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Business Plan

Seow Yi Cheng
Sam Wu Shao Zong
Elson Ee Cheong Seng
Oei Jun Long
Wong Jun Jie
Jack Huang Liang Yen
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EXECUTIVE SUMMARY

OPPORTUNITY STATEMENT
Our product is the first ever plaster that can accelerate wound healing. There is a
strong demand of our product which we can satisfy, and with the strong competitiveness
of our product, we are confident of capturing a significant amount of market share.
OUR PRODUCT
Our product is a plaster, which includes a formula that can accelerate wound
healing. The formula, scientifically proven, can speed up wound healing rates by up to
almost 700%. This product has three main qualities, namely its high effectiveness,
100% natural constituents (anti microbial infections and no side effects) and its cost
effectiveness.
THE MARKET
We target the Singapore market in our start up period. Market research has shown
that there is a need for wound healing materials, demand for products that
accelerates wound healing, and few products that can accelerate wound healing in
the market. These conditions will help to generate maximum demand for our product.
OUR COMPETITIVE ADVANTAGE
Our competitive advantage co incides w ith o ur pro duct’s qualities. We are much
higher in effectiveness than other products. Because of our 100% natural constituents,
we are able to prevent microbial infections and have no undesirable side effects, as
compared to chemical alternatives which may possibly result in side effects. We are
cost effective - allowing us to match the price of less effective alternatives - our value
for money quality is another reason for consumers to choose us.
OUR BUSINESS MODEL
The key components of our business model are: R&D, Patenting, Outsourcing,
Marketing and Wholesaling. R&D forms the key thrust for the development and
sustainability of our product, while Patenting serves to protect our intellectual property.
Outsourcing the manufacturing of our product to another company helps to cut down on
cost incurred, and can ensure the standard of product. Marketing helps us to outreach to
our customers, and Wholesaling is our method of generating revenue.
OPERATIONS
We plan to outsource the manufacturing of our product to other companies, and
wholesaling our product to distributors who will then distribute to retailers island-wide.
We will also utilize a marketing mix with the 4Ps of Product, Placement, Price and
Promotion to ensure maximum penetration and reception of our product.

SUMMARY
In summary, with the advantages of the product, and the m ark et’s d em an d s, we
are confident of securing 5% of the market share within one year. We would require
and has already obtained SGD 40,000 as start up capital.
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TABLE OF CONTENTS

EXECUTIVE SUMMARY 1
TABLE OF CONTENTS 2
I. ORGANIZATIONAL PLAN 3
· Company Profile 3
· Business Concept 3
· Management and Organization 5

II. OUR PRODUCT 7

· Product Analysis 7

III. MARKETING PLAN 9

· Marco-Environmental Analysis 9
· Competitive Analysis 10
· Consumer Analysis 13
· Marketing Strategy 15

IV. OPERATION PLAN 18

· Operation Process 18
· Action Plan 19
· Product Cycle 20

V. FINANCIAL PLAN 21
· Accounts Statement 21
· Break Even Analysis 22
· Capitalisation and Start up costs 23

VI. APPENDICES I
· Balance sheet and Cash Flow statement I
· Break Even Analysis III
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ORGANIZATIONAL PLAN
1.1 Company Profile

3
Vi
Vigour · Vitality · Vibe

Mission Statement

Through continuous innovation and research & development,

we aim to create organic products which are
environmentally friendly and superior in quality.

Our Vision

An international forerunner in wound healing technology.

Our Core Values

1. Innovation
2. Research & Development
3. Enterprise
4. Integrity
5. Trustworthiness

1.2 Business Concept

1.21 Business Model

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Vi3’s bu siness m o del hig h lights the niche in our operations, Research &
Development. Placed at the apex of the diagram, R&D is the driving engine of our
business. R&D serves to fulfil our mission of producing cost efficient and effective
products. We aim sustain and advance our business through continuous R&D, so as to
produce technologically advanced product of superior quality to satisfy co nsu m ers’ needs.
Cognizant of the rapid pace of technological advancement, our R&D would also serve to
improve marketability of current products, through continuous innovation and market
intelligence. They are also responsible for coming up with new products to serve the
m arket’s dem and.

Patenting our product serves to protect our research and intellectual property, and
offers us exclusive rights in terms of distribution and sales of our product.

Outsourcing provides a viable alternative to manufacturing the product ourselves.

Manufacturing costs are comparatively cheaper in places such as Taiwan, China, or
Malaysia. Therefore, our choice for production of our product would be to outsource to a
reliable company overseas.

Marketing is a key component in the business. Marketing our product effectively

will assist us in highlighting our niche in terms of being superior to other products. It will
also allow us to capture and retain customers.

Wholesaling is our choice of business as it provides the opportunity of selling our

products to customers of choice, distributing our product to large scale distributors such
as pharmacies or supermarkets for sales to consumers.

1.22 Type of Company – Private Joint Stock Company

The Private Joint Stock Company was selected to be our choice business
ownership type as it offers the best combination of investment opportunities, benefits and
accountability for our business.

