Write a report on “Dreamland Production and Trading Ltd”.
Business plan is the basic approach of every new entrepreneurship, which helps to understand the different aspect of the business. Business plan for a particular business helps to understand the market and the industry trend that will help to determine the business strategy. The business strategy of the business plan is associated with the marketing, operating and financing aspect that help the organization to decide the best possible to get the success in the market. The objective of this report is to understand the new entrepreneurship of a company that will operate their business in the oral hygiene segment (Blank 2013). The name of the company is “Dreamland Production and Trading Ltd” which will operate their business in a particular market. Therefore, this report will also focus on the macro and micro business environment to understand the competition in the market and gain a good market share in the future.
The Name of the organization is “Dreamland Production and Trading Ltd” which will operate their business primarily in the Singapore market. The company will be involved in the manufacturing and trading of oral hygiene product through a structured distribution channel that will mainly operate in the wholesale and retail market. The shareholders of the business are not liable as individuals for the business debts beyond the paid up value of the shares (Bridge and Hegarty 2013). It is a new business start up. Magic tooth cleaner is the first step for Dreamland production and trading Ltd.
Production of “Magic Tooth Cleaner” is the proposed new innovative venture. For the unique business, idea such as Magic Tooth Cleaner should have proprietary position. Such as trademark registration, patenting and licensing. This business plan is confidential because it is not to disclose in non-confidential circumstances. Otherwise the invention in the eyes of the law, it could be invalidating the patent application. The competent lawyer who specialized in patent will be employed (Davidsson and Gordon 2012).
The organization will start their business with the mission to deliver the shareholder value continuously by employing innovative creative individuals to contribute to business excellence
That will help to achieve environmental friendly business environment. Another mission of the company is to focus on every household around the Asia, Europe continent to make them use easy magic tooth cleaner.
Vision of the company is to become leading innovative tooth cleaner brand around the globe with better technology.
The aim of the company is to vale their employees, customer feedback and shareholders.
The objective of the company is to be the price leader in oral care by delivering continuous safety to their customer. Company will also focus on the benefit of the shareholders to encourage their further investment.
3.1 Industry size, growth and structure
The oral hygiene industry in Singapore is quite big because it is one of the developed country where majority of the population is aware about their health concerns. Therefore, sales of the oral hygiene product are also good in this country. The total market size is near about 4.6 billion where Colgate has the maximum market share of 28% (Forbes.com 2016). The oral hygiene product market is growing with a rate of 4% annually. Since there is lot of competitors in the market in this segment with an easy market entry and exit method, therefore it has oligopolistic market structure (Hiatt and Sine 2014).
Figure 1: Percentage of market share for each company and the volume of the market
3.2 Industry and market trends
The oral hygiene product market in Singapore is highly competitive and lot of global brand is operating business in this market. In spite of having so many competitions in the market, the segment is growing in a stable way and providing chance to the new entrants market (Parks, Olson and Bokor 2015). Oral hygiene market in Singapore is growing in 4% rate whereas the market leader is growing below the industry standard (Forbes.com 2016). Therefore, it can be said that there is good potential to enter the business because market leader is developing space for others to enter the market.
Figure 2: Market trend of toothpaste in the Singapore market for last 10 years
Dividing the market into segments helped the business to address the more specific market needs, media, pricing patterns and decision making in each of the different market segments. Oral hygiene is the basic treatment that is used by every household. Therefore market Segmentation for the product will be wide that eliminates the geographic and behavioural segmentation however demographic segmentation like occupation, socio economic group and psychographic segmentation like personality and lifestyle will be relevant. Entrepreneur segmented the market by the age of users (Mollick 2013).
Targeted market will be population between age 20 to 60 in Singapore areas approximately 3.5 million which is the largest population in the country. For future, there is plan for gaining more market share by selling the product in more than one country (Berry 2005).
Buyer of oral hygiene product in Singapore market is aware about their product benefit and they understand the need of their hygiene. In such case, it is very important to understand the market and provide the best product to the customer. The customer behaviour is associated with the product quality and benefit whereas it is not highly influenced by the price (Pollack, Rutherford and Nagy 2012).
Threats of substitutes – Threat of substitute is low in this market. Magic tooth cleaner has an innovative idea, with high quality and technology which makes it a user-friendly product. Magic tooth cleaner also creates value for everyday life for their consumer by providing benefit to their health.
Threats of New Entrants – Threat of new entrant is medium. Due to its innovative technology product of Magic tooth cleaner will have trademark and support of intellectual property right. This will provide barrier to the new entrants with same kind of product however, threat of different product with similar benefit is always there (Entrepreneurship.org 2016).
Rivalry among existing firms – Rivalry among existing firms is also considered as low in the market because it will operate in market segment where already many company exist with their existing brand.
Bargaining power of suppliers – Bargaining power of suppliers is high. The technological resources of the company are very limited therefore; company has to depend on very few suppliers that increase their bargaining power.
