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MM5011
Knowledge Management and Innovation
FINAL EXAM
Prime Analysis and Business Model of Muscle Egg Shake
29111311 Haidir Afesina
MBA Executive 46
MASTER OF BUSINESS ADMINISTRATION
SCHOOL OF BUSINESS AND MANAGEMENT
INSTITUT TEKNOLOGI BANDUNG
2012
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Photo: Fezi`s property with permission from Handy and Budi
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ENTREPRENEUR PROFILE
Name : Budiardi
Date of Birth : October 19th, 1977
Address : Jl Situ no 3 Bandung
Occupation : Entrepreneur
Education : Architecture at Parahyangan University 1997
Hobby : Networking
Employees : 3
Dare to fail as your first step, then improve and be the best
It was his first sentences on our first conversation. A philosophy that made him believe success is
start with our first step. Started many businesses as re-seller, distributor (baby product Sachi and
Crown) and hasmuscle egg shake as his own product bring him tears of joy. Ko Budi, a call to
respect older brother, likes to meet successful people and attend business and motivation seminars.
He said, Their attitude enlightens and motivates us. Their stories are lessons learned that bring
positivity to trust yourself and never give up. Ko` Budi also believes that inspiration is
everywhere, and most likely from conversation. Thus he likes to make networking with everyone.
September 2011, he accompanied his friends to attend Ade Rai Seminar. From the seminar, he
got the inspiration to create Ade Rai`s natural favorite drink i.e. white egg. He believes that it will
be a successfully product as many people at the gym needs natural protein sources. However, there
is a big player as competitor Jakarta i.e. Xpose. It made him more motivated as there is none in
Bandung. He believed that his homemade style and price would be advantage. On the other hand he
realized that the challenge is to create it with a good and tasty flavor. It seems impossible to keep it
natural as white egg has a nasty and smelly flavor. Ko` Budi still has faith that there is still huge
market (especially in Bandung) and only the best product that will be succeed. Then he just decided
to make it and wait for the market response. Therefore many times he stated first step is important
and improve it on the way to reach his goal. Thus with his own money he created CV. Prima Food
to produce the products with three employees who help him. In October 2011, his Muscle Egg
Shake (MES) is available on the market.
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PRODUCT PROFILE
Brand
The meaning of Muscle egg shake (MES) is a protein
drink for muscle made from white egg. Therefore the
name was chosen and believed easier to remember. The
color combination of white and orange with a picture of
strong arm was chosen to define the ingredients and the
benefit.
Product
Ko` Budi regularly consults with Ade Rai for taste and
quality improvement. He said, Ask the right and best
person to get best advices. Muscle egg shake made
from pure white egg and palm sugar with 5 flavors such
as palm sugar, chocolate, raisins, coffee, coffee caramel
and green tea. Thus the motto is The Natural Way to
Get in Shape. It registered on health department and
had three quality improvisations until now.
Pricing and Packaging
It packaged in a white 350 milliliters plastic bottle. Thus
it is a ready to go drink and convenient to carry on. Just
shake it and ready to drink. Sell at Rp.13,000.00 per
bottle in the market and Rp.10,000.00 to re-seller and
distributor.
Promotion and Distribution Channel
Muscle egg shake (MES) has 5 days of life cycle and
available in most of local gym in Bandung. The
minimum online order is 10 bottles and within Bandung
territory. The models for the product are Ko` Budi`s
friend who are also athletes.
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Photo: Fezi`s property with Handy and Budi permission
PRIME ANALYSIS
1. PRODUCTS/SERVICES/PROCESSES
Prime Category Rating Facts from the case, knowledge, or reasonable assumptions
Superiority + Taste;
Has five flavors (palm sugar, chocolate, raisins, coffee, coffeecaramel and green tea)
No eggs smell and tastePure ingredients (real white eggs, water and palm sugar)Sweetness coming from palm sugar
Palm sugar give energy boost (www.menshealth.com)
Value;
20gr net protein inside 1 bottleMinimum and standard protein supplement in the market
(www.meshealth.com)
Homemade (no fat and cholesterol)Rp.13,000.00 per bottle with homemade style as value
The 1stegg shake in Indonesia stated on the coverIt might be right, based on the author knowledge it was true,
while others are coming after it. However it successfully boost up
the sales.
Design;
Bottle of 330 mlIt is easy to carry on and ready to go
White plastic bottle (aqua bottle)Minimalized but looks not good. It should have a better
packaging e.g. in a cup or proper bottle.
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Uniqueness + Concept;
Just shake and ready to drinkSimilar with milkshake for texture
Taste;
No eggs smell and tasteRaisins are addedRaisins are very healthy as antioxidants (www.meshealth.com).
