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TRANSCRIPT
BUSINESS PLAN
SAFECUE SKI PATROL RESCUE EQUIPTMENT
Team
Scott Melanson
Tsung Han Tsai
Surachet
Waepeewutthikorn
Gurmohit Ahluwalia
EXECUTIVE SUMMARY
The purpose of this business plan is to turn the exceptional design for the state-of-the-art Ski Toboggan and Backboard rescue equipment envisioned by designer Scott Melanson (www.scottmelanson.com) into a profitable business venture called SafeCue Rescue Equipment
Inc.
VISION STATEMENT
The SafeCue Ski Toboggan and Backboard ™ challenges benchmarks set in the medical rescue equipment industry and provides an innovative solution to the inefficiency in today’s medical rescue equipments. The mission of the company is to have a pipeline of products like the SafeCue Ski Toboggan and Backboard ™ that guarantee safety in all kinds of rescue operations. Our goal is to become the preferred name in medical rescue equipments to see our products used in every medical rescue operation, every ambulance and every possible situation that involves saving lives. We envision our company to attain profits of $1.5 Million by the end of 4 years of operations. With the advent into the health Care of Ski-sports industry, these profits are expected to grow at a rate of 20% per annum.
OUR APPROACH
We conducted extensive market research by surveying professional ski patrollers all around the world (Australia, North Star, Big bear & Mountain Creek) to find the inadequacies in existing toboggans and backboard equipment. The results of these surveys clearly indicate the need and the market for a Ski Toboggan and Backboard that provides the following features: lesser number of moving parts, more adaptation to the human form, elimination of the existing straps to harness the patient’s body, flexibility in the backboard, light-weight and durability. The SafeCue Ski Toboggan and Backboard ™ fulfills all these needs and is a more sustainable product than any in the market.
Our initial approach is to target the Ski Resorts all over the US and partner with the National Ski Patrol Unit to build credibility for the brand. With moderate initial upfront costs in manufacturing, sales, R&D and a promising emerging market for the product, we estimate to break-even in the second year of operation. In the later stages, we plan to penetrate into the foreign markets by increasing distribution to Europe and Australia. Our expansion plans include penetration into the Health Care sector, with the vision to replace every stretcher in the healthcare industry with the SafeCue Back Board™.
VALUE PROPOSITION
Positioning statement
The SafeCue ski rescue equipment is the most effective performance oriented product that has been designed for Ski Patrol and EMS providers. It is a superior product as compared to all other rescue equipment manufacturers because our design maximizes the control of a ski toboggan, provides higher level of comfort for the patient, adds flexibility to the backboard, and convenience for repair and maintenance.
The need of speed- Emergency Medical Service
Inspired from National Ski Patrol (NSP) and current product for EMS, the product shape is designed to superior adaptability for snow, ice, and powder like terrain, and for high speed control with integrated toboggan and backboard design-no complicated components.
Comfort and multifunction of backboard
The backboard is bendable and also could be fixed to position, which depends on situations. Customers do not need to purchase different types of stretchers to deal with situations. In addition, the backboard is design to mimic the human form, even in the immobilization situation.
Convenience for users
The toboggan has extra space underneath and can store rescue kit. The backboard integrates
straps component in one single backboard, which makes it easy to use. In addition, the
backboard pad is changeable, which save time and effort of emergency personnel to clean
contamination from patients- The need for speed and time.
SAFECUE’S SUSTAINABLE COMPETITIVE ADVANTAGE
After comparing the SafeCue Ski Toboggan and Backboard ™ with the rival products in
the market, it is evident that our product is unique and is more a secure equipment which gives
us a sustainable competitive advantage. The table below gives more in depth clarity of the
superiority of the SafeCue Ski Toboggan and Backboard ™. Superior quality demands higher
control over design and manufacturing. For these reasons we have priced our products higher
than the competitor’s prices.
COMPARISON CRITERIA
OUR PRODUCT COMPETITOR A COMPETITOR B COMPETITOR C
Company Comparison
Brands
SafeCue Rescue
Equipment, Inc.
Traverse Rescue - A
Ferno Group
Company
Skedco Inc.
Cascade
Toboggan Rescue
Equipment
Company
Geographic Origin Cleveland, Ohio
Mississauga, Ontario,
Canada Oregon, USA Idaho, USA
Global Presence
Proposed Expansion
plans – Stage 1 –
Europe; Stage 2 –
Australia
North America, South
America, Caribbean,
Asia, Europe, Africa,
Russia
Japan, Europe, China,
Hong Kong None
Annual Revenues
$1.5 Million in year 4
of operations
3 – 4 Million per
annum
1 – 2.5 Million per
annum
$500,000 per
annum
Product Comparison
Product Name
SafeCue Ski
Toboggan and
Backboard ™
Squadra Patrol
Toboggan #231
SKED Basic Rescue
System
Cascade – Trauma
One
Price $2000 $1240 $597 - $624 $1899
Form
The new custom
design of our
product SafeCue Ski
Toboggan and
Backboard ™ replicates the human
form and is better
suited to prevent
spinal injuries that
occur during
transportation than
the rival products.
