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Market plan for Smart Blanket®

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Content Topic Page No Topic Page No

Problem and market need 3 Financial projections 10

Solution product & technology

4 Funding requirements and use of funds

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Opportunity sizing 5 Exit strategy 14

Business model 6 Executive team 16

Competition and sustainable advantage

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Marketing Strategies 8

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Problem and market need• Are you struggling with a sleep problem?• Do you wake up constantly?• Is your sleep disturbed often? Or is it hard to concentrate on things during the

day? • Above are some of the sleeping disorder problems that have been identified.

According to CDC (Centres for Disease Control and prevention) and Right Diagnosis from health grades 15% of Sri Lankan’s are suffering from sleeping disorders (population of Sri Lanka is 20 million). Sleeping disorders do contribute to loss in productivity in the work force of a country which cannot be taken lightly

• With no sight of stopping of fast moving busy life style and as it is turning up to be revving up to accelerate more people will have more and more sleeping disorders and this would lead to a market in relaxation and hospitality

• With the current health hazards to the chemically produced medicines their only option is to look for non lethal relaxation methods and thats where we pitch in to the market

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Solution product & technology• Solution we are offering is a blanket that would self monitor and regulate the

temperature inside the blanket where it will enable the user a seamless refreshing sleep. It has the capabilities such as– Monitoring the body temperature by heat sensors– Controlling and stabilizing the temperature underneath the blanket– Intelligent heat recognition– Stays powered for 12 hours

Here is why it works, in today's world people expect technologies to improve to an extent where the products work themselves. In this scenario the blanket heats and cools it self without any orders from the human counterpart and does not require his/ her assistance.. This product will gain a huge advantage compared to its substitutes because of its intelligence alone

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Opportunity sizing• Current potential market which is approximately 2.9 million* island wide who are

currently suffering from sleeping disorders

• Majority of the market is coming from urban areas such as Colombo and Kandy which takes up approximately 65% from the total domestic blanket market

• 60% from total corporate blanket market are identified as hotels in the locations in down south and Nuwara Eliya

• Male: female break would be around 81:19* in working force

Colombo and KandyOther areas

*Census and Statistics department of Sri Lanka

South

Nuwara Eli

ya0

20

40

60 5545

Hotel percentage

Hotel %

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Business modelValue

Customers

Relationship Building

Partners

RevenueDistribution channels

Costs

Activities

Resources

Competition

Smart Blanket®

Brand & Relationship

Domestic & corporate clients (segmented market)

Loyalty and excellent after sales service

Direct sales to the end customers as well as use of selected furniture and appliance outlets

Initial revenue through domestic sales and corporate sales within Sri lanka and planning to introduce new product variants and expand geographically

Initial capital and outsourcing costs, economies of scale

Arpico super malls etc.For optimization of economy,Reduction of uncertainty and risk

ATL advertising and payment scheme introductionsProblem solvingPlatform, networking

PhysicalIntellectualHumanFinancial

NO real competition but will have to look into substitutes such as air conditioners

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Competition and sustainable advantagePorters five forces• Supplier power: Here we assess how easy it is for suppliers to drive up prices. The fewer the

supplier choices we have, and the more we need suppliers' help, the more powerful the suppliers are. The smart blanket is an innovative product, so, the suppliers can raise the price of their fabric in demand.

• Buyer power: this is driven by the number of buyers, the importance of each individual buyer to our business, the cost to them of switching from our product , the smart blanket to those of someone else, and so on.

• Competitive Rivalry: What is important here is the number and capability of our competitors. If we have many competitors, we’ll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don't get a good deal from us. On the other hand, if no-one else can do what we can do, then our product can often have tremendous strength.

• Threat of Substitution: This is affected by the ability of our customers to find a different way of doing what you do .

• Threat of New Entry: Power is also affected by the ability of people to enter our target market. If it costs little in time or money to enter our market and compete effectively, if there are few economies of scale in place, or if we have little protection for our key technologies, then new competitors can quickly enter our market and weaken our position. But if we have strong and durable barriers to entry, the product can preserve a favorable position and take fair advantage of it.

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Competition and sustainable advantage

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Marketing StrategiesThe key marketing strategies that will be employed for the business are as follows:• Create an ‘In House’ brand name for both the local and export market• Manufacture for large trading companies’ private labels• Manufacture for overseas customers for export of their brands• Manufacture ‘Control Brands’ for major chain storesIn order to ensure the above marketing strategies are achieved, some of the CSFs

(Critical Success Factors) and corresponding KPIs (Key Performance Indicators)which have been identified for monitoring purposes are detailed below:

Advertising and Promotion

CSFs KPIs

Reaches target audience Measure customer awareness

Cost-effectiveness of advertising and promotion delivery

Market share

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Brand Management

CSFs KPIs

Understanding customer needs Sales demographics

Convergence of financial plans and brand potential

Customer research brand awareness

Price Management

CSFs KPIs

Price products based on purchasing styles

Gross margin return on inventory

Meet customers value perception Market share

Sales and Distribution

CSFs KPIs

Meet delivery schedule On time delivery rate

Effective capacity utilisation Order fulfilment cycle time

Marketing Strategies Contd..

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Marketing Strategies Contd..STRENGTHS

• Reputation in marketplace as the product is a unique product

• Power reduction and controlling when comparing with other devices which is used to control the temperature

• A portable Device which is User Friendly

• Accommodative and adaptability

WEAKNESSES• Trends that effects production

• The fiber and the material which the blanket is made up of may be allergy to some sensitive skinned consumers.

• The designs need to be varying according to different age levels of consumers.

OPPORTUNITIES

• Advent of internet provides an excellent opportunity to reach to a large base of customers and cut costs.

• Higher profit margin, though the initial manufacturing cost is high (future benefits)

• Possible expansion

THREATS• Lack of awareness for the wider

public

• Possibility of Government to increase taxes

• Change in fashion and designs

• New and innovative products(COPIED) being released into the market frequently

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Financial projections

60%

40%

Revenue Break up

Corpotare Domestic

60%

30%

6%

4%

Expenditure All 3years

Wages

Advertising

Utilities

General Expense

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Financial projectionsM

illio

ns

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Funding requirements and use of funds

37%

8%55%

Funding break down

CapitalBank loanInvestment42%

42%

6%

10%

material

advertising

utilities

Other

NPV @ 12% 2.5 mln Positive Value

IRR ( Internel Rate of Return) 14.17% > IRR Value (12%)

Pay Back Period 2 Years and 6 Months ACCEPT

37 Million

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Exit strategy• Recommended exit strategy for Smart Blanket would be ,to be acquired by

another company in 6 years time.

• As per the financial forecast company will reach $200 mln revenue with over $50 mln profits.

• Companies who are looking at extending the product line or companies which are looking at diversification as a strategy could bid for a acquisition. (Ex-Arpico, Damro )

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Advantage of the be acquired strategy

• The buyer may pay far more than what the business is actually worth and could be more profitable than a direct sale.

• If the acquisition is placed at the right time, buyers can compete for the company the company could be in a demanding position.

• The product and technology will be in the market and it will have room for further growth.

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Executive team• Marlon – Technological expert• Isuru – Business plan and market planning consultant• Himaayath – Financial Consultant• Saahira – Financial and Exit Strategist• Shuhani – Quantitative Research and Marketing Head• Nelum – Market analyst• Witney – Market analyst