UNIVERSITI MALAYSIA SABAH

SCHOOL OF BUSINESS AND ECONOMICS

PRINCIPLES OF ENTREPRENEURSHIP
PROJECT TITLE:

PRODUCT & BUSINESS IDEA GENERATION

PREPARED FOR:

Mr. Mohd Irwan Danhill Sikumbang

PREPARED BY:

Name 1. Fatima Andrada Yusop 2. Muhammad Rahmat Bin Jantan 3. Amiluddin Bin Thamrin 4. Hasan Eraslan 5. Mohd Sukrih Mohd Kassim 6. Rosini Deding 7. Jeneefer Wong Chun Yin 8. Kamariah Binti Nayan 9. Sashikala A/P Samudram 10. Rathigaa Santharan
SUBMITTION DATE:

Matric Number BB12170670 BB12110357 BB12110025 BB12170666 BB12110340 BB12160874 BB12110201 BB12110222 BB12110520 BB12110488

Signature

25th

OCTOBER 2013, Before 5.00PM

Table of Contents
INTRODUCTION ................................................................................................................................ 1 CHAPTER 1 DESCRIPTION OF THE IDEA AND FURTHER EXPLANATION ................. 3 CHAPTER 2 THE TECHNIQUES USED TO GENERATE AND ANALYSE THE IDEA ...... 5 2.1 Recognizing Opportunity and Generating Ideas ...................................................... 5 Observing Trends ......................................................................................................... 5 Solving the Problem .................................................................................................... 6 Finding Gaps in the Marketplace ............................................................................ 6 Product/Services Feasibility Analysis ................................................................... 7 Concept Test ...................................................................................................................... 8 Product / Service Demand ................................................................................................ 8 a. b. 2.2.2 2.2.3 2.2.4 Buying Intention Survey................................................................................................ 9 Conducting Library, Internet and Gumshoe Research ....................................... 9 Industry / Target Market Feasibility Analysis ....................................................... 9 Organizational Feasibility Analysis .......................................................................... 11 Financial Feasibility Analysis ..................................................................................... 13 Capital......................................................................................................................... 13 Cost of Sales ............................................................................................................. 13 Cost Management and Administration ........................................................... 13 Cost of Sales and Marketing ............................................................................... 13 Wages and Salaries ............................................................................................... 14 Industry Analysis........................................................................................................ 14 Key Partners ..................................................................................................................... 20 Key Activities ................................................................................................................... 20 Key Resources ................................................................................................................. 21 Value Prepositions ......................................................................................................... 22 Customer Relationships ............................................................................................... 22 Customer Segments ...................................................................................................... 24 Marketing segment ................................................................................................ 24 Channel .............................................................................................................................. 25 2.1.1 2.1.2 2.1.3 2.2. i. a. ii. 2.2.1

Feasibility Analysis .............................................................................................................. 7 Product/Services Desirability .......................................................................................... 7

2.2.4.1 2.2.4.2 2.2.4.3 2.2.4.4 2.2.4.5 2.3 2.3.1 3.1 3.2 3.3. 3.4 3.5 3.6 3.7

Industry and Competitor Analysis ............................................................................... 14

Chapter 3 The Business Model Canvas Elements............................................................ 20

3.6.1

3.9

Cost Structure.................................................................................................................. 27

CHAPTER 4 - CONCLUSION......................................................................................................... 28 Bibliography .......................................................................................................................................... 30 APPENDIX ............................................................................................................................................ 31

SMART PILLOW | BT11103

INTRODUCTION
A great business idea is a step towards a successful entrepreneurs. Many entrepreneurs today achieved their success from the business ideas they had and recognized the opportunity to start a business. An idea is defined as the A thought or collection of thoughts that generate in the mind. As for our group, weve done brainstorming session to generate ideas. Each of us had given different kind of ideas. Then, weve selected the best ideas that has the potential to enter in the marketplace. Through selecting, weve done some analysis to determine whether we can proceed in doing business or not. These analysis helped us to have the deep knowledge of the factors that we need to consider before building a new business. Such those factors may affect the performance and stability of the company. In this report, description of the business idea is further explained in the first step. Followed by developing successful business ideas using techniques such as generating ideas and recognizing opportunities. Once idea is selected and formed, we need to identify and recognize opportunities or recognizes a problem or an opportunity gap. In our analysis, weve able to identify the gap in the marketplace based on the trend that weve observed. These are economic forces, social forces, technological advances and political and regulatory changes. Through this, we were able to identify an opportunities and allowed us to see whats needed in peoples everyday lives and the problem that our customers is facing today which is sleeping problem. Through that, weve came up with the SMART pillow to fulfil customers needs and solve their problems. Next, feasibility analysis is also being done in our analysis to determine whether the business idea is viable. An assessment of our business idea helped us to determine whether the business has the potential in the marketplace. In order to do this, we had conducted our secondary research which is from library and internet research. Product/ service feasibility analysis is elaborated further in the report which contains the product/service desirability. Industry/target market feasibility analysis encompasses target market that we are targeting such as insomnia patients, group of students, workers, senior citizens. Moreover, organizational feasibility analysis is also being done in this report for us to know whether the proposed business has sufficient management expertise, organizational competence, and resources to successfully launch our business. Lastly, the financial feasibility analysis to assess the businesss current and future financial performance which are consists of total start up cash needed, financial performance of a similar business, and the overall attractiveness of the proposed venture.

