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Friday, December 17, 2004

Pollution Poker

Pollution Poker: Carbon Trading Responds to the Kyoto Protocol


John Acheson

San Francisco State University


Abstract

Throughout civilization, it has been free to pollute greenhouse gases into the atmosphere, but on February 16, 2005, organizations agreed to start paying to have their “garbage taken out.” The Kyoto Protocol called for 55 industrialized nations of the 127 that ratified the agreement. Starting in 2008 through 2012, most developed countries have agreed to reduce emissions levels over 5% below global levels in 1990. Carbon Dioxide has been targeted as the leading cause of global warming and has grown over 150% in the past 200 years. The United States has released more greenhouse gases than any other country in the world, but decided not to ratify the Kyoto Protocol as early as 2001. With the U.S. uninterested, the instrument, originally drawn up in 1997, did not have enough polluters signed on. The plan stalled, until Russia moved to sign on November 4, 2004. On February 16, 2004, eight years after the historic meeting in Kyoto, Japan and 90 days following Russia’s President Vladimir Putin’s historical signing, the agreement will come into full force. For the first time in the history, businesses have initiated investment into a new market for “carbon credits” that give industrialized countries the right to pollute. This paper examined the carbon trading industry at its infancy: a critical time of growth from start-up to mainstream. With the Protocol expected to jump start activity in early 2005, there was already a tremendous growth of carbon trading around the world. The case writer focused on the key players and global opportunities, as well as some of the broader mechanisms for implementation.


Introduction


“For strategic reasons, some companies have chosen to be quiet about their efforts
under the Kyoto Protocol’s more stringent emissions regulations
(Packard and Reinhardt, 2000).”


Carbon credits allow companies to pollute. Firms who pollute can buy, sell and trade for the right to pollute in a manner similar to stock market trades. Polluters from 55 developed nations must buy credits or invest in projects that will reduce emissions or pursue a combination of socially responsible activities such as trading credits with a partner from a developing country. Clean projects such as renewable energy and forestation in designated areas, can generate additional credits. From virtually nothing, a new commodities market sparked by the Protocol created trading platforms that could grow to an estimated hundreds of billions of dollars. Firms in gross polluting countries such as Japan have been buying credits even before the Protocol went into effect. Activity has grown in anticipation of 2008 and is expected to grow throughout 2012, the treaty’s commitment period.

Macro Forces


The most significant forces that influenced the carbon trading market were political and economical. Internationally, different countries polluted at significantly different levels, and some guidelines created a feeling of discrimination. Annex B countries included developed nations including 15 EU states, US, Canada, Hungary, Japan and others. Those developed countries were mandated to reduce emissions to specific targets (See Table 1).
Table 1
Countries included in Annex B to the Kyoto Protocol and their emissions targets
Country Target (1990** - 2008/2012)
EU-15*, Bulgaria, Czech Republic, Estonia, Latvia,Liechtenstein, Lithuania, Monaco, Romania,Slovakia,Slovenia, Switzerland -8%
US*** -7%
Canada, Hungary, Japan, Poland -6%
Croatia -5%
New Zealand, Russian Federation, Ukraine 0
Norway +1%
Australia +8%
Iceland +10%
(United Nations Framework Convention on Climate Change)

Policy tensions became an issue when the President of the United States refused to sign the Protocol. He stated that it would impact the U.S. economy negatively. In an article release two days after Russia signed, White house officials including James Connaughton, chairman of the White House Council on Environmental Quality defended Bush’s position in terms of protecting the $400 billion and 5 million jobs that the Kyoto Protocol would cost the U.S. (Heilprin , 2004). President Bush also complained that the Protocol was not fair. Since smaller countries were relieved from its impacts, Bush argued that the brunt of responsibility fell on developed countries.
In terms of the economic impact, business had every right to claim that the Kyoto Protocol was unfair. No matter what, it would raise prices and impact the bottom line. But, as consumerism shifted towards a more socially responsible stance in many industries, for example increased demand for clean hybrid automobiles and renewable energies, U.S. firms have joined the efforts and have volunteered to reduce emissions. The argument was that it helped stakeholders, and in fact stockholders have a new metric (carbon credits) from which to analyze firms. In the short run, there is no doubt that the impact of the Kyoto Protocol would raise the costs of doing business for several industries, including many politically charged ones such as steel and aluminum as well as the majority of manufacturing and energy production.
With energy prices reeling from an all time high in 2004, political and economic forces from the Kyoto Protocol would raise the world’s costs of doing business starting in 2005. The U.S. policy against the Protocol has left firms to pursue carbon trading on their own, or fall behind other developed countries like Japan.

Policy


Two extreme views toward the Kyoto Protocol (KP) emerged during 2004: one of support and one of skepticism and resistance. Having invested millions into projects geared towards buying credits or funding projects in developing countries, Japan was one of the highest polluting developed countries that took a pro-KP stance into 2005. But the U.S. held steady to economical reasoning and firmly believed that the KP would hurt. Other developed countries including many European members, admitted that there would be economic impact, but moved forward with projects under KP guidelines.

United States

The leading opponent to the Kyoto Protocol emphasized negative economic impact, while scientists and environmentalists got caught up in another argument. Most agreed that the impact would significantly raise the costs of doing business, so politicians successfully shifted debates towards the causes of global warming. Although scientists and environmentalists disagreed on the evidence that pollution caused global warming, the policy effectively steered the argument towards science and away from economics.
As the largest polluter in the world (36% of global emissions), there’s no doubt the impact of the Kyoto Protocol would hit the U.S. quite hard. Environmentalists pointed the finger at bad science and a poor social responsible political stance In light of the scientific debate, a fiscal policy could be blamed for the holdout policies. Politicians have focused on the potential rise in the costs of business and jobs. Still recovering from terrorist attacks and having experienced an expensive oil war financed by a tremendous deficit, most analysts agreed that the Kyoto Protocol would simply hurt the American economy.
Japan

Japan was one of the leading polluters on the list of Kyoto’s developed nations. The country supported ratification and invested into carbon trading activity faster than any other country. As a first-mover in carbon credits, Japan already amassed billions in carbon resources. Most of Japan’s large multinationals aligned with financial and governmental institutions to create intermediaries that had already purchased large quantities of carbon credits. The organizations had cut many deals from other markets, key players and exchanges. In addition, entities were already pooling and setting aside cash to fund future carbon trading activities. Japan’s policy seemed quite practical, with a common goal of meeting the Kyoto Protocol with a vision that aligned stakeholders from all sectors of society.
And Japan wanted to take polluting a step further. The government hoped to get consumers involved. The country’s Environment Ministry called for a plan that added customers to the carbon trading value chain. A proposed policy included new “carbon taxes.” Additional costs passed to consumers were proposed on fossil fuels, energy and electricity. For example, an oil tax added to the pump price for gasoline, or an additional tax on utilities. The rise in monthly expenses for a typical Japanese household was estimated at $30 at 100 yen per U.S. dollar (Japan Times, November 11, 2004).
Japan, home to some of the world’s largest manufacturing and polluting industries acted fast to meet Kyoto Protocol requirements. And by proposing to get consumers involved, Japan’s policy making generated a new tactic that brought the end-user into the carbon trading value chain. The pro-KP stance suggested that pollution was everyone’s problem, not just business.


Carbon Trading Industry


The goal of the carbon trading industry is to reduce global warming by providing the right to buy, sell and trade pollution. Exchanges allow companies in any country and industry to trade carbon and currency. Direct deals are another way to conduct business between organizations to generate carbon reductions. The industry allows global cooperation.
Credit trading grew around the world in 2004. Even the U.S. traded credits along with coalitions of Asian governments and Europeans. The Japanese were first-movers, as several large firms pooled millions in investment dollars to manage funds that would buy credits from Community Development Mechanism (CDM) partners.
Internal trading was also been instituted by large multinational players with multiple business units in different countries. BP Amoco announced voluntary goals to cutback carbon dioxide emissions; it setup a program that required business units to trade greenhouse gas levels in-house (Packard and Reinhardt, 2000).

Markets

The market for carbon credits was estimated at $200 million at the end of 2004, and projected to grow to $10 billion by 2007 by energy consultant, Point Carbon (Carr and Coulter, November 8, 2004). The EU has announced allowances over 2 billion tons worth 20 billion euros for 2005 (Ibid). The price per ton for the right to pollute carbon ranged from $1 in the U.S. to $11 in Europe. Growth reported by an emissions broker in London was reported at 140,000 credits in August, 1 million in September and 1.7 million tons in October (Ibid). In the United States, trading grew from 400,000 in September to October to over 1.7 million credits while the price jumped over 70% to $1.72 per ton (Carr and Coulter, 2004; Gibson, 2004).
“We are putting a price on pollution,” said Richard Sandor,
creator of U.S. Treasury futures at the Chicago Board of Trade
(Appelbaum, November 2004).


Even though the U.S. did not ratify the Protocol, volunteers lined up to join the Chicago Climate Exchange (CCX). Founded by financial futures pioneer, Sandor, the trading platform attracted 70 members including Baxter Healthcare, Ford, IBM, and the city of Chicago. The members have pledged to reduce carbon by 1% per year through 2006, and the exchange put a lower price on the U.S. version of the new global commodity. In its first nine months of operations, members exchanged over one million tons of carbon valued at several million dollars by the close of 2005 (Appelbaum, November 2004).
The CCX is viewed as a pilot program and its early success showed that members drove volume even before the Kyoto Protocol went into effect. The activity suggested that the U.S. market had acted on its own, and firms have adopted social responsibility voluntarily. It was not clear if the actions were driven by anticipation of U.S. ratification or environmental concerns.
By 2005, Sandor had looked to the EU to expand his platform and negotiated with London’s International Petroleum Exchange. He attracted E.CON, Royal Dutch/Shell Group, Britain’s largest steelmaker and other interested firms (Carr and Coulter, November 8, 2004).

Key Players

Several industries have been affected by the Kyoto Protocol. With interconnected global supply chains, the cost of doing business has increased across a variety of businesses. Japan’s proposed policy that added the customer to the carbon value chain implied that the effects of the Protocol would probably reach further than expected. Some of the key players that have conducted carbon trading by the end of 2004 have been profiled here.
Buyers.

• Japan, Netherlands, Europe, U.S. and the World Bank

Sellers.

• Latin America: Argentina, Brazil, Chile, Colombia, Panama, Costa Rica and Peru
• Eastern Europe: Austria, Romania
• Asia: Phillipines, China (world’s 2nd largest polluter), India

Major Industries.

• Automakers: GM, Ford
• Energy companies: Exxon-Mobil, BP, Shell, Matsushita Electric Industrial Co.
• Manufacturers: Factories that created emissions i.e. steelmakers
• Financial: The World Bank, Mitsui & Co.

Exchanges and futures markets have also created a new group of carbon credit management opportunities. Brokers, commodities traders, equity managers, and bankers were some of the human resources thrown at defending the Protocol. For example, some entities have avoided use of the carbon exchanges and have traded carbon credits directly: firms in developed countries have privately bought carbon credits from groups of projects in developing countries.

Brokers and Consultants.

For conducting deals between a CDM and multinational, several consultants and brokers have conducted large transactions in the tune of millions of credits. Cantor Fitzgerald, L.P.’s subsidiary, CO2e.com exemplified one such brokerage:

CO2e.com has offices in London, Toronto, Tokyo and the USA, together with local representation in many other countries through agency agreements. The company brokers greenhouse gas emissions allowances and credits globally, plus many other environmental commodities and instruments in different jurisdictions across the world. CO2e.com has brokered tens of millions of tonnes greenhouse gas offsets and has become a globally recognized market leader (Kendrik and Messina).



Opportunities


There were two areas of opportunities in the growing billion dollar business of carbon trading: financial trading opportunities and projects that reduce or eliminate carbon in developing countries. Carbon trading exchanges have been discussed earlier. For this section, strategies for foreign direct investment (FDI) was the focus. Under CDM guidelines, developed countries invested billions of dollars into projects in the developing world. Most were energy projects in Latin America that replaced existing power plants with cleaner alternatives.

Clean Development Mechanism
CDM has been the largest opportunity for key players that want to get involved in projects that satisfy the Kyoto Protocol. The requirements call for sustainable projects in developing countries. For example, sugar cane waste fired energy plants in Brazil and reforestation projects more commonly know as “sinks” in South East Asia. Forests or sinks were the only projects that cleaned the environment. Producers that have received CDM status had little problem selling their credits to international buyers from around the developed world.
CDM proposals grew fast in 2004. According to Canada’s CDM & JIO Office, there were several opportunities created by the Kyoto Protocol (Canada’s Clean Development Mechanism & Joint Implementation Office, 2004). CDM project guidelines were reported as follows:
• Increasing energy efficiency
• Renewable energy
• Electricity production
• Oil and gas production
• Alternative fuels and gases
• Waste management
• Afforestation and reforestation (Canada’s Clean Development Mechanism & Joint Implementation Office, 2004)

The Asian Development Bank described the following criteria for CDM projects in Asia:

A project should meet three essential requirements to qualify as a CDM project: reduce emissions below the level in the absence of the project, be located in a developing member country (DMC) of the Asian Development Bank (ADB), and provide benefits that contribute to sustainable development in the DMC (Asian Development Bank, 2004).

