DIPLOMA IN EARLY CHILDHOOD EDUCATION

SEMESTER MAY / 2021

MPU 2222

ENTREPRENEURSHIP I

MATRICULATION NO : 000805070226001
IDENTITY CARD NO. : 000805-07-0226
TELEPHONE NO. : 018-9400635
E-MAIL : zsang0805@oum.edu.my
LEARNING CENTRE : OUM SEBARANG JAYA
Table of Contents
Task 1...............................................................................................................................................
1.0 Description of the selected firm.............................................................................................
2.0 Descriptions of innovation sources in the chosen firm..........................................................
3.0 Identification and discussion on barriers to innovation in the selected firm.........................
4.0 Recommendations to improve innovation culture among the employees in the selected
firm...............................................................................................................................................
Task 2...............................................................................................................................................
1. Executive Summary.................................................................................................................
2. Introduction..............................................................................................................................
2.1 Background........................................................................................................................
2.2 New Business Venture.......................................................................................................
3.1 Market Analysis.....................................................................................................................
3.2 Marketing & Sales Strategies.................................................................................................
3.3 Product / Services...................................................................................................................
4.0 Management...........................................................................................................................
5.0 Funding Request....................................................................................................................
6.0 Financial Projections..............................................................................................................
References......................................................................................................................................
Task 1

1.0 Description of the selected firm

Roca Malaysia Berhad commenced its business initially with cast iron radiators specifically
for the domestic. Later on, the company has entered the bathroom space in the year 1929 with
the production of baths space. Roca Malaysia is the manufacturers of Sanitarywares but
originally operated with the name of Johnson Suisse. The best part of Roca is that it has
always focused on creating something new for the people. The company is always attentive
to the changes within society. The company in the year 1936 has understood the challenge of
producing vitreous bathroom appliances in China. So, in 1954, Roca started brassware
production. At present the company wholesome manufacturers and sells sanitary ware and
fittings (Roca, 2018).

Roca Malaysia Sdn Berhad was the first-ever company to obtain ISO standard in Malaysia. in
this present period, it holds more than 40 percent of the market share in Malaysia. The
company is equally responsible for exporting its unique and different products to Vietnam,
Australia, Pakistan, Middle East Countries, New Zealand, Singapore, Bangladesh, and the
Philippines. the company at present is owned by the Roca Group with the head office in
Petaling Jaya, Malaysia, and is the largest manufacturer of Sanitarywares (Construction1,
2019).

2.0 Descriptions of innovation sources in the chosen firm

Technological innovation constitutes a crucial element for achieving success and making
progressive development in any activity. Roca Malaysia Sdn Berhad maintains innovation
within its manufacturing process. State-of-the-art technology is implemented in all the
subsidiaries and all stages of production. Roca banks on innovation from the conception of
the product, manufacture, design, logistics, and distribution. Use of modern technology in all
the factories throughout the world facilities the highest quality in the production process. The
technology department of the company is much more committed to the manufacturing of
completely new products in the market. The entire manufacturing team dedicatedly works in
order to maintain the position.

The constant innovation of the company in terms of technology has just one aim as a whole
that to provide customers the best of the products and services. Furthermore, the research and
development team of the company is efficient enough. The research and development team of
the company analysis the needs and tastes of the society to manufacture the products as per
the market conditions. The adaptation process is not only conducted on the basis of
modernity but enhancement of people's life is equally given importance. The innovation lab
of the undertaken firms is a dynamic team with conceptual and international designers (Roca,
2020).

3.0 Identification and discussion on barriers to innovation in the selected firm

The term innovation sounds simple but is complicated and can turn out difficult at certain
points in time. Sometimes it can also feel like an uphill battle of innovation at large
companies. Initially, it was quite difficult for Roca to manage innovation and associated
things. Implementation of innovation can require sweeping up the internal changes. This
means it is better to change certain roles of the employee for some better reasons. People
began to think politically when the decision regarding innovation comes up. The problem is
people who feel at risk with the innovation usually work actively to undermine such
activities. But it was quite tricky to avoid such kinds of issues.

The company though has good innovation facilities and they have also invested a good
amount of money on that factor but still, there were certain issues that hinder the process of
innovation. it was from 2017, the profit margin of the company has started to fall downward.
This has made the company not attract people. The company sells its product but as a whole,
the company does not earn much. To be precise the company does not earn much and also
there is no as much profit. This is another barrier that has hindered the process of innovation
for the company. To overcome the barriers Roca Malaysia Sdn Berhad can reduce the cost of
additional expenses (Roca, 2016).

4.0 Recommendations to improve innovation culture among the employees in the

selected firm
An organization becomes successful when it practices good culture therein. but good culture
does not only signify ethics, proper communication, and others. But in this period surge of
innovation in the organization has become major crucial. Thus, to improve the innovation
culture among employees in Roca Malaysia Sdn Berhad some are illustrated below -

Communication of the innovation strategy

Proclamation of the innovation strategy within the organization sets the direction for the
entire company. The expectations regarding the goal of the innovation must be clear through
the innovation strategy. it has to be ensured that each member of the Roca Malaysia Sdn
Berhad understands the importance of innovative culture in the organization. Henceforth, to
make involve the employees of the organization communication is the first step.