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In addition, Industry and Competitor analysis is further explained on industries accessibility and market that were operating which in Malaysia. We had also came up with the 5 forces model based on our product to understand the structure of an industry and to be able to position our company towards the challenges that we will face particularly threat of new entrants and rivalry among existing firms. The competitors analysis which is crucial for us to identify our competitors in the industry and to gain competitive advantage in order to stand out from those competitors. Lastly, the business model canvas were being put in the report. In this world of business, an idea isnt just enough for you to be successful in business. Other factors should be considered as well before deciding and proceeding a business ventures. Feasibility analysis must be conducted business as this will help you to revise or improve your business ideas before establishing a business.

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CHAPTER 1 DESCRIPTION OF THE IDEA AND FURTHER EXPLANATION

SMART PILLOW
After some brainstorming and discussion among 10 of our team members, our group has come with new innovation idea from the existing product that has in our market. Our product is calls SMART PILLOW. This pillow is different than the normal pillow, because it is a multifunction pillow. The most attractive of our product is this pillow are equipped with alarm clock, massage system, Bluetooth system and MP3 system. We decide to insert that system because we want our product to be unique and base on our research, Malaysia still not produce this kind of product so for future more likely this product have a lot of chances to success. The function or specialty of our pillow are: it can control by other electronic devices such as mobile phone and computer from certain distances which are not less than 50 meters form the SMART PILLOW. For example, our product can be control by the computer for the function set up the time for alarm clock, control the speed or mode of massage system and add the music or song into the MP3 system. All of this function are connected by Bluetooth system.

Above is example of sketch for our product.

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SMART PILLOW is not like a normal pillow in the market. This is because, to make sure everybody or users can sleep easily and wake up on the time we did a lot of innovation. After some research, our product device functioning by allocates a smaller battery which is high powerful capacity inside the pillow. We decided to apply a direct USB wire to supply electricity so that, the duration of battery life more longer , so the user can only plug in during the time they use it and off if not using , so that the battery will long lasting. The SMART PILLOW is going to be design by using a high quality material.

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CHAPTER 2 THE TECHNIQUES USED TO GENERATE AND ANALYSE THE IDEA

2.1 Recognizing Opportunity and Generating Ideas
Observing Trends

2.1.1

Observing trends is the first approach to identifying opportunities and study how they create opportunities for entrepreneurs to pursue. The most important trends are economic trends, social trends, technological advances, political actions and regulatory changes. The first of all the is the economic trends which determines the areas that are ripe for new businesses ideas as well as areas to avoid. In this smart pillow business, when the economy is strong, the people have more money to spend and are willing to buy the smart pillows. In contrast, if the economic is weak the people cannot affordable buy the smart pillows. The second is about the social trends. The social trends explain the impact of the social forces on the trends and how they can affect the product, service, and business ideas. It is a fundamental piece of the opportunity recognition puzzle. Related to our product, people prefer smart pillow because it is a multifunction pillow. The insomnia patients can get the benefit from these functions. There are no other method except our product to help the insomnia patients to have enough sleep with smooth massages other than the medicines. Nowadays, there are so many people who are concern about their health and wellness and it is keep on increasing yearly. Next, the technological advances in the observing trends. Advances in the technologies frequently dovetail with the economic and the social changes to create opportunities. Due to the advancement in technology, people prefer using it in their everyday lives to do things easily. Through that, introducing smart pillow is the right timing for people to be able to match the current trend today because it has high tech and multi functions such as alarm clock, mp3, Bluetooth, and massage. They can have all those functions in a 1 pillow with lots of benefits. Lastly, the political action and regulatory changes. The political and regulatory changes provide the basis for the opportunities. For example, since more people are more concern about their health, the government encourages any companies that produces healthy products. In Malaysia, 70% of adult people who cant sleep easily during night time. So these can be the opportunities to grab the chance to solve their problems by producing right product that they need.

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2.1.2 Solving the Problem The second approach to identifying opportunities is we need to recognize problems and find ways to solve them. This can be recognized by observing the changes that people encounter in their daily life. Based on identifying opportunities, it will simply involve noticing a problem and finding a way to solve it, which mean, when our product have been marketable and it have a problem, we as an entrepreneur should be able find the solution in advance. Advances in technology often result in problems for people who cant use the technology in the way it is sold to the masses. Therefore, once we make a product we must come out with the solution if something happens to the product in the future. For example if our product SMART PILLOW having problem when we tested it, we should find way how to manage and solve the problem as soon as possible. 2.1.3 Finding Gaps in the Marketplace Finding gaps in the marketplace is the third ways or source to identify opportunities in marketplace. There are many example of products that consumers need or what that arent available in a particular location or arent available at all. This problem is created by large retailers, which compete primarily on price and offer the most popular items targeted toward mainstream consumer. A common way that gaps in the marketplace are recognized is when people become frustrated because they cant find a product or service that they need and recognize that other people feel the same way. A related technique for generating new business ideas is to take an existing product or service and create a new category by targeting a completely different target market. This action, can involves creating a gap and filling it Nevertheless, in our smart pillow, we were able to fulfil the gap in the marketplace. We are the only producer of the product which satisfies customers needs. Customers who are having a problem in sleeping and waking up early, can now sleep wake up early. Our smart pillow can get in all place in Malaysia, because we got an agent in all state to deliver our smart pillow. So, our target customer can try and see the advantages and benefit that they can get from the smart pillow. Our smart pillow is suitable old folks and insomnia patient, students, and workers that can use the smart pillow because its really good to use in our daily sleep. Thus, we identified the gap through identifying whats not available and the market. Hence, we came up with a new product to fulfill the gap.

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2.2.

