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Contents ......................................................................................................... Fout! Bladwijzer niet gedefinieerd. Chapter 1 Introduction ........................................................................................................................... 3 Chapter 2 Technology and product description ..................................................................................... 4 The technology................................................................................................................................ 5 Can the product be made? ............................................................................................................. 6 Manufacturing ................................................................................................................................ 6 Cost analysis .................................................................................................................................... 6 Chapter 3 Situation analysis.................................................................................................................... 7 Internal analysis .................................................................................................................................. 7 Strengths ......................................................................................................................................... 7 Weaknesses .................................................................................................................................... 7 External Analysis: ................................................................................................................................ 9 Pestel:.............................................................................................................................................. 9 Porter ............................................................................................................................................ 10 Influence of the market ................................................................................................................ 11 Confrontation Matrix ........................................................................................................................ 12 Chapter 4 STP ........................................................................................................................................ 13 Business model ................................................................................................................................. 13 Market Research ............................................................................................................................... 15 Market segmentation, Target segmentation and positioning .......................................................... 16 Evaluating Market Segments ............................................................................................................ 17 Marketing actions and associated costs ........................................................................................... 19 Chapter 5 Go/No Go decisions.............................................................................................................. 20 Chapter 6 Reflection ............................................................................................................................. 21 References ............................................................................................................................................ 23 Appendix A Structure of interviews and questions .............................................................................. 24 Appendix B Survey Results .................................................................................................................... 25 2 1ZAUB0 Spectrometer Group 2


Chapter 1 Introduction Restoring a motorbike, boat, car or even a building requires considerable effort and is a task owners do not embark upon lightly. Damage must be addressed and corrected, faulty components must be replaced and finally it must be repainted. All this adds up to a considerable amount, not only due to expenses for the material, but also for the man hours needed to complete the job in a timely fashion. Indeed one of the largest losses in these projects is the need to repaint the entire object, and not just the part that has been restored. This is because it is exceedingly difficult to judge paint colour exactly by eye, and whilst it yields satisfactory results, it does not blend in seamlessly with the rest of the paint. It is thusly clear that whilst an opportunity exists to exploit this market segment, it is however still debatable whether the market share is large enough to warrant investment. By assuming a collaboration with Admesy, thus repurposing products purchased from them, to meet the demands of the restoration market it is possible to create a baseline to understand the feasibility and profitability of such a venture. As most people will not attempt a restoration project on their own, it is best to focus on the business to business market. Restoration companies, especially those engaged in large scale restorations as well as jobs requiring high precision and good quality will greatly benefit from the Picasso 2.0. Decreasing material costs will make these companies more competitive as they can decrease the price of their services, furthermore as the paint jobs only affect a particular area they are completed faster, saving on labour costs and allowing the companies to further increase their competitive advantage by offering faster service to their clients. Overall the Picasso 2.0 focuses on companies need to remain competitive and offer improved services to their clients. It is possible to exploit a snowball effect, as more companies adopt this technology the pressure for the late adopters increases as they must find new ways of remaining competitive and forcing them to acquire the Picasso or risk losing market share. By focusing on the business to business market, not just in the Netherlands but in the whole of Europe, it is possible to guarantee a stable customer base as single individuals would be less willing to invest in the Picasso 2.0 if they are not engaged in multiple restoration projects as the initial investment must be covered by the savings in both labour and material costs.

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Chapter 2 Technology and product description The Picasso 2.0 is a product with several unique selling points. Reading the colour directly from the object that needs to be repainted presents a number of unique advantages. Colour changes over time, especially when exposed to the elements, as old and historic buildings and retro cars often are, it becomes important for the restoration that the colour is perfectly matched. A crack or a small spot in the paint could then easily be touched up using the right colour. In this way it is not necessary for the entire surface to be repainted, which is a lot cheaper and less labour intensive. Furthermore the historical values of the colour will be left intact. It is already possible to measure colour by using a sample of said colours and other existing devices that can provide this service. However for restorers it is often impossible to take a sample, especially if this sample must be taken without further damaging the object in need of restoration. The existing, more expensive tools, used to measure paint colours are made to develop paint and are too expensive for our target market. On the other hand, the cheaper tools are not small or accurate enough. The new Picasso 2.0 exists in the middle of the market, with an average price. Admesy, the manufacturer of the Arges 45, can ensure high quality and accuracy within one measurement. In addition their products can guarantee higher speed and better usability compared to other spectrometer/colorimeter manufacturers. The result would be especially useful for the target market. So, by adapting the Arges 45 our customers can quickly measure the colour of an object and they will save time and money while restoring cars, boats or buildings. The ease of use of the tool is a result of its portable and small design, visible in the sketches below.

