twc business proposal final

MGMT 002: Technology and World Change G14 Soon Loo

Business Proposal

MGMT 002 – Technology and World Change

Prof. Soon Loo

22 September 2009

Submitted by: Eugene Kwok, Pua Shuan Yang, Dai Wenjing,

Liow Pu Sheng, Lo Chuan Jian, Rynette Tan

(Prototype Our Passion Design Partnership)


Executive Summary

Prototype Our Passion (POP) comprises of a group of 6 Singapore Management University

undergraduates who are seeking to solve a pain in society with our product innovation. Our vision is to

become a world-class healthcare company, specializing in products that cater to the needs of the elderly.

POP is committed to enhancing the lives of the elderly by continually providing a wide range of high

quality healthcare products at “value for money” prices.

Market research has shown that a large proportion of the elderly use umbrellas in place of walking stick

because they find it more practical. Umbrellas are unsafe and unstable, and many elderly folk have

slipped when using them as a walking aid. Hence, we aim to produce a grip and base that will greatly

improve the safety of using umbrella as walking aid.

The provision of our service of improving the umbrella grips and bases via street sales to our customers

will serve as a stepping stone for our long term goal of mass producing detachable grips and bases in

various sizes to cater to differing consumer demands. This is to allow consumers the flexibility of re-

using their existing umbrellas, rather than having to buy a new one. At present, we possess insufficient

funds to produce the mould for our product and as a result, are offering the manual customization of

umbrellas to our customers as an interim to ensure a large enough market base for our product to be

profitable and simultaneously to source for capital injection so as to jumpstart production. The

response from our market testing has been encouraging. Hence, we hope to gain your interest in

investing with and partnering with us as we embark on our product development and expansion.

Furthermore, statistics from the United Nations indicate that there is an aging population worldwide. In

the year 2000, 1 in every 14 people worldwide was aged 65 and older, and this figure is expected to

increase to 1 in every 6 people by 2050. Such figures indicate that there is room for expansion in the

long run, not just in Singapore but also worldwide.

We believe that with sufficient investment, our innovation could go a long way. With regards to product

development and expansion, we aim to eventually expand our market base by catering not only to the

needs of the elderly but also to working adults and the injured.


Table of Contents

1. Business Analysis .................................................................................................................................. 4

1.1 Introduction ........................................................................................................................................ 4

1.2 Market Analysis ................................................................................................................................... 4

1.3 Market Testing .................................................................................................................................... 5

1.4 Competitive Advantage....................................................................................................................... 6

2. Marketing Strategy ............................................................................................................................... 7

2.1 People ................................................................................................................................................. 7

2.2 Place .................................................................................................................................................... 7

2.3 Promotion ........................................................................................................................................... 8

2.4 Product ................................................................................................................................................ 8

2.5 Price .................................................................................................................................................... 8

3. Financial Plan ........................................................................................................................................ 9

3.1 Sources of Funding .............................................................................................................................. 9

3.2 Finances .............................................................................................................................................. 9

4. Conclusion ............................................................................................................................................ 9

Appendix ..................................................................................................................................................... 10

(i) Bibliography .................................................................................................................................... 10

(ii) Finances .......................................................................................................................................... 11


1. Business Analysis

1.1 Introduction

Singapore is moving towards an aging population. According to the Singapore Medical Journal,

by 2030, about 26% of Singapore’s population is projected to comprise of senior citizens. This

poses a potential problem for the Singapore government as with age comes many health

problems; in the long run there may be insufficient working adults to support the needs of the

elderly.

Healthcare does not come cheap, and there might be dire consequences if the elderly sustain

injuries due to accidents that can be prevented, one of which is from falling. 85.3% of all elderly

injuries seen at the Emergency Medicine Department of National University Hospital were due

to fall. POP feels that we should be proactive instead of reactive, and thus aim to provide

solutions to prevent accidents from happening rather than having to mend injuries. Therefore,

there is the need to develop and provide elderly care products to minimize the risk of accidents.

