Describe the Investment Rationale of your product or service and include which of Brigham and Daves’ categories fit your product or service:
Replacement for maintenance of business
Replacement of existing products or market
Expansion of existing products or market
Expansion into new products or markets
Safety or environmental projects
Research and development
Long-term contract
Identify at least three Capital Investment items needed. Be sure to list amounts associated with items and why each item is needed. (For example: identify any licenses needed and costs, equipment rental/purchase, etc.)
Identify at least two Financial Assumptions: cost of materials and selling price. Discuss how you determined the costs and price.
Market Expansion: Targeting high-end corporate campuses and modern university hubs where the demand for quality food and technology-driven convenience justifies a premium price point. The investment is necessary to acquire the advanced, internet-connected equipment (the "Smart" part) needed for this expansion.
Capital Investment Items
To launch the initial phase of the Smart Vending Machine Network, the following capital investment items are required:
| Capital Investment Item | Amount | Rationale/Purpose |
| 1. Smart Vending Machine Units (10 units) | $80,000 ($8,000 per unit) | Core Asset: Purchase of ten high-tech, refrigerated, internet-enabled vending machines. These units require specialized features: multiple temperature zones, NFC/card readers, and inventory management software integration. This equipment is essential for maintaining food safety and enabling the core convenience model. |
| 2. Inventory Management Software License | $15,000 (Annual cost for enterprise license) | Operational Necessity: A sophisticated license is needed to manage inventory rotation, track real-time sales, monitor food expiration dates remotely, and provide predictive re-stocking alerts. This software minimizes food waste and labor costs, which are critical to the financial viability of a fresh-food model. |
| 3. Delivery and Refrigeration Van | $45,000 | Logistics and Quality Control: A dedicated, commercially-insured, refrigerated van is required to transport the fresh meals daily from the commissary kitchen (or supplier) to the ten machine locations while maintaining the cold chain. This ensures product quality and compliance with health regulations. |
Sample Answer
The product for this analysis is a Smart Vending Machine Network (SVMN) specializing in selling fresh, locally sourced, ready-to-eat meals and healthy snacks in high-traffic urban office buildings and university campuses. 🥗
Investment Rationale and Category
The investment rationale for the Smart Vending Machine Network (SVMN) is to capture the growing demand for convenient, healthy food options that are accessible 24/7, bypassing the labor costs and operational complexities of traditional brick-and-mortar retail food service.
The primary category, according to Brigham and Daves' classification, is:
Expansion of existing products or markets.
Rationale
While traditional vending is an existing market, this project represents an expansion by fundamentally changing the product offering and target market:
Product Expansion: Shifting the product from packaged junk food and beverages to fresh, perishable, full meals and gourmet snacks (a product category typically served by delis or cafeterias).