In Latin America, some examples of planned activity and projects underway included:

• Peru: 19 projects with investments planned at $935 million dollars including the replacement of coal and diesel fired power plants with hydroelectric
• Columbia: 15 projects including a wind energy plant
• Brazil: thermoelectricity powered on plant carbon from reforestation
• Mexico: 4 hydroelectric dams (Lasso, 2004)


Innovation

Some manufacturers responded to the Kyoto Protocol with new technology. Toyota for example, researched and developed Hybrid Electric Vehicle technology pushed by the first KP meeting. The R&D successfully became a consumer product called the Prius automobile. Toyota utilized socially responsibility and technology in designing the Prius that produced 90% less emissions than typical cars. It won “Car of the Year” in both America and Europe, and the prestigious Economist award:
The Economist recognized the following leader for launching new markets and revolutionising the way business is done:

Energy and the Environment, Prius hybrid automobile: Takeshi Uchiyamada, Director, Toyota Motor Corporation. Acting under a Toyota directive to create the lowest emissions vehicle possible, Uchiyamada in 1994 became leader of a project dubbed G21, for Global 21st Century. Toyota gave Uchiyamada a free hand in the design of a new automobile, unbound by traditional restraints such as component sharing, marketing considerations and project hierarchy. Uchiyamada's team initially developed an automobile that employed both an internal combustion engine and electric motor, working alternately or together, engaged with a clutch. Later, some 80 research engineers (working to meet a deadline of the 1997 Kyoto Conference on global warming) reviewed multiple engine designs to develop what eventually would become a full-production vehicle. By 2002, Prius sales had topped 100,000 units worldwide (Evenson, September 14, 2004).

Future


From energy producers, to manufacturers, and even consumers in Japan, carbon trading will impact value chains all over the world. The economic jolt will increase FDI flows. With the costs of doing business projected to rise 10-30%, the Kyoto Protocol could be a contributing factor that increases global prices starting in 2005. In the U.S. most operations are linked to international suppliers and interdependence could also create an upturn in costs. Combined with the currency crisis and sensitive policy issues, the United States of America may be poised for inflation and/or a recession at the same time the Kyoto Protocol goes into effect.
On the other hand, the developing world and the environment are enjoying the attention. CDMs will create jobs and economic growth; they will build clean projects that can provide developing countries with a new model for society. Sustainable living combined with high technology might become a reality in Latin American and South East Asia. Electronic carbon trading exchanges are using this new model to add social responsibility to global value chains.
With the fossil fuel model for industrialization waning, the Kyoto Protocol might come to define the physical turning point from the industrial age to the information age. As oil and other banked energies run critically low within a century, the world’s power might in fact become de-centralized. At the same time knowledge is being networked virtually. This new world could run on information and not oil. If knowledge becomes a natural resource and continues to flow freely into developing nations, global villages may become a reality.
The Kyoto Protocol is hurting the world’s developed nations, but it’s already stimulating the developing world. More importantly, the globalization of socially responsible values in the private and public sectors, and across multiple industries and country lines, might be argued as the largest macro force that has ever pushed Earth’s environment towards sustainability.
References

Appelbaum, A. (2004, November). What’s your carbon worth? Ask Richard Sandor [Electronic version]. Fast Company, Issue 88, November, Page 38.

Clean development mechanism facility (2004). Retrieved November 9, 2004 from Asian Development Bank’s Web site: http://www.adb.org/Documents/Brochures/Clean_Devt_Mech_Facility/default.asp

Carr, M. and Coulter, R. (2004, November 8). E.ON wins, hydro loses as EU prepares pollution limit. Bloomberg.com. Retrieved November 8, 2004, from http://quote.bloomberg.com/apps/news?pid=nifea&&sid=aJZ1u3ANcKA4

Editorial (2004, November 11). Rationale for a carbon tax Japan Times via LexisNexis Retrieved online on November 11, 2004.

Evenson, L. (2004). The Economist celebrates new routes to innovation at the 3rd annual Innovation Awards and Summit in San Francisco. The Economist, September 2004. Retrieved November 9, 2004, from Business Wire, Factiva,
http://0-global.factiva.com.opac.sfsu.edu/en/eSrch/ss_hl.asp

Gibson, K. (2004, November 17). Chicago climate exchange bears fruit in Europe. Retrieved November 18, 2004, from MarketWatch.com, Inc.

Heilprin J., (2004, November 13). Bush stands by rejection of Kyoto treaty. Washington Dateline. Retrieved November 14, 2004, from Associated Press, http://abcnews.go.com/Politics/wireStory?id=232031&CMP=OTC-RSSFeeds0312

Kendrick, T. and Messina, D. CO2e combines Kyoto Protocol and European Union Emissions Trading Provision for another landmark transaction to reduce greenhouse gas emissions. Retrieved online.

Lasso, M. A. (2004, November 24). Is Latin American really a carbon market pioneer? Inter Press Service News Agency, Retrieved November 24, 2004, from http://www.ipsnews.net/new_nota.asp?idnews=26417

Packard, K. O. and Reinhardt, F. (2000, July 1). What every executive needs to know about global warming. Harvard Business Review.

Canada’s Clean Development Mechanism & Joint Implementation Office, Question and Answers (2004). What type of projects qualify under the CDM and JI? Retrieved November 9, 2004 from http://www.dfait-maeci.gc.ca/cdm-ji/q_a-en.asp

United Nations Framework Convention on Climate Change: Essential Background, Kyoto Protocol. (n.d.) Retrieved December 15, 2004, from http://unfccc.int/essential_background/kyoto_protocol/items/3145.php

Wednesday, November 3, 2004

Sustainable Oil

There’s a funny thing about oil. It’s sustainable and so is hydrogen.

Dr. Murray Silverman, a management professor whose research has focused on the greening of business, made the profound statement to me in a conversation about solar power. Yes, hydrogen powered the sun, which in turn, produced ultraviolet light that feel on our Earth, broke down plant matter and other components of our eco-system, and over time, oil happened. It wasn’t that easy, but it was a natural act. The key distinction in sustainable is oil, not “big oil.” As Silverman put it, “oil is sustainable, for maybe a couple small cars…but we’ve been overdrawing the banks a long time.” Alternative fuels such as bio diesel, that are now an acceptable alternative to fossil fuels, illustrate the theory that Silverman explained. Shorten the eco-cycle and make the loop smaller and oil is sustainable, so long as we’re not drawing more from the tank than we put in.

How did you get to work? Did you drive a gasoline car? Possibly a diesel truck or SUV? Or maybe you commute with friends, and send less money per capita to big oil companies. Alternatively, you could have took a train like B.A.R.T. or M.U.N.I. and paid politicians to manage grid electricity; or rode one of San Francisco’s 450+ diesel buses, or one of Los Angeles’s Compressed Natural Gas (CNG) buses, a diesel or one of Seattle’s 230+ hybrid buses. Maybe you still have a job in the Silicon Valley and took CalTrain diesel-electric hybrids to the new transit station. Or maybe you telecommute and helped PG&E stay out of bankruptcy. Or just maybe, you’re off the grid with solar panels and drive an electric scooter, bike, car or other vehicle to work. Better yet, maybe you walked or rode your bike powered by a caffeine-free, oil-free, fat-free, sugar-free, chemical-free organic breakfast.

review of available Alternative Fuel

So the real question is what fuels are the most renewable? Luckily, consumers had more choice by the end of 2004 than any other time in history. Yes, electric cars and steamers outnumbered fossil fuel burners about 90 years ago, and it’s taken some time, but let’s celebrate the opportunity of choice over criticism. There are zero-emissions, hybrid that pollute 50-90% less than typical modern car and trucks, diesels that burn much cleaner and a variety of alternative forms of transportation. To get to an answer on renewable, looked at choice. Was choice more important than renewability? If so, electric vehicles must be combined with solar or wind powered homes.

CHOICES ON THE GRID

Gasoline, Diesel, Hybrids and Electric Vehicles

CHOICES OFF THE GRID

Bio-Diesel, Vegi-Oil,

There are two basic choices. Consume greener transportation more and leave energy policy up to government and business. Build your own transportation systems an produce your own energy source combined with a compatibile vehicle. Or of course a mixture of the two choices, such as Ed Begley driving his zero-emmission Toyota RAV-4 EV around town, and his wife’s Prius for longer trips. He produces electricity for his daily driver off the grid, but trades energy policy for practicality when he fills up on mid-east oil to power his Japanese hybrid.

debunking perhaps Arnold's fluff on hydrogen cars

One look at the list of “Partners and Stakeholders” listed at Governor Schwarzenegger’s website, www.hydrogenhighway.ca.gov, and greens might wonder where they belong. Some private sector players include Toyota, Ford alongside PG&E Clean Energy. Public sector included EPA and local cities such as SF and Santa Clara. UC Davis and UC Irvine made up some of the educational players. But most importantly, Greenpeace was listed as one of non-profts. This is only a few of the 86 organizations seriously involved in hydrogen. On the outside, CA Hydrogen Highway may look like “fluff” but on the inside, this is as serious as Henry Ford’s idea to use gasoline engines 100 years ago, when steamers and electric cars outnumbered him.

Which fuels answer renewability and choice? Let’s debunk hydrogen really quickly. I’ll make it easy on you. If you value solar power then hydrogen is your fuel. Why? Under the assumption that the sun is the most important component of our eco-system, Earth’s entire value chain was built on hydrogen. Hydrogen along with fission, created solar energy that powered plants, animals and mother nature. Solar power is hydrogen power one step removed.

Yes, in theory, it all sounds fine and dandy. Convert solar to electricity to split water into hydrogen. Power fuel cells and turn hydrogen back into electricity to power our lives and transportation and it turns back into water. The reality is much different. The conversion process is not that simple. That’s the same as saying, convert solar power and plants into oil, and then burn oil cleanly to power life. The problem is management and efficiency. Management creates power and efficiency creates opportunity.

Big oil is scared. They started investing in hydrogen years ago. They know that when oil banks out, there will be a massive shift in power and economics during this civilization. Future thinking politicians have realized that an infrastructure that does not support hydrogen will fail like the Pony Express. Can you imagine if there was an oil outage? Not the 70’s where we lined up for gas, but airlines halted, public transportation riots, and most importantly free trade ending. The increased costs to move goods around the planet could redefine the meaning of “Whole Paycheck” at Whole Foods.

Arnold Schwarzenegger was one of the first politicians in the world to embrace hydrogen. But he didn’t do it alone. California’s hydrogen highway was formed by a group that includes: Ballard Fuel Cells (Canada), Honda (Japan)

So why is hydrogen the most renewable and freest choice? It’s more renewable than any other fuel because of simplicity. Oxygen and water and two building blocks of life, and it might be argued that hydrogen is the third. It can be renewable for centuries or millennia beyond oils. Hydrogen is the most versatile because it can be produced on grid, off grid, or reformed. Hydrogen stations like Honda’s in Torrance are powered by solar panels and water. Honda has also manufactured a refrigerator sized hydrogen fuel-cell that powered everything in an average home including vehicles. On the grid, Hydrogen can move right into the gas station network or be reformed by converting natural gas or other fuels. It can also be produced by a combination of solar, wind or other renewable sources of energy.

suggest strategies that Greens can useto promote such alternatives.

Hydrogen is cleanest burning fuel known to man. Hydrogen is the most powerful fuel known to man. Hydrogen is the most flexible and efficient. Most importantly, hydrogen is free of power concentration. Since its not locked up in political banks, it can truly create a new economy and more importantly, a new power structure.

What can you do? Some strategies that the Green Party can employ to lessens big oil’s grip on political power:

  • Support the production of hydrogen by solar, wind or other renewable energy sources. Invest, volunteer, research, switch careers, etc.
  • Oppose hydrogen production by natural gas reforming. The United States has a massive bank of NG and a conversion from big oil to big NG could decrease Mid-East power and increase corporate power with ties to NG production.
  • Support hydrogen education including a systemic approach that shifts the view of homes, cars and trucks from “consumers” into “producers.” Debunk fear.
  • Support tax, grants, and other political vehicles that are building tomorrow’s hydrogen organizations, such as California’s Hydrogen Highway
  • Continually analyze and endorse the growing list of hydrogen related companies to help investors choose green stocks.

Wednesday, October 20, 2004

895 CASE STUDY ROUGH DRAFT

Innovation in the Automobile Industry: Hybrid Growth Strategies






Source: Toyota

John Acheson
San Francisco State University

Richard McCline
San Francisco State University

Murray Silverman
San Francisco State University


INTRODUCTION
“Meaty quote by industry insider like Dr. Lovins”

Introduce U.S. Hybrid Niche
Mention shortages
THE AUTOMOBILE INDUSTRY: A HYBRID PERSPECTIVE
Introduction
A Short History of Hybrids
Size world’s largest mfg. industry and most global
Growth (industry versus niche)
Players (summarize Big 8 major automakers, mention smaller players)
Scope (define industry as cars and light trucks, not industrial and commercial)
Innovation
Hybrid Technology (define as gasoline-electric car or light truck)
What is gasoline technology? Oil based
What is electric technology? Battery based
What was required to have both? Systems integration

Alternative Hybrid Technologies (diesel, fuel cells, etc)
What are diesel-electrics? Trains
What are other hybrids? Diesels and Hydrogen
What are fuel cell vehicles? Define them as hybrids

Clean Air Technologies (Emmissions, cylinder shut down)
What are the hybrid emissions innovations? PZEV and other developments
What are some ICE innovations? Cylinder shut down, lean burn, shut off, etc.