Hence, we have come up with an innovation called “Grip-aid” that improves the grip and base of

umbrellas to minimize the risk of the elderly falling when using umbrellas in place of walking

sticks. The idea is to provide a way to combine the practicality of using an umbrella and the

stability of a walking stick.

1.2 Market Analysis

We conducted a market survey with a sample size of 100, ranging from ages 13-82. 81% of them

said that they saw elderly using umbrellas as walking sticks, or personally used them (Fig.1).

During the survey, 79% said that they are willing to buy a new umbrella with improved grip and

base (Fig. 2). On the other hand, there was a more positive response (87%) from majority of

respondents if the improved grip and base were detachable. We later found out through focus

groups that the elderly would rather buy an add-on for their existing umbrellas than to buy a

completely new one.


Fig. 1 Fig. 2 Fig. 3

1.3 Market Testing

In order to confirm that there is a sizeable market to sell our product, we decided to conduct

market testing. We approached members of the public of various ages and showed them our

proposed product and offered our service to find out the response. We attempted to make this

experience more realistic by showing them an existing product first: an umbrella with a walking

stick T-shaped head and a firm rubber grip which retails at SGD$9.90-SGD$12.00 depending on

the size.

Next, we showed them our proposed grip and base that would be attached on to their own

existing umbrellas and informed them that it would cost approximately SGD$5.00 for a grip and

base set. The response was positive as cost factor is a priority.

In addition, our market testing revealed that our target market is not restricted to just the

elderly as there are interviewees whose sons/daughter is the one making the purchase decision

and there are even younger interviewees who are willing to pay just for the improved grip.

Q1: Have you seen elderly

use umbrellas as walking

aid, or do you use them

yourself?

Q2: Are you willing to

buy a newly designed

umbrella with improved

grip and base?

Q3. Are you willing to buy a

detachable grip instead of a

new umbrella?


1.4 Competitive Advantage

Presently, we are delving into a market that has existed for many years. The umbrella is in the

mature stage of the product life cycle. However, it does not seem to be phasing out any time

soon. What gives us the edge over other umbrella retailers is that we are offering an improved

product (detachability) that will greatly improve the functionality of their personal umbrellas.

Other advantages include low-cost solution and consumers can re-use our grip for any umbrella

thus, do not have to buy a new piece if parts of these specialty umbrellas are spoilt. Hence, this

blue-ocean strategy amongst the red-ocean of fanciful umbrella sellers gives us our competitive

edge.

SWOT analysis

Strengths - Provides preventive healthcare products instead of remedies

- Cheaper products compared to major players in the market

- New innovative products - Ease of Use - Low cost raw materials allows ease of

customization - Agility to adapt to any new untapped

market needs - First mover

Weaknesses - Lack of funding sources - New player in the industry - Lack technical expertise - Elderly not as receptive to new product

Opportunities - Growing target market - Growing emphasis on elderly catered

products - In line with government’s vision to make

Singapore’s environment more elderly friendly

Threats - Low barrier of entry - Non-technically sophisticated


2. Marketing Strategy

As a starting point, we will continue testing the public’s response to our product via direct sales on

the streets, especially elderly and business owners. This initial period will allow us to be well-

acquainted to real life demands and current trends of the usage of umbrellas, walking sticks and any

hybrids and also to obtain valuable feedback from small business owners with regards to sales of

such products. All these will be done in the interim. At the same time, we hope to seek investment

from business angels like yourselves for our startup in return for a share of future profits. Following

that, we aim to go into a partnership with the Singapore Health Promotion Board and polymer

companies such as Da/Pro Rubber Singapore Pte Ltd or Gewinnen Polymers Pte Ltd to mass produce

our products and market it to retailers such as Watsons, Guardian and other Pharmacies. In time,

we hope to see our products on the shelves of hospitals, elderly homes and clinics and eventually

spread overseas.