Feasibility Analysis

2.2.1 Product/Services Feasibility Analysis

This analysis is referring to an assessment of the overall appeal of proposed product and services. The main point of this analysis is to make sure what prospective customers want before developing the product/services. So, it is necessary for meeting customer requirements that change rapidly with advancing technology, evolving cultural trends, and expanding markets. There have two components under this analysis which is product/services desirability and product/services demand. i. Product/Services Desirability

The first component that confirm the proposed of product or services is desirable and needed in the marketplace. So, our company planning to produces the smart pillow which is needed to all type of categories, but our company target more on the adult people and insomnia patient. Nowadays, people are much busier on their daily activities until causes stress, anxiety, depression, disease, pain, medications, sleep disorders and poor sleep habits. We look into the Malaysian demographic, it is shows that 60% of population was reported in 2012 having insomnia symptoms. Before our company confirm to selling the pillows, we already determine the basic question that appeal of the product. Our company believe that a suitable and comfort pillow make sense and reasonable to these insomnia people besides can generate profit. We also predict that the customer will fell excited on our smart pillow because it can reduce their healthy problem, feel fresh every morning, cheaper and soft. Our company also doing the survey based on the environment trend observation which the marketplace of selling pillow are more but because our target market is more on solving the insomnia patient problem, so that our smart pillow still can compete with the other pillow competitors. The advantage of the smart pillow is the qualities are guaranteed because our company provides the pillow from the partner company that already know the brand into whole market. The pillow that we supply from our partners will be selling it into the market by replace the origin brand to our company brand which is smart pillow. So, there will not having any kind of fatal flaws in the product.

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a. Concept Test It is refer to a concept statement that distributed to other people who are asked to provide feedback and advice on the potential of the business idea. The main purpose of concept test is to measure the customer interest and willingness to purchase on that product/service. The feedbacks are very useful as the suggestions for the idea to strengthened or tweaked before proceed to further. Figure 1 below refers to our company concept statement about the smart pillow.

Business Concept Smart Pillows Inc. Product Smart Pillows Inc will sell healthy, comfort and cheap pillow to our target market which is adult and insomnia patient. Target Market Smart pillows plans to open supermarket where be located near to large population citizen with adult and insomnia patient. The target market for our company is to the insomnia people. Why Smart Pillows? Smart pillow has unique design and functions suitable for the customer who prefer to wake up early and want more relaxation beside give extra benefits to satisfy the customer needs and wants. Special Feature A smart pillow has a special feature which is design in different variety to meet the customer extra comfortable Management Team Smart Pillows led by the partners company which is Akemi Company and BeutyRest Company. Getting the share and supply from the partners to generate profits and trust from customer.

Figure 1: Smart Pillows Concept Statement

ii.

Product / Service Demand

The second component of the flexibility analysis which is to determine the demand of the product/service by the customer or target market. There are two techniques to asses it: buying

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intentions survey and conducting library, internet and gumshoe research.

a. Buying Intention Survey Our smart pillow product sure will be getting more demand according to the target market which is insomnia people and adult people. The features of the smart pillow exactly attract the customer to demand more quantity of smart pillow for example cheap, convenient, comfort, different designs, healthy and reduce the insomnia problem. So that, doing a simple survey to the customer can help to meet the need with our product design and getting more suggestion or information to improve our product. From here, personnel assistant play important role to speak with them and attract their intention to buy our product. b. Conducting Library, Internet and Gumshoe Research Our smart pillows using the online method to getting the customer demand though the www.smartpillow.com website. Customer can give any unsatisfied complaint about the product and booking service through the website. We also doing advertised through magazines, internet, television, posters and newspapers to increase our customer demand and attention.

2.2.2 Industry / Target Market Feasibility Analysis

i. Insomnia patients

Our companys target market are the insomnia patients who are disrupted in sleeping at night. Insomnia is a disease in which an individual's hard to begin to sleep (considered the beginning of insomnia), Easy to sleep, then woke up and could not go back to sleep (chronic insomnia) and Easy to sleep, but woke up every hour and cannot sleep (fragmented sleep). We choose to produce this smart pillow because statistics show that many people are now experiencing insomnia. Our product have pillow-tech functions which can reduce insomnia with extra comfortable to manual and selected herbs so as to reduce insomnia. Because sleep healthy and quality is important for the body especially the brain and other organs for us to function optimally.

ii.

Group of students

In Malaysia, there are many educational institutions and schools. In this case, there are many university students, colleges, polytechnics and schools that we can target. The students usually have a lot of work especially university students. Most students 9|Page

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suffer from stress and lack of sleep due to complete assignments and so on. Our company has proposed a smart pillow with the technology that has the vibrate alarm clock application which facilitates the students to wake up on time. This thing could solve the problem of students whos late to go to class or attend school.
iii. Group of workers

Our company is also targeting employee workers who has a heavy duty or employees always spend time in the workplace. Smart pillow has the health benefits and quality materials particularly quality fabrics for comfort.
iv. A group of old people

There are many elderly people in Malaysia who had various diseases. Our company offers a smart pillow which has additional comfort to the user which has the characteristics of a good health care to all walks of life. Elderly especially need a comfortable pillow to avoid one joint or headache. Our pillows have the characteristics needed comfort. We also offer these products to their children to better appreciate the parents to provide comfort to the parents to purchase our smart pillow.
v. Group of people who prefers convenience

People who are always looking for the convenience and comfort, we now have perfected the production of smart pillow. With health its characteristics, easy waking up and having a double comfort. Application and use of MP3 Massage is a highly accurate application to the society seeking comfort when sleeping. MP3 use highly application provides a facility for users who want to listen to songs while sleeping also features alarm clock and vibrate every application to make it easier for the wearer to wake up at the right time.

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2.2.3 Organizational Feasibility Analysis

Organization Chart of Smart Pillow Inc.