Bearing in mind the high start-up cost of our business, the Private Joint Stock
Company would be the best framework for our company to operate within, as a start-up
company. Furthermore, the limited liability which the shareholder would enjoy whilst
investing in our Private Joint Stock Company would also encourage investors to invest in
our company, because unlike a partnership, our shareholders would not be personally
liable for any debts of the business.

In addition, the compulsory audit and submission of annual accounts required of a

P rivate Jo int S to ck C o m pany, alig ns w ith o ur co m pany’s o b jective of becoming a
professional company with integrity, as the annual audits and accounts not only
underscores the high degree of transparency involved in running our business, they also
serve to em p hasize o n o ur co m pany’s acco untability to o ur investo rs and clients, hence
providing a platform to attract customers and investors.
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1.3 Management and Organization

The company, in its start-up period, will not be employing workers or

administrative officers. All research & development, administrative and marketing
responsibilities will be undertaken by ourselves, with exception of roles requiring legal
and professional knowledge.

1.31 Management Team

Chief Executive Officer

SEOW YI CHENG

Deputy CEO
SAM
WU SHAO ZONG

Vice President (Marketing)

Vice President (Research) Chief Financial Officer Vice President
ELSON EE
WONG JUN JIE OEI JUN LONG JACK HUANG
CHEONG SENG

Chief Executive Officer – SEOW YI CHENG

As Chief Executive Officer, Yi Cheng is responsible for the entire operations of the Company and
reports directly to the board of directors. He oversees all operational aspects including establishing policies,
objectives and initiatives, and directs long term strategy. He is also responsible for the management of
Human Resource in the company at the Management level.
Yi Cheng has extensive experience in senior management, and the formulation of policies and
strategies. He was a member of the Executive Committee of Ortus Council in Hwa Chong Institution, as
well as an Ex-Co member of the Hwa Chong Institution National Police Cadet Corps. We believe that Yi
C h en g is equipped w ith th e n ecessary abilities to see through th e com pan y’s progress in our start up years.

Deputy Chief Executive Officer – SAM WU

Sam is in charge of company administration and marketing strategies. In the absence of the CEO,
he takes over the reins of the company. Sam is experienced in leadership positions, having been the Vice
Chairman of the ORTUS council. He also has extensive knowledge of business, coming from a business
background.
S am ’s bilingual abilities, which his achievements as a Bicultural Studies Program Scholar is a
testament to, will aid in us tapping into the Chinese Speaking Market.

Chief Financial Officer – OEI JUN LONG

Reporting directly to the CEO, Jun Long is responsible for analyzing and reviewing financial data,
reporting financial performance, preparing budgets, and monitoring expenditures and costs. He is also
required to present this information to the board of directors at regular intervals and provide this
information to shareholders and regulatory bodies.
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Jun Long is trained in managing financials, and has previous experience of managing financial
accounts. His expertise in Math is also shown by his involvement in the Math Research Program.

Vice President, Marketing – ELSON EE

Elson is respon sible for form ulating m arketin g strategies for th e com pan y’s products, in cluding
but not limited to pricing strategies, promotions, identifying new markets and advertisements. His main
duty is to prom ote th e com pan y’s products to our clien ts, and to create an d in crease th eir aw aren ess of our
products and our Company as a whole. Elson has a passion for marketing and that has been the fuel for
excelling in this field.

Vice President, Research and Development – WONG JUN JIE

Jun Jie is for responsible for research and development of product to ensure that our product
remains at the forefront of technology in the market. Bearing in mind that R&D is cornerstone to the
C om pan y’s future developm en t, R & D operation s w h ich w ould be carried out in a day -by-day basis would
be managed by Jun Jie, and he would be involved in leading the R&D personnel in improving our current
product, in addition to creating new products for the Company.
Jun Jie is consistently engaged in extensive scientific research studies since Secondary School. His
research projects has participated in many acclaimed competitions, and winning awards in the likes of
Singapore Science and Engineering Fair, Biotechnology Fair (Singapore) among others. Jun Jie aids in
providing the strategic research thrust to bring our company forward in innovation and research.

Vice President – JACK HUANG

As Vice President, Jack aids the CEO in administration, acting on an advisory role. He oversees he
internal operations and formulating strategies for the company.
Jack is the President of the 32nd Students Council in Hwa Chong Institution, his previous
experiences as class committee member and councillor have helped extensively in the promotion and
communication, as well as the exchange, of ideas.

1.32 Professional & Advisory Support

Our professional and advisory support will consist of the following:

A. Science Advisory – Ms Koe Heong Yin and Mr Goh Yan Yih

B. Accountant; Banker
C. Attorney
D. Insurance Agent
E. Board of Directors
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OUR PRODUCT

2.1 Product Analysis

Skin Area Covered Against Time

220

200
Area covered wrt Original (%)

180
Control
160 Extract 1
Extract 2
140

120

100
0 5 10 15 20 25
Time (hours)

Graph showing efficiency of selected extracts

The product we are currently working on is based on a formula of different herb

and spice extracts that is able to accelerate the wound healing process, which can be
obtained through special dissolving and extraction processes. Our formula contains
extracts that are able to actively engage and speed up the mechanisms controlling cell-
multiplication and movement, thus healing broken skin. Laboratory tests have shown
that our formula is able to significantly shorten the wound healing process, as shown by
acceleration of keratinocyte (a type of skin cell) proliferation by up to 6.80 fold.
Our product, infusing our formula into the plaster, consists of a layer of woven
fabric as the absorbent pad (medicated with our formula), which is covered in a layer of
adhesive. It will also include all features of conventional plasters.