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The technology The Picasso 2.0 is based on the Arges 450 colorimeter and stable light source by Admesy. The Agres works by providing a calibrated and predefined light source, the frequency and wavelength of which are known and kept stable throughout the measurement process. Once the light reflects off the surface to be measured, it enters the colorimeter which then reads which wavelengths are being reflected by the surface. By comparing the known values for wavelength from the light source and those measured by the colorimeter it is then possible to determine the absorbance and the reflectivity of the material being tested. The values that are then generated by the device can then be fed into a computer and converted from a series of wavelength measurements to an averaged colour code. The name of the Arges 450 refers to the Arges’ method of measuring colours. Rather than having to insert a sample within the machine, to then be analysed by shining light through said material, the Arges measures by shining light upon a surface and reading the reflected beam in the colorimeter. This reflection occurs at an angle of 450, hence the name, and this means that the Picasso 2.0 will be capable 5 1ZAUB0 Spectrometer Group 2


of making measurements without having to physically take samples from the surfaces being analysed. In addition to this the Arges is capable of making over 10000 measurements per second, thus allowing to take an accurate average in a very short period of time. As previously mentioned the data can then be fed into a computer, or even a smartphone, by means of a USB cable and then be converted from a string of wavelengths being measured into an averaged colour code for the entire surface. In addition it is also possible to write out the data in the form of a graph, so that an operator can easily analyse it further.

Can the product be made? The Picasso 2.0 is a specific type of colorimeter which measures the absorbance of particular wavelengths of light by a specific solution. The tool can easily be produced, because Admesy already has a type of colorimeter that can be used for the tool in their assortment. The Arges is a high end colorimeter and a stable light source in one, and is very consistent with the qualities that the Picasso 2.0 should have. If the Picasso 2.0 has a demand of over the 100 pieces a year, it is worthwhile for Admesy to adjust the production process of Arges. A dedicated product would be the result. The Arges is designed to provide high speed measurements with great accuracy. However this high measurement speed (in the order of tens of thousands per second) provided by Arges is not necessary for the Picasso 2.0. So, all the capabilities of the Arges that the Picasso 2.0 does not need can be removed, such that downgrading would not cause any adverse effects whilst lowering costs. Moreover, capabilities also could be added to the Picasso 2.0. Admesy has confirmed the possibility of these adaptions being integrated in the manufacturing process. With this simplification, the selling price would drop to 750-1000 euros.

Manufacturing The hardware will be outsources to Admesy. We will buy the dedicated product for the selling price given above. Next to the hardware, the Picasso will be delivered with homebrew software, capable of interpreting the data from the Arges and giving a hexadecimal colour code.

Cost analysis The Picasso 2.0 is then a downgraded version based on the high end Arges colorimeter of Admesy. Due to the outsourcing to Admesy, the cost price can easily be determined. Next to the purchase price of 750 euros, we encounter also wages and other costs that would result to an amount of 900 euros. We think that the target market will allow us to ask a selling price of 2250 euros or more. In chapter 5 a more detailed calculation of the costs and profits are provided.

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Chapter 3 Situation analysis Internal analysis Strengths We are second year bachelor students, living and studying in Eindhoven. Strength of our collaboration is the diversity in the group. In our company we have three industrial designers, one industrial engineer and one mechanical engineer and there is an almost even balance in gender. In this way we can discuss several aspects from different views, which will lead to well-conceived decisions. A second strength of being a group of students is our access to information. The library, professors and other students can help us achieve our goals. Human resources that we miss in our group composition, as a marketing expert and someone who has expertise within the technology, can be easily approached. Thirdly, through the university we got in contact with the CEO of Admesy, Steven Goetstouwers. We obtained general information and his personal opinion about our ideas. In this way, we have been one step ahead of our competition. Furthermore, the physical resources at the university, like meeting rooms, computers, printers and other devices are advantages for our company. Also the location of the university, Eindhoven, can be convenient, because Eindhoven is the centre of technology in the Netherlands and it has good international access. Lastly, or technology is innovative, still not very well known and has an easy and widely application. Thereby, Admesy has a reputation of providing good quality which we can benefit of.

