Trexel Case

Trexel Case

What criteria should you use to evaluate the projects at Trexel? Which project (molded structural foam, injection molding, blow molding, PVC extrusions, or meat trays and food packaging) should Bernstein recommend to the board? Why?

In order to evaluate the projects at Trexel I could use these four criteria:

1. Customer Dynamics: it is necessary to analyze the growth rate of customers; in this case it is important because the five projects have differences among the number of new costumers, machines in this case that enter to the market. Also each of the companies have different suppliers and are more or less willing to change this process in a new like MuCell.

2. Technology adoption: In this case the five alternatives the potential market for the solution has a history of R&D, but there are differences among them. For instance, there is the impact of new technologies is easier for Blow molding and meat trays, and could be slower in the case of molded structural foam, and PVC extrusion because of the barriers of the industrial sector.

3. Microeconomics: Market size and profitability (licensing agreement, consulting agreement, royalty, super fluid delivery system, all this over the market size). This is a fundamental criterion; in this case, there are big differences among the projects, over all in the market size and the growth rate of the new machines that enter each year to production. When in a technology venture has faced the risk of the implementation of this kind of projects, and has successfully get a final concrete product the main issue is the business model depending on the opportunity that the market has.

4. Competitive Intensity: Even though that it is a patented and very differentiated technology, protected through a patent portfolio, could appear barrier and limitations that need to be faced through the most complete and accurate agreements for each project. It could be easier in some cases and challenging when is need to face externals regulations

The value offered to the costumers is the saving and performance with the MuCell process, it is clear and concrete, key learning took place when the company started working with its partners/customers. In the case we can learn about the market opportunity for this solution, however this opportunity has different magnitudes and feasibility depending on the four points listed above.

The table 1 shows the opportunity related with the market size and expected profitability for the five projects (just for the first year), the assumptions was based in the information gave in the case, despite appearing incomplete this information shows big differences between each project opportunity of market. Although could have change if we consider the complete data the differences will be maintained.

In this case we can see that the Injection Molding option appears how likely the most profitable