Smart Technologies (Nissan article)
What innovations have been enabled by hybrid systems? Satellite battery control, etc.
Profiles and Strategies of Hybrid Automakers

BMW, “The ultimate driving machine”

“Hydrogen will replace petrol.”[1]

Profile
BMW firmly believed in the hydrogen economy. One paragraph about BMW, a brief hybrid overview
Strategy
One paragraph about BMW’s strategy of bridging the gap to a hydrogen economy
through duel fuel tank vehicles
Projects
Discuss 7 series, 745h

Daimler-Chrysler (hy-wire, autonomy)
Chrysler, Dodge, Jeep, Maybach, Mercedez-Benz (MB), Smart
What is DC’s hybrid profile?
What is DC’s hybrid strategy?
What innovations has DC engineered?
MB A-Class F-Cell (FCV) MB Citaro F-Cell (FCV) MB Sprinter FCV MB F-500 Mind Diesel HEV

MB Vision GST HEV, S-Class Diesel HEV

Fiat
What is Fiat’s hybrid profile?
What is Fiat’s hybrid strategy?
What innovations has Fiat engineered?
Panda Hydrogen
2001 Seicento Elettra H2 Fuel Cell and recent Seicento Hydrogen

Ford, “fuel the enthusiast in you”
Aston Martin, Ford, Jaguar, Land Rover, Lincoln Mazda, Mercury, Volvo
What is Ford’s hybrid profile?
What is Ford’s hybrid strategy?
What innovations has Ford engineered?

Ford Escape HEV Ford Focus FCV-Hybrid
Ford Focus FCV Ford Focus FC5

Ford P2000 Mazda Premacy


General Motors (GM) (trucks)
Buick, Cadillac, Chevrolet, GMC, Hummer, Oldsmobile, Pontiac, Saturn, SAAB
What is GM’s hybrid profile?
What is GM’s hybrid strategy? Grow to be the 1st to sell 1 million FCVs
What innovations has GM engineered?

GM Hybrid Bus GMC Hybrid Truck (GMC Sierra) Saturn VUE Hy-wire
Chevy Silveradro

Hyundai
What is Hyundai’s hybrid profile?
What is Hyundai’s hybrid strategy?
What innovations has Hyundai engineered?


1994 Hydrogen Car 1994 Solar Car Santa Fe FCEV

FGV-1 electric hybrid sport utility vehicle (SUV)

Honda, “The power of dreams”
What is Honda’s hybrid profile?
What is Honda’s hybrid strategy?
What innovations has Honda engineered?
2000 Insight HEV 2003 Civic HEV 2005 Accord HEV
FCX

IMA, “In 1997 the Honda Accord Ultra-Low-Emission Vehicle became the cleanest gasoline-powered vehicle in the world.” http://www.hondacorporate.com/environ_tech/index.html?subsection=lev

Mitsubishi
Nissan
What is Nissan’s hybrid profile?
What is Nissan’s hybrid strategy? Multimodal approach to environmental responsibility
What innovations has Nissan engineered? Licensing all of Toyota’s hybrid technology

Renault
What is Renault’s strategy? “To be a key player in sustainable development.” Retrieved October 20, 2004 from http://www.sustainability.renault.com/e/e1.htm
What is VW’s hybrid strategy? Can’t find much
What innovations has VW engineered? 95% recyclable cars, research Kangoo

Toyota, “moving forward”
What is VW’s hybrid profile? World’s leader
What is VW’s hybrid strategy? Continuous deployment
What innovations has VW engineered? Synergy Drive
Prius, Estima, Highlander, EX-400h, Camry

Volkswagen, “go places”
What is VW’s hybrid profile? China’s leading manufacturer
What is VW’s hybrid strategy? Diesel?
What innovations has VW engineered? HYMOTION
162
Sunfuel diesel
2002
Golf IV
Volkswagen
Volkswagen AG
Hybrid (Bio diesel/Battery)

Independent Manufacturers
205
Diesel
2003
CEV3000
CEV
Chargebroad Electric Vehicle Co., Ltd. (CEV)
Hybrid (Diesel/Battery
208
Diesel & Electricity
2004
GZ6110HEV
SCUT (South China Univ. of Tech.)
SCUT (South China Univ. of Tech.)
Hybrid (Diesel/Battery)

Chinese Automakers
206
Diesel
2002
EQ6110HEV
Dongfeng Electric Vehicle Co., Ltd.
Dongfeng Electric Vehicle Co., Ltd.
Hybrid (Diesel/Battery)
209
Diesel
2003
XD 6120
Xiangtan Electric Vehicle Co. Ltd.
Xiangtan Electric Vehicle Co. Ltd.
Hybrid (Diesel/Battery)
210
Diesel
2004
Juying SJ6110CT3
Changsha Unite Electromotion Technology Co., Ltd
Changsha Unite Electromotion Technology Co., Ltd
Hybrid (Diesel/
213
Diesel
2004
CA6110SHH
FAW
China FAW Group Corporation
Hybrid (Diesel/Battery)
147
Gasoline & Electricity
2003
CA7150N
FAW
China FAW Group Corporation
Hybrid (Gasoline/Battery)

Emerging Markets
U.S. Hybrid Niche 750 dirty cars driving around, 15-20 million new units per year, 20-80% projected hybrid segment, 25% sold in CA
China, 1+ billion people, very few cars, little oil based infrastructure, lots of R&D by big 8 there
India, more research or cut this topic
Hybrid Consumers
Summary of who and behavior, more educated, more women, more money, environmentalists, more concerned with emissions and high tech than gas mileage, new segment of male techies coming on after early adopters, in transistion between early adoption and explosive growth phase
JD Power survey confirm above with stats
Oregon survey confirm above with stats
STRATEGIC ISSUES
Financial strategies: lowering costs, China and supply chain logistics
Operational strategies: Shortages and suppliers, automakers have transformed from manufacturers to systems integrators
Marketing strategies: very little market research, this is tough, but we know it’s different for the hybrid niche
Management strategies: use Ford Escape crossover team as basis for discussion, that team had PhD with engineer and high level project manager working without noise, reference the Business 2.0 article
Technological strategies: Mild versus Full versus FCV, discuss broad hybrid strategies
Macro factors
Politics
What are some federal forces? Taxes, grants, incentives, elections post November, Bush $B versus Kerry’s $10B, U.S. Dept of Energy Clean Cities Program Strategy at http://www.eere.energy.gov/cleancities/hevs.html
What are some CA forces? Zero emissions mandates, CA fuel cell partnership, Hydrogen Highway, Governor’s push
What about other states? Need more research

Fuel
Oil: Concise summary of oil relation to automobile industry and hybrids as well as environmental factors focusing on impact of the car
What is Lovins saying? Get off the oil through innovation
What about natural gas? Political power of oil versus natural gas
Methanol and Ethanol?
Discuss the hydrogen conversion (reforming natural gas, etc.)? research infrastructure scenarios, CA hydrogen stations at http://www.fuelcellpartnership.org/fuel-vehl_map.html

Global Warming
What is the relationship between hybrids and global warming?

CONCLUSION
Future

[1] “Switch over: from BMW to BMW,” The International BMW website, Retrieved October 20, 2004, from http://www.bmw.com/bmwe/pulse/enterprise/cleanenergy3/index.html

Monday, October 11, 2004

MBA PROPOSAL.5

BUS 895: PRELIMINARY PROJECT PROPOSAL

OPPORTUNITY RECOGNITION IN THE GREENING OF THE AMERICAN AUTOMOBILE INDUSTRY.

Revised Questions
Can the study identify a niche that has not been served, detect an improvement in an existing product, or discover an opportunity for a breakthrough product (Allen 2003) in the hybrid electric vehicle automotive segment?

Why are consumers buying hybrids?
The hybrid electric vehicle market segment has been for the past five years and is projected to be the fastest growing area in the greening of the automobile industry for the next 10-20 years. Some writers had emphasized that gas mileage was the driving consumer value behind this phenomenon. In 2002, a survey conducted by the Oregon Environmental Council of 596 hybrid consumers uncovered three new values that ranked higher than gas mileage.

1) To pollute the air less 89%
2) Top emit less climate-changing CO2 89%
3) The technology appealed to me 73%
4) To save money on gasoline 71% (Hagerbaumer 2002)

In 2004, a growing shortage of pure hybrids that run as zero emission electric vehicles at slow speeds supported the survey’s findings.

Why can’t Toyota and Ford make pure hybrids fast enough?
1) Software (running the over 80 computerized controllers)
2) Wiring (connecting the system components)
3) Hardware (computer controllers for braking and propulsion)

There’s an estimated $1 trillion back log of unfilled orders for pure hybrids. Preliminary research shows that pure hybrid manufacturers now value systems management. Toyota filed over 300 patents and Ford filed for over 100 to build their pure hybrids. Ford licensed over 20 software patents from Toyota to manage the electrifying of the vehicle.

Opportunities?
• Supplying consumer driven zero emissions pure hybrid vehicles
• Servicing manufacturer value driven systems integration solutions
• Researching and Developing innovative value driven gasoline-hydrogen hybrid pure electric systems to bridge the gap from hybrids to hydrogen fuel cell vehicles

Research: the research methods to be used consist of interviews, a literature review and collecting information from different business organizations' web sites. Sources include government/industry statistics, secondary data and publicly available data. The search will also include interviewing five experts in the field whose identities will not be revealed. The outcome of the project will be a feasibility analysis and report.
Bibliography


50 assorted articles including a couple journal studies and many data/webbased articles
Allen, K. R. (2003). Launching new ventures. Boston: Houghton Mifflin Company.
Appenzeller, T. (2004, June). The end of cheap oil. National Geographic Magazine. Retrieved September 27, 2004, from http://magma.nationalgeographic.com/ngm/0406/feature5/
Brant, B. (1994). Build your own electric vehicle. New York: TAB Books.
China’s auto production concentrated in 10 plants (2004, January 24). Xinhua General News Service. Retrieved Augsust 6, 2004, from http://0-web.lexis-nexis.com.opac.sfsu.edu/unvierse/printdoc
Clean machine (2004, September 4). Economist, Vol. 372, Issue 8391. Retrieved September 27, 2004, from EBSCOhost database, Accession No. 14350564.
Driving change (2004, September 2). Economist. Retrieved September 27, 2004, from http://www.economist.com/printedition/displayStory.cfm?Story_id=3127206
Electrifying times (2004, Spring-Summer). Vol 9 No 2
Ford’ first hybrid SUV delivered (2004, September 16). The San Diego Union-Tribune. Retrieved September 27, 2004, from Motor Trend, http://motortrend.com/features/news/112_news60/index.html
Friedman, D. (2003). Renewable hydrogen forum: a summary of expert opinion and policy recommendations. American Solar Energy Society. Washington DC, National Press Club. Retrieved September 30, 2004, from http://www.ases.org/hydrogen_forum03/Forum_report_c_9_24_03.pdf
Future/concept: allessandro volta (2004). Toyota. September 27, 2004, from
http://www.toyota.com/vehicles/future/volta.html
Gilinsky A. and McCline R. L. (?). Entrepreneurial strategy: an empirical investigation of the effects of the socially responsible value set on the people resources of the firm.
GMability (2004). Fuel cells & energy, cool car clean future: reinventing the automobile. General Motors Corporation. Retrieved September 30, 2004, from http://www.gm.com/company/gmability/edu_k-12/5- 8/fc_energy/autonomy_hywire_011303.html
Hagerbaumer, C. (2003). Survey of Oregon hybrid gas-electric car owners. Oregon Environmental Council and Oregon Department of Energy. Retrieved September 28, 2004, from http://www.orcouncil.org/reports/HybridSurvey%202003.pdf
Hakim, D. (2004). Hybrid Vehicles Hit the Heartland...Barely. The New York Times June 19, 2004. Retrieved September 17, 2004, from http://0-web.lexisnexis.com.opac.sfsu.edu/universe/document?_m=c450fb7234187d3952d93a7dbd7d1e80&_docnum=8&wchp=dGLbVlzzSkVA&_md5=1850351add749fd3ce4e2a34461c9fb0
Hayden, R and Sadjak, S, (2004). California Fuel Cell Partnership's Road Rally Places Record Number of People on the Road in Zero Emission Hydrogen Cars. California Fuel Cell Partnership. Retrieved September 27, 2004, from http://www.cafcp.org/news_releases-04/2004_09_28_RRIII.htm
Hubbard, G. (2004). Business leaders building a better world: the 12th annual net impact conference. Columbia Entrepreneurship Update. Summer 2004: pg. 2.
J.D. Power and Associates Reports: Anticipated Higher Costs for Hybrid Electric Vehicles Are Lowering Sales Expectations (2003, October 27). J.D. Power and Associates. Retrieved September 27, 2004, from http://www.jdpa.com/news/releases/pressrelease.asp?ID=2003135
McCline R. L. (2003). Lectures.
Motavalli, J. (2001). Forward drive. New York: Sierra Club Books.
Poll tally (2004). National Geographic Magazine Poll @ nationalgeographic.com. Retrieved September 28, 2004, from http://ngmpoll.melia.com/ngm/poll/0406/poll.html
Okuda, H. (2003). Speeches. North American Press Room. Remarks. Washington, D.C. U.S. Chamber of Commerce. Retrieved September 14, 2004, from
http://pressroom.toyota.com/photo_library/display_release.html?id=sp20030910
Rae, J. B. (1965). The American automobile: a brief history. Chicago: The University of Chicago Press.
Research protocol. Office of Protection for Human and Animal Subjects: Documents Samples. Retrieved September 27, 2004, from http://www.sfsu.edu/~protocol/human/sample_doc/exempt/protocol/E-4-protocol.doc
Rooney, D. J. (2004). Interview.
Salter, C. (2004). Ford’s Escape Route. Fast Company. Retrieved October 9, 2004, from http://www.fastcompany.com/magazine/87/ford.html
Simanaitis, D. (2004). Fill’er up… but whatever with? And wherever from? Road & Track, Volume 56, Number 2: pg 144.
Strattan, R. D. (2004). The electrifying future of the hybrid automobile. IEEE Potentials, August/September, 2004: pgs 4-7.
The White House: President George Bush (2004). Fact sheet: key bush environmental accomplishments. Retrieved September 24, 2004, from http://www.whitehouse.gov/news/releases/2004/07/20040714-2.html.
Traister, R. J. (1982). All about electric & hybrid cars. Blue Ridge Summit: TAB Books.
Writing the plan (2004). SBA: starting your business: business planning. Retrieved September 27, 2004, from http://www.sba.gov/starting_business/planning/writingplan.html
Yan, L. Y. (2004, March 26). China's new auto recall regulation may be a lemon. Asia Time Online. Retrieved September 28, 2004, from http://www.atimes.com/atimes/China/FC26Ad01.html

MBA PROPOSAL.5 - OPPORTUNITY RECOGNITION IN THE GREENING OF THE AMERICAN AUTOMOBILE INDUSTRY.