Weaknesses First of all, as second year bachelor students, we have almost no experience within entrepreneurship or the spectrometer market. We don’t have much previous work that shows we have good insight or skills within these areas. This will make the reputation of the company less strong. Our consumers and partners will have less trust. This will create a competitive disadvantage regarding to companies who are already for many years within this market. Secondly, it is harder to earn trust. There is little proof that the money of investors will return. They won’t get involved easily. This will make financial resources harder to reach. Additional we don’t have much money to spend ourselves, so we can’t invest with our own 7 1ZAUB0 Spectrometer Group 2


capital. We will be more sensitive for risk. Thereby, we do not have enough resources to start a patent process. (Reference: Rijksoverheid) On other weakness is that we don’t have much physical resources ourselves. This makes the company dependent. We are dependent from the TU/e for location and equipment and from Admesy for the technology. Although on the university we can search for knowledge missing in our group composition, it would be a lot better if we had a member with marketing expertise. The lack of this expertise and several others is a weakness of our company.

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External Analysis: What industry will you compete in? We will be competing in the paint/renovation industry. Our product can be provided to paint manufacturers but also to painting companies and renovation companies. What is the traditional value chain structure in the market? The product is made by Admesy and delivered to us. We will make the user-friendly software and sell the product to the company. The company uses the machine for its own use or rents/lends it out to customers. Of course the chain also works the other way; customers give feedback/orders to the company and the company comes to us. We then make more order at Admesy or change our software to the feedback. Strategic canvas:

The Picasso 2.0 Other colorimeters

Pestel: Political forces: On top of keeping the environment in a healthier condition, with the Picasso 2.0 it is also possible to preserve cultural heritage in a cheaper in a more efficient way. The government is likely to be interested in the Picasso for these facts and can provide subsidies. Economic: Also repainting a whole building is expensive and will be postponed as long as possible. With 9 1ZAUB0 Spectrometer Group 2


the Picasso 2.0 repainting will become cheaper and the paint market will become more alive. Repainting will be done more often because it is less expensive. Social: People will become more aware of small defects in paint layers. Because it is easier fix people will be more irritated by it. So The Picasso 2.0 will change the way people look at paint layers. This is an opportunity because people will repaint more frequently. Technological: Also companies, like Admesy, can be interested because of the new innovation that we provide. The technology has not been used in this application before which can provide extra opportunities. Environmental: The Picasso 2.0 contributes to a healthy environment because it is able to reduce the amount of paint that is needed during renovation projects. Because of this environmental norms are an opportunity. Legal forces: Because we want to sell our product all over Europe, different laws in different countries can be a threat. Although environmental laws will probably help our product.

Porter Threat of new entrants: Also according to the model of Porter opportunities can be identified. We are a company that delivers a high-end product on a small niche market. Other companies will not enter this market quickly because the high costs of the product in combination with the small market. Bargaining power supplier: We are a distributor, therefore we would need a contract with Admesy/the supplier so that we have a monopoly for distributing this product from this supplier for this purpose. This would give us a good market position because there are few other companies that produce high-end colorimeters. Because of this we will not have a lot of threats from other companies, but it will give Admesy/the suppliers a better bargaining position with respect to us. Bargaining power buyers: Buyers do not have a lot of choice in high-end colorimeters. Most colorimeters are low-end, as a result of this we have a good bargaining position with respect to the buyers. Threat of substitute products: The Picasso 2.0 is not mass-produced and also is high-tech, both these things make it less attractive to copy our product. We assume this will not be an issue. 10 1ZAUB0 Spectrometer Group 2


Influence of the market There are no new emerging technologies that make our product obsolete, this results in a stable market position. However there are already several colorimeters available on the market, most of these are of much lower quality in comparison to the Picasso 2.0. Despite that, their product is already on the market and also cheaper, which gives them an advantage with respect to us. They can anticipate to our emergent by also making their product highend.

