Slides from a presentation outlining the strategic plan for a new skin care enterprise, including strategic planning, customer analysis,marketing plan and forecasting

Aiken, Oneshin

Banchongraksa, Bhawinee

Mohammed, Marthed

Reyes, Catalina

Sheikh, Mohamed

English

PDXScholar (Portland State University)

Portland State UniversityPDXScholarEngineering and Technology Management StudentProjects Engineering and Technology ManagementFall 2017REB Strategic PlanMohamed SheikhPortland State UniversityCatalina ReyesPortland State UniversityOneshin AikenPortland State UniversityMarthed MohammedPortland State UniversityBhawinee BanchongraksaPortland State UniversityLet us know how access to this document benefits you.Follow this and additional works at: https://pdxscholar.library.pdx.edu/etm_studentprojectsPart of the Business Intelligence Commons, Strategic Management Policy Commons, and theTechnology and Innovation CommonsThis Project is brought to you for free and open access. It has been accepted for inclusion in Engineering and Technology Management Student Projectsby an authorized administrator of PDXScholar. For more information, please contact pdxscholar@pdx.edu.Citation DetailsSheikh, Mohamed; Reyes, Catalina; Aiken, Oneshin; Mohammed, Marthed; and Banchongraksa, Bhawinee, "REB Strategic Plan"(2017). Engineering and Technology Management Student Projects. 1153.https://pdxscholar.library.pdx.edu/etm_studentprojects/1153REBMohamed S|Catalina R|Oneshin A| Bhawinee B|Marthed METM 525 – Strategic Planning in Engineering Management Instructor: Dr. Ron KhormaeiFall 2017Agenda● Introduction / Company Overview● Strategic Planning● Customer Analysis● General Analysis● Marketing Plan● Forecasting & MetricsCompany Overview● Idea● Founder● Management TeamVisionTo become a market leader in the prestige skin care industry. MissionGiving your skin the most unique and elegant experienceUnique Value PropositionPreserving the potency of natural skin-care lotions and increasing their effectivenessGoals● TradeMarks and Patents ○ Patent for device and truffle idea/designby Q2 2018○ Trademark company and product names by Q1 2018● Successful Target Launch date of February 2019.● Profitable by the end of 2022 → 1 million+ cash at bank and 15% profit marginsWhere are we at?We are here-- Chasm InstituteWe want to go hereFive Forces Core Competencies Game Theory Competing on the EdgeAssumptions Stable or slowly changing industryAssemble the firm as a bundle of competenciesIndustry is viewed as a collection of equal playersIndustry is a collection of a chaotic interacting businesses in an unpredictable marketGoal Long term Defensible positionSustainable competitive advantageTemporary advantageContinuous flow of reinvented competitive advantagesPerformance Driver Industry Structure Unique business capabilities and experiencesMaking the winning movesAbility to change and adapt to the market of technologyStrategy Pick an industry, pick a strategic position, fit the organizationCreate a vision, build and exploit competencies to achieve the visionIdentify and execute the right competitive and collaborative movesOperate on the “edge” of time pacing, reinvention, coadaptation, semi-coherent adaptive planningSuccess Profit Long term dominanceShort term win Continual wins through reinventionStrategy ApproachREBFive ForcesCore CompetencyCompeting on the EdgeCompeting on the edgeCompeting on the Edge with aspects of Core CompetencyCompeting on the EdgeDefining our MarketSKIN CARE MARKET$107.3b -->2013$111b    -->2015Defining our Market~23% of the market size = $2.8b~80% premium anti-agers and facial moisturizers = $2.28bCUSTOMER ANALYSIS - SEGMENTATION(Qualitative interviews) ○ Women between 30-59 years old○ Household Income over 100KCUSTOMER ANALYSIS (Survey) CUSTOMER ANALYSIS - BEHAVIOURS & NEEDSI’m happy with my products right now, otherwise this would be a good ideanot a priorityI do not like the commitmentI don't use products regularly enough to gauge that and I can order anything online if I can't make it to a storeI don't like being on a fixed schedule as sometimes you use less or more of a productI don't like subscribing to things.Takes the thrill out of walking through malls and discovering new productsCUSTOMER ANALYSIS -BEHAVIOURS & NEEDS ● Women apply an average of 16 skincare and cosmetic products every day● East Coast women have the most expensive faces○ Women in New York, Connecticut and West Virginia spend on average $3 more per day than the rest ot of women in the US →  with a ‘face rate’ of $11● Women spend on average 10 minutes on their morning faces…○ Californian women under 3 minutes○ Women in New York more time ~ 21 minutes.