BUS 895: PRELIMINARY PROJECT PROPOSAL

OPPORTUNITY RECOGNITION IN THE GREENING OF THE AMERICAN AUTOMOBILE INDUSTRY.

Revised Questions
Can the study identify a niche that has not been served, detect an improvement in an existing product, or discover an opportunity for a breakthrough product (Allen 2003) in the hybrid electric vehicle automotive segment?

Why are consumers buying hybrids?
The hybrid electric vehicle market segment has been for the past five years and is projected to be the fastest growing area in the greening of the automobile industry for the next 10-20 years. Some writers had emphasized that gas mileage was the driving consumer value behind this phenomenon. In 2002, a survey conducted by the Oregon Environmental Council of 596 hybrid consumers uncovered three new values that ranked higher than gas mileage.

1) To pollute the air less 89%
2) Top emit less climate-changing CO2 89%
3) The technology appealed to me 73%
4) To save money on gasoline 71% (Hagerbaumer 2002)

In 2004, a growing shortage of pure hybrids that run as zero emission electric vehicles at slow speeds supported the survey’s findings.

Why can’t Toyota and Ford make pure hybrids fast enough?
1) Software (running the over 80 computerized controllers)
2) Wiring (connecting the system components)
3) Hardware (computer controllers for braking and propulsion)

There’s an estimated $1 trillion back log of unfilled orders for pure hybrids. Preliminary research shows that pure hybrid manufacturers now value systems management. Toyota filed over 300 patents and Ford filed for over 100 to build their pure hybrids. Ford licensed over 20 software patents from Toyota to manage the electrifying of the vehicle.

Opportunities?
• Supplying consumer driven zero emissions pure hybrid vehicles
• Servicing manufacturer value driven systems integration solutions
• Researching and Developing innovative value driven gasoline-hydrogen hybrid pure electric systems to bridge the gap from hybrids to hydrogen fuel cell vehicles

Research: the research methods to be used consist of interviews, a literature review and collecting information from different business organizations' web sites. Sources include government/industry statistics, secondary data and publicly available data. The search will also include interviewing five experts in the field whose identities will not be revealed. The outcome of the project will be a feasibility analysis and report.
Bibliography


50 assorted articles including a couple journal studies and many data/webbased articles
Allen, K. R. (2003). Launching new ventures. Boston: Houghton Mifflin Company.
Appenzeller, T. (2004, June). The end of cheap oil. National Geographic Magazine. Retrieved September 27, 2004, from http://magma.nationalgeographic.com/ngm/0406/feature5/
Brant, B. (1994). Build your own electric vehicle. New York: TAB Books.
China’s auto production concentrated in 10 plants (2004, January 24). Xinhua General News Service. Retrieved Augsust 6, 2004, from http://0-web.lexis-nexis.com.opac.sfsu.edu/unvierse/printdoc
Clean machine (2004, September 4). Economist, Vol. 372, Issue 8391. Retrieved September 27, 2004, from EBSCOhost database, Accession No. 14350564.
Driving change (2004, September 2). Economist. Retrieved September 27, 2004, from http://www.economist.com/printedition/displayStory.cfm?Story_id=3127206
Electrifying times (2004, Spring-Summer). Vol 9 No 2
Ford’ first hybrid SUV delivered (2004, September 16). The San Diego Union-Tribune. Retrieved September 27, 2004, from Motor Trend, http://motortrend.com/features/news/112_news60/index.html
Friedman, D. (2003). Renewable hydrogen forum: a summary of expert opinion and policy recommendations. American Solar Energy Society. Washington DC, National Press Club. Retrieved September 30, 2004, from http://www.ases.org/hydrogen_forum03/Forum_report_c_9_24_03.pdf
Future/concept: allessandro volta (2004). Toyota. September 27, 2004, from
http://www.toyota.com/vehicles/future/volta.html
Gilinsky A. and McCline R. L. (?). Entrepreneurial strategy: an empirical investigation of the effects of the socially responsible value set on the people resources of the firm.
GMability (2004). Fuel cells & energy, cool car clean future: reinventing the automobile. General Motors Corporation. Retrieved September 30, 2004, from http://www.gm.com/company/gmability/edu_k-12/5- 8/fc_energy/autonomy_hywire_011303.html
Hagerbaumer, C. (2003). Survey of Oregon hybrid gas-electric car owners. Oregon Environmental Council and Oregon Department of Energy. Retrieved September 28, 2004, from http://www.orcouncil.org/reports/HybridSurvey%202003.pdf
Hakim, D. (2004). Hybrid Vehicles Hit the Heartland...Barely. The New York Times June 19, 2004. Retrieved September 17, 2004, from http://0-web.lexisnexis.com.opac.sfsu.edu/universe/document?_m=c450fb7234187d3952d93a7dbd7d1e80&_docnum=8&wchp=dGLbVlzzSkVA&_md5=1850351add749fd3ce4e2a34461c9fb0
Hayden, R and Sadjak, S, (2004). California Fuel Cell Partnership's Road Rally Places Record Number of People on the Road in Zero Emission Hydrogen Cars. California Fuel Cell Partnership. Retrieved September 27, 2004, from http://www.cafcp.org/news_releases-04/2004_09_28_RRIII.htm
Hubbard, G. (2004). Business leaders building a better world: the 12th annual net impact conference. Columbia Entrepreneurship Update. Summer 2004: pg. 2.
J.D. Power and Associates Reports: Anticipated Higher Costs for Hybrid Electric Vehicles Are Lowering Sales Expectations (2003, October 27). J.D. Power and Associates. Retrieved September 27, 2004, from http://www.jdpa.com/news/releases/pressrelease.asp?ID=2003135
McCline R. L. (2003). Lectures.
Motavalli, J. (2001). Forward drive. New York: Sierra Club Books.
Poll tally (2004). National Geographic Magazine Poll @ nationalgeographic.com. Retrieved September 28, 2004, from http://ngmpoll.melia.com/ngm/poll/0406/poll.html
Okuda, H. (2003). Speeches. North American Press Room. Remarks. Washington, D.C. U.S. Chamber of Commerce. Retrieved September 14, 2004, from
http://pressroom.toyota.com/photo_library/display_release.html?id=sp20030910
Rae, J. B. (1965). The American automobile: a brief history. Chicago: The University of Chicago Press.
Research protocol. Office of Protection for Human and Animal Subjects: Documents Samples. Retrieved September 27, 2004, from http://www.sfsu.edu/~protocol/human/sample_doc/exempt/protocol/E-4-protocol.doc
Rooney, D. J. (2004). Interview.
Salter, C. (2004). Ford’s Escape Route. Fast Company. Retrieved October 9, 2004, from http://www.fastcompany.com/magazine/87/ford.html
Simanaitis, D. (2004). Fill’er up… but whatever with? And wherever from? Road & Track, Volume 56, Number 2: pg 144.
Strattan, R. D. (2004). The electrifying future of the hybrid automobile. IEEE Potentials, August/September, 2004: pgs 4-7.
The White House: President George Bush (2004). Fact sheet: key bush environmental accomplishments. Retrieved September 24, 2004, from http://www.whitehouse.gov/news/releases/2004/07/20040714-2.html.
Traister, R. J. (1982). All about electric & hybrid cars. Blue Ridge Summit: TAB Books.
Writing the plan (2004). SBA: starting your business: business planning. Retrieved September 27, 2004, from http://www.sba.gov/starting_business/planning/writingplan.html
Yan, L. Y. (2004, March 26). China's new auto recall regulation may be a lemon. Asia Time Online. Retrieved September 28, 2004, from http://www.atimes.com/atimes/China/FC26Ad01.html

Saturday, October 9, 2004

NEW RESEARCH QUESTIONS

NEW RESEARCH QUESTIONS:

IS THERE A NICHE?

YES, HYBRID SUPPLIER

WHERE IS THE PAIN?

100 FORD PATENTS
21 LICENSED TOYOTA PATENTS FOR SOFTWARE
350 TOYOTA

NISSAN WILL USE THEM ALL


RAPID AND VIRTUAL PROTOTYPING
COMPUTER SIMULATION
SOFTWARE, WIRING AND HARDWARE
The software and computerized controllers that make everything work effectively are the key to a hybrid.


http://www.fastcompany.com/magazine/87/ford.html


http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_levin&sid=azDp8xWV5rsU

http://www.detnews.com/2004/autosinsider/0403/11/autos-87820.htm

Development of vehicle dynamics management system for hybrid vehicles: ECB system for improved environmental and vehicle dynamic performance
Soga, Masayuki (Toyota Motor Corporation); Shimada, Michihito; Sakamoto, Jyun-Ichi; Otomo, Akihiro Source: JSAE Review, v 23, n 4, October, 2002, p 459-464
Database: Compendex

Gain without pain
Anon Source: Automotive Engineer (London), v 25, n 10, Nov, 2000, p 55-57
ISSN: 0307-6490 CODEN: EUENDA
Publisher: Professional Engineering Publishing Ltd.

Building the bridge to hydrogen cars
Chizek, Philip D. (Fuel Cells/Hydrogen Vehicle Program, SMT Lab I, Ford Motor Company) Source: Platinum Metals Review, v 48, n 2, April, 2004, p 60
ISSN: 0032-1400 CODEN: PTMRA3
Publisher: Johnson Matthey Public Limited Company

Friday, October 1, 2004

MBA PROPOSAL.4

BUS 895: PRELIMINARY PROJECT PROPOSAL

HYDRIVE: A FEASIBILITY ANALYSIS FOR A SUSTAINABLE AUTOMAKER.


• Macro problem: transportation technologies based on the internal combustion engine are not sustainable

• Research problem: how to start a “sustainable” automaker (or organization?)

• Business problem: conduct a feasibility analysis to study the challenges of starting-up a sustainable automaker that will manufacturer hydrogen fuel cell vehicles (FCV)

• Problem importance: unsustainable automaking is an important management problem because the transition to the “hydrogen economy” will affect managers in any organization that consumes energy and/or relies on transportation

• Research: the research methods to be used consist of interviews, literature review and different business organizations' web sites. Sources include government/industry statistics, secondary data and publicly available data. The search will also include interviewing five experts in the field whose identities will not be revealed. The outcome of the project will be a feasibility analysis and report.