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Confrontation Matrix Strength

Weakness

Opportunities Close collaboration with the university and Admesy to exploit their resources and expertise

Threats Contact via the TU/e can put us in contact with potential buyers that may be interested, even if the larger portion is not Whilst we may not have Small Niche Market much experience in the with a moderately high entrepreneurial field, we are entrance threshold unlikely to encounter much competition due to the high Existing entry threshold and the quick Alternatives market saturation

A multidisciplinary team can bring much to the table and by collaborating with larger companies and institutions it is possible to access a deep pool of knowledge, thus allowing the creation of a refined and high quality product. It is this collaboration and these connections that permit the exploitation of what would otherwise be niche market too small for the average business to access. The Picasso 2.0 is not without drawbacks; its high cost and the existence of alternatives on the market pose a great risk to the success of the company. Furthermore many of the advantages that come from collaborating with Admesy are only available should the Picasso manage to sell in large quantities. The market being exploited is, however, a niche and it is thus very possible that it becomes saturated before we achieve the minimum quotas. Possible threats notwithstanding, it is indeed possible to circumvent some of the potential weaknesses faced by the company; by formalizing our partnership with both the university and Admesy, through a contract, it is possible to obtain guarantees that the company will not suddenly loose support from either party. This also grants credibility to the budding company and should help investors to understand the commitment there is to the nascent company’s success. Finally, as mentioned before, through collaboration it is possible to obtain much of the missing knowledge. By being based in the TU/e it is possible to easily contact professors or researchers that may have knowledge crucial to the development of the company and the product. Additionally the Picasso will have to be marketed with great care. Potential customers must be made aware of the many benefits, how they can save on labour and material costs, or how they can provide a faster service. Furthermore making possible customers aware of how the Picasso is a purpose built instrument, unlike most of its competitors, should help sway opinions in our favour. In addition adjusting our business model to provide leasing, rather than selling the Picasso, could help convince reluctant customers to try, establishing a relationship with them as well as generating publicity for our company; all this at a minimum cost for ourselves. 12 1ZAUB0 Spectrometer Group 2


Chapter 4 STP Business model The business model we use is the Osterwalder framework, this is displayed below.

Key Partners We are a distributer for the Picasso 2.0, which is fabricated by Admesy. They are our key and only partner in our business case. They supply us with the product and they are able to customize the product slightly when our customer desires that, we are very tight linked to Admesy. Key Activities The activities performed by our company are mainly distributing the Picasso 2.0. Besides that our company takes care of the maintenance on the mobile web application that is used together with the Picasso 2.0. The application is free; revenue will be made through sales of the Picasso 2.0. This will happen via our website or during our product presentation sessions at companies. 13 1ZAUB0 Spectrometer Group 2


Key Resources One of the resources out company needs is the internet, this is something that is mostly seen as obvious, but in our case the sales depend very much on this. Admesy is also a very important resource, they do not only provide the product, but also provides us with knowledge for the application and extra options for the product. Value Propositions The value offered to the customer is saving time, the Picasso 2.0 is made to measure colour super-fast. It will not only save you time determining colour, but also ensures that you have to paint only a small part of the entire restoration project. The value offered can be used as a service by paint distributing companies, or by painters of restoration companies. Customer relation ship We do focus on keeping in touch with our customers; we send them a newsletter every month about the new updates or applications of the product. We are always available for adaptation, reparation or maintenance of the product, but we do not specially approach our customers after they have bought the item. Channels The channel we mainly use is the internet for sales; subsequently the item will be shipped by mail. We can also directly supply the customer with the product during a demonstration; during demonstrations our salesman will have a small amount of items with him. The internet is the most efficient way, because the cost of the website is lower of the costs of the salesman. Customer segment We create value for restoration companies, painters and paint distributers. The most important companies are the restoration companies; they are our main customers since they can save a lot of time and money while using this product. Cost structure The most important costs are the purchase price and the salaries of the workers. We use Admesy as a resource for information, this does not cost us money because Admesy provides this as a service. Revenue streams The value customers pay for is speed, they can work faster and more efficient. They can now deliver that as a service for their own company. The revenue will take place through our website, delivered by mail. Our salesman can also sell the item during presentations. 14 1ZAUB0 Spectrometer Group 2