Cascade workshops for the involvement of the employee

Communication of the innovation strategy helps to raise awareness. But communication is

very much one-sided and so, cascaded workshops might work out for the company. Cascaded
workshops employees from the different levels are picked up from top to down. The
workshop will define the viability of innovation and also the role of the employees in the
innovation process (HENGSBERGER, 2018).

Creativity workshops

Creativity workshops are also another way of improving innovation culture among
employees. to attract employees, it is significant to make the workshop well moderated and
the topic of discussion should be exciting. A massive attraction will be created and people
will be inspired much to give their viewpoint in the workshops.

Reduction of extra cost

Reduction of cost is an effective way to enhance the profitability of the company. The
company has to make an effective decision while the development of the product as each of
the development processes of the company affects cost. Initially, the company stressed the
launch of the new product instead of a major focus on the cost. So, it will help the company
to maintain profit by maintaining quality. Roca Malaysia Sdn Berhad has to make a profit
and, for that, they have to sustain themselves in the market.
Task 2

1. Executive Summary
The overall discussion is on the innovative product of In-wash Khroma which will be
launched by the company Roca Malaysia Sdn with the establishment of a new business
venture in the Malaysian market. The information of the background of the company and the
new venture is provided in this report. The market analysis along with market and sales
strategies are represented in this report. The information on the product and the management
structure is represented along with the funding request and the financial projections.

2. Introduction

2.1 Background
Roca Malaysia Sdn Bhd is one of the most recognized home construction businesses in
Malaysia. The organization was founded in 1964. Since its establishment, the organization
is providing innovative products such as plumbing fixtures and bathroom accessories. The
organization has belonged to the consumer discretionary industry. The organization is
maintaining its business activities very successfully. The organization is operating its
business activities from the headquarters which is situated in the Petaling Jaya, Selangor. The
organizational profit has been negatively impacted from 2017 to 2019. In this case, the
organization is intending to recapture the market by introducing significant products. One of
the most significant products of the organization is In-Wash Khroma. In-Wash Khroma is a
one-piece smart toilet with a soft texture (Emis, 2021).

2.2 New Business Venture

The organization is intending to create a significant market by undertaking a new venture. In
this case, the organization has to put a significant focus on smart toilet products. Moreover,
the organization can put significant focus on the other accessories that can be used in the
households. Through this way, the organization will be able to expand its business activities.
The organization can create smart kitchen products to increase product range. In this case, the
organization will be able to attract the attention of potential customers. Thus, the organization
will gain effective profitability (EduPristine, 2017).
3.1 Market Analysis
The market analysis for the new innovative product In-wash Khroma will initially surround
the identification of potential customers. The demand for the innovative product will be
identified with the help of placing the product appropriately among the customers. The target
market selected by the new venture is the Malaysian market. The targeting of potential
consumers is essential for the company to place the product appropriately. The proper
development of the supply chain process is essential to strengthen the product and service
provision environment. The identification of the willingness of the customers for the new
innovative product is essential. Apart from this, the identification of the existing competitors'
strengths and weaknesses should be determined before the placement of the product is made.
Thus, it will enable the new business venture to gain success for the innovative product In-
wash Khroma. The segmentation process should be made to place and position the new
innovative product appropriately in the market. The segmentation will be based on the
regional and behavioral-based segmentation process. The region surrounds the Kula-Lumpur,
Selangor, and Sarawak regions present in Malaysia. The behavioral-based segmentation will
be made with the identification of the needs of the customers, willingness to buy, and the
interest shown by the customers to buy in the future. It will help to strengthen the placement
of products appropriately in the targeted Malaysian market (Kuligowski, 2020).

3.2 Marketing & Sales Strategies

Pricing
The value-based pricing strategy should be implemented by the company so that it can be
easily able to establish a strong competitive and differentiated environment. It is essential as
it helps to strengthen new venture product placement processes in the market. It will help to
place the pricing process from the customers' perspective and also creates a more profitable
environment for the company (Bdc, 2020).
Sales strategies
The inbound sales strategy is referred to as the new venture so that the organization can be
easily able to prioritize the customers' interests, pain points, goals, and needs. These will
enable the new venture to focus to strengthen the perspective of customers appropriately and
also it can be easily able to place the product among the customers appropriately (Kopp,
2018).
Advertising and promotion
The business organization will use the internet medium and television to attract the attention
of potential customers. In the modern business ea, the general propel are very much attached
with the online sites. In this case, the organization can be able to promote its products through
an effective online approach. Moreover, the organization will be able to reach huge numbers
of target audiences through online advertisements. Moreover, the television advertisement
approach helps the entity to attract the attention of potential customers. For this reason, the
organization will undertake a television and online advertisement approach. The organization
will undertake product giveaways or demonstrations approach for better promotional
purposes. In this case, the employees of the organization will be able to demonstrate the
functions and systems of the products (Farooq, 2020).

