EcoGenix Harvard Case Solution & Analysis

What is the outlook for EcoGenix as a venture? Justify your view.

            Eco Genix is operating as a venture partnership and it is operating under biotechnology industry. The team of Eco Genix has over 60 years of experience relevant to the waste management. It is operating in the industry due to the skills of its team that has expertise to come up with innovative ideas to develop a business plan and run it effectively for a span of period. The venture  operates the project/business for a limited time with view to exit from the business through the means of exit strategy to generate the higher profitability for the venture and its partners. The exit strategies are usually following the method to sell the business to a potential buyer or take the step of IPO to exit from the business.

            The venture should invest in those industries and plan that are able to generate healthy inflows of the company and future growth prospect must be supporting the new project or the business. The venture has enough skills to create an innovative plan and execute the plan with some internal funds and some of external financing sources from angel investors. The venture has enough wealth to invest, but it is the strategy of the venture partners to invest less due to the risk of the failure of the new business or project. The risk of failure can affect the loss of investing amount therefore it uses to invest extensively in innovative projects due to lower risk factors, although the failure of the project affects the inflow of the profit that it uses to estimate before going through the projects therefore it’s team put extra efforts to operate successfully over new business plan to generate cash.

            The venture partners should come up with a plan regularly in many industries and the most of the cases they work on waste division because they are with an idea that most of the companies are willing to generate some of the cash from waste material that is a liability over companies to bear dumping costs. The cost can be eliminated and revenues can be generated to give benefit to the companies, therefore the plan would get successful reviews and cash flows. However, the waste management business must consider the costs and the benefits to the companies that are willing to manage their waste. The net discounted benefit to the companies can give an opportunity to venture partners to grow because nobody can invest in the project that has negative net present value (NPV), and internal rate of return (IRR) higher than the required return of a company (weighted average cost of capital or WACC).

            The venture partner has chosen a good target market and in short the target market is every industry in which the waste of material situation occurs. The scope of this business is very large because it is applicable in most of the industry that are undertaking manufacturing process. The strategy is to operate the business for a shorter period and sell the business during the period of maturity or high growth period to get a good price for the project. However, the effect of failure may be worthless as it wastes the time and money of the venture partners.

            The attractiveness of the project is based upon the trial that is being run during the initial period of the plan, if the trail gets the success, then the venture further proceed under the project because the failure under the trial period can save the extra time and money to proceed under the project.

            The exit strategy during the period of high growth and maturity of the project’s life cycle is considered to be a good option because after achieving the maturity there are certain problems that are being faced by the product’s revenue generation. This exit strategy gives an opportunity to expand in another industry or any other project in which a sustainable growth can be generated higher cash flows in present in future term for Eco Genix.

EcoGenix Case Solution

How would you rate the Eco Genix business plan - Poor/ Good/ Excellent and why?

The business plan of EcoGenix to target the palm oil companies of Malaysia is a good plan, however, it could be excellent, but some of the risks are incorporated with the plan that largely affect the excellence of the project. The business plan is good due to below specified reasons. There are some of the drawbacks that are also discussed along with the acceptable reasons for the project.......................

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