Market Research Method To get insight in our market we contacted various possible clients. It’s hard to find concrete numbers about the market via the internet, so we wanted to validate the market via interviews. First we set up an email en sent it to possible customers. Most of the companies didn’t have the time or knowledge to answer our questions. However two companies were open for an interview and we could ask all our questions. So the following answers are based on the interviews we took with two restore companies. You can read the full interviews in the appendix. Here you can also find the sample we used for the interview. We did one interview by email and one interview by phone. We described our product as a tool to measure colors which are changed over time, so the color code doesn’t match anymore. With our product you could measure the right color, so you can paint a part of the surface without noticing difference. How large is the market you are seeking to serve? One we contacted measured the market in the Netherlands between the 200 – 300 companies. However we are serving whole Europe. Therefor the whole market would probably be between the 5000 and 6000 companies. However the other company said that the market is relatively small, except when you also look at the car restore industry. Luckily this is also one of our customer segments. We think we can’t reach the whole market immediately. So in the first year the market we can reach would probably 10%. So then we have a market around 500 companies. We estimate the companies who are willing to buy our product also around 10%, so the amount of customers will probably be 50 companies in the first year. How did the market grow the past years and how will it grow the upcoming year? This market is quite steady. Since the amount of cars, boats and buildings that need to be restored isn’t growing very fast, the market isn’t growing fast either. The fact that the amount of companies in the market is not growing has no noticeable effects for our company. Average net income for firms in the market? The company we had contact with gave an average net income between the 7000 and 8000 euros. However this was a smaller company than most of our customers will be. Therefor the net income for firms in the market is probably higher than this. How do the customers traditionally use the product? How will they use your product? 15 1ZAUB0 Spectrometer Group 2


Currently some companies aren’t using a product like these, others do. The companies who don’t use such products they measure colors with color samples. However with this technique they can’t measure the exact colors. So if they want to paint a part of a surface which is more than a year old, they need to paint the whole surface. So the problem occurs and they don’t have a solution for it right now. If we offer a product like this they mentioned that they should use it if a paint company will offer it. However this will be a good solution for the small companies. The bigger companies need it more often, so they could have more interest in having our product. The other company mentioned that they don’t use a color meter. However they know that others in the market do. They use a color meter which can measure the exact color of painted walls. Results The market research gave new insights. There are already products on the market which do the same as we want. However the companies say that there will be still a market for our product. But it is important in to be cheaper or better. Important is to take the car market into account, but we do that already. Also the paint distribution companies are important. We now have an idea of the size of the market and the relevance of our company and product. There is market, however we have competition.

Market segmentation, Target segmentation and positioning First, we start with market segmentation, which is the identification of individuals or organisations with similar buying or usage characteristics. Our customer markets can be segmented primarily according to geographic, demographic, usage, and psychological segments or a combination of the above. - Geographic segmentation profile The ongoing globalization and the usage of the internet decreases the importance of the geographical differences and distances. Through the small size of our colorimeter, we can send it all over the world. Also climates, population density and city size will not make a difference, because everywhere people have their reasons to renovate. - Demographic segmentation profile In the poorer areas of the world, there will not be enough money to renovate or to buy the colorimeter for another application. We mainly have to focus on wealthy parts of the world. Buildings, boats and cars that need restoration are all over these wealthy countries and are not specifically centralized. In the more religious areas old buildings will be of more value and will be restored more quickly. - Psychological segmentation profile We have to look for customers that appreciate historic value and are open to invest money in these values. Probably, these customers will be in the higher social classes. 16 1ZAUB0 Spectrometer Group 2


Municipalities can also start with a renovation and will be customers that appreciate historic value. The business-to-business markets can be segmented according to usage, purchasing oriented, situational, geographic location and industry sector. - Usage profile Businesses that will use this type of colorimeter will be operating enterprises. Which, as previously stated, are mostly renovation companies. Businesses that could rent out our product are wholesalers and paint selling companies. - Purchasing oriented profile Important when segmenting our product is that our target group is open to invest in our product that will make their service and result better. - Situational profile It can be that our product is used for a special occasion. That is also the reason why we think of leasing the product. However, for big projects the investment in our product will be worthwhile. We have to stay informed about big renovation projects, so that we can reach these customers quickly. - Geographic location profile As said in the geographical segmentation profile for customers, the size of our colorimeter ensures that we can send it all over the world. Geographic location will be no issue for us. - Industry sector profile What we can conclude really quickly is that the colorimeter would be really beneficial in the renovation industry. In other industries, the investment will not be worthwhile, or this type of high quality colorimeter is not necessary. All are segments are measurable, accessible, substantial, differentiable and actionable, which it important for effective segmentation.

