GyroCoaster
Blue Group
Objective
• To create a safe and reliable
educational toy, targeting
children ages 6-10 years old, in
order to save Kids, Inc.
Overview
• Product Description
• Business Plan
• Future Work
Product Description
• The GyroCoaster Concept
– Constructible toy roller coaster
• Child constructs a custom track using track
pieces and stanchions
• Child can launch the GyroWheel through
the completed track and watch it work
– Educational value
• Physical: Hand-eye coordination
• Spatial: 3-D sense of space
• Logical: Momentum, potential energy,
inertia
– Provides fun and learning for children
of all ages
• Expansion sets allow the track to grow with
the child
Product Description
Beginner
Product Description
• Stanchion Assembly
– Fasten any number of equal height
risers to a base
– Add a connector for track connection
Product Description
• Track Assembly
– Custom build a track using various
track pieces
– Use connectors to fasten track pieces
together and to stanchions
Product Description
• GyroCoaster Advantage
– GyroWheel
• More attractive than current
parts
– Magnetism
• Counter-acts gravity
– Specialty Pieces
• Unique track pieces that only
work with the GyroWheel
Product Description
Intermediate
Product Description
Advanced
Product Description
• Design for Safety
– Plastic track with metallic coating
– Sleeves on connectors for track assembly
– Wider connectors
• Failure Mode and Effects Analysis
– Track pieces may shear
– Pin at base may shear
Part
Severity
Occurrence
Detection
RPN
Action
Effects
Rating
Causes
Rating
Tests
Rating
Pin at Base
Shear
7
Small diameter
4
None
1
28
Sell/Include extra
Rod for Track
Shear
6
Small diameter/Poor material
8
1
48
Sell/Include extra
Stanchion
Buckling
4
Excess force
2
1
8
None
Sleeve
Shear
7
Small thickness
2
1
14
None
Sleeve holder
Shear
6
Excess force
1
1
6
None
Business Plan
• The Construction Toy Market
– Increasing 21% over the next 4
years
– Lego has shown a steady
decrease over the last 3 years
Construction Toy Market
Business Plan
• The Roller Coaster Toy Market
– Roller Coaster Toy Market is an
expanding portion of the
Construction Toy Market
– Roller coaster toys have won
numerous educational toy
awards in the last 4 years
• Scholastic Parent & Child Teacher's
Picks Award (2002)
• Great American Toy Test Award
(2003)
• Toys ‘R’ Us Ultimate Toy winner
(2004)
Business Plan
Competition Comparison (extracted from QFD)
Customer Requirements
Attractive
Expansion
Storage Size
"The Latest"
Selling Price
Social Interaction
Safety
Production Cost
6
Uniqueness
Reliable
8
Manufacturability
Easy to Construct
7
10 10
8
9
6
4
6
5
2
3
8
Profitable
Educational
Raw
Total
Weight .08 .09 .07 .11 .11 .09 .10 .07 .04 .07 .05 .02 .03 .09
Competitors
Skyrail
8
3
4
3
5
5
2
3
7
6
8
8
7
7
5
Marble Works
9
10
6
5
9
1
4
10
1
1
9
8
8
3
5.9
Hot Wheels Tech Trax
5
3
7
5
5
6
8
7
6
9
8
8
7
2
5.8
K’nex Roller Coasters
9
2
5
8
3
5
8
8
2
4
6
8
4
8
5.8
GyroCoaster
9
8
7
5
8
6
8
10
6
9
8
8
7
2
7.1
Business Plan
• Our share of the market
– Roller coaster toys will gain a large
amount of Lego’s decreasing market
share
– GyroCoaster will gain 2.5% of the
Construction Toy Market over the next
5 years
Projected Construction Toy Market
Business Plan
Estimated Profit and Losses Statement
Investment
Year One
Year Two
Year Three
Year Four
Year Five
$9,922,500 $12,155,063 $14,586,075 $17,229,801 $20,101,435
Sales Revenue
Returns, etc.
$148,838
$182,326
$218,791
$258,447
$301,522
$1,686,825
$1,944,810
$2,187,911
$2,412,172
$2,613,186
Manufacturing Cost
$1,686,825
$1,944,810
$2,187,911
$2,412,172
$2,613,186
Depreciation
$496,125
$607,753
$729,304
$861,490
$1,005,072
Materials Cost
$3,000,000
Gross Profit
-$3,000,000
$5,903,888
$7,475,363
$9,262,158
$11,285,520
$13,568,468
R&D
$5,000,000
$1,000,000
$500,000
$400,000
$300,000
$200,000
SG&A
$2,000,000
$1,475,972
$1,868,841
$2,315,539
$2,821,380
$3,392,117
NEBT
-$10,000,000
$3,427,916
$5,106,523
$6,546,618
$8,164,140
$9,976,351
Interest exp.
$342,792
$510,652
$654,662
$816,414
$997,635
Taxes
$1,028,375
$1,531,957
$1,963,985
$2,449,242
$2,992,905
$3,927,971
$4,898,484
$5,985,811
$2,056,749 $3,063,914
NEAT
IRR
23.30%
Business Plan
Net Profit Per Year
Profit (Millions)
Break Even Point
Year
Future Work
• Expansion Sets
– Includes even more original and
specialty pieces
– Attracts return customers
• Enhancements
– Lights and Colors
– Mechanical Starter
– Drive Belt Escalator
Conclusion
• Cutting edge design
• Growing market
• Open market share
– Capture 2.5% of the market
within 5 years
• Profitable Investment
– Internal Rate of Return of 23.3%
Questions?
Product Description
Base Product Parts and Cost
Qty.
Bulk Plastic
Metallic Paint
Steel
Total Price Per Item
Base
10
$0.24
$0.00
$1.53
$1.77
Riser
16
$5.02
$0.00
$0.00
$5.02
Non-Stanchion Connector
8
$1.25
$0.00
$0.00
$1.25
Horizontal Connector
8
$1.64
$0.00
$0.00
$1.64
Vertical Connector
4
$0.82
$0.00
$0.00
$0.82
Straight Track
20
$0.98
$0.52
$0.00
$1.50
45° Curve Track
10
$0.41
$0.21
$0.00
$0.62
90° Curve Track
10
$0.72
$0.37
$0.00
$1.09
Twisted Track
8
$0.32
$0.17
$0.00
$0.48
$11.39
$1.27
$1.53
Total Price Per Material
Total
$14.19
Product Description
Specialty Pieces
Loop–the-Loop
Zig - Zag
Tornado
Corkscrew
Product Description
Failure Modes and Effects Analysis Calculations
M  0
Ft * l  T * 0.5  0
T  Ft * l * 2
T
V 
A
Ft * l * 2
V 
A
V*A
Ft 
l *2
Ft
T
d
L
Force T will cause the shearing stress
V
A
d
l
Ft
Ft with F.S. of 3
psi
inches2
in.
inches
pounds force
pounds force
4290
0.1963
0.50
24
17.54
5.849
9430
0.1963
0.50
24
38.57
12.85
4290
0.0490
0.25
24
4.379
1.459
9430
0.0490
0.25
24
8.758
2.919
Product Description
Failure Modes and Effects Analysis Calculations
F max* l
8
2 * * * y 3
F max 
l
M 
I
Fmax
 * D4
64
M *y