The form of the Squadra Patrol
Toboggan #231 is rigid
and lacks flexibility.
The SKED has a rigid
form, which serves
well for general
injuries, but is not
best suited for critical
injuries.
Great form, better
than the products
offered by A & B.
However, lacks
the adaptation to
true human form
that is needed for
higher safety.
Storage
Excellent integration
of storage space
within the toboggan
design. Medical
Support Pack needs to
be stored separately
and eats into the
space allowed by the
Support Pack needs
to be stored
separately and eats
into the space
Support pack is
hooked onto the
inside of the
Toboggan, which
INDUSTRY ANALYSIS – PORTER’S FIVE FORCES FRAMEWORKi
The rescue equipment manufacture belongs to one segment of surgical appliances and supplies industry, which contributes 40.6% of market size of medical instrument and supply manufacturing. The competition is based on product differentiation- quality, performance, and reliability. The intense of competition is medium and expected to increase.
The barriers to entry
The capital requirement for medical commodity manufacturing is low. The economies of scales are high in commodity. The products have high differentiation because manufacturers continuously issue patents to protect their competitive advantages. In addition, the health care industry is regulated by government and agency, creating more R&D costs and time consuming process for new entrants. Therefore, the entry barrier is high.
Support Pack can be
stored seamlessness
without consuming
extra space
toboggan allowed by the
toboggan
makes could prove
inconvenient in
rescues.
Backboard Flexibility
Bendable – can be
easily switched into
upright position
when needed.
Not flexible and
cannot be used to
keep patient in
upright position.
Is flexible, but the
assembly is too
complex.
Is flexible, but the
assembly is too
complex.
Backboard Height
Height is adjustable
and can be used
seamlessly for an
infant or an adult up
to 6 feet in height.
Not adjustable. Not adjustable. Not adjustable.
Backboard Fabric
highly durable,
disposable, can be
easily replaced from
the backboard
Durable, but not
made of disposable
material. Taking off
the fabric involves dis-
assembly.
Durable, but not
made of disposable
material. Taking off
the fabric involves
dis-assembly.
Durable, but not
made of
disposable
material. Taking
off the fabric
involves dis-
assembly.
Threat of substitutes
The threat of substitutes is low because of the nature of product. Rescue products are assets specific in EMS and rescue applications. The purchase criteria are based on performance and reliability of products. However, for non-EMS providers, ski resort may purchase normal ski sked for emergency rescue.
Suppliers’ Power
The bargaining power of suppliers is low for following reasons: The components manufacturers are plastic, metal casting, and hose and belt producers. These industries are mature and have many firms competing with each other. They compete on price. There is no product differentiation.
Buyers’ Power
The buyer power is low. The size of buyers in ski rescue is relative small in medical device and supplies industry. The purchase criteria for buyers are based on performance and reliability. The product differentiation is high. The competition between buyers is limited.
Rivalry among existing firms
Firms compete on product differentiation-Brands, reliability, and performance of products.
The intense of competition is medium for following reasons: The concentration is low because no big players specialized in ski rescue segment and many brands competing with each other. For example, Skedco, Ferno group/Traverse rescue, and Cascade toboggan, are direct competitors while they are all small size firms. Major competitors offer a broad range of products for rescue application, creating low intense of competition in ski rescue application. Targeted users: Existing brands targeted at government agency, rescue organizations, and individual users, for instance, firefighter, military, and National Ski Patrol.
COMPETITOR ANALYSIS
The targeted industry is the rescue equipment manufacturing industry, which is a segment of the surgical appliance and supplies industry. The scope of competition is in rescue operations and the targeted customers are ski rescue professionals, skiers, owners of ski resorts, and EMS providers.
Competitor analysis process:
We will show critical success factors and current competitors in the market:
Critical Success factors Weighted Ferno/Traverse Skedco Cascade Toboggan Benchmark
1. Certification from medical association* 0.3 7 6 9 10
2. Performance** 0.4 7 5 8 10
3. Product development*** 0.2 9 8 6 10
4. Access to distribution/customers 0.1 9 8 8 10
Overall rating**** 7.6 6.2 7.9 10
*Certification from NSP, Ski Area Association.