• Chapter outline:

Chapter 1: Introduction
Problem, background/macro-factors, purpose
Chapter 2: Feasibility Analysis
Industry analysis, market analysis, product/service analysis, team analysis, financial analysis, value chain analysis
Chapter 3: Feasibility Report
Executive summary, industry/forecasts/trends, market/entry strategies/tactics, team building plan, product/service development plan, financial plan, timeline to launch
$8-10B Optional Chapter: Grant Proposal/ Incentives (depending on new legislation)
Face page, budget, project description, bibliography, need help???
Conclusion
Summary and discussion, conclusion and recommendations.
Appendices
Resumes, Tax returns, Copies of lease, purchase agreement for RE, Copies of licenses and other legal documents, Copies of letters of intent from suppliers, etc., Pro-forma financial statements, Forms (critical tasks etc), Interviews, Survey, Human Subjects, Grant Application/s, Tax Incentives (optional)
Bibliography


50 assorted articles including a couple journal studies and many data/webbased articles
Allen, K. R. (2003). Launching new ventures. Boston: Houghton Mifflin Company.
Appenzeller, T. (2004, June). The end of cheap oil. National Geographic Magazine. Retrieved September 27, 2004, from http://magma.nationalgeographic.com/ngm/0406/feature5/
Brant, B. (1994). Build your own electric vehicle. New York: TAB Books.
China’s auto production concentrated in 10 plants (2004, January 24). Xinhua General News Service. Retrieved Augsust 6, 2004, from http://0-web.lexis-nexis.com.opac.sfsu.edu/unvierse/printdoc
Clean machine (2004, September 4). Economist, Vol. 372, Issue 8391. Retrieved September 27, 2004, from EBSCOhost database, Accession No. 14350564.
Driving change (2004, September 2). Economist. Retrieved September 27, 2004, from http://www.economist.com/printedition/displayStory.cfm?Story_id=3127206
Electrifying times (2004, Spring-Summer). Vol 9 No 2
Ford’ first hybrid SUV delivered (2004, September 16). The San Diego Union-Tribune. Retrieved September 27, 2004, from Motor Trend, http://motortrend.com/features/news/112_news60/index.html
Friedman, D. (2003). Renewable hydrogen forum: a summary of expert opinion and policy recommendations. American Solar Energy Society. Washington DC, National Press Club. Retrieved September 30, 2004, from http://www.ases.org/hydrogen_forum03/Forum_report_c_9_24_03.pdf
Future/concept: allessandro volta (2004). Toyota. September 27, 2004, from
http://www.toyota.com/vehicles/future/volta.html
Gilinsky A. and McCline R. L. (?). Entrepreneurial strategy: an empirical investigation of the effects of the socially responsible value set on the people resources of the firm.
GMability (2004). Fuel cells & energy, cool car clean future: reinventing the automobile. General Motors Corporation. Retrieved September 30, 2004, from http://www.gm.com/company/gmability/edu_k-12/5- 8/fc_energy/autonomy_hywire_011303.html
Hagerbaumer, C. (2003). Survey of Oregon hybrid gas-electric car owners. Oregon Environmental Council and Oregon Department of Energy. Retrieved September 28, 2004, from http://www.orcouncil.org/reports/HybridSurvey%202003.pdf
Hakim, D. (2004). Hybrid Vehicles Hit the Heartland...Barely. The New York Times June 19, 2004. Retrieved September 17, 2004, from http://0-web.lexisnexis.com.opac.sfsu.edu/universe/document?_m=c450fb7234187d3952d93a7dbd7d1e80&_docnum=8&wchp=dGLbVlzzSkVA&_md5=1850351add749fd3ce4e2a34461c9fb0
Hayden, R and Sadjak, S, (2004). California Fuel Cell Partnership's Road Rally Places Record Number of People on the Road in Zero Emission Hydrogen Cars. California Fuel Cell Partnership. Retrieved September 27, 2004, from http://www.cafcp.org/news_releases-04/2004_09_28_RRIII.htm
Hubbard, G. (2004). Business leaders building a better world: the 12th annual net impact conference. Columbia Entrepreneurship Update. Summer 2004: pg. 2.
J.D. Power and Associates Reports: Anticipated Higher Costs for Hybrid Electric Vehicles Are Lowering Sales Expectations (2003, October 27). J.D. Power and Associates. Retrieved September 27, 2004, from http://www.jdpa.com/news/releases/pressrelease.asp?ID=2003135
McCline R. L. (2003). Lectures.
Motavalli, J. (2001). Forward drive. New York: Sierra Club Books.
Poll tally (2004). National Geographic Magazine Poll @ nationalgeographic.com. Retrieved September 28, 2004, from http://ngmpoll.melia.com/ngm/poll/0406/poll.html
Okuda, H. (2003). Speeches. North American Press Room. Remarks. Washington, D.C. U.S. Chamber of Commerce. Retrieved September 14, 2004, from
http://pressroom.toyota.com/photo_library/display_release.html?id=sp20030910
Rae, J. B. (1965). The American automobile: a brief history. Chicago: The University of Chicago Press.
Research protocol. Office of Protection for Human and Animal Subjects: Documents Samples. Retrieved September 27, 2004, from http://www.sfsu.edu/~protocol/human/sample_doc/exempt/protocol/E-4-protocol.doc
Rooney, D. J. (2004). Interview.
Simanaitis, D. (2004). Fill’er up… but whatever with? And wherever from? Road & Track, Volume 56, Number 2: pg 144.
Strattan, R. D. (2004). The electrifying future of the hybrid automobile. IEEE Potentials, August/September, 2004: pgs 4-7.
The White House: President George Bush (2004). Fact sheet: key bush environmental accomplishments. Retrieved September 24, 2004, from http://www.whitehouse.gov/news/releases/2004/07/20040714-2.html.
Traister, R. J. (1982). All about electric & hybrid cars. Blue Ridge Summit: TAB Books.
Writing the plan (2004). SBA: starting your business: business planning. Retrieved September 27, 2004, from http://www.sba.gov/starting_business/planning/writingplan.html
Yan, L. Y. (2004, March 26). China's new auto recall regulation may be a lemon. Asia Time Online. Retrieved September 28, 2004, from http://www.atimes.com/atimes/China/FC26Ad01.html

MBA PROJECT.4

HYDRIVE: A FEASIBILITY ANALYSIS FOR A SUSTAINABLE AUTOMAKER.





A research project submitted to the faculty of
San Francisco State University
In partial fulfillment of the
requirements for the
degree


Master of Business Administration



By
John Edward Acheson
Los Angeles, California
June 2004


HYDRIVE: A FEASIBILITY ANALYSIS FOR A SUSTAINABLE AUTOMAKER.


John Acheson
San Francisco State University
June 2004


The purpose of this project is to analyze the hydrogen powered transportation value chain and determine feasibility of starting-up a sustainable automaker. The methods used in the research were literature review and primary data collection from interviews with industry insiders and online consumer surveys. The outcome of this project will be a forecast of the industry’s growth.
If the forecast results in sustained growth of over 25% per year until 2010 and can support a venture that will net one million dollars on proforma income statements by year three, the results of the project will be presented in feasibility analysis report form with business plan for doing business in the market niche.

I certify that the Abstract is a correct representation of the contents of this research project.
________________________________________ _________________




CERTIFICATION OF APPROVAL




I certify that I have read

HYDRIVE: A FEASIBILITY ANALYSIS FOR A SUSTAINABLE AUTOMAKER.

by John Acheson, and that in my opinion this work meets the criteria for approving a research project submitted in partial fulfillment of requirements for the Master of Business Administration degree at San Francisco State University.


________________________________________ (Typewritten name of supervising instructor and professional title, for example, Professor of Management.)

________________________________________ (Typewritten name of the other committee member and professional title)

Table of Contents



Introduction

I Feasibility Analysis

A. Industry Analysis
I) History
II) Demographics
III) Trends
IV) Life cycle

B. Market Analysis
I) Demographics
II) Customer analysis
III) Competitors

C. Product/Service
I) Features and benefits
II) Timeline
III) IP and technology
IV) Differentiation

D. Team
I) Potential team members
II) Gap analysis

E. Finance
I) Start-up capital
II) Working capital
III) Fixed cost requirements
IV) Break-even analysis

F. Value Chain Analysis
I) Value chain
II) Alternative channel analysis
III) Innovations in the value chain

Feasibility analysis adapted from (Allen, 2003)

II Forecast

III Feasibility Report

G. Industry Analysis
I) Demographic forecasts
II) Trend forecasts
III) Life cycle trends

H. Market Analysis
I) Target market analysis
II) Competitor analysis
III) Customer profile
IV) Distribution channels
V) Entry strategies

I. Team
I) Qualifications
II) Critical task timeline
III) Gap descriptions


J. Product/Service Development Plan
I) Detailed description of offering
II) Current status
III) Tasks and timeline
IV) Prototype plan

K. Financial Plan
I) Summary of key points
II) Assumptions
III) Resources needs analysis
IV) Pro-formas
V) Break-even analysis

L. Timeline to Launch
I) Critical tasks

Feasibility analysis outline adapted from (Allen, 2003)

V Grant Proposal

1. The Face Page (DOE Form 4650.2) - completed and signed by appropriate officials.
2. Budget Page(s) (DOE Form 4620.1.) using U.S. dollars, with supporting written justification sufficient to evaluate the costs of the proposed project. List and explain cost-sharing arrangements, if any. If the application is for a multi-year period, use one budget page for each year of requested support.
3. Project Description: A detailed description of the proposed project, including the objectives of the project, its relationship to the Office of Science program and the applicant's plan for carrying it out. Use English only.
4. Biographical Sketches: Detailed information about the background and experience of the principal investigator(s) including references to publications.
5. Facilities and Resources: Include information on the experience of the applicant organization, its facilities and resources.
6. Bibliography of Literature
7. Statement of all current and pending support for the project and all related projects, and description of support for all projects which involve the principal investigator(s) and the period of time devoted to each project.
8. Pre-award assurances and certifications
http://www.science.doe.gov/grants/App.html
Conclusion
Bibliography
Appendix
A) Resumes
B) Tax returns
C) Copies of lease, purchase agreement for RE
D) Copies of licenses and other legal documents
E) Copies of letters of intent from suppliers, etc.
F) Pro-forma financial statements
G) Forms (critical tasks etc)
H) Interviews
I) Survey
J) Human Subjects







Introduction
“The design of the propulsion systems for automobiles and other transportation products is going through a major evolution…perhaps one of the biggest changes since the early part of the 1900s (Strattan, 2004).”

Most experts agree that our civilization is on the eve of a revolution in energy and transportation. Following a century of producing carbon from burning fossil fuels, the current world energy economy is no longer sustainable. Some researchers report that oil production has peaked while most all agree that demand will continue to rise for decades. Fossil fuel based technologies are not feasible for the next generations.

To answer the call for such a far reaching global epidemic, most of the major players in energy and transportation have invested trillions of dollars towards a quantum leap to a hydrogen world. The revolution promises a tremendous increase in efficiency at the same time drastically reducing harm to the environment. Hydrogen plans to provide sustainable power for mankind’s energy and transportation needs for the generations that grow up after oil. After all, our solar system is powered by a hydrogen sun and without it, life as we know it would not exist.

Feasibility Analysis
The result of this study is a feasibility analysis that researched multiple influencial factors in starting up an organization focused solely on sustainability in the manufacture of hydrogen powered vehicles. Our company plans to build itself from the ground up based on clean and efficient technologies. Since our competitors are fighting to change huge value chains entrenched in capital intensive oil based technologies, we believe our green vision will provide a competitive first-mover advantage in marketplaces moving towards socially responsible values. From the factories we build, to the partners we choose, to our products and services, our vision is to give back more than we borrow.
Antecedents
For the automotive industry, President George Bush has initiated over $4 billion and has begun to stimulate the transformation to hydrogen. California is poised at the front of the wave and already has hydrogen fuel cell vehicles (FCV) on the road. Governer Arnold Schwarznegger promises to be the first state in the union with a hydrogen highway with stations lined up and down the state every 20 miles. Finally, automakers have already leased FCVs to governmental agencies and hydrogen vehicles are being driven daily.

In 2004, cars became sexy again (Driving change, 2004) and hybrids were the fastest growing market niche in the automobile industry. Demand exceeded supply and consumers ordered $1 trillion (10% of US Gross National Product) more hybrid-electric vehicles (HEV) than the big six manufacturers could make. There were no manufacturers solely producing hybrids, although several niche players made alternative fuel vehicles (AFV), electric vehicles (EV) and fuel-cell vehicles (FCV).

One problem is the lack of research investigating why consumers are buying hybrids.

There are two types to choose from: completely new designs such as the Toyota Prius and redesigns of existing models such as the Honda Accord hybrid. JD Power (2003) reported that there were only three hybrid choices in 2004 and forecasted 12 in two years growing to 28 in 2008. Total sales in the trillions are projected for hybrids products including Volta, Dual-note, Hy-wire, Mind and Vision over the next six years. By 2010, hydrogen fuel-cell vehicles (FCV) will be available to the mass market prompting another industry evolution. FCVs are considered hybrids as they use both hydrogen and electricity for transportation. The trillion dollar race for the next propulsion system has started and most manufacturers have turned to outsiders; such as Ford licensing Toyota’s synergy drive or Toyota’s Volta hybrid being designed by an Italian firm. The 2007 Volta pictured below will be a hybrid with “drive by wire” and one electric motor for each wheel. Rated over 30 mpg it’s socially responsible at the same time providing high performace above and beyond most of Earth’s one billion cars forecasted in 2010 by Okuda (2003).


(Future/concept, 2004)

This feasibility analysis will review literature and primary data to forecast the emerging “hybrid” market segment and determine how large of an opportunity will be available for a first-mover hybrid automaker in 2005.

One question that this project will investigate is, what will hydrogen consumer want?

NOTE
Verbs from AOM journal
PAST
Indicated, noted, it has been well noted in literature, showed, it is worth reiterating, our findings suggest, we have suggested that, our results suggested,
FUTURE
Might instead explore

CONDUCTING THE FEASBILITY ANALYSIS

Industry Analysis
History
At turn of the last century, the automobile was born in Europe and adopted by America. The first propulsion systems were designed after the European internal combustion engine (ICE) to make machines that moved people. American entrepreneurs took the automobile from luxurious priveledge to ubiquity. By 1965, the American automobile industry grew to become the largest manufacturing operation in the world. In only two generations, the car came to define American life (Rae 1965).

It can be argued that American automobiles started a transportation revolution. But did cars start a gasoline and big oil revolution?