Healing Mostly Healed Almost fully healed

Changes in skin cell proliferation in 45 hours, with application of formula.

Our product has 3 main advantages:

A. Superior effectiveness in wound healing

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B. Additional anti-oxidant and anti-microbial properties (with no

undesirable side effects)
C. Cost Effectiveness

Firstly, our product is superior effectiveness in wound healing, as proven from

the results ex-vivo and in-vitro experiments. Made of herbal and spice extracts obtained
through special solution and extraction processes, laboratory tests indicated that our
formula significantly shortens the wound healing process. Indicators include direct
evaluation of the rate of open wound recovery through scraping of skin cell culture, as
well as an increase in the expression of cell proliferation key indicating protein by 6.80
fold. Our research idea is scientifically accredited through clinching awards from science
competitions such as the Singapore Science Engineering Fair and Annual Bio-
technological Fair, and recognition from Nanyang Technological University (NTU).

Secondly, they have other medicinal value such as anti-oxidant and anti-
microbial properties. Thus, the application of such natural extracts not only accelerates
the wound healing process, but also provides additional protection for the wound site.
In addition, our product has no undesirable side effects, because it uses natural extracts,
thus making it safer than existing chemical-based products.

Thirdly, our product is cost effective. The production cost of a plaster is estimated
to be S$0.10 with addition of our formula. Due to the advancement of manufacturing
technology, there are many available manufacturers for outsourcing, allowing us to get a
competitive price. Because of the economics of scale, the manufacturing costs would also

Our product has potential for future improvement and upgrading. We are
currently experimenting with increasing the concentration of formula so as to cater
different needs such as severe burns and deep cuts. In order to increase the variety of
products that our company offers, we are exploring new avenues such as integrating our
formula with other dressings such as gauze or in the forms of sprays, coating or cream.

With superior effectiveness in wound healing, extra anti-oxidants and anti-

microbial protection (with no undesirable side effects) and cost effectiveness, we are
highly confident that this product will be a significant improvement from conventional
plasters and will be well-received by our customers.

In summary, due to its spectrum of superior properties, our product is profitable

and feasible as it potentially caters to the demand of our customers.

*For our full Scientific Report, please refer to

http://www.chs.edu.sg/~y03chs305/Vi3_Scientific%20Report.pdf
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MARKETING PLAN

3.1 Marco-Environmental Analysis

Internationally, the wound healing industry is a very profitable market to venture

into. The wound healing synthetic materials market is worth US$ 11 billion (European
Medical Device Manufacturer) every year, and is growing at a rate of 11% every year. In
the following segment, we will examine factors in the Singaporean Environment that
makes selling our product in Singapore profitable.

Pharmaceuticals contributed $9.5 billio n o r 84% o f S ingapo re’s m anu facturing

output (2005). The latest 2005 statistics showed that retail sales of medicinal products
increased by 8.2% as compared to the corresponding period of the previous year. From
this, we can see that there is a need for wound healing products, such as plasters, in the
market. Sales of wound healing materials represent a significant amount of this figure.
This signifies a potential growing market for our product to enter.
The nature of wound healing is not discriminatory, as there is a widespread
demand from people from all parts of society. As such, there is high demand for wound
healing products.

Another factor in the environment that aids in the development of our products is
S ingapo re go vernm ent’s emphasis on Research and Development. Prime Minister
announced in the 2005 National Day rally that Innovation and Enterprise, as well as
R esearch an d D evelop m en t, w ill form th e n ew tw in en gin e for S in gap ore’s grow th .
He emphasised on the importance of competing on the basis of efficiency and cost
effectiveness, which our company mission also advocates. Therefore, the Singapore
infrastructure will contain many facilities that will aid in the R&D process, for example
the Biopolis research facilities, research funding and research labs in all recognized
education institutions, to name a few.
Government support makes establishing our business in Singapore an ideal option
for us.

In conclusion, there is huge market potential both internationally and locally, and
due to S ingapo re’s niche in the bio m ed ical indu stry, it is ideal fo r us to establish o ur
foundations here.
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3.2 Competitive Analysis

3.21 Competitive Advantage

Factor Me Strength Weakness Competitor Competitor Importance to

A1 B1 Customer
Product Effective YES Slightly Relatively 1
Effective Less
Effective
Side Effects Minimal Side YES Minimal Side Possible 2
Effects Effects Side
Effects
Stability Biological YES Inert Chemical 3
Product Based
Expertise New Firm NO More More 6
experience experience
Novelty First ever plaster YES Plaster which A relatively 5
to integrate has been new idea.
Formula around for long
Sales Method One - to -many - - One - to - One - to –
Many Many
Price Approximately YES $3.00 for a box $13.00 for a 4
$3.00 for a box can
Potential Versatility of YES -
Formula Only applicable Only applicable
(can be used to to plasters to spray
develop new
products)
Table showing competitiveness of product comparing different factors

We have highlighted two main competitors and compared their strengths with
ours. 1Competitor A is a normal plaster with disinfectant (Electroplast Fast Healing)
while Competitor B is a spray which when sprayed upon the wound would dry and serve
the function of a plaster (Hansaplast Spray Bandage), which is to provide the right
conditions for a wound to heal.