**Performance based on functionality: Lift weight, Durability
***Complementary and commodity product development
****Access to distribution channels, including retailers, dealers, and other rescue market segments- firefighter, water rescue.
•Rescue equipment manufacturing industry
•Resuce operations: Ski rescue, water rescue, and fire rescue
Surgical appliances
and supplies industry
•Ski Patrol
•Firefighter
•Air resuce
•EMS providers
Targeted customers-
Rescue Organizations
•Performance
•Government Certifications
•Product development
•Access to distribution channels
Key success factors
BUSINESS STRATEGY / PRODUCT DEVELOPMENT LIFECYCLE
Our business strategy is to focus on our core competencies of design and promote the sales of the Toboggan and Blackboard by providing continual innovative improvements to the existing product. The table below summarizes our proposed business strategy and gives brief idea about our product lifecycle.
Product Brief Description Target Audience
Year 1 – Launch of the SafeCue Ski Toboggan and Backboard ™
SafeCue Ski Toboggan and Backboard ™
Exceptional Hull design for the ski
toboggan with a flexible backboard,
which uses seat-belt technology for
the straps. The material used is
extremely durable and the assembly
involves very few parts
Ski Resorts world over.
However the focus will be to
partner the NSP and build a
credible brand name
amongst the Ski resorts in
the US.
Year 2 – International Distribution (Europe & Australia ski resorts)
International Expansion
With an increased popularity for
skiing in Europe and Australia, the Ski
Toboggan and Backboard can sell
extensively in the international arena.
Ski Resorts in Australia /
Europe
Year 3 – Launch of the Adaptable Ski Toboggan (Ski Toboggan that adapts to backboards from
different vendors)
SafeCue Adjustable Ski Toboggan ™
This product will give the flexibility to
sell the Ski toboggan along with other
stretchers from other manufacturers.
Cannibalization of sales of
existing players.
Year 4 – Entry into Health Care with the Backboard
SafeCue EMS Backboard™
The backboard’s unique design is apt
to replace the current backboards
used in ambulance / EMS rescue units
all over the country.
Ambulances in US with plans
for sales to healthcare
industry in Europe and
Australia
Year 5 – Launch of the Ski Toboggan for water-borne rescues
SafeCue Aqua Toboggan ™
The Hull design of the Ski Toboggan
can be improvised to float as a rescue
device in water-borne rescue
operations.
Coast Guards, Navy Rescue
teams.
MARKETING PLAN For the development of marketing strategy, the first step is to appropriately identify the distinct target markets. By doing so, we can emphasize more on specific value each segment needs from our product and provide the most benefits we can base on our value proposition. Thus, according to industry analysis on our potential buyers, our product is classified as commercial product, which will be served in business-to-business market. According to the nature of our product that provides new and specific functional benefits to the users, who always responsible to human safety and emergency situations, the marketing plan should promote outbound innovation and should be directly designed to appeal specific interests. For this case, a concept of integrated marketing communication will be used to develop consistent and long-lasting approaches for each stage of market penetration. Introduction Stage – In this stage, our products should have already been tested and approved by medical association to ensure that our products have met national standard of rescue system. Thereafter, we hope to work along with “National Ski Patrol (NSP)” as its main supplier for Toboggans and Backboards for ski and snowboard recue. The certifications from both medical association and NSP are important before issuing brand image into public. The basic idea of marketing communication in the first stage of introducing product is to build proper brand awareness and brand perception in the customer’s point of view.
After products have been guaranteed by above reliable organizations, the next marketing plan is to promote cognitive associations of the brand with SAFETY. To achieve this objective, we need to cooperate with Ski training schools in famous ski regions. By doing so, we can communicate the unique benefits of our products directly to skiers and ski trainers, who are our main target audience. Then, accurate brand perception and brand acknowledgement would develop outstanding brand image in customers’ mind. The most important thing we get from this point is reliability of the brand, which needs to emphasize on “SAFETY” issue. Up to this point, as a certified brand for the most safety of sport players, our product will also be promoted in the international ski tournaments.
