A&L Canada
Laboratories Inc.
Opportunity in the Precision
Agriculture Industry
Team 56
Sid Aiyar, Simon Clark, Harpreet Marwah, Rayner
Mendes, Kelsey Paskell, Claire Sandilands
EIR: Bryan Walkey

Executive Summary
• Project objectives:
• Go to market strategy that includes Marketing, Internal Decisions, and
Operations Strategy
• Break even within 18 months of operations
• Realize 18% ROI within second year of operations
• Recommendations:
• Target consultants and farms over 2,000 acres
• Use product advocates, a whitepaper, trade shows and print/electronic
advertising
• Price $24,670 - $28,670
• Hire a division manager
2
Impact
• Breakeven in 2016
• 19.2% ROI
• 88 total units sold in 2019
• Implicit value of $1.63 million

Within this section:
Precision Agriculture Overview
Competitive Analysis and Positioning
A&L’s Product and Unique Selling
Proposition
Target Market and Marketing Efforts
Pricing and Projections
Marketing

Precision Agriculture and its Benefits
For the farmer, precision systems provide meaningful benefits that
justify the investment.
4
Reduce Time Surveying Crops
Minimize Impact of DiseasesReduce Costs of Inputs
Improve Yields
Research suggests that a farmer could save up to 33% on fertilizer alone.

Competitive Analysis
Many competitors fail to focus on benefits to the end consumer,
and market their specifications in isolation of each other.
Competitor
Image
Precision
Ease of Use
Processing
Speed
Retail Price
(basic
package)
Variety of Options
Offered
eBee Ag by
SenseFly
2 cm per
pixel
Fixed wing
Proprietary
autopilot
Flight planning
1 hour
617 - 823 acres
$25,000
Multiple models
Multiple sensors
Additional accessories
Lancaster
Hawkeye by
Precision
Hawk
1 cm per
pixel
Fixed wing
Autopilot
Results
analysis
ND $25,000
Multiple sensors
Multiple cameras
Analysis provided free
AgDrone by
Honeycomb
3.2 - 4.6 cm
per pixel
Fixed wing
Autopilot
Flight planning
Results
analysis
1 hour
750 - 1,000
acres
$15,000
Multiple sensors
Tablet with built-in software
A&L
1.5 cm per
pixel
Fixed wing
Open-sourced
autopilot
Flight planning
1 hour
900 – 1,200
acres
$24,670
Single sensor
Single model
5

Competitive Positioning
SenseFly and PrecisionHawk present the greatest threat from a
financial and human capital perspective.
Financial
Capabilities
Innovation &
Expertise
Service End-to-End Solution Sensor
• Parrot: $96.9
million (cash)
• 2013
revenues
$6.3 million
• 427 internal
full-time
employees and
75 external
contractors
• Not
disclosed
• Import data into
eMotion, and provides
images, immediate
feedback
• Poor
quality
• $10 million in
Series B
financing
• Investors: Intel
Capital and
CEO of
Hulu.com
• Significant
lead time
• Data upload via
Cloud; $0.10 per acre
for data processing &
$0.20 per acre for
data storage
• Poor
quality
6
Competitors’ access to resources presents a threat to A&L. However, their lack of high-quality
product and service is an opportunity that A&L can and should capitalize on.

A&L’s Product Offering & USP
The UAV provides a unique end-to-end solution that addresses
pain points experienced by farmers.
A&L’s Product Offering
7
Autopilot
Stitching
Software
Cloud Mapping
Image
Sensor
A&L will only be
able to sustain its
competitive
advantage once
they can develop
and monetize
prescription
algorithms
NDVI
Light Sensor

8
Potential Target Markets – Consultants
Consultants have been early adopters of technological innovation
and can be used to increase brand recognition.
Total Market Size (1,800)
Size of the Actionable Market in FY2015
Actionable (200)
Accessible (300)
Expected (9)

9
Potential Target Markets – Large Farms
Large farms are the consumer group that receives the greatest
direct benefit from the product.

10
Potential Target Markets – Crop Insurers
Crop insurers could see $1.2 million in cost savings on seasonal
workers if they were to utilize UAV technology.
$1.2 million
Savings assuming workers are paid $15/hr,
8 hours/day for 40 days
90,000
Yearly claims
2,250
Temp workers
needed
750
Workers with
UAVs
1,500
Fewer seasonal workers needed after
investment

11
Market Strategy and Marketing Efforts
Direct sales to consultants and large farms presents itself as the
optimal short-term strategy.
Medium-Term (2018-2019)Short Term (2015-2017) Long-Term (2020 onwards)
Consultants Farmers Crop Insurers Distribution
through Retailers
Whitepapers &
Publications
Leasing to
Consultants
Trade Shows Paradigm
Precision

Farmers’ Willingness to Pay
12
Pricing Considerations
When pricing the UAV, A&L needs to primarily consider the value
to the end user.
Competitors’
Pricing
Market
Signalling
Production
Costs
$12,875
$17,167
$21,459
$25,751
$30,042
$34,334
$38,626
$42,918
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000
Acreage
Yearly Input Savings Yearly Potential Yield Increase
Basic Price ($24,670) Premium Price ($28,670)
Product
Packages
Basic Safety Premium
$24,470 $26,920 $28,670

A&L can give customers flexibility and the option to customize their
UAV solution by offering different product packages.
13
Pricing Considerations & Projections
22 23 28 31
22 23
28
31
20
23
26
9
44
66
79
88
0
20
40
60
80
100
2015 2016 2017 2018 2019
Consultants Large Farms Crop Insurers
5-Year Unit Sales Projections

Establishing
the UAV
Division
Within this section:
Internal Capabilities & Requirements
The Division Manager
Positioning within A&L
Projected Financial Performance

Current Capabilities
Internal Capabilities & Requirements
• Research and Analytics
• Only 3 full-time employees
• Strong relationships with farmers and
consultants
• Continuous improvement, which has resulted
in late to market
• Only one R&D employee
15
Requirements
• Build manufacturing capabilities:
• Leverage existing personnel for sales and
marketing
• Hire a division manager
• Hire one additional full-time employee for
production and testing
• Seek out additional human capital for
research and development from top
universities
Human Capital
Capacity
Constraints
Core
Competencies
A&L’s core competencies lie in agricultural research and analytics
where they have developed strong relationships.