Firstly, in terms of effectiveness, we are competitive. Our product is more

effective than Competitor A because of its added formula. While Competitor B claims to
have high healing rate of up to 50%, it only provides the right conditions for the wound to
heal. Our product would not only do that, but also accelerates the wound healing
process on its own. It is scientifically proven that a faster rate of wound healing prevents
the incidences of scarring occurring. This adds to our competitive advantage over other
plasters that has no cosmetic properties.

Secondly, our product is a biological product made up of organic elements. It

has minimal side effects as compared to Competitor B which is a chemical based
product. Also, with its organic constituents, our product benefits the skin in other ways as
the organic elements contain certain anti-oxidants with anti-microbial properties.
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While our product does not compete on this basis, it remains competitive in
terms of price. This is when compared to the two competitors, which offered the same
price (in A) and a price four times higher (in B).

Our competitive advantage summarized

In conclusion, the competitive edge of our product is consistent with the unique
qualities it offers (refer to Section 2.1). They are namely, superior effectiveness in
wound healing, additional protective elements, and cost effectiveness.
When comparing in terms of price and quality we are able to achieve a high
standard of quality while maintaining a relatively cheaper price, due to the cost
effectiveness of the natural herbs and spices used in our product. This can be summed up
in the following diagram:

Comparison of Different Products

Quality

Hansaplast
Spray Bandage
Electroplast Fast
Healing

$0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00

Price
Comparison of Price against Quality of selected products
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3.22 Porter 5 Forces Analysis

Bargaining Bargaining Threat of new Threat of Intensity of

Power of Power of entrants substitute competitive
customers Suppliers products rivalry
· Need for wound · Need for wound · Product patenting · Quite some · Wide spectrum of
healing healing required. products available brands
materials. materials. · Sophisticated formula to help heal wound. · Competition based
· Many wound · Many wound requires advanced · No product of on different niche.
healing materials healing materials scientific research. similar or better
available. available. effectiveness.
· Demand for · Demand for
acceleration of acceleration of
wound healing. wound healing.
· Limited · Limited
technologies technologies
present. present.

From the Porter 5 analysis, we can conclude that our product do not offer much
bargaining power to the customers, instead holding this power in our hands. This is due
to the fact that there is a demand for our product concept, but a limited number of
alternatives for the consumers to obtain this concept.

The threat of new entrants, substitute products, and the intensity of competitive
rivalry is minimal, because of our advanced technology used. Other companies are
unable to copy our technology due to the sophistication in research, as well as the
intellectual protection we receive by applying for a patent. Although there are substitute
products such as the Hansaplast Spray bandage available, their effectiveness pales in
comparison to ours. Besides, even though there are several brands of plaster and wound
healing chemicals available, they focus on different niches. For example, very few, if
not none, of the existing products campaign on the niche of effectiveness, making us
unique in this sense. Therefore, threat from other companies is limited.

As shown from the analysis, there is a definite need for wound healing materials
in the market. This is satisfied by a variety of wound healing product. However, it is also
true that wound healing materials that is not only able to provide the necessary conditions
for wound healing, but also accelerates the rate of wound healing, will generate much
demand. Due to the lack of potential competition as mentioned, the bargaining power of
consumers is limited.

In conclusion, there is a constant demand for our product, and due to the limited
number of competitors, we have a significant amount of bargaining power. This would
mean that we are able to adjust our pricing and promotion strategies with relative ease.
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3.3 Consumer Analysis

The consumer analysis consists of a general survey, in addition to our existing

market research and intelligence. The survey, conducted on 500 randomly selected
participants, serves the following objectives:
A. To evaluate the potential of the wound healing materials market.
B. To find out the relevance and competitiveness of our product in the (above)
market.
C. T o understand factors that w ill affect co nsu m er’s choice of product.

Selected results from the survey are presented below:

Research Question Response

R esp on den ts’ P erception of T im e Very Long Quite Long Not Long
Taken for Wound Healing 16% 74% 10%
R esp on den ts’ regularity of plaster Frequently Occasional Infrequently
usage 16% 62% 22%

R esp on den ts’ rating of effectiven ess Very Ineffective Neutral Effective Very
of current plasters in wound healing. Ineffective Effective
12% 12% 52% 16% 8%
The price which respondents are Not willing SGD 0.10- SGD 0.60 – SGD 1.10 – SGD 1.60
willing to pay for a more effective 0.50 more 1.00 more 1.50 more or more
product. (Relative to normal 8% 76% 10% 4% 2%
plasters)
If respondents are willing to pay for a Not willing Somewhat Neutral Willing More than
product with additional effects of Willing Willing
preventing scarring, and having anti 8% 4% 8% 77% 3%
oxidants and anti microbial properties.
R esp on den ts’ w illingn ess to bu y Absolutely Not willing Neutral Willing Absolutely
better packaged plasters Not willing willing
6% 18% 32% 34% 10%
Quality which respondent look for Effectiveness Pricing Side effects Environmental Manufacturer
Friendliness
in plasters
80% 3% 14% 2% >1%

The results have shown that the market identified is profitable, that our product
will be successful in the chosen market, and that our product is competitive. In addition,
it has also indicated the factors that w ill affect co nsu m ers’ perceptio n o f o ur pro duct.

