SITUATION
Jay Sorenson of Portland, Oregon, created a product called the Java Jacket, which is a patented honeycombed insulating sleeve that slides over a paper cup containing a hot beverage to make it comfortable to hold. Having introduced the new product to the market, Sorenson already has cut deals with coffeehouses, specialty stores, and convenience stores nationwide. He started the business with $15,000 in 1993, but Java Jacket has grown tremendously since then. In fact, the company has already sold more than one billion cup sleeves! Sorenson is now in a position where he would like to continue expanding his business, but he is concerned that large and established competitors could introduce their own variations of the same product.

Question 1 Will the market for Sorenson's product continue to grow in the years ahead?

Question 2 If he is successful, what sources of competition should he expect?

Question 3 What steps would you recommend that he take to protect his company from the onslaught of competition that is likely to come?