CEO Fatima Andrada Yusop

Managing Director Muhammad Rahmat Bin Jantan

Executive Director
Rathigaa Santharan

Financial Manager Sashikala a/p Samudram

Operation Manager Hasan Eraslan

Human Resource

Rosini Deding

Product Development Manager Mohd Zukrih Bin Mohd Kassim

Accountancy Manager Jeneefer Wong Chun Yin

Public Relation
Amiluddin Bin Thamrin

Marketing Manager Kamariah Binti Nayan

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Board of Directors Fatima Andrada Yusop (Chairman) She graduated from the University Malaya (UM), with a Bachelor of Business (Hons) Degree in Business Management and Accountancy. She is really experienced in leading a company. Before joining Smart Pillow Inc., She has been leading a few other new start-up companies and manage to bring those company to the feel of success. She also the main sources of Smart Pillow capital. Rahmat Mat (Managing Director) He is the founder of Smart Pillow brand. He was appointed as the managing director because he is the founder of this product, other than that he also has wide experience related to this product. Before he found this product, he has been working as an engineer in several company and has been awarded with a few award because of his excellence performance. He graduated from University College London, London University and Ashridge Management College with Bachelor of Science (Hons) Degree in engineer. Smart Pillow Inc. Have a sufficient management expertise, organization competence, and resources to successfully launch our own brand. As have been mention before our board of director have been on this industry for so many year and gain lots of experience. Smart pillow Inc. also have a very trustworthy line of manager, every manager that have been hire has a working experience in their own field for so many year. With the experienced manager, they can help the broad of director to administering the company so they can manage it more efficiently. All of this manager also have really extensive professional and social network that can help this company to reach goal. For example our manager in public relation has been work as a publisher, so with this working experience he used to know a lot of media people which is can help our organization to be well known in the future. The human resources manager also have a wide experience about selecting a right candidate to work with our organization, this factor is really important because, employee that can work in high competitive industry and can give a brilliant idea in a same time is really important. She also, have experience about training a new employee so they can cope with company vision and mission in order to achieve the company goal. Even though, all of this manager have been format to function differently, but in the same time, they also function in a same way which is toward the organization goal.

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2.2.4 Financial Feasibility Analysis

2.2.4.1 Capital

Capital is very important to start a business and can be a key to a successful business. Our company started the business in the form of services by borrowing from banks in the amount required as our company's capital resources. The Bank is the main source of capital for an organization or company that wants to start a new business in the market. In addition to a loan from the bank, each member of our company has also released a sum of money to be a source of additional capital to start a business of our company. Our companies need capital to start a business of RM 250,000.00.

2.2.4.2

Cost of Sales

Cost of sales involved in the service of our company is the cost of buying the "smart pillow". Finished goods is a key ingredient to our company's services are sold to consumers. In addition, the shipping cost is also the costs involved in our company's services. Shipping is also done by the same company which the company main produce finished goods of our company services. Total cost for each unit is RM 35.00 including postage. Total sales for the year to 10,000 units is RM 350,000.00. We will sell RM 80.00 per unit and got a sales revenue of RM 800,000.00 if 10,000 units were sold smart pillow. 2.2.4.3 Cost Management and Administration

In administrative expenses and management costs, various expenses incurred by our company which is the business of insurance, licensing fees and permits, rental of premises, telephone bills and all sorts of other expenses necessary for the operation of the business from day to day. Costs we need to management and administration amounted to RM 20,000.00 per year.

2.2.4.4

Cost of Sales and Marketing

Expenses incurred in cost of sales and marketing services of our company is the cost to print promotional banners, advertising, and the cost of building and maintaining the website. For the cost, we use a cost of RM 5,000.00.

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2.2.4.5

Wages and Salaries

In wage and salary expenditures to be financed spending many of which are part of every employee wages, medical costs, the Employees Provident Fund (EPF), SOCSO and bonuses for each employee. Total costs for wages and salaries is RM 60,000.00. Description Start Up Cash Expenses : Cost of smart pillow and transportation Cost of management and administrative Cost of wages and salaries Cost of marketing Start up Loan Cost Lump sump 350,000.00 20,000.00 60,000.00 5,000.00 200,000.00 50,000.00 Amount for 1 years(RM) 685,000.00

2.3

Industry and Competitor Analysis

2.3.1 Industry Analysis i. Industrys Accessibility

It realistic for a new venture to enter the industry of smart pillow in Malaysia. Malaysia is considered as one of the country which is advance in technology. So, we are in the right place to produce high tech products. However, smart pillow is still new and have a lots of opportunity. The product have a high demand, therefore is a good idea for a new venture to enter the industry while the industry can be easily enter by any new venture.
ii. Industry market

This industry is a ripe for innovation but it still new in Malaysia. Our company see this opportunity in Malaysia and that why our company enter this market in Malaysia. We as an entrepreneur must take advantage of every opportunity that we see. The 14 | P a g e

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industry market in Malaysia still needs innovation because the pillow industry in Malaysia is still new.
iii. Position in the industry

The essence of competitive strategy for a company is to find a position in its industry where it can best cope with these competitive forces or can influence them in its favour. Knowledge of the underlying sources of competitive pressure can reveal the basic attractiveness of an industry, highlight the critical strengths and weaknesses of a company, clarify the areas where strategic changes may yield the greatest payoff and pinpoint the industry trends that promise the greatest significance as either opportunities or threats.
2.3.1.1 i. Assessing Industry Attractiveness Environmental Trends

This product are benefitting for adult because now days many adult have insomnia problems and have a lot of difficulties to sleep. Our product is multifunction and the main function of our product is for healthy product. Where our product can treat insomnia disease.
ii. Business Trends