● ...and only 6 minutes at nightSkinStore exclusive Survey to 3000 women CUSTOMER ANALYSIS - SEGMENTATION ● New York, Connecticut, West Virginia, New Jersey, Wyoming  34,670,684○ 51% female → 17,682,048○ 26% Women between 40-59 years old → 4,597,332 ○ 13.6% Household income Income in the US over 150K → 625,237○ 30% bachelor's degree or higher → 187,571~200,000 womenCompetitor AnalysisEstablishedCompetitor AnalysisInnovative Brands in the Prestige Natural Skincare Segment● Tata Harper● May Lindstrom● Goop● Glossier$180$185Porter’s Five ForcesThreat of New EntryNew entry easy (high)Brand loyalty (High)Economies of scale (low)Adaptation from incumbents (high)Supplier PowerDesign (Low)Device (Low)Truffles (Low)Buyer PowerMany boutiques & Spas (Low)Bergdorf Goodman (Medium)Online direct orders (Low)Substitution ThreatHighLoyalty to established brands (High)Cheaper substitutes (High)RivalryIncumbentsFashions ChangeLow RiskHigh RiskCompetitor AnalysisS WTThreatsHigh price can limit potential customers. Intense competition from international brands. OWeaknessesSmall market. segment. Uncertain funding.  StrengthsDr Robb name and connections. Low fixed cost.Novel product.OpportunitiesSocial media. Growth market and expansion. High consumers goods spending.Recommendations from SWOT Use social media effectively to domain the small market segment. Try to use Dr.Robb’s connections and working on his network to strengthen the marketing strategy. Focus in pricing to avoid competitors threat but we have to know other factors especially high consumers spending. We can’t keep fixed cost too little because at the some point REA will expand the business.  Make sure our product is novel and unique (product, packaging, launching...etc).Marketing Plan-Influencers Marketing plan- Channels Marketing Plan ● Hire Agencies○ Instagram / YouTube Influencer Focus○ Motion Graphics / Interactive Design○ Event Planning Agency○ Hire SEO Consultancy ● Hire PR and marketing full-time employee● Hire sales team to engage with high end stores and retail stores.● Track Metrics  ● Attend Trade-shows● Host small private events to showcase the productMarketing Plan - BudgetForecasting...MethodsVariables:● N = Target population (~200k starting)● A = 0.2 ( conservative, given that we’re a start up)● P= (𝐶𝑑𝑒𝑓𝑖𝑛𝑖𝑡𝑒𝑙𝑦 ∗ 0.4) + (𝐶𝑝𝑟𝑜𝑏𝑎𝑏𝑙𝑦 ∗ 0.2) = 0.4 ∗ 0.1 + 0.2 ∗ 0.39 = 𝟎. 𝟏𝟏𝟖First year forecastsTotal Annual Revenue~5.9 MDevice Q N A P Unit price Revenue4720 200k 0.2 0.118 $350 1,652,000Truffles Device Quantity x 10 truffles per monthUnit price Revenue566,400 $7.5 4,248,000Year two ForecastsTotal Annual Revenue~12.2 MDevice Q N A P Unit price Revenue9440 400k 0.2 0.118 $350 3,304,000Truffles [Device Quantity x 10 truffles per month] + [Repeat buyers]Unit price Revenue1,132,800 +56k $7.5 8,916,0005 year forecast● Increase N to 1M. Device Q N A P Unit price Revenue23600 1M 0.2 0.118 $350 8,260,000Total Annual Revenue~31.75 MTruffles [Device Quantity x 10 truffles per month] + [Repeat buyers]Unit price Revenue2,832,000 +300k $7.5 23,490,0000Metrics  - Flexible BSCFinancial PerspectiveGoals Initiatives MeasuresSurvive Start UP Phase Secure Enough funding to cover staff and other running costsFund raise 2 Million USD investmentSet up Production and optimize productivitySet up supply chain for materials and develop manufacturing capabilitiesProduction facility to satisfy demandYear 1: ~5000 units (devices) + # trufflesYear 2 : ~10k unitsYear 5 : ~24k unitsRevenue Growth Set up the manufacturing, marketing, and supply channels for the product.Year to year sales increase. ~12 M by second yearCustomer PerspectiveGoals Initiatives MeasuresCreate a sense of upscale lifestyle around the product● Set up partnerships with upper end boutiques, SPAs for initial release and give them exclusivity for a period of time.