Firstly, the market identified is profitable because there is a widespread usage of

wound healing materials. From the survey, 78% of the respondents use plasters
regularly. The universal nature of plaster means that people from all walks of life would
require its use. This means that regardless of their place in society, anybody would be
inclined to purchase our plaster, which translates into a wide and profitable target
audience.

Secondly, our product will succeed in the chosen market because our qualities
satisfy con su m ers’ n eed s. According to our findings, less than a quarter of
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respondents feel that current plaster is effective enough in wound healing, and 90%
pointed out that wounds in general takes too long to heal. This indicates to us that our
product, which is able to oust competitors in terms of wound healing effectiveness, will
generate a demand among this majority.

Thirdly, our niche area is very competitive in the Market, as the results have
shown. The qualities and competitive advantage of our product is namely its superior
effectiveness in wound healing, extra anti-oxidants and anti-microbial protection (with no
undesirable side effects) and cost effectiveness. An overwhelming majority (80%) of the
respondents agreed that effectiveness was the most important quality they look out for
when choosing plasters. Moreover, a large 80% indicated that they are willing to pay
more to get a product with additional effects such as anti microbial and anti oxidants
properties, and the ability to prevent scarring. The next popular choice is the presence
side effects. More than 13% of the respondents indicated that they are more inclined to
buy plasters that offered no side effects. Pricing also features prominently on this list.
Thus, this section of the results shows that our niche area is consistent with the
demands of the market, implying that we will occupy a significant market share.

Finally, w e surveyed co nsu m ers’ w illing ness to purchase better marketed or better
priced products. Our findings are that consumers are divided on whether marketing can
affect their reception of the product. However, they are only willing to purchase higher
priced products to a small extent (SGD 0.50). Therefore, this indicates to us how we
can position our product in the market, stipulate our promotional activities, and
adjust our pricing strategy accordingly.

In conclusion, the consumer analysis has pointed out that our venture into wound
healing materials market is an apt choice, that we are competitively placed in the market
to cater to con su m ers’ n eed s and that our niche areas highlights the consumers
demands in analogous products.
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3.4 Marketing Strategy

3.41 Objectives
In summary, the objectives of our marketing strategy are as follows:

A. To achieve domestic recognition as a credible and trustworthy product.

B. To establish for ourselves the image of a technologically superior product.
C. To capture 5% of the total market share and breaking even within a year.
D. Long term sustainability

3.42 Marketing Mix

We aim to achieve a marketing mix so as to appeal to our buyers and the
general public. Our marketing mix will be achieved with a balance of the ‘4P’s of
Product, Price, Placement and Promotion. The marketing mix will be suited to our niche
(refer to Section 3.2 for more details). In order to portray a good image of our company,
it is essential that the marketing strategies for our product be kept consistent.

Product
In order to distinguish ourselves from the array of wound healing product, it is
essential that we do not negate the product positioning and branding process. The
target audience for our product will be average consumers. Therefore, in order to achieve
domestic recognition as a credible and trustworthy product, the following is how our
product will sell:

A. A technologically advanced product that is superior is effectiveness

and quality.
B. 100% Natural Constituents
C. No undesirable side effects
D. Anti Microbial and Anti Oxidants properties
E. Able to Prevent Scarring
F. Negligible price difference as compared to less effective products.

These are also our niche areas with regards to competitiveness. The constant
emphasis of these strengths will serve to stren gth en con su m ers’ im p ression of our
product. Besides our positioning, another key marketing strategy in order to penetrate the
market would be to brand our product successfully. Therefore, we will be branding our
product in the following aspects:

A. Professional and scientifically proven

B. Reliable and trustworthy
C. High technology and advanced
D. Value for money

Ultimately we aim to market our product to suit the demands of the market and
consumers.
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Price
In terms of pricing, we will be practicing a market orientated pricing strategy.
We have done extensive research on the market and reached a conclusion about the
pricing strategy that will be able to both retain our current customers as well as attract
new ones. A detailed analysis is available in Section 3.2.

As a result of the analysis, we have concluded that our product would tentatively
be priced at SGD 3.00 per packet. The following are the factors that will potentially
change the price of our product, as well as being the factors which led to this conclusion:

A. Lack of strong competitors in market

B. Demand of consumers for our product
C. Strong competitive advantage of our product
D. Low Price Elasticity1
E. Charging lower prices in start up period 1
F. Production Costs
G. Governmental Regulations
1. High price elasticity not taken into account yet so as to allow lower prices to be charged in start up
period.