Protection 0 Health department certified Licensing agreement No halal certification
MES argued that there is no other ingredient besides white eggs,
water and palm sugar. In addition, people know exactly where the
natural proteins come from i.e. white egg. However, the author
argued that it is essential to get halal certification as mostly
Indonesian are Muslim.
Ethicality 0
Fair on doing business. Respect competitor and follow the rules andnorm on their promotion actions.
Good relationship with supplier. It is a must in order to get the besteggs supplied.
Actively attended events on the gym i.e. health supplement productsocialization)
Labeling
The best protein for you, it was stated on the coverThe author argues that it would be boomerang for MES, as it is
potentially misleading information.
Readiness _ Within Bandung city area only (unable to reach suburb)As it is natural, the main problem is MES will not be able to stay
more than 5 days also have to store in chill temperature and no direct
sunlight. Otherwise it shorten its life cycles and possibly broken.
Daily limited production i.e. 20 bottles
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It could be good thing, so that will not be a waste also keeps it rare.
However, there is possibility for customer turning to other products
who always available
BusinessModel
+ MES business model is quite effective on generate revenues and
operate its business.
Has specific daily target sales i.e. 15 weekdays and 25 weekend With limited productions it continue making a profit. Innovative concept i.e. just shake it and ready to drink
It is not east to be copy, as there is secret method to blend it well.
Mouth to mouth and networking are very effective as promotion tools MES only focus with distributor or re-seller in Bandung city
Unable to delivered product to outside Bandung city
No reward for re-seller or distributor.It will be necessary to give reward for those who are able to achieve
daily and monthly sales target
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2. RESOURCES
Prime Category Rating Facts from the case, knowledge, or reasonable assumptions
Defined 0
Supplier;
Networking (eggs supplier, food distributor, bottle packaging) The best protein for you, the sentence is stated on the cove.However, there is no written or clear whether it is free range
chicken and contain high omega.
The natural way to get in shape, as it stated, there ispossibility that people thought about it is organic white eggs.
Therefore the author argued that it has to be clear for public
education
Employees; 3 (salesperson and production) Help from family members (administration and finance)
Distributor;
Athlete (family member and friends)Funding;
Own money
Accessible + Good relationships with suppliers, gym and fitness places,employees and distributor
Teach and educate employees about product ingredientsRegularly each of the employee are going to health seminar with
Ko` Budi.
Minimized + Below the line promotion tool
Using social media (twitter), mouth to mouth, friends networking. It is effectively work and cost nothing. No big and expensive machine for production Limited production daily Has only maximum 5 days life cycle
SustainableAdvantage
0
In terms of concept, competitor can easily imitate In terms of taste, it is not easy to imitate Looks easy and simple but there is a secret method to blend the
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white eggs well with water and palm sugar.
No other substitute for the main ingredients i.e. white eggs 20gr net of protein coming from white eggs The standard of minimum protein supplement on the market
(www.meshealth.com)
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3. INDIVIDUALS
Prime Category Rating Facts from the case, knowledge, or reasonable assumptions
Skills ++ Ko` Budi able to focus on how MES could improve on taste andquality.Started from 2 flavors (palm sugar and raisins), and added 1 flavor
every 3 months along with quality improvement
Believe in the power of mouth and networking Communicate well with employee, good leadership style and good
motivator for the team
Low profile person
Enthusiastic to explain MES to customer and ask their advice forquality improvement
Has a good discipline in terms of setting the production time(morning) and number of production (20 bottles daily)
Open with any critics, and always consult with expert i.e. Ade Rai ashis mentor
Trust his employees and develop them by asked them to go togetherto attend seminars
Traits ++ Started all his business with his own money Stick with three employees who are loyal to him since the beginning Failed few times in starting business such as distributor. Take a risk to create MES only within a month after attended Ade Rai
Seminar Launch the product and wait the market response
Learned from customer insight
Aspirations ++ Attended Ade Rai seminar in September 2011, and launched MES inOctober 2012
Learned from customer insightQuality improvement (taste, ingredients and method)
Attended motivation and business seminars
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Like to talk, ask, and share knowledge
Relevant
Experience
+ Previous entrepreneurial experience as baby product distributor Family history as entrepreneur
Learned how to see opportunity and created opportunity
Educational experienceUsing his networking relationship to promote, distribute and knowing
more people in business
Synergies + Pure his own brand and own money.There is no other person who share or join the MES. Purely uses hisstrong networking to sell the product.
Strong commitment with his entrepreneurship styleKeep the production low and limited but generated steady revenue
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4. MARKETS
Prime Category Rating Facts from the case, knowledge, or reasonable assumptions
Size + Niche marketKo` Budi saw it as an opportunity to dominate the market especiallyBandung. He believed that there is no other brand like MES in
Bandung. Also people at the gym like protein but dislike to have white
eggs. Thus MES offer the protein source that is natural and good taste.