No, in 1900, Traister (1982) reported over 57 automobile plants in the US. 75% were manufacturing steam or electric vehicles (EV). Gasoline powered cars were considered primitive as noisy, smelly, shaky products that had to be hand-cranked. Historians are not sure why Henry Ford choose an ICE to lead the next evolution in the industry with his assembly line. By 1920 and the invention of the electric starter, Ford’s operations had wiped out the majority of steamers and electrics and the gasoline powered car monopolized transportation (Traister 1982).

One entrepreneurs choice had affected mankind for a century.

There were ? manufacturers including mom and pops that were making cars in garages all over the world. Tinkerers, scientist, entrepreneurs, businessmen and consumers were curiously fascinated with the replacement to the horse and carriage.

Demographics

Market
Global
In 2004 over 700 million vehicles parked and drove around Earth. Toyota’s CEO Hiroshi Okuda (2003) projected 1 billion units by 2010.

CHINA
Many analysts forecast that China will produce as many vehicles as the US sometime in the next 10 to 20 years. Optimists see China producing 30 million units while consuming more than half leaving 10-15 million in exports. That number could satisfy almost every new car and truck sold each year in the US. As global supply increases as China’s numerous plants in progress come online, the question mark is Chinese demand.

A primary data collection and analysis could yield more insight into Chinese consumers considering buying their first automobiles. On the production side of the industry, the Chinese market segment is in a strong growth phase.

Yan (2004) wrote that the Chinese automaking industry had 120 manufacturers that produced 4.2 vehicles in 2003. The larger players that produced over 100,000 units all had a “foreign equity partner sitting on the board (Yan, 2004).” Yan counted Volkswagon, GM, Hyundai, Honda, Citroen, Toyota, Ford, BMW and Mercedes-Benz as the big 10.

That leaves over 100 mom and pops building cars in China that the other forecasts will go bankrupt as the market approaches maturity and finally decline. A supplier partnership with a niche player is an excellent opportunity to add low-costs leader to the first mover strategy.

U.S
Of all the major manufacturers only two were American in 2004. The Big 3 was actually reduced to the Big 2 when Daimler (Mercedes Benz) acquired control of Chrysler. The US population and market was projected to continue growing where Okuda (2003) saw an 18-20 million unit market by 2010. In 2004, over 17 million new cars and light trucks were sold at the retail level.

CA
“Californians, who buy about 20 percent of the nation's automobiles, account for 28 percent of hybrid purchases nationwide (Hakim, 2004).” JD Power projected that the upper limit of the hybrid market segment at 3% while other more optimistic analysts foresee 10% (Hakim 2003). Gordon Wangers of Automotive Marketing Consultants is one of the optimists that forecasted the California hybrid market at 10% of all new-car sales by 2006 (Motor Trend, 2004).

Hakim (2004) wrote that according to R.L. Polk, the No.1 US market segment for hybrids is Los Angeles. LA is also the largest market segment in terms of existing units at 10 million registered vehicles.


Hydrogen Key Players
California leads the way in hydrogen transportation infrastructure development. Suppliers, producers, manufacturers and several governmental agencies formed a powerful partnership in 1999 to put more FCVs on the road.
The California Fuel Cell Partnership is a voluntary, industry-government collaboration to advance a new vehicle and fueling technology that could move the world toward practical and affordable environmental solutions. CaFCP members are demonstrating fuel cell-powered electric vehicles under real day-to-day driving conditions; testing alternative fuels and demonstrating the viability of an alternative fuel infrastructure technology; facilitating the path to commercialization; and increasing public awareness of fuel cell electric vehicles. The CaFCP is working to facilitate placement of up to 300 fuel cell passenger cars and buses on the road by the end of 2007.
The CaFCP -- which started in April 1999 -- includes auto manufacturers (DaimlerChrysler, Ford, General Motors, Honda, Hyundai, Nissan, Toyota and Volkswagen); energy providers (Air Products, BP, ChevronTexaco, ExxonMobil, Methanex, Pacific Gas and Electric Company, Praxair, Proton Energy Systems, Shell Hydrogen, Stuart Energy, and Ztek); technology companies (Ballard Power Systems and UTC Fuel Cells); government agencies (California Air Resources Board, California Energy Commission, South Coast AQMD, US Department of Energy, US Department of Transportation and US Environmental Protection Agency and Institute of Transportation Studies, UC Davis); and bus transit agencies (AC Transit, Santa Clara Valley Transportation Authority, and SunLine Transit Agency). For more information, please contact the California Fuel Cell Partnership at: 916-371-2870 or by email: info@cafcp.org (Hayden, R and Sadjak, S, 2004).

US Hydrogen Conversion
For hydrogen vehicle use to become feasible the issue of refueling vehicles cannot be ignored. California has the toughest smog laws in the world and has already initiated an infrastructure development project for hydrogen stations. “California Governor Arnold Schwarzenegger has launched the California Hydrogen Highway Network to promote broad availability of hydrogen fuel stations by 2010 (Hayden, R and Sadjak, S, 2004)” Under the assumption that the US converts to a hydrogen economy, the source and distribution of electricity to produce the hydrogen becomes relavent.

Cars and trucks remain the largest market segment in advanced transportation. Friedman (2003) stated that cars and trucks use about 70% of energy in the transportation sector. He projected that fuel cell vehicles could help the US achieve 100% renewable hydrogen by 2030. As far as the amount required to run American cars and trucks, Friedman (2003) emphacized that only a fraction of the electricity production at that time could produce all the hydrogen needed for transportation without any burden on the electricity infrastructure. But, he warned that smog would not go away because of the transistion from dirty hydrogen production to 100% renewable sources such as solar or wind (Friedman, 2003).


Geopolitical: oil

US
America imports more than half of its oil demand. 34% comes from Latin America, 16% from Canada and 18% from Saudi Arabia.
CHINA
In the past three years demand for oil has increased 1.2 million barrels.
WORLDWIDE RESERVES
Conservative estimates run around 1,000 billion barrels of supply and 100 million in demand per day or 40 billion per year. That works out to about 25 years worth of oil. Whether we look at the conservative or optimistic projections, oil will run out by the end of the millennium.
IMPLICATIONS
In the auto industry, the implication is that every one of the 50 to a projected 100 million cars and light trucks on the planet will be replaced by a new technology (Simanaitis, 2004)

Fortunately the race has begun and the market segment that includes green vehicles is experiencing 100% growth spurred by oil price record highs reached in 2004.

Sociopolitical: grants

$4.1 Billion in Tax Incentives for Renewable Energy and Hybrid and Fuel-Cell Vehicles
The President has called for tax incentives totaling $4.1 billion through 2009 to spur the use of clean, renewable energy, and energy-efficient technologies, such as hybrid and fuel-cell vehicles, residential solar heating systems, renewable energy produced from landfill gas, wind, or biomass, and efficient combined heat and power systems.
http://www.whitehouse.gov/news/releases/2004/07/20040714-2.html

The White House: President George Bush
Fact Sheet: Key Bush Environmental Accomplishments


ROONEY
Local political level:
Rooney reported that automotive dealership are the most sought after businesses within city limits for tax revenues. Dealership contribute more than any other business in all other segments combined. Rooney reported a situation involved with a political battle that his dealership property that a competing dealership has rights for. Ford owns the land, Galpin has the rights, but Galpin won’t release the rights. Galpin can’t build a dealership there because of a non-compete TMA compliance within Sunrise’s area of 6 miles.

Democrats have not been kind to dealership, Rooney reported. Schwarzenegger took Grey’s triple tax back down. And Grey really pissed off the dealership during the budget crisis and HCE group is highly compensated and workman comp issues and the democrats have been unkind. It all lead to cutbacks for the dealerships.

Small dealership are going down but big dealership are doing great!

NOTES Expand on this with a interview
Demographics: baby boomers, 68M new drivers
Trends:
Hybrids
ULTRA CAPACITORS
SUPER CAPACITORS
BATTERIES
HEVs have an additional battery that helps the vehicle down the road. American hybrids were 1st sold in 2001 and some have already worn out those battery packs. Simanaitis (2004) identified an un-served aftermarket segment replacing battery packs. He wrote that the secondary market outside of the manufactures value chain will offer reconditioned units at lower prices. On the other hand, he estimated that battery packs may exhibit the same durability of traditional power trains around 150,000 miles (Simanaitis 2004).
Life cycle stage: mature
Barriers to entry: high
Technology: batteries, materials, networking, fuel cells
The Economist reported that the next generation of cars will be powered by electronics. This will allow cars to be connected among drivers and to the outside world. Modern cars have about 80 computer controlled devices. Some control braking, movies, radios, the car’s mechanical systems, steering, suspension and most recently airbags. Telematics connect cars to network the ability to monitor traffic and accidents for example. The economist wrote analysts forcasted Telematics in two of three vehicles within a few years up from one in 20 in 2000 including satellite navigation systems rising from 1M to 30M (Clean machine, 2004).

R&D expenditures: research
Profit margins: research
Primary research from distributors, suppliers, competitors, retailers: interviews

Market (What does the terrain look like?)

Size: 16-17 million vehicles/year
2003 = 43K hybrids and 2004 = 80K???

In a speech for Washington DC’s Chamber of Commerce, Toyota’s CEO, Okuda (2003) spoke of the automotive industry’s future. Although some view the industry as mature, he introduced his projections with increased competition and opportunity. Populations and markets are projected to continue growing including the US which Okuda (2003) projected as a 18-20 million unit market by 2010. Okuda (2003) added that Europe is on a similar path with an equivalent market size. Asia with half of unit sales coming from China is also projected to consume 20 million units (Okuda 2003).


Growth:
Hakim (2004) wrote that according to R.L. Polk, the No.1 American market segment for hybrids is Los Angeles. “Californians, who buy about 20 percent of the nation's automobiles, account for 28 percent of hybrid purchases nationwide.” Automakers have an incentive to sell hybrids in California and the Northeast, where stringent emissions regulations are due to be phased in. JD Power projected that the upper limit of the hybrid market segment at 3% while other more optimistic analysts forsee 10% (Hakim 2003). Gordon Wangers of Automotive Marketing Consultants is one of the optimists that forecasted the California hybrid market at 10% of all new-car sales by 2006 (Motor Trend, 2004).


the California market for hybrids could range from

Demographics
Customer profile: green

Secondary Data Review
At National Geographic Magazine’s online article, “the end of cheap oil (Appenzeller, 2004) an online pool revealed the following poll, “Which would you rather own, an SUV or a hybrid?” There were only two possible answers: SUV or hybrid and of the 18,368 responses 27% or 5,075 chose SUV and 72% of 13,293 responses were Hyrbrid (Poll tally, 2004).

This implies that there is a large possible consumer segment within the National Geographic reader demographic.

Competitors
DaimlerChrysler, Ford, General Motors, Honda, Hyundai, Nissan, Toyota and Volkswagen

Primary research on the customer: interviews

Idea (Products and Services)

Features and benefits of products and services: green

Sustainability
The most important sustainable benefit that hydrogen powered vehicles provide is zero emissions: in theory only water comes out of the tailpipe.

Performance

Universal Design
The design of the FCV revolutionizes automobile production similarly to Ford cranking up the assembly line. Just as Henry Ford built his chassis or guts of the car and then put the bodies on later, the FCV can be broken down similarly. The benefit to the customer is that universal chassis can be designed providing a pleathora of custom designs for the customer to choose from.

For example, GM’s AUTOnomy skateboard-like chassis is planned to be used for the hy-wire a normal passenger vehicle for America, a jitney for India and a truck for China. GM stressed that the hydrogen fuel cells can be arranged in any order and split up around the vehicles carcass. The same engineering can accodmodate different bodies that can almost be snapped on like one puts on a different coat (GMability, 2004).