We will also be practicing Price Discrimination to set prices differently in lieu of

different circumstances. Such circumstances will include:
A. Different economic environments; governmental regulations
B. Marketing Mix
· Product positioning states one of our goals as value for money with
negligible price differences with lower quality products.
· Price will be kept in consistence with placement of product (e.g.
internet purchase may be cheaper)
· Promotion specials can lower prices island-wide; lower prices may be
offered to regular retailers.

Placement
In order to guarantee accessibility of our product, the distributions channels of
our product will be considered to ensure maximum outreach of our product. We have
decided that we will approach a distributor to help us distribute our products to smaller
retailers across the island. Interested retailers can also approach the distributor. Below are
some major retailers we have considered in order to achieve maximum penetration (the
list is not exhaustive):

Pharmacies / Healthcare Supermarkets Convenience Stores

· Guardian Pharmacy · NTUC Fairprice · Cheers Convenience
· Watsons Pharmacy · S ho p ‘N ’ S ave · 7 Eleven
· NTUC Unity Healthcare · Cold Storage
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The rationale of making our product available at Pharmacies is so as to portray

an image of a professional product, having been endorsed by healthcare companies. To
be sold at supermarkets will signify a value for money and commonly available
product, so it will become a necessity in every household. We will also be selling at
convenience stores to allow more access to our product.

In the long run, we hope to set up our own website to handle e-commerce, to
allow people world wide to learn about and purchase our product. This will also help to
cut down on price if sold in bulk. We also hope to be able to distribute our own product,
so that the retail price can be cut down further.

Promotion
Our product promotion will serve to appeal to new customers, secure current
ones, as well as project the desired image of our product. Below are the main methods
we will employ in order to achieve these objectives.

· Direct Marketing
This element serves to create awareness of our product. Direct marketing
will mostly be in forms of mails and information, releasing information to
consumers and customers. These impersonal presentations will allow the general
public and interested retailers to learn more about our product. They include:

· Brochures · Window, Counter and other Display

· Flyers · Postal Mail (to potential retailers)
· Other printed advertisements · Sponsorships
· Banners / Signage · Other publicity (e.g. endorsements)

· Advertising
Advertising will add to direct marketing as an avenue for outreach to
consumers. Medium of these commercial broadcasts include:

· Television · Radio
· Internet · Professional Healthcare Magazines
· Newspapers · Other media (e.g. MRT advertisements)

· Personal Presentations / Public Relations

In order to secure our distributor and retailers, this section is vital for our
company. Regular personal presentations will update distributors and retailers on
our product and sustain their interest in us. Keeping up good public relations can
foster closer relationships between us and our distributor and retailers, and can cut
potential red tapes. Utilizing professional Presentations, grooming of our Public
Relation Officers, as well as maintaining a supplier-distributor relationship will aid in
these segments, and generate more revenue for us.
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OPERATION PLAN

4.1 Operation Process

Research & Development

As mentioned above, research and development is a key driving engine of our
business. Therefore, research facilities will be integral in ensuring the success of our
business. At the present moment, we have established our research facilities in the Hwa
Chong Institution (High School) Biological Studies Learning and Research Centre. The
estimated monthly cost of operations in the facility, which includes costs for research and
experimental materials, falls within the SGD 100 range. This makes it an inexpensive and
ideal option for us.

Patenting / Licensing
Patenting is required for our product to ensure our intellectual property is
protected. The one-time cost for patenting our invention amounts to SGD 25 000. As
stated above, a license is also required in order to sell a product of our nature. The
process of obtaining a license includes surfacing the medical product for clinical trials
and passing random checks by the Ministry Regulators, as stipulated by the Medicines
Act of 1985. The licensing fees required would be SGD 10 000.

Company Administration
The cost for registering our company in Singapore is SGD 500. Besides, our
company would also require an office from which we will carry out our administration
operations. Currently, our operations would be carried out in a home office situated at
63A P asir P anjang H ill. W e aim to establish a co rpo rate o ffice in 6 m o nth’s tim e, in o rder
to maintain a professional image.
For the sake of corporate communications, we will be setting up an email account
with storage of 2.6 Gigabytes. We will also be subscribing to a specialized phone line at
SGD 3.00 per month. In addition, we will also rent a P.O. Box to receive corporate mail
at SGD 81.00 per month.

Outsourcing / Manufacturing
 19

We have calculated that it is the most cost effective for our product to be mass
produced by another company other that our own (refer to business model). As such, we
have decided that our product would be outsourced a manufacturer to be produced at 10
000 packs per month, at a cost price of SGD 5000, including delivery and other
miscellaneous charges. The price to produce one packet ourselves would be SGD 1.50.
Therefore, outsourcing the job to another company would be the ideal choice of
manufacturing our product.
Several prospective companies with the technology to help manufacture our
product have been identified. These companies include but are not limited to: Johnson &
Johnson Corp., ConvaTec, Gentell, HealthPoint, AssisTec Medical, Coloplast-Sween,
Medline, Medline Industries, Derma Sciences, MPM Medical and Scott Health Care.

