Nanophase Technologies
Observation | Strategic Implication | Cumulative losses since inception | Nanophase will need additional financing to complete another year of operations. Its apparent that the company has experienced cumulative losses to the value of $34,754,188. As of Dec 2011, has $7.4 million available in cash and investments. | Too many current development projects | Nanophase does not have enough products or customers to generate revenue stream to support projects. This also resulted in lack of business focus. | Nanophase employs too many team members | When a company is operating at a loss of $34 million, its not viable to be operating with 51 full time workers (1/3 having Masters degree implying higher annual salary) accruing excessive labor costs without a ROI. | Primary revenue stream coming from one customer | In 2001, Nanophase obtained 75% of its revenue from one customer. Particularly through economic hardship, reliance upon one customer is a risk, potentially leading to immediate closure if the customer were to go under. | Competitor profiling | Insufficient awareness of competitive market – affecting Nanophase’s ability to compete effectively and forecast future challenges/opportunities | High revenue & R&D costs | Cost of manufacturing and R&D costs are way too high considering product revenue generated. Investing further in assets that isn’t selling, and having to pay storage fees, over and above cost of goods is not financially viable – resulting in company operating at a loss | Core Problem | How can Nanophase Technology expect to generate a profit when they do not have enough money coming in to sustain day-to-day operations? | Recommended (SMART) Objectives | Recommended Strategies | 1. Develop and present each of Nanophase’s customer with 2 new promotional programs for next financial year. | Develop promotional programs for current customer base, incentivizing them to pre-purchase upfront. | 2. Increase sales by