Bargaining power of buyers – Bargaining power of buyers is high. Due to lot of competition in the market buyer will have lot of option for their oral care that increases their bargaining power however, the uniqueness of the product will also control the market and the buyer behaviour (Keating, Geiger and McLoughlin 2014).
The customers may have different needs for different demographic region. Therefore, market segmentation comes in as important factors. As magic tooth cleaner is suitable for every household, oral hygiene is recognised as a must for all human. It is also one of the Maslow’s basic needs. Therefore, when entrepreneur consider market segmentation for this area, age is consider main factor. Too young age may need supervision; in addition, old age may not want to opt for new technology invention (Söderblom et al. 2015). Entrepreneur decided Age 20 to 60 has been chosen to segment in Singapore area. Marketing effort and strategies will zoom into particular age group. The sale target for 1st year of the production will be at least 40% of consumer age within 20 to 60 around Singapore area (Entrepreneurship.org 2016).
Value proposition statement – “Oral hygiene is necessity for every household and it is a norm. We promote every household for hygienic tooth care; minimize time consuming for cleaning of the sink with better technology, cost saving and low maintenance after each usage as it is disposable.”
Unique value proposition will be first-ever product among oral hygiene, Time saving for cleaning up the sink every morning for housewives, for hospitals, lower cross infection caused by body fluid bore disease such as AIDS, Hep-B etc.
The most crucial part is determining the competitor accurately. Tactics and strategy will be created according to the competitor’s business nature. Someone sells a product that is different from magic tooth cleaner does not mean that they are not a competitor. As long as it can be substitutable, they are competitor. As magic cleaner is first of that kind in the market, toothpaste industries are classified as competitors because they also provide oral care benefits (Mullins 2012).
|
Colgate |
Magic Tooth Cleaner |
|
|
Profits margin |
Dec. 31, 2015 58.81% |
39.8% (Projected) |
|
Sales |
worldwide Net sales of $3,899 million in fourth quarter 2015 |
$900,000 (Projected) |
|
Location |
World Wide |
Singapore |
|
Price strategy |
Never use price cut to increase sales |
Market skimming pricing |
|
Customer service |
Good |
Aim for “excellent” by going extra miles for consumers, listening the customer needs, 24 hours helpline |
|
Direct sale or whole sale or retail |
Retail |
Retail, B2B |
|
Parent Company |
The Colgate company |
“Dreamland” production and trading Ltd. |
|
Market Share |
28.3% (Forbes.com, 2016) |
Aim to go global and gain market share more than 25% |
Sale tactics will be firstly sponsorship for events such as band performance, some company’s D&D sponsorship, Marathon events etc. By sponsoring, the events that targeted age group will be going and events must be aligned with the market segment targeted age between 20 to 60 populations
|
4P |
Strategy |
|
Product |
Magic tooth cleaner is completely new product and differentiated from other types of tooth cleaners. The product has differentiation strategy from its competitors. |
|
Price |
Price will remain flexible and it will be fixed according to the market that will be characterized by market skimming pricing and Neutral pricing. Selling price will have to accommodate the mark-ups prevailing in oral care industry. Selling price will be based on market research on how much customers are willing to pay for “Magic Tooth Cleaner” as compared to the competitor’s product. According to the result of buyer intension survey, customers are willing to pay maximum 18$ per magic tooth cleaner. |
|
Place |
Distribution channels are also part of the brand strategy because it will increase the product visibility. Wholesaler and retailer will be the part of the distribution channel. Apart from that, company will also distribute product through supermarkets. |
|
Promotion |
Promotion will be done to create awareness for the entire targeted consumer regarding innovative “Magic Tooth Cleaner”. Planned promotional activities will be Advertising on social media, radio, magazines, newspaper, MediaCorp, Sales, Organisational sales, Sponsorship deals for businesses (Plummer, Allison and Connelly 2015). |
A successful launch makes potential customers aware of the new product and keen to try it. Distribution, promotion and customer support are three important elements for new launching of the product.
Website is the main look of the business. Therefore, magic cleaner website will create as smart design, well organized and later on will add on the online ordering option. Website will be finalized at least 8-10 weeks prior to launching date.
Create people awareness before the launching of the product, continue posting the promotion information or lucky draw information until launch date, Sneak peak and coming soon posts to let the people know about “magic tooth cleaner”. Facebook, Instagram and twitter is also powerful social media platforms for potential customers and business partners and shareholders.
Email Marketing will be used before launching of the product. But email marketing option will be utilized more after product has been in the market for at least 7 months and announce in email marketing after customers become members, email marketing will inform about give away points and samples (Schjoedt et al. 2013).
Public relations (PR) support was substantial for new product launch. 6 to 10 weeks before the product has been launch, invite press people and reporter to know about the product. Making sure to highlight product’s unique features and will make the reporters to write the article about the product.