Marketing
As mentioned above, the marketing process for our product would be very
vigorous so as to sustain and advance our company. As such, the estimated costs for each
component of our marketing plan are as follows:

A. Newspaper Advertisements
B. Television Advertisements
C. Direct Marketing

Product Storage
Intermediate between production and sales, we would require a place for the
storage of our products. Therefore, we have decided to rent a container at for SGD 100
per month.

Delivery
Delivery to the various sales locations would be done through delivery companies.
Such delivery companies charges between SGD 100 – SGD 300 for each delivery. An
estimated number of deliveries to be made per month are 8, on a twice per week basis.

4.2 Action Plan

S/N Item Requirements Time/ Date1 Remarks

1. Research & Development Bio Studies Laboratory Ongoing Hwa Chong Institution
2. Research & Development Experiment Materials / Apparatus Ongoing
3. Patenting Patenting Fees One Time Amortization of 5 years
4. Licensing Clinical Trials One Time R&D Team
Scientific Documents Attorney handles
Licensing Fees process. Paid over 5
years
5. Company Administration Furniture One Time
6. Company Administration Computer One Time
7. Company Administration PO Box Rental Monthly
8. Company Administration Telephone Line Subscription Monthly
9. Company Administration Corporate Email One Time Registration
10. Production2 Refer to Production Cycle -
 20

11. Marketing Newspaper Advertisements Within 1 year

Straits Times, The New Paper
Lian He Zao Bao, Shin Min Daily, Lian
He Wan Bao
12. Marketing Television Commercials With 1 year
Mediacorp Stations
13. Marketing Other expenses – Presentation, Grooming Ongoing
14. Marketing Miscellaneous Marketing Items Ad Hoc
Brochures; Flyers; Handouts; Door gifts
15. Product Storage2 Refer to Product Cycle
16. Delivery2 Refer to Product Cycle
1 Refers to Time Period which item is taking place
2 Refers to Production of product. Refer to 4.3 Product Cycle

4.3 Product Cycle3

S/N Item Time period3

1. Outsourcing to Manufacturer to produce One Time
2. Production of First Batch – 2 250 Packs Day 2
3. Delivery of First Batch to warehouse (delivery by manufacturer) Day 3
4. Arrival of First Batch at warehouse, storage Day 3
5. Departure of First Batch to distributor from warehouse via delivery Day 4
company
6. Production of Second Batch – 2 250 Packs Day 4
7. First Batch Distributed by distributor to various retailers Day 5
8. First Batch Appear on shelves Day 1’-2’
9. Delivery of Second Batch to warehouse (delivery by manufacturer) Day 5
10. Arrival of Second Batch at warehouse, storage Day 5
11. Departure of Second Batch to distributor from warehouse via delivery Day 1’
company
12. Second Batch Distributed by distributor to various retailers D ay 2’
13. Second Batch Appear on shelves D ay 3’-4’
th
3 D ates are coun ted in a F ive D ay w ork w eek form at, w ith n ’ m ean in g n day of the second week.
 21

FINANCIAL PLAN

5.1 Accounts Statement

Assumptions made :
1. Monthly sales of 18,000 packs at a proposed price of $3.00 per pack
2. Estimated production cost of $0.50 per pack
3. Estimated year end stock in hand of 24,000 packs
4. Amortisation of product is over 5 years

Income statement: (2006) Money

Involved
(SGD)
1.Total sales (16,000 packs X $5.00 X 12 months X0.60) 576,0001
2.Cost of goods sold (16,000 packs X $0.50 X 12 months) 96,0002
3.Closing Stock 24,0003
4.Gross Profit: $1,080,000 (sales) - $108,000 (cost) 480,000

Selling expenses
1.Newspaper advertisement 10,000
2.Television advertisements 200,000
3. Catalogues and brochure printing 2,000
4. Marketing gifts 1,000
5.Delivery expenses ($350 X 8 times X 12 months) 33,600
Subtotal 246,600

Administrative expenses
1. Warehouse Rental ($1000 X 12 months) 12,000
2. Office Rental ($2,000 X 12 months) 24,000
3. Electricity ($500 X 12 months) 6,000
4.Water ($150 X 12 months) 1,800
5.Telephone expenses- inclusive of specialized phone
line cost and P.O box rental cost ($600 X 12 months) 7,200
6.Research and experimental operations and materials
At HCI 100
7.Travelling expenses ($2,000 X 4 trips) 8,000
Subtotal 59,100

Depreciation/ Amortization
Computers 10,000
Furniture 5,000
Renovation 5,000
Product patent amortization (over 5 years) 5,0004
Product licensing fees (over 5 years) 2,000
Subtotal: 27,000

Other expenses:
Bank charges 800
A uditor’s fee 1,000
 22

Secretary fee 600

Subtotal 2,400

Total expenses = $246,600 + $59,100 + $27,000 + $2,400 335,100

Net profits before tax 144,900
Tax payable: 21% 30,429
Net profits after tax ($401,900-$84,399) 114,471