2.1 People

Although our primary market is the elderly market, we also intend to target multiple secondary

markets of the general public. To attract our secondary markets, we will improve on the

aesthetic looks of the products to raise its appeal and desirability.

2.2 Place

Gewinnen Polymers Pte Ltd, our manufacturer will procure their own raw materials to

manufacture the product. We will arrange for a logistics firm to distribute the finished products

to the warehouses of the main retailers who will ultimately place these products on their

shelves.


2.3 Promotion

We are not advocates of traditional promotional means like TV or newspaper advertisements.

Instead we hope to liaise with hospitals and the Health Promotion Board to assist with

promoting the products through talks that advocate falls precautions. We will also utilize

current social mediums such as the use of FACEBOOK, Myspace and Youtube videos to publicize

our products.

2.4 Product

The elderly are very price sensitive and prefer to fully use their belonging till it reaches disrepair,

as their items have deep sentimental value to them. Hence, they will rather use their umbrellas

that are inadequate in functioning as a walking aid.

Grip-aid is inexpensive and not a sophisticated piece of technology that enables the elderly to

continue using their own umbrellas and at the same time prevents the problem of slipping. Thus,

it solves all the above needs.

2.5 Price

From our surveys, random interviews and focus groups, we have found that 46% of our

potential customers are willing to pay $10.00 and below while 54% are willing to pay from

$10.01 to $20.00 for a new umbrella with our added modifications (fig. 4). This is highly

encouraging as it gives us substantial profit margins.

To attract people to buy and to achieve faster market penetration, we decide to price our new

detachable product (without umbrella) using the low cost strategy to be in line with our vision in

making such products easily available to benefit as many elderly folk as possible.

The reason for this strategy is due to the unsophisticated product, as molding technology is not

patentable thus luxury pricing strategy would be unrealistic. Besides, our primary target market

are usually unaffected by aesthetics, so patenting a designer’s drawn design and adopting the

luxury pricing strategy will not be very rational too.

fig.4


3. Financial Plan

3.1 Sources of Funding

We are also seeking potential investors like SPRING Singapore whose vision is similar to

that of ours thus may be willing to invest in the production of our mould and also to

invest in research and development for our product.

3.2 Finances

Capital injection is needed to make the mould as well as to cover the first 2 month’s production

and logistic cost before our revenue starts flowing in.

The capital can be recouped in 1.92 years. Yearly return on investment will be approximately

9.56%. Assumptions of how the figures are derived can be found in the appendix.

The above is calculated only base on a single product with a lifespan of about 5 years. However,

we know the importance of continuous product innovation and development thus with new

product coming in, it is possible to sustain the level of profit and raise it further.

4. Conclusion

As no one can stay young forever, our product has much promise as the world’s population ages.

With continuous product development and improvement, we can ensure that we will keep

staying ahead by constantly finding new ways to remain a blue-ocean firm.

We thank you for taking time to read this proposal and we hope to be able gain your interest in

investing with us.


Appendix

(i) Bibliography

a. Population Division, DESA, United Nations. (2002). World Population Aging. Retrieved

on 29 September 2009 from

http://www.un.org/esa/population/publications/worldageing19502050/

b. P.W.J. Choo, K.S. Lee, R.E. Owen & J.F. Jayaratnam. (1990). Singapore - An Aging

Society. Singapore Medical Journal. Retrieved on 29 September 2009 from

http://smj.sma.org.sg/3105/3105ia3.pdf

c. Y.Y.C. Eo, S.K. Lee, C.Y. Lim, L.S. QUEK & S.B.S. Ooi. (2009). A review of elderly injuries

seen in a Singapore emergency department. Singapore medical journal ISSN 0037-

5675 CODEN SIMJA3 .

http://www.un.org/esa/population/publications/worldageing19502050/

http://smj.sma.org.sg/3105/3105ia3.pdf


(ii) Finances

a. Profit and Loss Statement Forecast for single product


b. Capital Budgeting


c. Sales Budget