Evaluating Market Segments Segment Size and Growth Potential Out of the results of the market research we can’t precisely define the size of the segment and growth potential. However we now know that there are already companies who do this. However both companies noticed that there is still potential for us in the market. One company stated that the market will not grow much. We think that we will address a small part of the market, and there for the growth potential isn’t of high importance for our company in this stage.

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Segment Structural Attractiveness The competition sells colorimeters, but nog as high-end as our Picasso 2.0. In this way we are trying to serve a new market. In this market the quality of the colour measured must be of the utmost importance. We are substituting a lot of products, because when using our spectrometer lots of work and materials are speared. According to Porter’s Five Forces model, we have to deal with supplier power because we are the only company selling this type of spectrometer adjusted to this specific market. Of course we have to consider the possibilities of new entrants and copy cats. However, we think that the quality of the products of Admesy will ensure profitability next to our first mover advantage. Company Objectives and Resources Our core competence will be the selling of colorimeters. We outsource the production to Admesy and we will take care of the marketing, shipping and selling of the Picasso 2.0. We will be focusing on the construction/renovation industry. Then, we continue with target marketing, in which we develop a measure of segment attractiveness. Market Segment Segment. Match Competition Available Score Size Growth Profitability with resources customer needs High ++ ++ ++ ++ ++ ++ 1 Money/High Quality Low + + ++ ++ ++ 2 Money/High Quality High + ++ --+ 3 Money/Low Quality Low --+ 4 Money/Low Quality The target group selection if again concludes that the Picasso 2.0 has to focus on high money and high quality groups. Finally, we have to position our product, which is the act of designing the company’s offering so that it occupies a meaningful and distinct position in the target customer’s mind. With the help of a slogan we transmit the positioning we are trying to achieve.

Restoration using The Picasso 2.0: use less get more. 18 1ZAUB0 Spectrometer Group 2


Marketing actions and associated costs In the early stages of our product launch we have to make sure that restoration companies get to know us. We will be active at conventions and in other restoration events. We will also visit some of the major restoration companies to introduce ourselves and our product. To do this will only cost us wages, plane tickets and hotel stays. The estimated costs are provided in chapter 5. In the phase where we go from a few customers to many customers we will grow because of good experiences, reviews and through the word of mouth between the different restoration companies. Our pricing strategy is based on the research of Bertini and Wahtieu. One strategy that they identified was intentional overpricing. This strategy stated that a product priced higher than the market standard raises curiosity under consumers. It forces the consumer to think on the products values and benefits. Our product colorimeter is pricier than the existing colorimeters, which according to the research of Bertini and Wahtieu would raise more curiosity. Another strategy is to adopt a price structure that clarifies the benefit of the product. We have planned to sell our product through the internet. On our website there will be opportunities to look for information, contact us, to request a quote and to place an order. After an order is received, we will contact the buyer. We think it is important that the buyer talks to a real person when purchasing an expensive tool.

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Chapter 5 Go/No Go decisions To make a good Go/No decision we have make a clear overview of the expected sales and costs, the table below shows how money will be made by our company. In the first year we will need an investment of roughly €50.000, - to end the year with a positive number. Subsequently as the years pass it is likely that we will become more known among restorers and so we expect more revenue. Year

Amount

Purchase

1

50

37500

Sales price (€) 112500

2

80

60000

180000

120000

100000

500

3000

16500

-29000

3

200

150000

450000

300000

100000

500

3000

199500

170500

price (€)

Gross profit (€)

Wages (€)

Website (€)

Other costs (€)

Total net profit (€)

5000

Net profit/year (€) -45500

75000

100000

4000

-45500

We estimate to sell 50 products in the first year; the costs however are bigger than the amount of money made. In the second year this loss has partly improved because the revenue will increase. In the third year we will start making profit. It is very likely for a start up to lose money in the first years, so we do not see that as a problem. The only issue is the start-up loan; we need an investment to start the company, because we need to be able to pay our employees. A potential alternative for the loan could be paying our employees in company shares. As the company ages its value will increase, so the shares will increase in value. Besides that we could also use Admesy as an investor, they could provide us with the product and make us pay after we sold enough to play even. The company will turn the investment into a total net profit of €170.500, - after two years, this means an increase of 85% each year. A part of this profit will remain in the company as investment and can serve as a reserve. We will liquidate 35% for our investors, so the ROI is 35%, we will start doing this in the third year. When we look at the total picture we can conclude that this is a GO-situation.

