HawkX Technology: A Microcomputer Company

Business Plan

By: Camden Posney, DJ Main, Colin Roble, George Malerbo

1.0 Company Summary Company Ownership –

CEO/VP of Sales Management – DJ Main VP of Marketing & Human Resources – Camden Posney VP of Sales Management & Manufacturing – George Malerbo VP of Accounting, Finance & Marketing Research – Colin Roble

o As a company still in the introduction stages of the industry, our ownership has stayed mostly within the four of us. This is something that we have addressed and are willing to sell a large portion of if it will give us a competitive advantage against the other companies in the market.

o Currently at 40,000 shares being sold at $100 per share which we would like to see continue.

Company History: o A startup company in the computer industry. o Currently in the 5th quarter of production and growth. o After quarter 5, we will be in six different markets in the North American and European

segments. o Heavily invested in the future, keeping the money we spend spread evenly between all

departments within the company. o Future Goals:

To have the highest production rate within the industry.

Spending more money each quarter on the compensation packages and salaries for our factory workers.

To be highly competitive within all the markets that we decide to enter.

Innovator

Workhorse

Costcutter

Traveler To spend more money than our competitors in the Research & Development

segment.

Have done our own research while also partnering with competitors to split the cost of other things.

Fast Networking speed – Alone

Ultra Capacity – With Bullmarket Tech Hoping to land the $5 million investment so that we can continue to invest

heavily in the future, looking 3 years down the road. To be at the top of the industry as a better overall company than the rest of the

competition.

Spending money in each area of the company. o HR o Sales o Advertising o R&D o Manufacturing o Financial Stability

Company Locations & Facilities o Sales Offices: 80% focus

Chicago Los Angeles Toronto London Paris – Quarter 5 Moscow – Quarter 5

o Web Center: Closing Quarter 5 Chicago

o Factory: Mexico City

2.0 Products & Services

Within this section, you will find all of our products that we offer our target markets. You will also find

information on our competitor’s products and how our product stacks up against theirs. Finally, you will

find future products that we intend to start selling within the current quarter.

2.1 Current Product Description

Hummingbird 2.0 – This is our computer that is our cash cow. It is moderately cheap to produce, has

great computing power, and a large target market. This computer is directed the workhorse market

segment. Key features include: mid-range computing power, a 21 inch high resolution monitor,

bookkeeping and web design applications, and a security suite with auto backup. We price this

computer at $3,200 in the NORAM and EURO markets.

Golden Goose 2.0 – This product is our higher scale computer that appeals to the innovator segment

and also leaks into the Mercedes target market. We build this computer to be one of the strongest, if

not the strongest, computer on the market. Key R&D features that will be added to newer versions of

this product include: ultra-fast computing power and a high-speed network link. We consider this

product to be our STAR product as it costs more to produce but still brings in a hefty profit. Key features

include: Ultra capacity, High speed computing power, Engineering and Statistical applications, and a 21

inch resolution monitor. We price this product at $3800 in the NORAM region and $3,550 in the EURO

region.

2.2 Competitive Comparison

Workhorse Segment – We have some extreme competition in terms of product in the workhorse

segment. Jacket 1 has a product called the Captain 2000, which is the only product that his ranked

higher above our product. Sheer Program’s product, The Worker 2.0, is on par with our product.

However, with these products on the market, we have been able to maintain 31% of the market share

which is tied for first in the segment. To maintain our success, we plan to release a third version of our

Hummingbird after our R&D is complete with a high speed networking capability which the segment is

really looking for. We hope that these changes, along with more salespeople pushing the product in

new sales channels, can continue our dominance in the workhorse market.

Innovator Segment – After entering the test market, we felt that we had a product in the innovator

market that would bring us immediate success. After another quarter, we fell victim to copycats in our

industry and got set back a little in the market share area. Bull Market Tech took first place from us

during Quarter 4 with their Stampede XXL product. Without any R&D our innovator brand cannot go

any higher than it is currently, so we are entering into a licensing agreement with Bull Market Tech to

improve our products. Why would we team with someone in direct competition with us? Well, we plan

on taking over the EURO region since it has barely been touched by any of the other companies.

Therefore, we feel like entering into a licensing agreement with Bull Market Tech will not hurt us and we

are getting a great deal for it too.

3.3 Technology

As our consumer reach grows, we must adapt to our consumers wants and needs. After putting out a

product that had decent success, our consumers are left desiring more from our technology. Now that

we have the opportunity to be funded by venture capitalists, we will have the capital to invest in

research & development. After looking over the options that our scientists have come up with, we have

decided to make the initial decision of investing in the fast network/internet function of R&D. It is the

highest customer need for our two current products and is very high for a product we will be introducing

this quarter.

Another R&D decision we are pushing through is entering a licensing agreement with Bull Market Tech.

Like mentioned above, we do not feel that it will hurt our business to invest with our competitor

because we plan on taking this product to the EURO region which they are not in. The licensing

agreement will get us the Ultra-Fast computer processor which helps tremendously for our Golden

Goose product and will help a lot to create a Mercedes market presence. We will only be paying $1.1

Million for the license which would normally cost us $3.5 Million to develop on our own.

