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Medium Market Entry Growth Strategy Diversification

Fire Proof Inc.

#Manufacturing #Government Contracting
ProHub Comment

This case tests market attractiveness analysis using multiple criteria (production overlap, market size, growth rate, and competition). The structured approach requires candidates to evaluate trade-offs between different opportunities and perform revenue projections with compounding growth calculations. Strong candidates will recognize that bullet proof vests offer the optimal balance of overlap with existing capabilities and market opportunity.

Estimated Time 15 minutes
Difficulty Medium
Source Darden
50 / 100
The CEO of Fire Proof Inc. wants to find new ways to diversify her revenue and product line. Currently, Fire Proof only sells fire resistant jackets, gloves, hard-hats, and tools to government sponsored fire departments nationwide. The CEO believes the company can expand their operations to make equipment for other industries. How would you advise Fire Proof Inc.?

Clarifying Information

  1. How does Fire Proof Inc. make money? They sign contracts with municipalities and cities to supply fire proof apparel to fire departments
  2. How large is Fire Proof Inc.? Fire Proof Inc. does $500M in annual sales and has been growing at 4% yearly over the last 5 years
  3. How many competitors do they have / Market position? Fire Proof is number 1 in the fire equipment market but they have 3 main competitors that compete for government contracts
  4. How diversified are their competitors: Fire equipment makes up no more than 25% of all 3 competitor’s revenue.
  5. Why haven’t Fire Proof diversified their business before? The company focused on mastering what they knew and improving their operations in building fire equipment