Rachel McCormack: Avionics and White Goods

Comments (7)

Over the next 12 months, MicroMax wants to expand into avionics and white goods.

Looking over the next 12 months, Rachel McCormack, President of MicroMax, is looking to expand into avionics and white goods. Avionics represents a good fit. Mike, MicroMax's CEO, got his start in avionics and so is familiar with the industry. Further, mission critical avionics components require stringent testing much as in the automotive industry.

The market for MicroMax's products in white goods like refrigerators and washing machines is less clear. While these products have embedded systems, the extent to which testing is necessary is less apparent.

7 Comments

Cheryl Stacy on June 9, 2008 4:40 PM
What I am understanding from this pod cast is that Rachel McCormick, president of Micromax would like to expand their business into avionics and white goods. Most of their work so far has been in the automotive industry creating a software program that does testing for things like breaks. Mike, who is the Ceo has background in avionics so it seems reasonable to head in that direction. This sounds like a great opportunity but the challenge is that if a person's washing machine is not working there isn't the urgency to get it fixed, unlike getting breaks on a car fixed. My thought is to build the warranty into the cost of the dishwasher so that they use the service. The appliance company pays Micromax for the warranty and they in turn build it into their cost. I'm just a student in an entrepreneur class so I am interested in hearing if this is a good idea. Thanks Cheryl
Sarah Peterhans on June 9, 2008 7:02 PM
I think that expanding from the automotive industry into the avionics industry is an interesting expansion. It is definitely one way to set MicroMax apart from other businesses. I don't know too much about either industry, but I don't think that they are very similar, which could make the expansion tricky and costly. At the same time though, the CEO has a background in avionics, so the expansion would make sense. As I mentioned earlier, this is one way that could really set the business apart from others. Having a unique business is something that's important for a business to survive. I'm curious to see if this idea would really work and how it would actually work. I think that it would be risky, but from the sounds of it, I think it would be something worthwhile to look into. Sarah Peterhans
Sarah Allen on June 9, 2008 8:48 PM
I think that the expansion is a great idea especially since the CEO, Mike, has experience in that field. What I found to be the most interesting is that Rachel mentioned that the automotive industry has its limits and although they have been successful with this industry, they are looking to go beyond it. I think that this is a good related diversification strategy because they are using what they already know and there are similarities between the two industries and the technologies involved. MicroMax does need to evaluate all the risks associated with this venture because seeing profits could be a slow go.
Tyresse Ferguson on June 11, 2008 3:30 PM
I think that the expansion of MicroMax into avionics and white goods is a good idea. The company has a global customer base already when it comes to testing automotive parts. The company may take a loss in the white goods area since the owner or president of the company is not really sure how MicroMax can really fit into that industry. In addition, I feel that MicroMax has a great opportunity when it comes to the white goods market because every appliance is becoming high-tech that more and more testing will need to be done on these products to make sure that the products are safe enough to be put into people homes. Furthermore, Rachel made the comment that many people are not in a hurry to get their washing machine fixed when it break as oppose to the breaks on their car. I would have to disagree with that statement because with gas prices on the rise many people would be quicker to pay for their washing machine to get fixed than having to drive to the Laundromat, pay to wash their clothes, and then have to drive back home would be a waste of gas and money. Then the opportunity that the company is thinking about taking into avionics is great since the CEO of the company, Mike, started his career in avionics. The company will be able to analysis the market more thoroughly to see what are its strengths, weaknesses, opportunities, and threats. I believe that Rachel or Mike should develop a separate business plan for each expansion and this way they will be able to see whether the expansion into either industry will be profitable or not. Also, Rachel and Mike could look at it from a standpoint of trying to go into a global market. For instance, the company already exist but Mike and Rachel would like for the company to enter into two new industries; one where the company has a chance because of the knowledge that Mike possess about that industry already and the other industry is where either one of them are sure the company has a place or future. I would suggest that they try going into both industries for a year and see how things pan out. However, either way the company go with the expansion it will cost them.
Tyresse Ferguson on June 11, 2008 3:32 PM