The next part of the plan is to make our brand the official sponsor for the Winter Olympics and International Ski Federation (FIS) tournaments. These activities have normally been broadcasted through both traditional television media and modern online media. Growth Stage - For continuous partnership between our brand and Ski training school, the plan for this stage is to conduct educational program, which will also be developed to enhance comprehension of safety for new skiers. This purpose is to build upon “safety” brand image as we did in introduction stage. Additionally, when the current product line is well adopted by USA and Canada customers, the next plan is to give them more convenience on buying process. Up to this point, direct marketing and online purchase will play more significant role to provide worldwide access to our customized products. Official website has been created since introduction stage but will be focused more on online purchase this term. By the way, labeling as premium with additional benefits, our products will be priced approximately in the same range as those of our competitors. To keep premium image is crucial base on the fact that “safety” image has the most influence on the end users. Thus, to cut off the price to penetrate
into the current market is not considered as a good move in this case. Furthermore, we also offer warranty and maintenance program for all products sold. Expansion Phase – To remind essential brand messages to target audiences, our products will be promotes constantly in Ski magazines, not only in USA and Canada, but also bigger markets in Europe. Moreover, there are several annual Ski exhibitions which our product can be participated and promoted. In those events, we can use direct communication to customize customer’s needs for the best combination. Additionally, we can both communicate to business buyers – such as ski resorts, ski training school – and individual skiers who form their own ski team and need our safety system. Last but not least, after our products have been widely accepted by major ski resorts and schools, we can expand business relationship to coordinate with hospital located nearby those places. By doing so, hospital’s guarantee can emphasize our value on “better safety” which is the core value of our products. When the people perceive our brand with good collaboration with hospital, it means they confident enough their lives are already saved.
Marketing Plan
•NSP authorization
•Ski-training schools
•SafeCue = Safety
INTRODUCTION STAGE
•Winter Olympics
•FIS tournaments
•Television and Online Media
GROWTH STAGE
•Europe
•International Ski-exhibitions
EXPANSION STAGE
COST ANALYSIS
Assumption
Base on the current prices of our competitors, the price for our product set – both toboggan and backboard – is rated at $2000 per set. In the first year, sales volume is estimated to be 100 units, which has been forecasted to increase 100 percent every year for the next 5 years.
Cost structure assumptions:ii
According to industry analysis- The medical instrument and supply manufacturing industry, the rescue equipment belongs to surgical appliances and supplies segment of medical instrument and supply manufacturing industry. The cost of direct material and direct labor are around 35.6% and 18.5% of net sales respectively. Since rescue equipment manufacturers are small firms with employees from 0 to 50. We assume the direct cost will increase to 30% of cost of goods manufacturing and direct material cost will increase to 40% of cost of goods manufacturing while variable SG&A and Variable overhead account for 30% of cost of goods manufacturing. We estimate the cost of manufacturing at $1300 per unit, including, molding cost and variable costs. In addition, we assume that fixed overhead, fixed SG&A, and R&D cost,
which consists all costs incurred from ideation and prototype cost, are $30,000, $20,000, and
$50,000 per year respectively.
Summary
According to the table, we expect to reach our break-even point within the second year of
operation where we get positive net income. Base on above assumptions, we projected only
next five year without concerning on the initial investment on year 0, where we have
insufficient information to forecast it. The total sales units of 200 can give us a break-even
result, after deducted both variable and fixed costs. This forecast is for one kind of product
within the company. From our plan of product expansion in the future, we can also apply this
calculation to each type of product and see individual contribution they will generate for
upcoming years.
PERFORMANCE MEASUREMENT The purpose of performance measurement is to evaluate effectiveness of the current practices of production, financing and marketing perspectives from doing this business. By doing so, we can learn how good or bad current practices were in the past for designing better control guidelines and improve overall performance.
After 3 months of issuing new product into the market, two performances should be evaluated, current product performance and marketing strategy. The internal process called “Balanced Scorecard” will be conducted on current practices in each line of the company. Base on the fact that this method can provide both financial and non-financial measures simultaneously, we can develop better insights from past performances by using this procedure. After we completed the process, we can see which specific criteria should be improved and which one is doing well. According to low manufacture cost is one outstanding advantage we have over competitors, this measurement system will examine whether current production capacity meets the standard we set at the beginning. Furthermore, if we found discrepancies between current practices and guidelines, we can communicate more to make better understanding among players within the company.
On the other hand, to conduct “marketing research” in ongoing market system is important to see whether we capture desirable portion of brand awareness and brand perception. The effectiveness of current marketing plan should be measured for further improvement on both marketing design and integrated communication. Additionally, from this research, we can observe customer’s response rate which mainly illustrates how good our marketing plan turn customer’s perception into buying process. Therefore, for future consistency of our performance, market observation should be conducted continuously to keep up pace with market changing throughout our target regions.
Works Cited:
i IBISWorld. ” Medical instrument and supply manufacturing in the US:33911a.” IBISWorld Industry
Report. 33911a (2010). IBISWorld. Web. 8 May 2010. ii IBISWorld. ” Medical instrument and supply manufacturing in the US:33911a.” IBISWorld Industry
Report. 33911a (2010):19-20. IBISWorld. Web. 8 May 2010.