I
y
σ
l
Fmax[1]
Fmax with F.S. (3)
inches
psi
inches
pounds force
pounds force
0.1250
9430
14.00
8.265
2.755
0.1500
9430
14.00
14.28
4.761
0.2000
9430
14.00
33.85
11.28
0.2500
9430
14.00
66.12
22.04
0.5000
9430
14.00
529.0
176.341
Business Plan
Competitors
Skyrail
Marble Works
Hot Wheels Tech Trax
K’nex Roller Coasters
Business Plan
Selling Price Comparison
GyroCoaster
$49.99
Skyrail
$49.99
Tech Trax
$49.98
Marble Works
$36.99
K'nex
$68.88
Business Plan
• Competitors’ Awards
– Skyrail by Quercetti
• Dr. Toy 10 Best Educational Toy Winner (2003)
– Marble Works by Discovery Toys
• Scholastic Parent & Child Teacher's Picks
Award (2002)
• Great American Toy Test Award (2003)
– Hot Wheels Tech Trax by Mattel
• Toys ‘R’ Us Ultimate Toy winner (2004)
– Screamin’ Serpent by K’nex
• Toy Of The Year Award Winner (2002)
Business Plan
Estimated Profit and Losses Statement Explained
Investment
Year One
Year Two
Year Three
Year Four
Year Five
1.5%
1.5%
1.5%
1.5%
1.5%
17%
16%
15%
14%
13%
Manufacturing Cost
17%
16%
15%
14%
13%
Depreciation
5%
5%
5%
5%
5%
Sales Revenue
Returns, etc.
Materials Cost
$3,000,000
Gross Profit
R&D
$5,000,000
$1,000,000
$500,000
$400,000
$300,000
$200,000
SG&A
$2,000,000
25%
25%
25%
25%
25%
Interest exp.
10%
10%
10%
10%
10%
Taxes
30%
30%
30%
30%
30%
NEBT
Neat
Business Plan
Calculating the Internal Rate of Return
CF3
CF5
CF1
CF2
CF4




 I0  0
1
2
3
4
5
1  R  1  R  1  R  1  R  1  R 
$2,056,749
1  R 
1

$3,063,914
1  R 
2

$3,927,971
1  R 
3

$4,898,484
Solve for R
R  IRR  0.233  23.3%
1  R 
4

$5,985,811
1  R 5
 $10,000,000  0
Business Plan
References
Euromonitor International. “Business Intelligence, Company
Profiles, Strategic Markets Analysis: Euromonitor
International.
Euromonitor Plc. May 1, 2005.
Http://www.euromonitor.com
Hot Wheels. Mattel, Inc. April 24, 2005.
Http://www.hotwheels.com
K’nex. “The World’s Most Creative Construction Toy”. April 29, 2005.
Http://www.knex.com
Riley, William F., Leroy D. Sturges, and Don H. Morris. “Mechanics of
Materials”. Fifth Edition. New York: John Wiley & Sons, Inc.,
1999.The LEGO group.
“The Official Website of Lego ® Products”. Lucasfilm Ltd. & TM. April 23,
2005. Http://www.lego.com
U.S. Census Bureau. “Census Bureau Homepage”. April 21, 2005.
Http://www.census.gov.