Targeting _ MES has no specific target.It is created for people who either like fitness or not. Because basically
people need protein daily. However the author argued that it has to be
clear for whom. For instance the product has to be set for people who
exercise but no supplement intake such as beginner. For those who
need to maintain because of its extensive exercise, MES should offer
higher dose of protein.
Reachability 0 It is available at the local gym in Bandung. Mostly their customers are people at the gym, as it is their prime
target.
Using social media online is good move. It would reach lots of peopleif with the right strategy. However, the problem is when people order
it online or asked for the delivery. First it has short life cycle, second
within Bandung city only, and last is only at local gym. This MES
unable to anticipate it.
Other
Choices
+ Strengths;
Taste and concept (shake and ready to drink)Weaknesses;
Packaging (plastic bottle) Within Bandung only
Differentiation;
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a)The concept of milkshake style (shake and ready to go)Competitor such as Xpose (Jakarta) have the sugar separately, so
that customer would adjust their sweetness, while Cifel
(Bandung) has limited flavors (3) also it doesn`t blend well.
Thus we could see the layer of water, sugar and the white eggitself. However, they both have better packaging, especially
Xpose which has website, and products varieties such as cookies
and different portion of protein products.
Needs + Provide basic needs of protein supply
It is perceived as expensive while others sell at Rp.10,000.00However, the value is ready to go concept (shake) and homemade
style
Everyone can have MES as a snacks or muscle recovery for people atthe gym, especially body builder.
Growth + Steady growth for the last 3 months (August, September and October)Mostly 25 bottles per day are sold. The new flavor came from
customer insight. Means it engages well with the customer.
The demand was increased during Ramadhan.That was the time that they produce more up to 40 bottles and sold out
in a day. Thus it becoming so popular recently. Protein blend is good
for metabolism (www.meshealth.com).
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5. ECONOMICS
Prime Category Rating Facts from case, your knowledge, or reasonable assumptions
Forgiving + MES never lost its profit since its start upBeing consistent with its 20 bottles production per day and have itstarget sales monthly. However there are no sales force actions. It
seems that Ko`Budi quiet happy with the performance of MES
Have a sample for those who come to the MES place or outlet.
Rewarding + The business is profitable MES increases its sales growth in the first four months. The highest net profit was on August (Ramadhan). Break even point is reached in a very short term i.e. 4 months
Enduring + MES made the flavor based on customer insight Study is taken from other competitor Consult regularly to Ade Rai for the innovation
Stable +
:
It has been a year since the beginning and never gets lost. Using his own money and the break even point is fast The profit is being use to create new innovation on the flavor also to
use hire a friend as a model for promotion.
Purchase some machines for a better product
Harvest
Options
0 Activity;
Available at local gym in Bandung city Product improvement for the ingredients from customer insight Join supplement product socialization event in gym on monthly
basis
MES should try to collaborate more with re-seller, distributor andespecially gym in Bandung both of local and international
franchise.
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EXISTING BUSINESS MODEL
(Osterwalder and Pigneur, 2010)
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EXISTING BUSINESS MODEL ANALYSIS
SWOT analysis is being used in order to analyze the existing business model of muscle egg shake.
Internal
According to Osterwalder and Pigneur (2010), strength and weakness are coming from inside
perspectives. They are the brand itself, the organization or the entrepreneur.
Strengths:
Ko`Budi as the owner of Muscle Egg Shake (MES) has a strong entrepreneur history in the family.
Along with his low profile personality made him easier to share his experience and show good
leadership to the employees. In addition, his business skills made him able to see the opportunity that
people need natural source of protein after work out or exercise. Using his networking, the product is
able to enter local gyms in Bandung city. Moreover, it received good acceptance and create its
market leadership for the local brand. Within a year, the brand is pretty solid as it promotes healthy
lifestyle. Entrepreneurship is about making meaning (Kawasaki, 2004).
Weaknesses:
For Ko`Budi, entered this industry is very new. It showed the inexperience of the entrepreneur that
unable to put the brand positioning. MES has a problem as it made for everyone, in other words it
created for mass market. It was a disappointed move. Positioning helps the company build a strategy
based on its competition weaknesses (Trout and Ries, 2001). The five flavors that MES have tastesimilar. It has not much difference from one to another, thus the improvement should be made.
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External
Opportunity:
In Bandung, MES dominated the market for this protein shake drink. MES also has a very low cost
for labor (3 employees), production and promotion (below the line). Ko`Budi used his networking
for both of supplier (raw material) and distributor. Some of the distributors are owner of local gym,body builder and personal trainer. Indeed it helps to introduce the product and spread them to their
clients. Thus he would be able to use most of MES`s profit to innovate the product i.e. flavor and
ingredients. MES should gain partnership with international gym franchise in Bandung (Gold Gyms,
Celebrity Fitness) and also actively sponsored sports event to get customer recognition.