The profit margin in this industry is increasing in Malaysia because this product is still new in Malaysia and product demand is increasing. Because of our product is a healthy product, have high qualities and affordable price and our product demand keep increasing.
iii. Five Competitive Forces Model for Pillow Industry a. Threat of substitutes. There is no threat of substitutes because this product is much cheaper than to get the treatments for the insomnia patient. Because of our product is a product that will be mainly used by the insomnia patients, theres no threat of substitutes because the insomnia patient will prefer to our product. This is because our product

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not only used for treating the insomnia disease but it have the another function. Not to mention that the medicine that used for treating the insomnia disease is much expensive than our product. This is why our product will not have a threat of substitutes. b. Threats of new entrants New entrants to an industry can raise the level of competition and when the level of competition increase there will be some changes that is more attractive and innovative product will be produce. This is because a company will not improve if theres no competitor. In this industry, there is a high threat of a new entrant which is means there will be a competitor in the future either in a near future or a distant future. This is also means that a new competitor can easily enter the industry. There are high threats for a new entrants to enter this industry because this product have a high demand and the demand of this product keep increasing because of the function of this product that used for insomnia person. This products have a high profitability that makes a newcomer want to enter the industry. Because of the high demand and high profitability many new company want to enter the industry. Also, a company can easily enter the industry and out of the industry its make a new entrants want to enter the industry. Therefore, there is a high threats of a new entrants that enter the industry. c. Rivalry among existing firms In most industries, the major determinant of industry profitability is the level of competition among existing firms. Some industries are fiercely competitive, to the point where prices are pushed below the level of costs, and industry-wide losses occur. In other industries, competition is much less intense and price competition is subdued. Our product is still new in Malaysia. Our only rivalry is only with our partnership for the time being. This is because they are the supplier for our product. Our company is trying to get profitability and then we make agreement with our partnership to get a lower price and high qualities. d. Bargaining power of Supplies Suppliers can suppress the profitability of an industry to which they sell by raising prices or reducing the qualities of the components they provide. In this pillow

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industry, they are many suppliers but our company only have only two suppliers where our company make the two supplier that is Beauty Rest Company and Akemi Company as a partnership. Because of our company have two suppliers we dont have many problems with the bargaining power of supplies. i. Supplier concentration

In the market In the market, when they are only a few suppliers that supply a product or services to a large number of buyers, the supplier has an advantage in controlling the market or the price. In this industry, our company only have two supplier, therefore our company make a partnership with the two supplier. This makes our company easy to get a product from the supplier. Then, because of our company have two partnerships for supplier and many suppliers for the industry, the supplier give a good price and qualities for the product they provide. ii. Switching cost

Switching costs are the fixed costs that buyers encounter when switching or changing from one supplier to another. If switching costs are high, a buyer will be less likely to switch suppliers. For our company, because of our companys suppliers are our business partners as well. We have the contract in which we can make an agreement for the product and price they provide. So, our company wont switch to another supplier as well as our manufacturer switch to another buyer. iii. Attractiveness of substitutes

Supplier power is enhanced if there are no attractive substitutes for the product or services the supplier offers. In this industry, the substitute for our product in the market a more expensive than our product. Therefore, the supplier power for our industry is enhanced. iv. Threat of forward integration

The power of a supplier is enhanced if there is a credible possibility that the supplier might enter the buyers industry. When supplier trying to enter the buyer industry, our company will change to other supplier to keep on business on the industry and be a competitor to the supplier that might enter the buyer industry.

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e. Bargaining power of buyers Buyer Power is while the buyers are fragmented, their diminishing brand loyalty and ability to switch for most products or services to gives them reasonable buying power. Buyers can suppress the profitability of the industries from which they purchase by demanding price concessions or increases in quality. As for our company, we have the power towards our manufacturer because they are our partners in business at the same time who invests in our company. i. Buyers cost

The greater the importance of an item is to a buyer, the more sensitive the buyer will be to the price it pays. In our selling product, all the packages will be standardized and the price will surely affordable because our product can treat insomnia disease and the price for our product much cheaper than the medicine to cure the insomnia disease. So, buyer costs will not be the problem in our company. ii. Degree of standardization of suppliers products

The degree to which a suppliers product differs from its competitors affects the buyers bargaining power. Even though there are substitutes for our product, but buyers still choose our product because our product have qualities and multifunction and much cheaper than the substitutes. iii. Threat of backward integration

The power of buyers is enhanced if there is a credible threat that the buyer might enter the suppliers industry.

2.3.2 Competitor Analysis

Next, after we finish our industrial analysis, now we move to the competitor analysis. The reason why we need to do the competitor analysis is because as an entrepreneur, we need to have full understanding about our competitors in our targeted industry and also seek to find opportunities to gain competitive advantage in order to successfully launch our venture. Firstly, to have better knowledge about our competitors, we have to identify who are our major competitors. Our Direct competitor is the competitor offering identical or similar products. In our industry, our company direct competitor is our partnership. This is because, our company buy product from our partnership company. The supplier for our product is a

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direct competitor for our industry because they are the supplier for our product and because of this we been a direct competitor to them because if they enter the market as a seller they will be a big threats to our company. Indirect competitors is a businesses that offering close substitute products. Our indirect competitor is a medicine company that making insomnia disease medicine. For the time being, our company product is not having a problem with the indirect competitor. This is because our product is much cheaper while the indirect competitor selling the substitutes product much higher than our product. Future competitor is a business that is not yet direct or indirect competitors but could be in anytime. This future competitor can be any company at any time either in the near future or a distant future. There is a high probability that there will be a new competitor in the future because the industry that our company in have a high demand of the product and the demand is keeps increasing. Because of this, our company will be prepares for any competitor that want to enter the market. Competitors analysis help the company clearly identify their major competitors as well as indirect and future competitors, for any start-up companies. It is necessary to analyze the competitors in order to have a successful venture.