3.3 Product / Services

In-wash Khroma is an innovative product that is targeted to be launched with the
establishment of a new venture. It is described as a one-piece smart toilet with a soft texture.
It is consisting of an automatic cistern flush, back to wall, remote control panel, fixing kit,
and hot water cleaning process is also included. It consists of dual-outlet type as well as it
surrounds the strong personalized program with seat temperature control. These
characteristics of the innovative product will create a strong demand in the Malaysian market.
It also consists of a floor-standing LCD screen as installation features (Roca, 2021).

Source: (Roca, 2021)

4.0 Management
The organizational structure of the new venture that will be established by Roca Malaysia
Sdn Bhd will be functional. It aims to strengthen the management of different segments that
are present in the organization. It also allows the organization to improve the efficiencies of
the functional groups that are present in the company. This will enable the company to
manage the overall functions appropriately (Tutorialspoint, 2021).

The management profile will cover the CEO, Financial manager, HR manager, and
Operational Manager. These management profiles will help to strengthen the management
activities of the new venture that will be established by the company. The financial manager
will be consisting of the responsibilities of the financial environment present in the new
venture. The HR manager will be involved in the training, recruitment, and selection of the
human resources. The operational manager will be involved in the marketing, production, and
placement of the product.

The remuneration will be provided to CEO will be RM300000, for Financial Manager will be
RM 150000, for HR Manager will be RM 150000, and Operational Manager will be RM
150000. The administrative expenses will be around RM 100000 for the new venture.

5.0 Funding Request

The organization has to request the funding amount from the financial institutions. In this
case, the organization has to require 1000000 RM to start the new venture. In this case, the
organization has to pay the interest of the loan amount every month. The organization will
take the loan for short-term purposes. The organization will complete the loan repayments
process in 1 year. In this case, the organization will be able to maintain its business activities.
In the initial stage, the organization needs a loan for maintaining the activities. While the
organization will be able to earn a significant amount of profit, then the organization will
meet the obligation in an effective manner.

6.0 Financial Projections

Pro forma Income Statement 2021 2022

Sales 354705 461550

Cost 199051 229974

Production Payroll 44000 57000

Net Cost of Sales 243051 286974

Gross Margin 111654 174576

Gross Margin (%) 31.48% 37.82%

Operating Expenses

Sales and Marketing Expenses

Payroll 2750 4000

Advertising and promotion 4950 6000

Net Expenses 7700 10000

Sales and Marketing % 2.17% 2.17%

General and Administrative Expenses

Payroll 43200 43500

Other Expenses 5400 7200

Depreciation 7750 7750

Rent 8400 8400

Lease of Equipment 35988 35988

Utilities 7200 7200

Insurance 4800 5400

Net Expenses 112738 115438

General and Administrative % 31.78% 25.01%

Other Expenses:

Consultants 0 6,000

Total Other Expenses 0 6,000

Other % 0.00% 1.30%

Net Operating Expenses 120438 131438

PBIT (8784) 43138

EBITDA (1034) 50888

Expense of interest 4297 3938

Taxes Incurred 0 11760

Net Profit (13081) 27440

Net Profit / Sales -3.69% 5.95%

Other Expenses:

Consultants 0 6,000

Net Other Expenses 0 6,000

Other % 0.00% 1.30%

Total Operating Expenses 120438 131438

PBIT (8784) 43138

EBITDA (1,034) 50,888

Interest Expense 4297 3938

Taxes Incurred 0 11760

Net Profit (13081) 27440

Net Profit/Sales -3.69% 5.95%

Pro forma Cash Flow

Cash Received 2021 2022

Cash from Operations

Cash Sales 88676 115387

Cash Receivables 207172 328433

Subtotal Cash 295848 443821

Subtotal Cash Received 295848 443821

Expenditures

Cash Spending 89950 104500

Bill Payments 260345 346477

Subtotal 350295 450977

Additional Cash Spent

Principal Repayment of Long-term Liabilities 3750 3750

Subtotal Spent 354045 454727

Net Cash Flow (58197) (10906)

Cash Balance 112453 101547

Pro forma Balance Sheet

Assets 2021 2022

Current Assets

Cash 112453 101547

Accounts Receivable 58857 76586

Inventory 37048 42803

Current Assets (others) 5000 5000

Total Current Assets 213358 225937

Long-term Assets 45000 45000

Accumulated Depreciation 7750 15500

Total Long-term Assets 37250 29500

Total Assets 250608 255437

Liabilities and Capital

Current Liabilities

Accounts Payable 45789 26927

Subtotal of the Current Liabilities 45789 26927

Long-term Liabilities 41250 37500

Total Liabilities 87039 64427

Paid-in Capital 230000 230000

Retained Earnings (53350) (66431)

Earnings (13081) 27440

Total Capital 163569 191010

Total Liabilities and Capital 250608 255437

Net Worth 163569 191010

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