Is E Ink Science Experiment or a Start-up Company?
I think Project Financing is best because:
* Control Issues
* D/E is High
* Huge technology costs but even bigger payoffs, option like contracts.
* Phases are like a development of a new asset “Rolling Technology platform” Vertical Integration.
E Ink is unlike a majority of startup companies. It was confronted with the problem of having to turn away funding from numerous venture capitalists, technology firms and publishers. Based on their revolutionizing technology of electronic ink, E Ink was able to have their pick of financing partners. So why did they choose venture capital financing instead of other financing options? In answering this question, we need to walk through an overview of the company’s strategy. E Ink’s ambition was to revolutionize the way people view information via “radio paper” utilization. Their current (1997 – 1999) business strategy for achieving their goal can be separated in five major elements.
1. Arenas: Where and with how much emphasis will E INK be active? (Industries/Sectors)
2. Vehicles: How will E INK get there? (Growth Strategy)
3. Differentiators: How will E INK win the marketplace? (Competitive Advantage)
4. Staging: What will be E INK’s speed and sequence of moves?
5. Economic Logic: How will E INK obtain their returns?
E Ink’s arenas - the information-exchange value chain - publishing industry. Their growth strategy - Organic Growth; was increasing the company's own business activity via gaining share of established markets. The differentiating approach was to provide state of the art new technology – revolutionizing the way people view information at a substantial lower cost. The staging of the company was very unique - it was more of a “vertical integration” or “rolling-technology platform” sequencing. Phase 1: Large Area Displays, Phase 2; Flat-Panel Displays, Phase 3: Publishing....