Market Analysis Summary
Subscribers of The Wonderkind will be motivated to gain exposure to the pulse of collegiate America. The Wonderkind's target market consists of business professionals who enjoy a multitude of information sources.
4.1 Market Segmentation
We will target business professionals who enjoy a range information sources. These people could include buy/sell-side Wall Street analysts or other marketing managers at companies with an interest in consumer trends. The perspective offered by college students is truly separate from the bombardment of traditional business periodical sources. The interests of today's college generation indicates broader themes business professionals need to be aware of.
4.2 Market Trends
The most relevant trend to the success of The Wonderkind is the continuing recognition of college business persons. No longer are the top Wall Street analysts and managers the only voices being heard. After the astounding success stories of college students such as Bill Gates, Michael Dell, and Sean Fanning, everyone seems to have an open ear to the collective collegiate conscious.
Another important trend originating in the last few years results from the "Fair Disclosure Act" which was created by the S.E.C. This act states explicitly that companies must disclose all information to the general investing public at the same time as releasing information to Wall Street analysts. In other words, individual investors can be present in the same conference calls with management along with Wall Street analysts effectively leveling the playing field for individual investors.
Another critical market influence on the investing public deals with the separation of the Wall Street research analysts from their investment banking counterparts. The inherent biases of investment banking research is being realized by the investing public. Investors want unbiased fundamental research to make decisions.
4.3 Market Growth
J. P. Morgan estimates that that 18 million Americans used online brokerages in 2000. This number is expected to increase to 27 million users with online accounts by the year 2003. J. P. Morgan also projects European online accounts to increase from 3.9 million in 2000 to an estimated 17 million accounts by 2003, an anticipated average annualized growth of over 60%. We mention the European statistics here because we expect some foreign investors to utilize The Wonderkind's service as a concise, interactive, and cost-efficient method of gaining insight into the American markets. This trend indicates that more people are investing without the aid of a traditional broker. Such people, whether they be college students or business professionals, need supplementary research and information to make their investment decisions.
4.4 Service Business Analysis
The online investment research industry consists of a handful of all-inclusive websites that touch on nearly all realms of financial activity. Next, there are numerous lesser-known websites and newsletter services that take a more limited approach, specializing in various aspects of the financial markets.
The Wonderkind's biggest challenge will be to establish itself as a quality niche service in an arena already filled with a wealth of information.
4.4.1 Business Participants
To our knowledge, there is no other company that offers the same services as The Wonderkind. However, there are several virtual businesses that charge fixed monthly rates for their analysts' suggested portfolios along with periodic email newsletters. These companies will certainly be competition. However, we believe that The Wonderkind offers many competitive advantages over these more automated market information services. The uniquely powerful collection of extremely smart college students that we plan to create will separate us from these other standardized information services.
4.4.2 Distributing a Service
The Wonderkind will be distributed via Internet subscriptions and mailed newsletters, which will be promoted via our marketing campaigns. The highly scalable knowledge-based platform on which we will operate, will allow us to efficiently leverage our business to a large audience. In addition, we will be able to communicate with our clients via our website, email, and telephone.
4.4.3 Main Competitors
The Wonderkind is removed from these otherwise comparable sites because of our collection of the best and brightest young minds representative of the American collegiate pulse:
1. All-inclusive online financial services:
Already established financial sites such as Yahoo! Finance, CBS MarketWatch, MSN MoneyCentral, The Street.com, and Fool.com certainly could be grouped in the same industry as The Wonderkind. We also group any information provided by discount brokers into this category as well. These services provide market research, daily articles, charts, quotes, and much more. We certainly recognize the breadth and reputation of these sites. However, our object will not be to take away market share from this group. Instead we will strive to serve as a desired supplementary informational service.
2. Reputable and focused companies:
Some of these sites include Bloomberg, Investorguide.com, and Hoover's. Each of the aforementioned sites have a more limited arena of expertise. For example, Bloomberg Online focuses primarily on the status of the market and economy while Hoover's provides superb company profiles for nearly all publicly traded companies.
3. Stock Picking Services/Technological Forecasting
Persons such as George Gilder and Michael Murphy have set up subscription-based revenue models similar to what we will strive to achieve for The Wonderkind.