Ultra fast, handle large tasks 95 122 129 101 98

Fast network/internet 102 120 129 117 118

Another R&D project we may look at down the road is the Fail Proof Hard Drive. Most of our segments

are searching for something that has the capability to back up their files. If we implement a fail proof

hard drive, we would eliminate that need and give them the security of their files that they want.

3.4 Future Products

In Quarter 5, we plan to open up two new brands that we believe we can grab a share of the market

with. The traveler segment is being attacked by Bull Market Tech, Phoenix Technologies, and Jacket 1.

However, we still think with our move into the EURO market we can achieve high sales in the traveler

segment. As for the costcutter market, we have decided to enter it just to try and make a splash with

Phoenix Technologies, who is the only other competitor really in the costcutting market.

The Carrier Pigeon – This new product will attract the traveler segment. We believe in the first quarter

of sales we can sell almost 500 units. We have designed this product as a replica of the XGlobal2 by

Phoenix Technologies and the Bullet 2000 by Jacket 1. We believe it will get great reviews out of the

gate and we will be tapping into a market that we have yet to attack. The market size in our current

cities is quite large so we feel we can attract a good amount of demand. Key features for this product

include: a 14 inch laptop screen, presentation graphics, featuring office applications, and the portable

design. We will be pricing this product at a competitive price of $3,450 around the NORAM and EURO

markets.

The Crow – The Crow will be our product we are placing into the Costcutter market. This product is

designed as a replica of the W-Elite by Phoenix Technologies. Phoenix Technologies is the only company

in the industry aggressively targeting the costcutting market so we decided to throw a costcutter

product together and try to grab some of the market share. We estimate to sell about 500 units this

quarter. The gross profit on The Crow will not be as lucrative as our other three products, but it will still

make money and should be a nice little tool to increase sales numbers. Key features of this product

include: A very secure computer, a simple design, a very low price, and a smart backup system. We will

be selling this product at $2,150 across the NORAM and EURO markets, which is a competitive price with

Phoenix Technologies.

3.0 – Market Analysis Summary Market Segmentation:

o Market Segments: Innovator – Golden Goose 2.0 Workhorse – Hummingbird 2.0 Costcutter – The Crow Traveler – Carrier Pigeon Mercedes

o Target Markets: North America

Los Angeles – Opened

Chicago – Opened

Toronto – Opened

Mexico City – Factory location Europe

London – Opened

Paris – Open in Quarter 5

Moscow – Open in Quarter 5

Warsaw Asia-Pacific

Tokyo

Mumbai

Shanghai

Sydney Latin America

Santo Domingo

Santiago

Sao Paulo

Quito

Middle East

Abu Dhabi

Accra

Cairo

Johannesburg

Target Market Segment Strategy o As a company we have decided to attack two main segments right off that bat but will

be introducing products for two more segments in Quarter 5. Workhorse (Hummingbird 2.0) – Top Priority Innovator (Golden Goose 2.0) – 2nd Priority Traveler (CarrierPigeon) – 3rd Priority Costcutter (The Crow) – 4th Priority Mercedes – No specific product but are getting some overflow sales from our

Innovator designed product, the Golden Goose 2.0 o By focusing on a majority of the market segments we have shown that as a company we

want to design and market a product to fit everyone’s needs, from those who want to spend a lot of money on the most innovative brand to those who need something cheap and easy to use.

Market Needs: set at a 120 or above rating by the consumer o Innovator

Technical Leader Fast access to graphical images High performance over price Fast processing and output Work on multiple programs Ultra-fast, handle large tasks Security – back up data Fast network/Internet

o Workhorse Peace of mind, secure, safe, no hassle Easy to use Multi-Purpose Workstation Monitor is easy on the eyes Computers are lowest price Fast service response time

o Traveler Can connect to office on the road Can use on the road Portability Reliability of product Monitor is easy on the eyes Small footprint/slim design

o Costcutter Peace of mind, secure, safe, no hassle Easy to use Minimum complexity for operators Easy to set up and use New PC

Little training needed before use Computers are lowest price

Industry Participants o Phoenix Technologies – 23% Market share

Costcutter Traveler

o Jacket 1 – 21% Market share Workhorse Traveler

o Bull Market Tech – 21% Market share Innovator Traveler

o Hawk X – 19% Market Share Innovator Workhorse

o Bamplanet LLC – 9% Market share Traveler Workhorse

o Sheer Program – 7% Market share Traveler Workhorse

Main Competitors o Bull Market Tech

They took a large portion of our market shares in the Innovator segment over the last quarter.

o Jacket 1 We are tied with this company in the lead for most market share in the

Workhorse segment but with the R&D we have done over the last quarter we are hoping to see a significant increase

o Phoenix Technologies We are considering this company a main competitor at this point because they

are the leader in total market share and that is because they have the entire Costcutter market cornered with the only product available there.

We are introducing a product to compete in this market for Quarter 5 and are hoping to cut into a portion of their shares.