The sale potential of the “magic tooth cleaner” will stay in market worthwhile. It is not just for short term. It has opportunity on long-term growth rather than just a trend, as it is an oral care, which is necessary for every household. It can dominate the largest market in future with growing opportunities to expand different region, aim for younger age group in future.
The brand development is associated with the product positioning by the company. The brand is set to position in the premium class segment however; the price of the product will remain in the middle segment. Therefore, brand development will be associated with the sensation of good feeling as well as better efficacy.
Once an opportunity match the business’s vision and goals, market growth and market potential need to be assessed. The competitive advantage of the magic tooth cleaner will be market differentiation due to its early market entry and product uniqueness. It is a unique product and base on the chances of differentiation, the business will build more strength for future success. The duration that “magic tooth cleaner” will seize the market is also main factors. Base on the market and economically, in term of duration of the opportunity “Dreamland” production will have about 2 to 3 years before the competitors or similar products will come out into the market (Block et al. 2013).
Product and market will be developed with the proper channel sales and distribution method. If the promotion of the product is good then availability of the product is next most important aspects. The wholesaler and retailer will be set in the channel distribution system who will distribute the product to the customers.
The market of the oral hygiene product in the Singapore market is growing in a 4% rate annually where the market leaders are growing below the rate of the industry. Therefore, it can be said that there is a moderate growth potential in the market for a normal brand. However if the new product is associated with the good features then it can grow beyond the market growth (Klotz et al. 2014).
6.1 Making, assembling and outsourcing
Buying some of the machines and equipments, which are not playing vital roles, will be used second hand machinery and tools because it will reduce the cost of production and maximise the profit. From there on, after the business is stable, the machines and equipments will be upgraded for newer and latest models. Entrepreneur will carry out negotiating the deal with suppliers for the raw materials. Items that need to be outsourced or make will be decided after ACCA graduate professional accountant’s advice. It will be decided most cost effective production for beginning. The general rule is that entrepreneur should buy little and in expensive machines for new venture to avoid wastage on re-equipment for production (Au et al. 2013).
|
Plant/Equipment (Second hand) |
Cost ($) |
Do you already own it |
Make or buy |
|
Packaging conveyor |
15,000 |
No |
Buy |
|
Package machine |
6,000 |
No |
Buy |
|
Sterilizer |
23,000 |
No |
Buy |
|
Laboratory equipment |
20,000 |
No |
Buy |
|
Chemicals mixer machines |
5,700 |
No |
Buy |
|
Generator |
500 |
No |
Buy |
|
Mixer machine |
300 |
No |
Buy |
|
Total |
70,500 |
Magic tooth cleaner is a scalable business it has high margins with medium level support and minimum staffs. To make the business more scalable, entrepreneur will define the process that is non-strategic to produce optimum level of product and will outsource the required support. The core competency is the high technology biomedical-engineered sterilized process. Even though Scaling requires leveraging outside resources, the core competency of the magic cleaner production part will not be outsourced (Kunz and Dow 2013).
Entrepreneur has considered the franchising possibilities as well. Franchising will make the business scale faster and maximise profit for shareholders. Magic tooth cleaner will build the long-term strategy that will promote continuous innovation by valuing customer’s feedback and seeking their needs. Business development department will be duly responsible for continuous research and closely monitor for product development activities. This will maintain the scalability of the business.
The possible strategy that “Magic Tooth Cleaner” may adopt in future will be merger and acquisition with profitable companies. By combining the business, the purpose is to gain synergy that can be benefited by better performance and cost will become lower (Entrepreneurship.org 2016). It will make business more scalable and beneficial for investors.
7. Conclusion
From the above discussion, it can be summarized that Magic Tooth Cleaner of Dreamland Production and Trading Limited will get the success in the Singapore market because of the unique product benefit and quality along with innovation. The business plan of the company also describes about the details of the business including the marketing and finance developing a concrete image of the toothpaste market in the country. Therefore may become highly successful in the market due to its aggressive targeting strategy.
8. Reference list
Au, K., Chiang, F.F., Birtch, T.A. and Ding, Z., 2013. Incubating the next generation to venture: The case of a family business in Hong Kong. Asia Pacific Journal of Management, 30(3), pp.749-767.
Berry, T. (2005). Conducting a Market Analysis for Your Business Plan. [online] Entrepreneur.
Blank, S., 2013. Why the lean start-up changes everything. Harvard Business Review, 91(5), pp.63-72.
Block, J., Thurik, R., Van der Zwan, P. and Walter, S., 2013. Business Takeover or New Venture? Individual and Environmental Determinants From a Crossâ€ÂCountry Study. Entrepreneurship Theory and Practice, 37(5), pp.1099-1121.
Bridge, S. and Hegarty, C., 2013. Beyond the Business Plan: 10 Principles for New Venture Explorers. Palgrave Macmillan.
Davidsson, P. and Gordon, S.R., 2012. Panel studies of new venture creation: a methods-focused review and suggestions for future research. Small Business Economics, 39(4), pp.853-876.
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