Fixed costs:
1.Warehouse Rental ($1000 X 12 months) 12,000
2.Office Rental ($2,000 X 12 months) 24,000
3.Computers 10,000
4.Furniture 5,000
5.Renovation 5,000
6.Product patent amortization (over 5 years) 5,000
7.Product licensing fees (over 5 years) 2,000
Total 63,000

Variable costs:
1.Newspaper advertisement 10,000
2.Television advertisements 200,000
3. Catalogues and brochure printing 2,000
4. Marketing gifts 1,000
5.Delivery expenses ($350 X 8 times X 12 months) 33,600
6. Electricity ($500 X 12 months) 6,000
Water ($150 X 12 months) 1,800
7.Telephone expenses- inclusive of specialized phone line cost and P.O box 7,200
rental cost ($600 X 12 months)
8.Research and experimental operations and materials at HCI 100
9.Travelling expenses ($2,000 X 4 trips) 8,000
10.Bank charges 800
11.A uditor’s fee 1,000
12.Secretary fee 600
Total 272,100

5.2 Break even analysis:

Variable Unit Cost SGD 0.92

Fixed Cost SGD 46,000
Expected Unit Sales SGD216,000
Price Per Unit SGD 3.0

Total Revenue SGD 648,000

Total Variable Costs SGD 200,016
Profit SGD 401,984
BREAK-EVEN AT 22,179 UNITS
 23

5.3 Capitalisation and start up costs

Capitalisation
Investor name Amount (SGD) Percentage Ownership
Seow Yi Cheng 10,500 18.4
Jack Huang Liang Yen 10,500 18.4
Sam Wu Shao Zong 8,000 14.0
Oei Jun Long 7,000 12.3
Wong Jun Jie 7,000 12.3
Elson Ee Cheong Seng 7,000 12.3
Goh Yan Yih 7,000 12.3
Total 57,000 100.0
Start up Expenses
Item Expense (SGD)
Computers 10,000
Furniture 5,000
Renovation 5,000
Product patent amortization (over 5 years) 25,000
Product licensing fees (over 5 years) 10,000
Total Cost 55,0005
5. The remainder of capitalization (S$2,000) shall be used for contingency measures.
 I

APPENDICES
Appendix 1 Balance Sheet and Cash Flow Statement

Opening day balance sheet as of 1.1.2006

S h areh o ld er’s eq u ity
Item SGD
Authorised Capital: SGD 1,000,000
Paid up capital: SGD 57,000

Assets
(A)Fixed assets: SGD
Computers 10,000
Furniture 5,000
Office renovation 5,000
Subtotal 20,000

(B) Intangible assets: SGD

Product patent 25,000
Product license 10,000
Subtotal 35,000

Cash at bank 2,000

Total assets 57,000

Liabilities
Current Liabilities NIL
Long term Liabilities NIL
Working Capital 57,000
Balance sheet as of 31.12.2006
S h areh o ld er’s eq u ity
Item SGD
Authorised capital 1,000,000
Paid up capital 57,000
Net profit 104,991
Total equity 161,991

Assets
(A) Fixed assets: SGD
Computers 10,000
Furniture 5,000
Office renovation 5,000
Less: Accumulated 3,000
Amortisation
 II

Total fixed assets NIL

(B) Current assets SGD

Closing Inventory (24,000 packs X $0.50) 12,000
Cash at bank 260,000
Accounts receivable (trade) 108,000
Total current assets 380,000

(C) Intangible assets SGD

Product patent 25,000
Product license 10,000
Less: Accumulated Amortisation 7,000
Total intangible assets 28,000

Total assets 408,000

Less: Liabilities
(A) Current liabilities: SGD
Trade creditors 13,500
Accrued expenses 36,999
Total current liabilities 50,499

(B) Long term liabilities:

Working capital 357,501

Cash flow statement as of 31.12.2006

Operating cash flow SGD
Net Profit after tax 317,501
Depreciation 3,000
Amortisation 7,000
Increase in accounts receivable 108,000
Increase in inventory 12,000
Increase in accounts payable 13,500
Increase in accrued expenses 36,999

Total operating cash flow $258,000

Investing cash flow SGD

Purchase of computers 2,000
Purchase of furniture 500
Purchase of office renovation 500
Purchase of product patent 25,000
Purchase of product license 10,000
 III

Total investing cash flow $38,000

Financing cash flow SGD

S h areh old er’s p aid -up capital 40,000
TOTAL CASH FLOW AS OF 31.12.2006 260000

Appendix 2 Break Even Analysis

Break Even Analysis

Units Fixed Cost Total cost Total Profit
revenue

0 46 46 0 - 46
10000 46 55 30 - 25
20000 46 64 60 -4.51
30000 46 73 90 16
40000 46 83 120 36
50000 46 92 150 57
60000 46 101 180 78
70000 46 110 210 99
80000 46 120 240 119
90000 46 129 270 140
100000 46 138 300 161
110000 46 147 330 182
120000 46 157 360 202
130000 46 166 390 223
140000 46 175 420 244
150000 46 184 450 265
160000 46 194 480 285
170000 46 203 510 306
180000 46 212 540 327
190000 46 221 570 348
200000 46 231 600 368
210000 46 240 630 389