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Chapter 3 The Business Model Canvas Elements

3.1 Key Partners

Because of our company is not the main producer of the smart pillow, so we supply our product from our partner/supplier company which is known as BeautyRest Company and Akemi Company. Beautyrest Company come from US meanwhile Akemi Company come from Japan. Both company a produce very comfort pillows where the brand already know by all of people. So that, we decide to supply their product and sell it into market by using our own brand. We are choosing this two company as our partner is because that our partner is a famous major manufacturer of mattresses and related bedding products such as our smart pillow product and also our opportunity growth motivation. Smart pillow is our company brand where the product is supply by our key partner company to maintain the quality and at the same time to promote our smart pillow to our target market. Besides that, by having relationship between Akemi and BeautyRest, our company can lower the producer cost and also can reduce the research and development program which needed a large amount of cost to produce our product.

3.2

Key Activities a. Manufacture

Our company is not the producer of the product. We dont manufacture it, but we take our share of the company and as well as their share from ours. Our partners in business are Beautyrest Company and Akemi company. We are using our own brand and our duty is to sell and promote the product. Our manufacturer is responsible in doing all the research and development, manufacturing process of high-tech machines were used. The company has implemented the production of manufactured inputs to the finished product. b. Branding Branding our company choose to have the right to assess core business and created by communicating through the essence of the business and what needs to be communicated to our customers . Therefore, we chose to use our own brand on the product as smart pillow can create a brand reputation and business personalities. Branding is the clear highlight what makes a quality product smart pillows, and more attractive than other competitors. Deeper

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brand more recognizable than just our company logo. We define as a set of brand associations that existing customers or potential company, product, or individual. The use of smart design and creative, advertising, marketing, service proposition, and corporate culture can all help to make the public will benefit your business. Any business or organization that would benefit enormously by creating a brand that is accurate, is, one that represents their true value. Branding also easily strengthen the company's name in the competitive market. c. Marketing Our company has also decided to market and sell our smart pillow through service providers, sales agents, and super markets. We are now focusing on promoting our products in magazines, televisions, internets, billboards, posters and newspapers. Service provider appointed by our company are always interacting with our company to get feedback. We choose the supermarket because the supermarket is a place frequented by the public. Customers can get us in the supermarket smart pillow easily and quickly without any hassle.

3.3.

Key Resources

Key resources are the business resources that includes human, financial, physical, and knowledge factors that provide a firm the means to perform its business processes. In our company the key resources that we have are the resources needed to perform the key activities such as manufacturing, branding, and marketing. a. Manufacturing Beautyrest and Akemi Company are the two companies who produces our product which is the SMART pillow. They are the supplier and our business partners who invests in our company. Thus, since we depend on them, they are considered as our key resources because if its not for them, we couldnt do business and couldnt manufacture our product. b. Branding Brand recognition is crucial in business. If a certain brand is recognize, it will be easily for the company to sell the product because customers will definitely buy it because of the brand awareness that they have. A good branding will help us to compete and to stand out from the

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other competitors. In terms of our brand, we had definitely used various method in order to promote our brand. Methods like promotion, good customer service, maintaining good image towards our customers and most important is to provide quality products. These are the ways for us to have a positive image regarding our brand. So, as for our company we strive hard to provide quality product and good service to our consumers in order to gain their trust and keep on buying our product. c. Marketing For marketing activities, were using posters, banners, magazines, televisions, internet to promote our product. So, financial budget is needed in order to execute those promotion activities especially advertising which is our main focus right now to promote our products. Staff skills and knowledge is also our resources for promotion. They are the one who are mainly assigned to implement strategies on how to market our products wherein Four Ps being used such as product, pricing, promotion, and place. These are the things needed in order to execute promotions.

3.4

Value Prepositions

We address our product as SMART PILLOW this is a worth it product to buy. From this product we given the value proposition such as convenience. Our product are easy to bring. The user can bring this product anywhere because our product already provided the small battery inside the pillow so our product not limited to use. About the price, this product is high technologies so from the price we offer i think that is cheeper with the high tech. We also make a lot of variety design and application or this product. So the price also are variety. The price of product is base on how many application we provide. The high tech we use and a lot function we provide so the price we will offer also hight compare to the normal product we are produce. Because our product is multifunction, so cost to buy this product are cheeper. Our company also providing 1 year warranty and any technical problems we will repair or we will change the new one after check it. We also providing "SMART PILLOW CARE CENTRE". Maybe most people especially for the buyer this product don know how to use this product because first time use, so we will help them to give information about that product. 3.5 Customer Relationships