Development tasks
IP: .coms, Passive Climate Control
Differentiation: green

Team
Potential Team members are the focus of this section broken down into:
Managers and Employees
The front office team consists of the following tentative lineup.
Legal Council: Chris Sozzi and Matt Sundly
Architects: Allen Green and Public Vision Research
Chairman and President: Eric Quanstrom
Chief Strategic Officer (CSO): John Acheson
Chief Operating Officer (COO): Eric Quanstrom
Chief Financial Officer (CFO): Jeff Higashi, CPA, UCSB alumni, Phy Psy alumni
General Manager (GM): Jeremy Jacobs
Coach (Hitting and Pitching): Jeff Jacobs
VP of Baseball Sales and Marketing: John Wenger
VP of Entertainment Sales and Marketing: Dameth Rooney
Director of Public and International Relations: James McMichael
Director of Baseball Operations: Troy Hautzenrader

6.2 Management Team
The front office will be elected before January 1, 2005. Members may hold more than one position during the start-up phase.
Key leadership positions will be recruited from the following pool:
John Acheson, Entrepreneur and MBA candidate at SFSU
Entrepreneurship and strategic planning of the new venture are two areas that Acheson brings experience. His mission is to formulate a successful business plan, develop a powerful pitch, and put together a A team that leads idea through opportunity. His vision is to leverage experience into professional sports franchise ownership, and his mission is to implement ownership and operations of at least one minor league baseball team in the near term.
Previously Acheson has operated four start-ups and an acquisition in the sports entertainment industries. Acheson founded Altered Shot in 1991, conducted B2B e-commerce selling sports entertainment in 1992, acquired TNT Sports and founded Acheson Trading Co.in 1997, opened The Card Pro in 1999, 4th n Goal in 2000, started BEST Playroom in 2003, and went online with the Shot Boyz team in 2004. As an entrepreneur he has experience in strategy, finance, operations, sales and marketing and e-commerce. He has also worked professionally as a consultant, registered tax preparer, banker, teacher and computer operator.
Acheson will earn a MBA from San Francisco State University in 2004 and has a BA in Statistical Science from University of California at Santa Barbara (1994). John is an expert on sports statistics and Japanese baseball. He speaks Japanese and has a solid understanding of Asian cultures.
Jeff Jacobs, UCSB Coach and Entrepreneur
Jacobs held CEO responsibilities along with majority ownership in Altered Shot when Acheson approached him with a growth strategy in 1991. He successful led the company for three years and helped negotiate the sale of the business when Acheson graduated from UCSB. Professionally, Jacobs is a business consultant and has experience in long-term financial investments as well as retail sports management experience at Big 5 Sporting Goods.
Jacobs has decades of experience in sports, including several years of coaching experience. Jeff just started his fifth year assisting Head Coach Pete Dolan with the UCSB Track & Field/Cross Country teams. He assisted with cross country for the '90 and '91 seasons and then returned to the staff in the fall of 1999. Jeff has been an integral part of the recent success for Gaucho distance runners. Since 2000 Gaucho distance athletes have set school records in the women's 1500m, 5000m, 3000mSC, 10,000m and Distance Medley Relay, as well as the men's 800m and 10000m. Two athletes have received All-American honors and the men's cross country team has been ranked among the top 25 for the first time in school history, finishing 17th at the '01 NCAA Championship. In addition to being an assistant coach for the Gauchos, Jeff works for a financial planning organization, and still finds time to train and race. Jeff was a major contributor to the Gaucho program by earning team MVP three times in cross country as well as being an All-Conference runner in 1988. Top collegiate 5,000 was a 14:34.11.
Jacobs completed USATF I and II coaching certifications. He earned a BA in Communication Studies and completed the Coaching Certification Program at UC Santa Barbara in 1990. Jeff is an expert in sports information and coaching.
Jeremy Jacobs, Managing Director at Diavolo
Jeremy Jacobs, Jeff's younger brother, was born in Los Angeles, CA and has grown an organization from a $25,000 annual budget to a million dollar heavy hitter. He was the driving force behind transforming Diavolo into a professional touring group, securing a permanent 6,300 sq. ft. rehearsal studio and has managed every aspect of operations: travel, finance, public relations including radio and T.V. Most importantly, Jeremy has risen to the top of human resource management having dealt with the outrageous egos of circus performers, choreographers, designers, booking agents and the various unique personalities found in the sports and entertainment industries. He is an expert in managing the dynamics found in a sports franchise.
Leading up to his successful management at Diavolo, he received a BFA in Theater from The University of California at Santa Barbara, where he studied movement theater with James Donlon. Jacobs received an MFA in Theater from the University of South Carolina, where he studied modern dance with Melody Schaper. In 1993 he received a scholarship to the American Dance Festival. He joined his current organization, Diavolo in 1994 as a performer, was the Rehearsal Director from 1997-1999, and served on the Board of Directors from 1998 thru 2000. In 1999, Jacobs became Technical Director for Diavolo, and also assumed the role of Managing Director in August of 2000.
Jacobs has managed several fantasy sports teams and has achieved a winning record while working full-time for Diavolo. He's a seasoned human resource manager and Major League Baseball expert.
John Wenger, Sales Manager
Mr. Wenger can fill the essential position of Director of Sales and Marketing no matter what venture the team agrees to turn from idea into opportunity! John was actually college roommates with all three of the Altered Shot founders and experienced small business entrepreneurship first hand.
Wenger graduated UCSB in the early 1990s and earned a degree in Political Science. A long-beach native, he currently manages a large sales territory and conducts outside sales. Wenger has several years experience managing fantasy sports teams.
A die-hard Dodger fan, Wenger along with the Jacobs are fore-most experts on the Los Angeles Dodgers organization. Wenger is an expert in sports entertainment.
Eric Quanstrom, Manager and Entrepreneur
Quanstrom is a born leader, A player and top notch manager. Not only has Quanstrom successfully launched a $5M media start-up, he has on the field experience having played college baseball at SDSU. In addition, his professional career spans a decade of experience in sports entertainment media and business development.
He has co-produced a variety of projects including the Super Bowl and has tremendous passion for leadership, particularly in sport entertainment organization.
Quanstrom is a MBA candidate at San Francisco State University and earned a BA at SDSU's School of Journalism. He's an expert in sports media.
Troy Hautzenrader, Entrepreneur
Troy Hautzenrader, Vice President
leavz4455@comcast.net
1 Myrtle Court
Petaluma, CA 94952

Troy founded The Card Pro with John Acheson and has depth in the sports merchandising industries. He brings energy and youth to a leadership team that will need to implement on game day. Hautzenrader is an expert in project management and can step up to the plate when under pressure in the spot light. He loves a challenge and works hard to implement new ideas.
Troy started his 1st business at only 14 years old, grew up in Sonoma County and has been a lifelong sport fan. He has six years of experience in sports merchandising.
Dameth Rooney, President
daemeth@yahoo.com
27251 Sanford Way
Valencia, CA 91354
(818) 974-2992

(415) 250-8739

John Acheson, Secretary/Treasurer
email@johnacheson.com
11524 Poema Pl Unit 104
Chatsworth, CA 91311
(818) 882-0806

Consultants and Advisors
Bankers
Partners






Gap analysis
Team Gaps
The following Shot Boyz are currently being recruited to fill front office positions.
James McMichael, International Manager and Entrepreneur
When the Shot Boyz go global, McMichael will lead our international operations. As an experienced global leader, corporate manager and backed with small business ownership experience, James can round out our executive team. He'll be called upon to scout international players, work with foreign organizations, and research the possibility of international expansion.
It should be noted that baseball growth in diversity has been on a tear, with Latin American and Japanese players making up the majority of foreign born athletes playing in the bigs.
James currently manages social accountability and has a long professional career in management. He resides in San Francisco and has recently gotten engaged. As a San Diego native, he's a die-hard Padres fan!
McMichael holds a MSBA from San Francisco State University and BA from UC Santa Barbara. James is an expert in ethics and international relations, speaks Spanish and has a cultural understanding of Latin American countries.
Dameth Rooney, Sales Manager
This Shot Boy was last seen selling Fords near Six Flags Magic Mountain and the rumor is that he made it big in the .com days as the top sales manager. If you or anyone you know has heard of Rooney's whereabouts, please email the core@shotboyz.com
Rooney attended UCSB with the Shot Boyz in the early 90's and transferred to CSU Northridge to earn his Bachelor's degree.
As the company expands and pursues it's vision, we foresee a need for legal council and hope to retain one or both of the following Shot Boyz as lawyers and council. Future duties will include management of all legal contracts including business, human resources and of course player management:
Matt Sundly, Attorney at Law
Sundly joined Acheson and Jacobs in 1991 to form the partnership that managed the sports entertainment venture, Altered Shot. He brought multiple expertise including soccer, football and an understanding of human resource management. His professional background includes restaurant management and he's currently working towards partner in a law firm out of Orange County in California.
He earned a BA in Philosophy from UCSB in the early 1990's and went on to successfully graduate Western with a J.D. degree in law. Matt is an expert in soccer and sports entertainment law.
Chris Sozzi, Corporate Attorney at Law
Sozzi attended UCSB along with the Shot Boyz and earned his degree in the early 1990s. He went on to study law at Santa Clara and earned a J.D.. Currently he's on retainer by a for-profit corporation in the Silicon Valley.
As a Bay Area native, Sozzi is a die-hard Warriors fan and golf aficionado. He is also an expert in corporate law.


Values: green
Passion: save the planet
Experience: problem
Expertise: ok
Gaps: many

Finance

Start-up capital:
Foundation ISP Media Automaker Dealer RE
Assets
PP&E 10,000.00 10,000.00 1,000,000.00 2,100,000.00 3,000,000.00
Expenses
Wages 24,000.00 12,000.00 108,000.00 300,000.00 360,000.00 36,000.00
Sub-contractors 12,000.00 60,000.00 12,000.00
Rent 1,200.00 24,000.00 12,000.00 120,000.00 120,000.00
Fees 1,000.00 1,000.00 2,000.00 10,000.00 5,000.00 2,000.00

Total Start-up costs 26,200.00 59,000.00 192,000.00 1,430,000.00 2,585,000.00 3,050,000.00

Group Start-up costs 7,342,200.00
Working capital
Fixed cost requirements:
Break even analysis
Value Chain Analysis
Freeman (2004) wrote that strong demand for the Prius HEV has created a backlog in the value chain for the world’s best selling hybrid. In the U.S. alone, there were 22,000 orders taken by dealership with no physical inventory to supply them. Although Toyota has promised to double future production, there is not guarantee at the retail level that when or where consumers can buy a Prius. The results have been increased demand that has created a secondary market
Illustrate the chain
Distribution alternatives and target market segments
Innovation in the chain
The economist reported on the automotive industry’s value chain that when products change, the ways in which they’re made also change. The barriers of entry will come down along with the need for capital intensive factories. Start-ups could take away business from the big six in the form of hi tech firms, parts manufacturers turned assemblers and/or low-cost leaders like they have done in the airline industry. “The old car firms must reinvent themselves to seek profit, not just market share. Otherwise new, nimbler competitors will take advantage of technological change to do the job for them (Driving change, 2004).”


PRESENTING THE FEASIBILITY ANALYSIS

Executive Summary
Business Concept
Hydrive Motor Company will manufacture innovative and efficient vehicles for socially responsible consumers. Through worldwide partnerships, we’ll help our customers build to order. By bringing together transportation technologies from China, Japan and the Americas, our customers will experience sustainable solutions offering convenience, style and performance. Hydrive will build our brand through socially responsible media and deliver our product directly to the customer. We’ll service our products door to door through a network of dealers.

Macro-factors
President Bush (2004) recently initiated over $8 billion in grants and tax incentives, lasting through 2009, spurring clean technologies including hybrid and fuel-cell vehicles. Presidential candidate John Kerry has proposed $10 billion in grant monies to stimulate innovative green auto-making in an effort to bring back American jobs. California Governor Arnold Schwarzenegger just signed a bill to allow solo driven hybrids in commuter lanes and a few months earlier debuted the Hydrogen Highway project to make California first in zero emission infrastructure and. Following an oil war clean energy vehicles are very strong political drivers of macro business initiatives.

Market niche
Based on the data aggregated from the feasibility analysis, the overall US market for hybrids alone is projected at 600,000 to 2,000,000 units over the next five years. At $20,000 per unit, the CA market segment could spend over $3-10 trillion on new hybrids by 2010.

Growth

The opportunity is massive, growing and has room for new entrants.

Opportunity
The preliminary research shows that there is a growing un-served niche in hybrid vehicle technology. Only Toyota and Honda have released mass produced vehicles that pollute ten fold less than older technologies and decrease gasoline consumption by two to five times. In fact, Toyota is pre-sold out of over $1 trillion in socially responsible consumer dollars for hybrids through 2006, and the industry leader is scrambling to make vehicles to fill orders. Ford was forced to play catch up and licensed Toyota’s technology to put the first American hybrid into production. As of this proposal, there are no other players on the playing field with billions sunk into research.

Hybrids are the tip of the iceberg. The author has identified a niche in a growing multi-trillion dollar market up and down the value chain in advanced transportation technologies. From scooters to snowmobiles to cars and trucks to airplanes an evolution has started that the author believes will last 100 years, as long as the Internal Combustion Engine (ICE) survived. From suppliers to manufactures to dealers and consumers and from non-profit organizations to for-profit ventures, there is a socially responsible vacuum for clean hi tech solutions.

Opportunity
Preliminary research has identified a growing trillion dollar “changing, chaotic and confusing” (McCline, 2003) market “greening (Silverman)” across several value chains. Sustainable automaking hybrids including zero emissions hydrogen fuel cell vehicles have begun to fill the socially responsible vacuum for advanced transportation solutions. The hydrogen economy will be massive and the opportunity for Hydrive to help grow a budding industry is big.



Title Page


Table of Contents



Introduction


I Executive Summary

II Title Page

II Feasbility Decision

III The Business Concept

IV Industry Analysis

A) Market Analysis


V Team

VI Product/Service Plan

VII Financial Plan

Names: The Acheson Foundation (Foundation), Hybrid ISP (ISP), Hybrid Media Group (Media), Hybrid Motor Co (Automaker), Hybrid Auto Group (Dealer), Advanced Real Estate (RE)

Founding Team Member Names: John Acheson, James Acheson, Daemeth Rooney, Troy Hautzenrader, Chris Sozzi, Olivier Lepord
Executive Summary
GET ATTENTION WITH FIRST SENTENCE
Business Concept
HyDrive will manufacture innovative and efficient vehicles for socially responsible consumers. Through worldwide partnerships, we’ll help our customers build to order. By bringing together transportation technologies from around the world, our customers will experience convenience and satisfaction. HyDrive will build our sustainable brand through forms of socially responsible media. We plan to become the most sustainable advanced transportation manufacturer and will produce fuel cell hybrid electric vehicles. HyDrive will deliver products directly to the customer and provide door to door service through a networked value chain.

