business management: all one problem, read the case and answer the questions. for number 1, give 3 points to support your answer

one that would involve mass production and a potentially huge CHAPTER CLOSING CASE Big-Box or Specialty Shop? Lance Fried is an electrical engineer who loves to design new shops. A big-box strategy meant a whole new business plan products. He and a buddy were watching surfers and scenery at the beach near his home in Del Mar, California, when the buddy up-front investment. Oh yeah, and retailers wanted the players dropped his 20 Gig iPod into a cooler full of water and ice. The in time for the holiday shopping season, which was just four trashed iPod gave Fried an idea-to make an MP3 player that months away would work underwater How, or should, Freestyle capitalize on that interest? Fried quickly Fried spent months tinkering with his invention, a waterproof convened a meeting of his three-man board at Jimmy O's, a local ocean-view hangout. Houlgate presented the good news to the third MP3 player designed specifically for athletes who need tunes while surfing, swimming, waterskiing, or snowboarding. Like partner, Mike Brower. "Mass distribution gets your name out fast and most entrepreneurs, Fried had invested his personal savings but gives you an instant hit, "Hougate said. "Your vendors really start 10 he had also somehow convinced half a dozen friends to work for take you seriously." That wasn't the only advantage. With mainstream him for free (pretty smooth). retailers on board, it would be easier to attract investors. That part appealed to Fried, who was ready for money to come into rather than By August 2004. Fried finished a working prototype and created out of his own bank account his company called Freestyle Audio. The player was lightweight (40 grams), with a 40-hour battery, and lots of memory (for 2004). But Brower, CFO of the popular sunglasses company Spy Optic, The headphones wrapped tightly around ears, and all of it was was not jumping on board. His experience working at sporting waterproofed using a proprietary technology. He projected to goods companies had always been to start small, get an sell the units for $180. influential niche group to love you, and or bloger distribution deals only after that groundwork had been fuld. How would It was then that Fried brought Greg Houlgate into the story. Freestyle get its key customer groups-surfers and Houlgate was a friend who served on Freestyle's board and had snowboarders-into big, unhip retail outlets like Best Buy and worked as a sales strategist for a number of large sporting goods Bass Pro? And what would Freestyle have to give for the privilege companies, including Callaway Golf. Houlgate showed the player of a good position on big-box shelves? "They'll make you a to some of his contacts in the big-box retall world. "I've never commodity if you don't know how to negotiate, asking for had such a quick and positive response on any consumer discounts that just kill your margins," Brower said. electronics," he says Ramping up production would be no small feat in itself. It would Fried was amazed when Houlgate told him that major retailers - require a significant capital investment. How could Freestyle find including Best Buy and Bass Pro Sporting Goods -wanted to that kind of money? Would the company's manufacturing put his gadget on their shelves side-by-side with players by partners be able to maintain quality it orders suddenly spiked? giants liko Apple and Sony, Fried knew that such a deal with just How would the company get more attention than competing a single big chain could be worth an instant million dollars in MP3 player brands manufactured by corporate giants and backed by multimillion-dollar marketing campaigns? But the idea also scared Fried. Distribution via mass retailers had Fried had to make a huge decision-fast. The action sports retail never been part of his San Diego start-up's plan. Instead, the trade show-where independent retailers go to test and order idea always had been to start small, selling through specialty new gear to sell at their surt, dive, skate, and snowboard shops revenue for the holiday season-was just weeks away. Making a big Fried signed on for a big-box deal, that plan would have to splash at the show had always been part of Freestyle's plan. If change, Questions 1. Can Fried really say "no" to the big-box retailers? Why or why not? 2. What do you think Fried should do