits over $1.8 million IRR = 22% IRR = 22% Break even on investment after the 2 nd year Break even on investment after the 2 nd year

9. December 15th 2004Little Builder Construction Set ME 270 Sec. C Teal Group Joints fit together easily Joints fit together easily Solid joints: All factors of safety>8 Solid joints: All factors of safety>8 Joint variety (6 types) Joint variety (6 types) Sit flush on floor Sit flush on floor Blanket Clips Blanket Clips Design Features

10. December 15th 2004Little Builder Construction Set ME 270 Sec. C Teal Group Some Possible Configurations

11. December 15th 2004Little Builder Construction Set ME 270 Sec. C Teal Group Why The Little Builder Construction Set? Fosters creative, constructive play Fosters creative, constructive play Unique to the market Unique to the market Construction toys and fort sets very successful Construction toys and fort sets very successful