MOST IMPORTANT POINTS OF FEASIBILITY STUDY

Business
Customer
Value proposition
Delivery
Potential for growth and spinoffs

Industry Analysis

Industry and Target Market analysis
At $20K per unit times Okuda’s (2003) industry projections for 2010, the worldwide industry is valued at $1,200,000,000,000.00 while the US target market segments at $360-400 trillion. Using the US 2004 units sales figures of 17 million units shows a projected 18% increase in unit sales over the next six years. Although a mature domestic market, the size is massive, and the 3% annual growth rate is acceptable at current inflation rates.

Focusing on the hybrid market segment findings was much more exciting. Using the Prius as a barometer, and unit projection at 80m in the US for 2004 and 43K the year before, a growth rate is still 96% only three years after the introductory rate of 276%.

The numbers are elusive because supply cannot keep up with demand and tens of thousands of consumers have already put deposit up to buy 20-30,000 hybrid vehicles.

Niche
Based on Hakim’s (2004) reported data and Okuda (2003) projections, the overall US market for hybrids is projected at 600,000 to 2,000,000 units within the next five years. At an assumed 25% at $20,000 each, the CA market segment could spend over $3-10 trillion on new hybrids by 2010. That translates into another $3-10 billion in parts and services for new vehicles alone.

There’s no doubt about explosive growth but the size is still a niche market of a projected 100,000 units or $2 trillion at $20K per unit. A larger market exists in the cumulative hybrid vehicles on the road that require service. This suggests that remanufacturing and servicing the cumulative aging fleet is a larger market experiencing a slower growth rate. Even so, the competitors are fragmented mom and pop shops and virtually no aftermarket manufacturers. Batteries or other components that wear out may be another market segement to investigate.



Competitor analysis
Customer

Value Chain Innovation
A) R&D CALIFORNIA/NEVADA (design, software, systems)
B) Standard Components CHINA (fuel pump, suspension, plastic body parts etc.)
C) Advanced Components JAPAN (power and drive trains)
D) Final Assemby MEXICO or NEVADA (nuts and bolts, painting, finishing, etc.)
E) Sales/Mktg. CA (internet only sales, door to door distribution and service)


Distribution channels
Entry strategies
Just like JetBlue boomed during United’s bankruptcy with TVs in every leather seat combined with cheap tickets sold on the internet, Green Motors plans to combine hi tech with low cost assembly while delivering over the internet.


http://www.economist.com/printedition/displayStory.cfm?Story_id=3127206

Team
Qualifications
How critical tasks will be handled
Gap analysis
Product/Service
Descriptions
Current status
Tasks and timeline
IP owned and to be acquired
Plan for prototype

NOTE
The project proposes a current market segment serving 100,000 hybrid vehicles with aftermarket parts and services after they have left dealer lots.
Financial Plan
Summary of key points
Assumptions
Resource needs assessment
Pro-forma financial statements
Break even analysis
Timeline to Launch (use operations analysis)
Task
Order












References
Bibliography


50 assorted articles including a couple journal studies and many data/webbased articles
Allen, K. R. (2003). Launching new ventures. Boston: Houghton Mifflin Company.
Appenzeller, T. (2004, June). The end of cheap oil. National Geographic Magazine. Retrieved September 27, 2004, from http://magma.nationalgeographic.com/ngm/0406/feature5/
Brant, B. (1994). Build your own electric vehicle. New York: TAB Books.
China’s auto production concentrated in 10 plants (2004, January 24). Xinhua General News Service. Retrieved Augsust 6, 2004, from http://0-web.lexis-nexis.com.opac.sfsu.edu/unvierse/printdoc
Clean machine (2004, September 4). Economist, Vol. 372, Issue 8391. Retrieved September 27, 2004, from EBSCOhost database, Accession No. 14350564.
Driving change (2004, September 2). Economist. Retrieved September 27, 2004, from http://www.economist.com/printedition/displayStory.cfm?Story_id=3127206
Electrifying times (2004, Spring-Summer). Vol 9 No 2
Ford’ first hybrid SUV delivered (2004, September 16). The San Diego Union-Tribune. Retrieved September 27, 2004, from Motor Trend, http://motortrend.com/features/news/112_news60/index.html
Friedman, D. (2003). Renewable hydrogen forum: a summary of expert opinion and policy recommendations. American Solar Energy Society. Washington DC, National Press Club. Retrieved September 30, 2004, from http://www.ases.org/hydrogen_forum03/Forum_report_c_9_24_03.pdf
Future/concept: allessandro volta (2004). Toyota. September 27, 2004, from
http://www.toyota.com/vehicles/future/volta.html
Gilinsky A. and McCline R. L. (?). Entrepreneurial strategy: an empirical investigation of the effects of the socially responsible value set on the people resources of the firm.
GMability (2004). Fuel cells & energy, cool car clean future: reinventing the automobile. General Motors Corporation. Retrieved September 30, 2004, from http://www.gm.com/company/gmability/edu_k-12/5- 8/fc_energy/autonomy_hywire_011303.html
Hagerbaumer, C. (2003). Survey of Oregon hybrid gas-electric car owners. Oregon Environmental Council and Oregon Department of Energy. Retrieved September 28, 2004, from http://www.orcouncil.org/reports/HybridSurvey%202003.pdf
Hakim, D. (2004). Hybrid Vehicles Hit the Heartland...Barely. The New York Times June 19, 2004. Retrieved September 17, 2004, from http://0-web.lexisnexis.com.opac.sfsu.edu/universe/document?_m=c450fb7234187d3952d93a7dbd7d1e80&_docnum=8&wchp=dGLbVlzzSkVA&_md5=1850351add749fd3ce4e2a34461c9fb0
Hayden, R and Sadjak, S, (2004). California Fuel Cell Partnership's Road Rally Places Record Number of People on the Road in Zero Emission Hydrogen Cars. California Fuel Cell Partnership. Retrieved September 27, 2004, from http://www.cafcp.org/news_releases-04/2004_09_28_RRIII.htm
Hubbard, G. (2004). Business leaders building a better world: the 12th annual net impact conference. Columbia Entrepreneurship Update. Summer 2004: pg. 2.
J.D. Power and Associates Reports: Anticipated Higher Costs for Hybrid Electric Vehicles Are Lowering Sales Expectations (2003, October 27). J.D. Power and Associates. Retrieved September 27, 2004, from http://www.jdpa.com/news/releases/pressrelease.asp?ID=2003135
McCline R. L. (2003). Lectures.
Motavalli, J. (2001). Forward drive. New York: Sierra Club Books.
Poll tally (2004). National Geographic Magazine Poll @ nationalgeographic.com. Retrieved September 28, 2004, from http://ngmpoll.melia.com/ngm/poll/0406/poll.html
Okuda, H. (2003). Speeches. North American Press Room. Remarks. Washington, D.C. U.S. Chamber of Commerce. Retrieved September 14, 2004, from
http://pressroom.toyota.com/photo_library/display_release.html?id=sp20030910
Rae, J. B. (1965). The American automobile: a brief history. Chicago: The University of Chicago Press.
Research protocol. Office of Protection for Human and Animal Subjects: Documents Samples. Retrieved September 27, 2004, from http://www.sfsu.edu/~protocol/human/sample_doc/exempt/protocol/E-4-protocol.doc
Rooney, D. J. (2004). Interview.
Simanaitis, D. (2004). Fill’er up… but whatever with? And wherever from? Road & Track, Volume 56, Number 2: pg 144.
Strattan, R. D. (2004). The electrifying future of the hybrid automobile. IEEE Potentials, August/September, 2004: pgs 4-7.
The White House: President George Bush (2004). Fact sheet: key bush environmental accomplishments. Retrieved September 24, 2004, from http://www.whitehouse.gov/news/releases/2004/07/20040714-2.html.
Traister, R. J. (1982). All about electric & hybrid cars. Blue Ridge Summit: TAB Books.
Writing the plan (2004). SBA: starting your business: business planning. Retrieved September 27, 2004, from http://www.sba.gov/starting_business/planning/writingplan.html
Yan, L. Y. (2004, March 26). China's new auto recall regulation may be a lemon. Asia Time Online. Retrieved September 28, 2004, from http://www.atimes.com/atimes/China/FC26Ad01.html

Pg. 109, “TABLE 5.2: Feasibility Analysis”
Pg. 112, “TABLE 5.3: Feasbility Analysis Outline”

Appendix

Glossary
Social entrepreneurship: pursuing “double-bottom line venturing opportunities;” focused but not limited to the following industries: “energy, the environment, economic and community development, education, arts, and health (Columbia, 2004);” measuring social impact and social return on investment


Questionnaires
Maps
Forms
Resumes
Marc Ekert
Daemeth Rooney
James Acheson
John Acheson
Troy Hautzenrader














Survey
===============================================================
(Drive the future: a feasibility analysis for a hybrid automaker.)

Data collected from this anonymous survey will be used for completion of a master’s degree in Business at San Francisco State University. The information gathered will be used for research on forecasting.

You must be 18 years of age or older to participate. There are no risks or benefits to you in participating in this survey. Participation in the survey is optional. You may choose to participate or not, and may answer only the questions you feel comfortable answering. You may stop answering questions at any time. If you do not wish to participate, you may simply not fill out the online survey, with no penalty to yourself. If you do participate, completion and return of the survey indicates your consent to the above conditions.

Please do not put your name on the survey. The survey should take approximately 10 minutes to complete. Any questions or concerns should be directed to the principal investigator, John Acheson, at john@hyDrive.net
===============================================================

Do you own a hybrid?
Yes
No

NOWhat hybrid feature would you pay the most for?
Less air pollution
Higher gas mileage
A popular style
High technology

YES: What is the most important feature of your hybrid?
Less air pollution
Higher gas mileage
A popular style
High technology

Would you buy a hybrid if?
It polluted more than a normal car
It got worse gas mileage but better performance than a normal car
If broke down more than a normal car
It looked like a normal car and didn’t say “hybrid”
It used diesel instead of gasoline?
It used hydrogen instead of gasoline?
If you had to plug it in?
If it kept running an a stop light?

YESWhat could the dealer have done to make hybrid shopping better for you?
NO How could dealers have done to make hybrid shopping better for you?

How many hybrids do you think there will be?

Where do you service your vehicle?

1. Where are you from?
___North America
___South America
___Europe
___Asia
___Australia
___Africa
___Antartica

2. What is your Gender?
___Male
___Female

2. What is your yearly income level in U.S. dollars?
___$0 to 7,000
___$7,000 to $30,000
___$30,000 to $70,000
___$70,000 to $150,000
___$150,000 to $300,000
___$300,000 to $1 million
___$1 million to $1 billion

3. What is your Education Level?
___Did not graduate from high school
___High school graduate
___Associate Degree
___Bachelor’s Degree
___Master’s Degree
___Doctorate Degree

5. Are you married?
___Yes
___No

6. Do you have children?
__Yes
___ No

8. How often do you buy whole bean coffee?
___Never
___Sometimes
___Often
___Always (can’t start the day without making my own pot of joe!)

If never, thank you for taking my survey. You are done! If you chose Sometimes, Often, or Always, please proceed. You are half-way finished with the survey.

9. Please rank on the following scale your preference between the two coffee products. 1 = most likely to buy product #1 whereas 5 = most likely to buy product #2.

[NOTE: This type of questioning continues until all combinations of product attributes have been evaluated and ranked – approximately 20 preference options.]

Please indicate your preference between the two products on the scale provided.
Coffee Product #1 Coffee Product #2
Fair Trade Organic
$8.99 $6.99
Supermarket Specialty Grocery Store
Dark Roast Light/Medium Roast
Product 1 (1) (2) (3) (4) (5) Product 2

Please indicate your preference between the two products on the scale provided.
Coffee Product #1 Coffee Product #2
Shade-Grown Organic
$9.99 $8.50
Specialty Store Coffee Shop
Light/Roast Dark Roast
Product 1 (1) (2) (3) (4) (5) Product 2
2 of 3
10. When you considered and ranked Organic products, were you concerned about
___Your health
___The planet’s environment
___The health of the farmers who grow the coffee
(please rank from 1 – most important to 3 least important.)

11. When you considered and ranked Shade-Grown products, were you concerned about
___ Bird/wildlife environment
___ Protecting the rainforests
___The environment of the farmers who grow the coffee
(please rank from 1 – most important to 3 least important.)

12. When you considered and ranked buying the product
in the Supermarket, were you concerned about:
___Convenience
___Product Freshness/Quality
___Other (Please explain
____________________________________)
(please rank from 1 most important to 3 least
important.)

13. When you considered and ranked buying the product
in a Coffee Shop, were you concerned about:
___Convenience
___Product Freshness/Quality
___Support Neighborhood/Small Business
___Other (Please explain
_____________________________________)
(please rank from 1 most important to 4 least
important.)

14. When you considered and ranked buying the product
at a Specialty Supermarket, were you concerned about
___Convenience
___Product Freshness/Quality
___Support Neighborhood/Small Business
___Other (Please explain
_____________________________________)
(please rank from 1 most important to 4 least
important.)


15. Do you have any comments for me? ________________________________________


Survey adapted from Research protocol (2004).

About Me

My photo
Portland, OR, United States
LinkedIn Profile http://www.linkedin.com/in/johnmba Yahoo Answers Profile http://answers.yahoo.com/my/profile;_ylt=AqUFgloHkgwIawoJS0O77lDsy6IX;_ylv=3?show=98f170ed6dadf6edd5fc239fce211dfcaa&preview=true