Hello: Please disregard my first post. I think that the expansion of MicroMax into avionics and white goods is a good idea. The company has a global customer base already when it comes to testing automotive parts. The company may take a loss in the white goods area since the owner or president of the company is not really sure how MicroMax can really fit into that industry. In addition, I feel that MicroMax has a great opportunity when it comes to the white goods market because every appliance is becoming high-tech that more and more testing will need to be done on these products to make sure that the products are safe enough to be put into people homes. Furthermore, Rachel made the comment that many people are not in a hurry to get their washing machine fixed when it break as oppose to the breaks on their car. I would have to disagree with that statement because with gas prices on the rise many people would be quicker to pay for their washing machine to get fixed than having to drive to the Laundromat, pay to wash their clothes, and then have to drive back home would be a waste of gas and money. Then the opportunity that the company is thinking about taking into avionics is great since the CEO of the company, Mike, started his career in avionics. The company will be able to analysis the market more thoroughly to see what are its strengths, weaknesses, opportunities, and threats. I believe that Rachel or Mike should develop a separate business plan for each expansion and this way they will be able to see whether the expansion into either industry will be profitable or not. Also, Rachel and Mike could look at it from a standpoint of trying to go into a global market. For instance, the company already exist but Mike and Rachel would like for the company to enter into two new industries; one where the company has a chance because of the knowledge that Mike possess about that industry already and the other industry is where either one of them are sure the company has a place or future. I would suggest that they try going into both industries for a year and see how things pan out. However, either way the company go with the expansion it will cost them. Tyresse Ferguson
Mary Adams on June 11, 2008 7:05 PM
Good evening bloggers! Being in the auto industry, or having a business that supports the auto industry is probably stressful, and causing trying times. If that business is in support of the “Big 3” Ford, GM or Chrysler, it is more magnified. The US auto manufacturers have suffered greatly in the recent economy, and have affected negatively, the same economy. They continue to fail at innovation, and are not keeping pace with either the Japanese or European auto manufacturers. Therefore, for Micormax to be in pursuit of diversifying their business, I say “BRAVO.” Being a student at EMU I understand the importance of innovation and out of the box thinking. Micromax has a successful business, and recognizes the need to think and move forward. Planning to diversity and sticking within the expertise of the company is brilliant. With the experience with avionics, they are not only thinking about moving forward, but perhaps into the atmosphere! The white goods concept should also be explored as there are local capabilities right here in Michigan. This interview is certainly one way to “get the feelers out” and I suggest also considering some S.W.O.T analysis. What is the size of the market? How would Micromax fit its current business model into the market? Before launching into a full blown business plan, doing market research and analysis can help determine if these are worth while pursuits. Good luck, Mary Adams
kelly darr on June 12, 2008 8:14 AM
Hello Rachel, Moving into avionics seems like it could be a smart advancement for your company. Right now MicroMax’s deals with the automotive industry such as creating software programs for them. Now they are looking into moving into avionics and white goods. Avionics is an electronic system that can be used in airplanes, and spacecrafts. White Goods are things such as washing machines and refrigerators. I can understand the problem of not knowing if consumers are going to pay for the washing machine like they would for a breaking system. I have grown up in a single parent house, where money is tight, and one time we did not have a washing machine. While not having one isn’t an emergency but after awhile your hands can only take so much watching. So for me a washing machine is extremely important. So to see if or what people are willing to pay for washing machines you can send out questionnaires and them send it back to you with their answers. With the peoples feed back you can see if you have a good idea or if you need to make some changes. Maybe the people can even give suggestions on the changes. You could also look into doing a focus group. This would be a group of around eight to twelve potential customers. Here they will be able to give you specific issue about the product. You will defiantly want to make sure that you do research and see what other companies are doing in this field. You may even want to look at their financial statements and see how well they are doing. You may also want try doing a feasibility analysis test. This way you can find out if this really will work for your company or not. This can really give you an in-depth look into the business. Thank You, Kelly Darr

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