● Invite key influencers (bloggers, online personalities, beauty editors, etc.) to promote the product ● SEO results (above 16% of organic traffic)● Track beauty editor and blogger coverage (# of views and shares)Diversify product line available to customers● Increase selection varieties of the truffles available● Build on initial prototype and create version 2.0Sales of new products. 20% of revenue should come from new products introduced within 2 years!Customer Feedback ● Set up either an app or an online platform to engage usersCustomer satisfaction and aggregated reviews including online reviews,direct customer feedback, and survey (NPS, CES, and CSAT)Internal Business ProcessGoals Initiatives MeasuresAcquire the technical capabilities to develop the product and bring it to marketSeek or hire a competent team capable of producing and bringing concept idea to marketA working prototype and a product that is ready for market.  Streamline manufacturing Streamline every aspect of manufacturing from cost considerations, design optimization, to supplier evaluations.Reduced manufacturing costs. Reduce production costs from 70% of unit value to 50%.Learning and Growth Goals Initiatives MeasuresSecure IP Finalize product idea and submit trademark/patents where applicable.● Granted design / product patent for US & Canada by Q2 2018● Trademarked product / design / name within North America by Q1 2018Develop an internal system that documents ongoing processes/procedures.Document procedures on current  research and development efforts● Relevant ISO Certifications within 3 years of launch● Transferability of previous lessons to future products -verified via external auditProduct Launch Road Map2018 2019 2020PriceLaunch $440Starter Pack$90Truffle Pack$90Truffle VariationsTest Market $5502.0 Starter Pack$150Truffle VariationsDevelopment & TestingQuestions?References● Saenz, A., & Andres Saenz, E. (2015, December). Premium skin care market as an area for private equity investment (Rep.). Retrieved October 15, 2017, from Parthenon-EY website: http://cdn.ey.com/parthenon/pdf/perspectives/Parthenon-EY_Premium-skincare-market.pdf● M. (2015, November 17). How Consumers Shop: Anti-Aging Skin Care Market Trends 2015(Rep.). Retrieved October 20, 2017, from https://www.linkedin.com/pulse/how-consumers-shop-anti-aging-skin-care-market-trends-michelle-skelly/● Census profile: United States. (n.d.). Retrieved October 31, 2017, from https://censusreporter.org/profiles/01000US-united-states/● H. (2013, August). Dermatology Market Overview. Retrieved October 26, 2017, from http://www.harriswilliams.com/system/files/industry_update/dermatology_market_overview.pdfProduct Road-Map● Filing trademarks● Perfecting the device● Truffle Supplier● Device Manufacturer● Boutique Sales● Spa Sales● Build truffle eco-system● Device 2.0Current Near Term FutureManufacturingMarketing● Survey target market ● Influencer Marketing ● Nationwide department store like Nieman Marcus (owner of Bergdorf Goodman)Competitor AnalysisNew Channels● SOHO House  Cowshed-Spa● Space NK● Dover Street Market, Beijing● Five Story NY● Max Field LAREA position and channels Marketing Metrics● Sales● Number of prestige retail distributors○ Boutiques○ Spas● Online Engagement○ YouTube○ Instagram● Favorable Reviews○ Magazine Beauty Editors○ Online bloggers and YouTube vloggersCUSTOMER ANALYSIS Based on Survey:Defining our Market~3% of the market size = $372m~80% premium anti-agers and facial moisturizers = $297mStart up costs Calculations●40% of first year units (944  devices,  226k truffles)●Value of developing and producing each unit = 70 % of 350 (~246). 70%  of 7.5 (~5.25).● 1.18M truffles + 239K devices =1.41 M●+ Headroom ●2M

REB Strategic Plan

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REB Strategic Plan

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