Threat
The competition is quiet high for supplement drink. Xpose and Cifel (both are local) are ready to get
the take the market share. Especially for Xpose, based in Jakarta, has a more professional look such
as website and product varieties. It also aggressively entered the international gym franchise i.e.
Gold Gyms. In addition, the inability of MES to deliver the product outside Bandung (suburb and
other cities) will soon create a problem. Last is that Xpose has variety on their product line, while
MES only has one.
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FUTURE BUSINESS MODEL RECOMMENDATION
(Osterwalder and Pigneur, 2010)
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FUTURE BUSINESS MODEL RECOMMENDATION ANALYSIS
Environment analysis is being used in order to propose future business model. According to Osterwalder
and Pigneur, environment analysis helps to choose competitive business model and to get strong.
Market Analysis
Instead of going for mass market, it would be better go for youth and woman.
a) YouthYouth are increasing in Indonesia. Based on the author experiences, most of people join the
Gym and Fitness are youth around (19-25). Thus it is a huge market. They need the protein
source to build their muscle and body. However they tend to use international brand that is
recognized even expensive. Nevertheless, youth or young people are determined to try
something new especially when the price is affordable. Once they like it and go to the their
mind, they will definitely repurchase it.
b) WomanIt is still very rarely a protein product for woman. It will give huge advantage if MES
promote the product is healthy, no sugar and no cholesterol. However, taste is very
important here. They rather not to have white eggs as their protein source, but in this
milkshake concept, the market is there. Therefore, MES has to really careful to get this
market, as the woman perfection of their taste and quality.
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Markplus conference in December, 2011 stated that, youth and woman are the champions
for consumptions and both of woman and youth are now have a strong awareness of healthy
life style. They might be starting to drink it as alternatives.
Industry Analysis
The competition is increasing in this industry. Therefore MES has to be able gain partnership with
big international gym franchise such as Celebrity Fitness and Gold Gym. Also play a role in
supporting sports event will help to get customer recognition. Partnership should benefit and
enhance both parties (Kawasaki, 2004). Viral marketing will bring benefit for MES. Using social
media and Internet in order to capture and documented the customer experiences using MES. The
strategy is believed to captures viewers attention and inspiring them to share with friends and
family (Nalty,2010)
Future Challenge
Halal certification will definitely worth. It will build the confidence of customer to consume it and
also popular within the industry. It is the culture most people like sweetness on their drink. Thus
MES has to be able to have a standard of its sweat to ensure the quality of the product itself.
Macro Economy
MES has chance to add more employees in order to develop its business. Not only that but also to
increase the service especially for delivery. It will not spend much as the labors are cheap in
Bandung and not necessarily find a skillful one. From the conversation with Ko`Budi, he has
planned to increase the price to be Rp.20,000.00. It is normal as the competition is higher now.
However the value added has to be in the product, especially for the packaging, flavor and taste.
People in Bandung might be accepted as long as they like the quality. Thus the customer insight is
really helpful to create the next innovation.
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CONCLUSION
From the PRIME analysis, it can be concluded that muscle egg shake;
Muscle egg shake as a good business opportunity because; Niche market
It has small competition in the market especially in Bandung.
Stable cash flowSteady in the last 3 months and popular among local people
Product innovationEngages well with the customers as the innovation based on their insight. Promote
healthy life to public.
I would love to invest in this business because; Small capital but steady return Fast break even point i.e. 4 months Unique concept but need new business model
Natural protein source that ready to go with affordable price
LaborNo need special labor
Niche marketHuge potential as fitness at gym is lifestyle for modern people. It will create great profit
if manage it well with the right strategy such as targeting, segmentation, promotion and
the product innovation
Categories Rate
Product +
Resources 0
Individual ++
Market (Target costumers) -
Economic +
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APPENDIX
A. Questions
These are true questions given on the PRIME analysis template.
Look beyond the facts of the case since we want to evaluate the opportunity from our standpoint (e.g., as
potential supporters or investors), and not just whether the actors in the case think it is a good ide;
1. What is your overall analysis/evaluation of this business opportunity?2. Is it a good business opportunity (yes or no)? Why or why not?3. Would you invest in this opportunity? Why or why not?4. What other information would you need to have to better make a decision? Briefly summarize the
key points from your completed tables
B. Competitor
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REFERENCES
Kawasaki, Guy (2004) The Art of The Start, London: Penguin Books
Markplus Conference December 2011, at Ritz Carlton Jakarta
Nalty, Kevin H (2010)Beyond Viral, John Wiley & Sons
Osterwalder, Alexander and Pigneur, Yves (2010)Business Model Generation, John Wiley & Sons
Trout, Jack and Ries, Al (2001)Positioning: The Battle of Your Mind, McGraw Hill
www.menshealth.com
http://www.menshealth.com/http://www.menshealth.com/http://www.menshealth.com/