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Customer relationship or sometimes also known as customer service is one of the most important aspect for every company nowadays. People sometimes use term customer relationship as a term to describe anything that help customer. But our customer relationship focus here is the service that required to solve a problem that happening before and after customer made their purchase, and the highlight is give customer a good image with their purchasing experience. Since our company in a business where we selling a smart pillow and our company is one of the earlier company that involve in selling this product and there is not much of people that has professional knowledge regarding our product, so customer service that can help customer before and after their purchasing is highly required. There is a few way that we will use to stay in touch with our customer after their purchasing. Our company will use personal assistance as follow up that ensure our business is always in the customer's mind. Through personal assistance indeed there are individuals who will be serving customers at the time. This is one of the most effective way to get in touch with our customer since we can personally speak with them. Under personal assistance we can use method such as telemarketing. This is the method where we use telephone to call on customer, by using toll-free incoming telephone line to make it convenient for customer to call our assistance for personal assistance or guidance. This is really an effective way to get in touch with customer especially with the hard-to-reach customer (customer that live far from the city). The big advantage of telemarketing is that we can save time and our money, and it also give customer a fast and easy way to solve problem that arise after purchasing. Other than telemarketing, our company also can use email to communicate with our customer, through email they can address all they concern to us, so we can respond to them as soon as we can. Other than that we also can set up a community site for customers to exchange opinions. The majority of businesses today are using some form of social media (blogs, forum, twitter, Facebook and also official webpage). If we set up online communities where customer help each other with their problem, it will be easy for them to find someone else who has experience the same problem and see how it fixed. Through this method we can keep track the issue that make our customer stay or left our brand. For example if we set up a community support forum, Customer can visit that forum to ask a question or to search for other with similar problem, other customer also can leave comment to answer or give an advise. If we monitor this forum we actually can get lots of advantage because we can discover any issues with our product, so we can quickly improve our product. This really important because when customer like our product they will stay and make another purchase or even suggest they

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family and friend to use our product, but when they dont have any experience memory with their previous purchase, customer will likely to tell people around them about how bed our product is. Other initiative that our company can do is give the customer with a voucher that they can exchange with goods up to their face value. Customer can exchange the voucher with home appliances like mini fan, dishes and other. Our main goal of giving voucher is to tell our customer that we are very appreciate their purchase with us. Giving warranty is one of the most efficient way to convince our customer that our product is very high quality and we will responsible if our product didnt work like what we tell them when they make their purchasing. Our company can give our customer 1 year warranty, within this period, if there any damage, failure or what so ever that occur, customer can bring that smart pillow to us and we can repair the product without giving any charge to our customer. Giving free gift to our customer also can help us to maintain our relationship with them. When customer made a purchasing we can give them a free gift related with our product, since we selling smart pillow so our free gift should be like pillowcase, blankets and blindfold. Gift that can help them to sleep well and comfortable. Even the gift that we gave is not really expansive but customer will consider it as a warm hearted gift from us. When organization want to boots up their revenue, find a new customer might be one of the first thing on their mind, but think again, if organization want to find new customer it will cost them money, because they need to make promotion and hire more salesperson. It will be good if they can reach their goal, but the risk to fail is also high. This is the reason why every organization will try their best to keep their current customer and try to treat them as good as they can. Because current customer is not only a person that will make continuous purchasing to us, but also the person that can bring new customer to our company.

3.6

Customer Segments

3.6.1 Marketing segment Marketing segmentation will focus on customer and also businesses to create the customers to target. Marketing segment is a group of customer and the businesses which is have the similar responses to the particular type of the service or the product. It is difficult for the target diverse segment of market. As for our product, the SMART pillow chose the correct market segment. We target students and workers but our target group of the smart pillow is

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mainly for adult and insomnia patient. The product is mostly suitable for the adult who have the insomnia problem and who has a lot of the difficulties to sleep. The research shows that 78% of the adult nowadays effected by insomnia problem particularly in Malaysia. Therefore, we mainly target insomnia patients and adults.

3.7

Channel

There are many types way that we can use to supply or distribute our smart pillow, for example, we can use agent as represent our company to supply and give information to customers about our smart pillow to all state in Malaysia. Agent is who handles business affairs for another, especially one who deals with employees, actors agent, and theatrical agent, a business agent for representative who acts on behalf of other persons or organization. Meanwhile, by this action we can increase our level of increment in term of profit to our company, might be we can get a good profit because the product is sale to all state by agent. Moreover, we also can sell our smart pillow by direct selling method. By this we can show the sample of our product to the customer so that the customer can evaluate benefit and advantages that can get from the smart pillow. Direct selling means selling the products directly to consumers away from a fixed location. Modern direct selling includes sales made through the party plan, one-on-one demonstration, and other personal contact arrangements as well as internet sales. The direct personal presentation, demonstration, and sale of products and service to consumers usually in their homes or at their jobs. There are many types of direct selling such as door to door, party plan, multi-level. Door to door is the agent or dealer obtain an immediate discount from the company at the point of purchase. The product then makes a profit by selling the product to the consumer a6t the recommended retail price. The line of distribution is simple, involving the direct sales company, the dealer and the consumer. Party plan means under this type of plan, the direct seller or retailer arranges with a friend who shall act as hostels towage a group of friends for demonstrations of a product or product. In the received for products. The hostess receives merchandise, products as compels for the use of her home and her help in getting their friends together. Multiple level means marketing or distributor network plan. This plan allows the direct seller to manage and service a large direct retail network or distributor network. Beside that, we also can sell the smart pillow using social network. Social network is involve Facebook, twitter, website, portal, blogs and many more. Beside that, we will open a web site or portal about our smart pillow with all information. By this information the

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customer can purchase the smart pillow through online and will makes easier to us to make profit. I think this method will work out because most of the costumer nowadays is adapted to internet and facebook using, so by grapping this chance we can sell our smart pillow through online and really will make profit. Facebook is an opportunity to promote product and services to millions of daily users, and at the same time we can survey the progress of the selling in via this channel. Meanwhile, Facebook is overwhelmingly the most effective social media marketing channel for small businesses with exponentially more saying its better than other social network. Otherwise, media also can be platform to channels such as radio and television can help as a channel to distribute to our smart pillow in term of advertisement. Expo also can help the smart pillow in term of channel. Moreover, branch also being important part to channel to our smart pillow. 3.8 Revenue stream

