1. eMerge Interactive, Inc. Sierra Howry Baltazar Prado Ross Pruitt

2. Description of the Case Situation  eMerge: A diversified agricultural technology company  Two main product lines: CattleLog and VerifEYE –Market Environment –Technology and Development –Sales and Marketing –Customers –Intellectual Property Rights –Competition

3. eMerge’s Problems  How does the company stay afloat until the market is ready?  What business strategy will allow them to increase the adoption rate of this technology?

4. eMerge SWOT  Strengths –Exclusive license to unique intellectual property rights (VerifEYE) –First mover advantage with VerifEYE –VerifEYE works within existing HACCP regulations  Weaknesses –Lack of competitive advantage of CattleLog –CattleLog is not a stand alone piece of software –Difficult to measure monetary benefits from CattleLog

5. eMerge SWOT  Opportunities –Ability of VerifEYE to evolve into more differentiated products (bioterrorism/fruits and vegetables) –Use by federal/state regulatory agencies –Divide and conquer potential food safety markets  Threats –Close substitutes that are less expensive than CattleLog and gaining USDA PVP certification –Inability to defend intellectual property rights (VerifEYE) –Lack of access to capital markets

6. Strategic Directions SELL, SELL, SELL  Why Sell CattleLog? –Not a unique product –Too many close substitutes –Does not have a competitive advantage –Too dependent on government mandates –Too costly to redevelop CattleLog into a product that would be compatible with newer technology

7. Strategic Directions Expand, Expand, Expand  Exploit the VerifEYE systems (CIS, Solo, and HandScan) to their full potential due to: –Uniqueness of systems –No direct competitors –Not relying on government mandates –Ability to be incorporated into industries other than agriculture –Currently having monopoly power with these products

8. Strategic Recommendations  In order to expand, eMerge should take Solo and HandScan to: –Restaurants / Fast Food Industry –Governmental Health Inspectors –Insurance Companies –Grocery Stores –Food Processors –Hotels –Day Cares –Hospitals –Private Consumers –Bioterrorism

9. Example: McDonald’s  Setup a round table discussion with McDonald’s corporate office for feedback

10. McDonald’s Corporate Meeting  Show advantages of the VerifEYE systems such as: –Decrease food contamination from poor worker hygiene  Illustrate how the HandScan can determine contaminated areas to be cleaned on hands –Solo could be used to randomly scan the food preparation areas  Possible at the end of a shift or the end of the day –Solo can also scan utensils / condiment area

11. McDonald’s Corporate Meeting  Utilizing Solo and the HandScan can help prevent the loss of revenue and protect reputation –Potential loss  Jack in Box lost estimated $160 million in first 18 months following contamination (Roberts, et al.)  The average award in foodborne illness lawsuits was $133,280 in 1998 (USDA ERS)

12. McDonald’s Corporate Meeting  Test pilot program –Let McDonald's use the Solo and HandScan in a few of their franchises, so they can obtain feedback and see the benefits of these systems

13. Strategic Recommendations  Thirty two percent of defendants in foodborne illness lawsuits are restaurants (USDA ERS) –Sell HandScan products to ensure employee compliance with sanitary regulations. –Sell Solo products to franchise managers as well as regional managers to ensure individual franchises meet corporate standards.

14. eMerge’s Solutions  How does the company stay afloat until the market is ready? –Sell CattleLog –Further develop capabilities of VerifEYE  Bioterrorism  Fruits and Vegetables

15. eMerge’s Solutions  What business strategy will allow them to increase the adoption rate of this technology? –Targeting McDonald’s to purchase VerifEYE techonologies  Will set standard for rest of restaurant industry –Governmental Health Inspectors

16. References  Roberts, T., R.A. Morales, C.T. J. Lin, A. Caswell, and N.H. Hooker. "Worldwide Opportunities to Market Food Safety." Ch. 10 in Government and the Food: Economic and Political Effects of Conflict and Cooperation, eds. L.T. Wallace and W.R. Schroder, Boston: Kluwer Academic Publishers, 1997.  U.S. Department of Agriculture, Economic Research Service. Consumer Food Safety Behavior: Restaurants the Chief Target of Foodborne Illness Lawsuits. http://www.ers.usda.gov/Briefing/ConsumerFoodSafety/feature.ht m, July 22, 2005. http://www.ers.usda.gov/Briefing/ConsumerFoodSafety/feature.ht m http://www.ers.usda.gov/Briefing/ConsumerFoodSafety/feature.ht m

17. Questions

18. Awards in Foodborne Illness Lawsuits Source: USDA ERS

19. Primary Defendant in Foodborne Illness Court Cases Source: USDA ERS