Phantom StockSalary
ResponsibilitiesEducation and Expertise
The Division Manager
16
A&L should hire a division manager with strong business acumen,
leadership skills, and experience within agriculture.
• Minimum 2-year business diploma
 Basic accounting
 Financial projections and modelling
 Marketing
 Operations and Logistics
• Minimum five years Agriculture
experience
• Product Development experience
• 5% phantom stock, redeemable after 5
years, or increasing by 1% thereafter until
2025
• Suggested salary of $70,000
Growth
DirectionLeadership
Communication

Positioning within A&L
A&Ls UAV division will interact closely with other divisions and will
benefit directly from the proprietary algorithms developed by other
A&L divisions, once they are fully functional.
17
Farmer
A&L Biologicals
UAV division
Paradigm Precision A&L
$24,670 for a UAV and $500 for prescriptions
Pays of portion of salaries Pays $150 in royalties
Illustrative ScenarioPositioning
30% Royalty to A&L
for Algorithms
Separate Entity
Portion of Paradigm
Precision’s Salaries

Projected Financial Performance
The division has an implied value of approximately $1.63 million.
18
Key Metrics
FY'15 FY'16 FY'17
Unit Sales 9 44 66
Revenue $ 247,500 $ 1,210,000 $ 1,815,000
Variable Cost Per Unit 5,970 5,649 5,366
Fixed Costs 317,615 637,837 658,196
EBITDA (150,844) 191,598 604,674
Free Cash Flows (216,963) (30,600) 298,122
Operating Leverage 0.8x 1.9x 2.8x
Annual ROI -15.1% 19.2% 60.5%
Cumulative ROI -15.1% 4.1% 64.5%
Cash Flow Projections
(216,963) (246,562) 50,560
440,069
998,746(30,600)
298,122
389,509
558,677
-400,000
-200,000
0
200,000
400,000
600,000
800,000
1,000,000
2015 2016 2017 2018 2019
Cumulative Free Cash Flows Free Cash Flow
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
19% 21% 23% 25% 27% 29% 31%
Thousands
Discount Rate
2.5x
3.5x
4.5x
Exit Multiple
Valuation Sensitivity
$1.63 million

Operations
Strategy
Within this section:
Refining A&L’s Business Model
Make versus Buy
A&L Training Program

Refining A&L’s Business Model
A&L must choose a value discipline that takes into account its
capabilities and culture as well as competitors’ strengths.
Operational
Excellence
Product Leadership
A&L’s OpportunityValue Disciplines Explained
20
Customer Intimacy
• Understanding of the Problem
• Customer Relationships
• Complete End-To-End Solution

Make vs. Buy
A&L should manufacture until critical mass is reached and then
consider outsourcing.
21
Assemble UAVs
Manufacturing UAVs
Explore Alternatives Once Critical Mass is Reached
Source Parts in Bulk Reduce
Dependence
Re-Focus on Core
Competencies
Explore Partnerships
and Joint Ventures

A&L Training Program
22
A&L should offer training sessions that focus on software use as
well as flight operations of the UAV.
Overview of Training Program
Groups of Customers Classroom Component UAV Operations
• At Customer Field
• Pre-FlightPost-Flight
• SFOC Not Required
• Autopilot Set-up
• Stitching Integration
• Troubleshooting
• At Customer Location
• In London, ON
• Group Rates at Hotel

Implementation

Implementation Plan
24
Marketing Activities
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Activities Dec'14 Mar'15 Jun'15 Sep'15 Dec'15 Mar'16 Jun'16 Sep'16 Dec'16 Mar'17 Jun'17 Sep'17 Dec'17 Mar'18 Jun'18 Sep'18 Dec'18 Mar'19 Jun'19
General Marketing:
Website Development $20,000
Publication Advertisements $7,200/Year
Whitepaper from MNP $60,000
Promotional Leasing Agreements
Trade Shows: $75,000/Year
Western Canadian Crop Production Show
Canadian Farm Progress Show
Canadian Western Agribition
Target Market:
Consultants
Large Farmers
Crop Insurers
Marketing Activities Sales Efforts Sales & Marketing
Division and Operational Activities
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019
Activities Dec'14 Mar'15 Jun'15 Sep'15 Dec'15 Mar'16 Jun'16 Sep'16 Dec'16 Mar'17 Jun'17 Sep'17 Dec'17 Mar'18 Jun'18 Sep'18 Dec'18 Mar'19 Jun'19
Manufacturing Efficiencies Production 80 hrs Target Production Time 60 hrs Target Production Time 50 hrs Target Production Time 40 hrs
Develop Sales Channels
Hire Division Manager
Hire Production and Testing Staff
Search for Additional Engineering Staff
Production 10 units 45 units 70 units 80 units 90 units
Sourcing of Bulk Parts
Develop Flight Training Program
Run Training Programs
Ongoing effort Hard Target

Thank you