business proposal we've worked out for grip-aid

1. 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)
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2. 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.
MGMT 002: Technology and World Change
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3. 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
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4. 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.
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5. Fig. 1 Fig. 2 Fig. 3
Q1: Have you seen elderly Q2: Are you willing to Q3. Are you willing to buy a
use umbrellas as walking buy a newly designed detachable grip instead of a
aid, or do you use them umbrella with improved new umbrella?
yourself? grip and base?
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.
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6. 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
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7. 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.
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8. 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.
fig.4
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.
MGMT 002: Technology and World Change
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9. 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.
MGMT 002: Technology and World Change
G14
Soon Loo
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10. 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 .
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11. (ii) Finances
a. Profit and Loss Statement Forecast for single product
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12. b. Capital Budgeting
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13. c. Sales Budget
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