Miss Hawahawai Air Products.

(MHAP)
History and formation of the company: MHAP is a 3-year-old start up private limited company. It
was started by an IIMA graduate with 20 years of experience in the field of HR consulting and
politics. To start this venture, another partner joined, who brought in industry experience of dealing
with Oxygen supplies to the Hospital sector. He has sourcing experience from suppliers in China and
Europe.

Market needs: Indoor Air Quality is an area of great concern in India. The particulate matter
suspended in the air (called PM2.5) is a silent long-term killer. It enters the lungs, and get embedded
in the lungs cell, causing long term health detriment. These particulate matters in the air is heavy in
industrial cities, with high traffic volumes, construction activities, crop burning etc. The Government
of India has installed PM2.5 sensors in NCR region to monitor the air quality and colour codes of
green, yellow and red, are used to show the quality of outside air that we breathe.

There is another dimension to the air that we breathe. Contrary to popular belief that the indoor air
we breathe is cleaner than the outside air, it is just the opposite. Indoor air is 5 times more polluted
than outside air, due to fine dust, pollen, kitchen emissions, pet hair shedding, mold, fungus, & other
particles. Since we spend most of our times indoor (either at home or in office), the risk to our
health is more from poor indoor air quality. Air-conditioners are of no help, as they re-circulate the
air in the room, and the filters are not fine enough to catch the minutest of particle. This is
overlooked by the end user. People who have breathing troubles, like asthmatic patients and old age
people are especially vulnerable to this problem. There are a variety of other associated symptoms
to prolonged exposure to poor air quality – lack of attention, drowsiness, tiredness, all leading to
long term health issues.

There are 2 elements of indoor air quality.

1. The particulate matter of sizes of 2.5 micron or less. These can be removed by using the
portable air cleaners that are readily available in the market, made by the white goods
manufacturer. Sharp air purifiers, Panasonics, Hitachi, Dyson are popular names in the
market.
2. The concentration of oxygen in the air. Healthy clean air should have 21% oxygen, the same
level as what we get in mountain. The oxygen level in the air in most metros is around 15 –
17%. We do not realize this as we do not measure it. Oxygen is the first intervention in any
medical emergencies. Now during Covid, it is all the more important to monitor the level of
oxygen in our blood.

Product: The above scenario led to MHAP’s new product idea. In retrospect, the product was
launched ahead of its time. To introduce a product that ensures that the air we breathe has 21%
oxygen and not less. It is not a regular air-purifier. It is an air-purifier plus an oxygen producer. That
is the USP of the product. There is currently no competition of this product.

Customer segmentation: The target consumers are: High net worth individuals who understand the
benefits of breathing healthy air and are willing to pay a price premium. Since they already have
disposable income to invest in various home gadgets, the OXYGEN product from MHAP falls in the
affordable range. The second target group is corporates (especially foreign) that is willing to invest in
office infrastructure to provide healthy working to their employees.

Customer Application: For the residential segment, the MHAP product, comes as a portable product.
It is a plug and play solution. One machine can be used for 1 bedroom of approximately 100 – 120
square metres. Multiple machines can be put in the apartment. For high end apartments, that have
a false ceiling height, this machine can be integrated with the air supply system of the apartment
(typically a VRV or small central A/C system).

For the commercial segment, it can be installed in the Air Handling Unit at the basement of the
building that serves the A/C needs of each floor of the office complex.

Distribution: There are about 10 distributors in India, mostly in the NCR region. But they are not
very well engaged with the company and do not actively promote the product.

Promotion: Very little direct promotion is done and most of them are word of mouth. The company
depends heavily on the support of architects and air-conditioning consultants, who play a major role
in the purchase decision.

Product sourcing: The components are sheet metal fabrication, fans, motors, air compressor and
filters of various types. All these components are sourced from outside suppliers. The critical
components (filters & air-compressors) are sourced from China. There is an assembly unit in Noida,
that assembles all the components. The production is based on “order” and is not a continuous
assembly process. There is no warehouse for storing finished goods.

Customer Launch Strategy: MHAP have successfully launched and sold units to many customers
with some very satisfied customers. After CORONA pandemic it has become very clear that air
quality will play a major role in the life of future. Also, oxygen is the most important aspect for
survival.

Initial investment: MHAP was started by its founders with a small first year revenue of INR 100k, and
grew to do more than INR 75 Lacs business in 2018. Since the market awareness for air quality was
low, and Covid not there, it took time for MHAP to penetrate wide & deep into the real segment.

Past 3-year P&L, Balance sheet, cash flow statement: Exhibit 1 shows the financial statements, as
submitted on April 2019.

Management team: Role of advisors: There is a board of advisors who comes from various
backgrounds, businessmen who have understood the value of the product, retired IAS officer,
Professor in Environmental Science. Their engagement has been brief and not much value has come
out of having them on board.

Initial success: There has been few customers to start with, that have remained loyal for the period.
Subsequently, MHAP acquired more satisfied customers who have placed repeated orders after
experiencing the value of the product. But pre- Covid, the orders were slowing down as the required
promotional budget was not available. Many staff exited the company and there was a problem.

While reflecting on the business, the management team is confused. There is a clear market
opportunity due to Covid. New segment of Hospitals/nursing homes have come up across India.
Govt. is encouraging local companies to step in and fight Covid. Grants are being given and funds
are available.

Problem Statement: MHAP is in the RED. It needs a turnaround. A new business model on
acquiring customers on a much wider platform than the earlier model has to be developed.

Case Problem: Fundamentals are there. Product is there. Value proposition is there. Experience of
assembly is there. Small base of satisfied customer is there. MHAP thinks the critical missing items
are: Strong marketing strategy to increase awareness, more funds to energize the business, a
strong organization structure to support sales, installation & service capability. MHAP wants a
comprehensive strategy & execution plan for turnaround.