4.0 Strategy and Implementation Summary

HawkX Technology will leverage its competitive edge in order to gain significant market share. We focus

on our various customers’ needs. Our modern technology we offer to consumers includes state of the

art personal computers. Our customers might be in larger companies, smaller medium businesses, or in

home offices. We believe what is important to the customer is elegance, ease of use, practicality,

reliability, and of course safety and security.

4.1 Strategy Pyramids

Our main strategy at HawkX Technology is to position ourselves at the top of the quality scale, featuring

our combination of superb technology and hardware reliability. Tactics underneath our strategy include

research and development related to new designs and new technology for our brands, choosing the

right distribution channels, and communicating our quality position to the market. We have invested in

new equipment to keep up with the design of our products, our direct sales, and our continued

presence in high-end catalogue and our presence in the web.

4.2 Value Proposition

HawkX Technology gives the personal computer user who cares about design, functionality, and

convenience, a combination of highest quality hardware and software at a relatively reasonable price.

4.3 Competitive Edge

Our competitive edge is our dominance of high-technology. HawkX Technology has a willing to spend

money to invest in their future. HawkX Technology is a pioneer in the market and posseses strong brand

judgment with a large number of sales offices. Presently, HawkX Technology possesses good cash

reserves strong advertising.

4.4 Marketing Strategy

Our products are positioned very carefully. We are positioning to customers who understand the

importance of quality, users of high performance equipment, and who are willing to spend money on

the best. Unlike the mainstream products produced by our competitors, we do not use cheap

manufacturing technology. Our marketing strategy is based mainly on making the right information

available to the right target customers. We can't afford to sell people on our expensive products who

are not in the segment we are trying to target and advertise to. The main part of our marketing strategy

involves making sure that those who have the budget for our personal computer and those who

appreciate the product, know that the product exists, and know where to find it. The marketing team

conveys the sense of quality and reliability in every picture, every promotion, and every publication. We

can't afford to use poor illustrations in our ads that make the product look less than it is.

4.4.1 Positioning Statements

HawkX Technology believes that it can reach the market better than any other company even in a

market with highly competitive segments. Our company has the ability to provide easy to use solutions

for everyday computer users for both personal and business use. We are positioned well given our

brands for each segment

4.4.2 Pricing Strategy

We will maintain our pricing position as a premier provider. We are the best product available, for the

most discriminating consumer. We intend to maintain our separation from the price competition at the

lower end of the business. Our plan calls for no significant changes in pricing.

4.4.4 Distribution Patterns

Our products are almost entirely sold through retail stores to consumers. Internet sales make up little of

our product distribution. Technology has had little effect patterns of distribution in our industry as we

will have seen little impact on web center sales.

4.4.5 Marketing Programs

Our company is eager to start developing new technologies and components that will make our

products and personal computers stand out from the competition. With bank and venture capital

funding that we hopefully obtain, our company will be able to focus on the top needs of our market

segments through new technology.

4.5 Sales Strategy

4.5.1 Sales Forecast

Our sales forecast assumes no change in costs or prices, which is a reasonable assumption, considering

our first four quarters. We are expecting to increase sales vigorously in the next year specifically through

our direct in-house-sales, about doubling in size. We are projecting significant change in the product

line, or in the proportion between different lines. HawkX Technology, has reached a significant

milestone and generated 3,455,653 in Q4.

4.5.2 Sales Programs

Last quarter HawkX Technology had significantly greater sales in our in house sales offices. Therefore we

plan on continuing to lean toward our house sales as our primary method of sales. At the end of quarter

4 HawkX was 85% office sales with only 15% online sales. We plan on closing our web center to avoid

losing more money.

4.6 Strategic Alliances

HawkX Technology agreed to enter into a strategic alliance with Bull Market Tech and has agreed to

license the technology “Computing power: Ultra-fast” to HawkX Technology beginning in quarter 7 in

exchange for the sum of $1,100,000.

5.0 Financial Forecasts

A successful business is on the rise and soaring higher than anyone, HawkX Technologies

will be seen soon crushing its competitors. Finances are in order for you to put down a deal

right away! Everything is on the motion to get better as you are reading. Every quarter we have

seen a rise from important financial pieces. We have just upgraded our plant twice in two

quarters and also put over one million dollars on top of the 500,000 already invested into

improving changeover so less stock outs will occur. Revenues are going up every quarter, they

should continue to excel with our new research and development happening. Also, with our

new offices put around the globe, we are trying to take over the sales office game. The

increasing amount of cash can be used to pay back dividends or invest even more into the

company. By quarter twelve we could have forty million in cash ready to use. Net income and

earnings per share also rising this is your time to jump on board. We are finally seeing positive

retained earnings in quarter seven, then into the future. Retained earnings are going up at least

six million after quarter six for every quarter. Scared about your earnings per share? You should

have no worries when you see that they also are on the rise and soon enough you can sell your

shares for a ton of profit!

5.1 Top Line Financials from Quarter 8 (End of 2nd Year)

Revenues 25,482,000 Gross Profit 12,090,000 Total Expenses 3,738,142 Earnings before Interest and Taxes 9,051,858 Net Income 5,011,115 Earnings per Share 55 For a more in-depth look into our projected financials, please view our Pro Forma workbooks which show projections to the end of our third year of operations