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nalysis The Lazy Mower: Is It Really Worth It? If there was one thing the folks at Innovative Products Inc. (IPI) knew well, it was how to come up with useful and unique products in the midst of economic adversity. With current year revenues considerably lower and profit margins shrinking due to severe price competition, the firm’s engineers and been pushed really hard to develop a prototype of a useful, and hopefully, highly profitable “unique” product. Then, last month, the design team unveiled a fully-tested prototype of their latest innovation, the “remotecontrolled” lawn mower, nick-named the “The Lazy Mower.” Surveys of retailers and customers, conducted by the marketing department, indicated that demand would be excellent, provided the price was lower than a riding lawn mower. The testing and development phases took almost 3 years and final product passed all safety hazard tests with flying colors. After the unveiling, the product was exhibited at various home shows nationwide and received raving reviews. Full production had not yet started, however, because there had been a change in CEOs and the new CEO was highly conservative. Before being given the “ go ahead” to go into full-scale production of the Lazy Mower, the design team had to present a detailed feasibility study to the Capital Investment Committee (CIC), which was chaired by the Vice President of Finance, Pete Fieldstone. As was typical in a major undertaking of this type, the proposal had
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