Smart pillow is one of the products that we sell and that revenue of the production will comes from this product. Mainly we gain profit from selling this product normally. The more important for us is just about the acceptation from buyers toward our product and their comfortable when used this smart pillow. We know that, if we sell a product using a normal selling we will only have minimum revenue. To increase the revenue, we must rose up and made a new product with better invention and design. The better ways is to make a different design of smart pillow and every kind of design we sell at a different price. The most attracted design our company made, we sell it at higher price than the normal design. Our company make this kind of tactics to maximize our revenue. Beside that, to increase our revenue our company make a smart pillow with different colour. As we know, everyone have their own interest in colour and people will definitely buy the colour that they like. From that point, our company sell the smart pillow with a different colour at a different price. Mostly, people with a higher income will buy a design they like and the colour that they like. This will make our company gain more profit. People can buy our product using monthly payment but with interest. This ways, people with a low and average income can buy our product because they can pay to us using monthly payment. People with low and average income that have a insomnia disease will buy our product because now they can buy it but pay it with monthly payment. If before they want to buy our product but they dont have enough money to buy our product with cash, but now they can buy our product because we change our payment method using cash and monthly payment with interest. This way our revenue will increase because more people buy

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our product and they add more money to buy our product because they using different payment method to buy our product. 3.9 Cost Structure

What are the most important contents in our business model? In our business, our company is ready to use existing items to make new products SMART pillow. With the cooperation of our company with the company's leading manufactures pillows Akemi company and the company as a leading supplier Beutryrest company. This can save our cost structure. Cost cornerstone of our business is the cost of materials to produce our products. Which Key Resources are more expensive? The main sources are the most expensive in our business are physical resources. Important physical resources in our company to do business smoothly. These resources are building for the location of the production activities , technologies such as computers , telephones , CCTV , etc. , machines into equipment for producing input to output more quickly and effectively , and the finished product ready for sale . These resources are important to make inputs transformed into outputs. Next, the resulting product will provide financial flows in to our company through distribution to customers. Which Key Activities are most expensive? The main activities are expensive is branding. Branding is done by our company to showcase new products emerge in the market. Branding aims to ensure that the products we produce and the customer is known to have a place as well as our company personality in the market.

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CHAPTER 4 - CONCLUSION
In order to become a successful entrepreneur, we must have the ability to see things without engaging deliberate search or what they call it sixth sense. Factors in observing the trend such as economic forces, social forces, and technological advances, political and regulatory changes helps to identify opportunities for an entrepreneur to pursue and be aware of the changes happening outside. Next is, solving problem which allows entrepreneurs to spot customers problem and think of solution on how to solve their problems. Lastly, finding gaps in the marketplace allows them to see the gap and find a way to fulfil it. With these, it can lead to an business idea and can come up with an innovative product that customers needs which is crucial because people do business mainly to satisfy customers demands. In addition, conducting feasibility analysis is important before establishing a business. It helps you to decide whether to move forward with the project idea or not. It also helps to determine if the project has the necessary resources to make it viable and whether people will buy or use the resulting product. However, when it comes to financial, feasibility analysis helps us to assess whether it can withstand financial risks that come up and whether it can still remain viable in the long term. More importantly, it helps us to observe the current market trend and its projected growth and what is already available in the market. Thus, it is important to conduct these analysis first before jumping in to the next level which will lead to failure if we didnt do any research about our product. On the other side industry and competitor analysis is crucial for us to determine how competitive the industry that were operating and who are the competitors were competing. Through that, we are able to position our company to survive in a competitive environment. In our business which we came up with SMART pillow, the analysis helped us to identify the factors that we need to consider before starting up a new business. Through fulfilling customers needs and analysis weve conducted, we were able to develop an idea into innovation and able to decide whether to proceed the idea or not. We were able to consider some factors needed before introducing a new product in the market. However, management skills and expertise, determination, product promotion, brand recognition, these are the competitive advantage that we have towards other competitors. In todays business world, lots of companies offering lots of products. In establishing a business, we need to be competitive enough to survive in the future challenges that we may face in the future. One way to match this, we need to have a creative and innovative idea when producing a certain product because same product is boring and will definitely not catch

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customers attention. Thats why we have introduced SMART pillow which is unique and is not yet in the market which satisfy customers needs with its high tech features and function. Therefore, in order for a firm to be successful, it need to have competitive advantage in order to survive in the marketplace.

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Bibliography
Beautyrest: Beds and Mattresses : Recharge the Human Life. (21 October, 2013). Retrieved
from Beautyrest: Living Life Fully Charged: http://beautyrest.com Bruce R. Barringer, R. D. (2009). Entrepreneurship: Successfully Launching New Ventures. England: Pearson. Gladden, M. (24 Octoer, 2013). Why Is a Feasibility Study Important in Business? Retrieved from eHow: http://www.ehow.com/facts_5997942_feasibility-study-importantbusiness_.html Three key factors that make successful businesses. (21 October, 2013). Retrieved from Imperial College London: http://www3.imperial.ac.uk/businessschool/programmes/innovation-and-entrepreneurship/startupsincubators/threekeyfactorsthatmakesuccessfulbusinesses#maincontent Welcome to Akemi Home. (21 October, 2013). Retrieved from Akemi: http://www.akemihome.com/ What is Business Resources? Definition and Meaning. (23 October, 2013). Retrieved from BusinessDictionary.com: http://www.businessdictionary.com/definition/businessresources.html What is idea? definition and meaning. (25 October, 2013). Retrieved from BussinessDictionary.com: http://www.businessdictionary.com/definition/idea.html

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APPENDIX

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