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Chapter 6 Reflection Whilst the first mover advantage helps strengthen the position of the Picasso 2.0 on the market, it is necessary to ensure that second movers do not push the company out of the market. However patenting, the standard process to protect one’s ideas and products from competitors, is time consuming and complex in addition to being complicated to enforce through the courts. It therefore fails to provide an adequate solution to protect the company’s assets. However it is debatable whether these assets do indeed need to be protected, the first mover advantage, combined with the relatively small size of the market itself means the market can quickly be taken over before any significant competition arises. Furthermore second mover advantage materializes when companies can enter a market by exploiting the technologies developed by the first mover, their advantages being that they do not need to market as intensively nor suffer through the entire research and development phase the first movers faced. However the Picasso 2.0 does not require extensive research, nor will the marketing be particularity wide-ranging. This will make entry for the second movers complicated and, as the market becomes saturated, less economically advantageous. To further discourage imitation, the Picasso 2.0 will be sold with customer support and help with installation. As this requires special expertise, which is not widely available, competing companies will be at a greater disadvantage as they either need to build this knowledge internally or recruit it elsewhere. Working in direct collaboration with customers allows for additional advantages. It is possible to better monitor the needs of the customers and respond faster to any changes in the market or the requirements of the users. Furthermore it becomes much simpler to see pitfalls in the design or the business model as there is direct contact and information can flow much more freely between the two parties. This is in contrast to relying on questionnaires or indirect feedback collected electronically or physically on paper. This is due to the limited information that can be conveyed in these forms as well as the high entry threshold that may discourage certain individuals from partaking in the surveys. The market analysis undertaken and the ensuing conclusion have been rather sound. The market exists and is ripe for the taking, it is small enough to be conquered with little competition from others and the service provided creates a real value proposition that is sure to entice and attract customers. Furthermore despite the small size of the market it is possible to expand into neighbouring markets targeting not just restoration companies but also paint companies and contractors. Despite the availability of potential customers there are still risks to the product. As with all new inventions it will be difficult to convince others of the value proposition due to people’s inherent interest in maintaining the status quo. In addition the market may become saturated before the company is capable of switching to a different 21 1ZAUB0 Spectrometer Group 2


market, limiting the revenue and hampering growth. Lastly the cost of the Picasso 2.0 may discourage some potential clients. Whilst risks are always part of entrepreneurial growth these should always be minimized, the go/no go analysis has found the risks to be worth the potential gains and even if the market were to saturate before a profit can be generated it is possible to tackle neighbouring markets with a minimal increase in costs. Additionally the cost of the Picasso should not present any difficulties, especially considering its long term durability. However it is always possible to lower the price or offer special discounts to clients to entice them to buy the product. In conclusion it appears that the concept is sound, and that there are additional safeguards and emergency measures that can be taken in case of need.

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References "Hoe Kan Ik Octrooi Aanvragen?" Rijksoverheid.nl. Rijksoverheid, n.d. Web. 16 June 2014. <http://www.rijksoverheid.nl/onderwerpen/intellectueel-eigendom/vraag-en-antwoord/hoekan-ik-octrooi-aanvragen.html>. Bertini and Wathieu 2010, HBR “How to Stop Customers Fixating on Prices”

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Appendix A Structure of interviews and questions We are five students of the University of Technology in Eindhoven. We are currently developing a business concept for a project within the subject of entrepreneurship. We offer measurement for colours, which can be used to measure the exact colour. For example you can use this to paint a part of a building, boat or car without having to paint the whole surface. In this way you wonâ&#x20AC;&#x2122;t see any colour difference. Now we want to validate if there is demand for our concept. Therefor we want to ask you a couple questions. I takes a couple of minutes, but it will help us a lot! We have the following questions: What are you currently using to measure colours? How are you currently solving problems like these? Do you have an idea how we could approach the market and promote our product? Would you have interest in our product? What would be the maximum prize which you want to spend for our product? Would you have interest in a partnership? (co-develop, co-finance or introduction) Can you estimate the market size?

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Appendix B Survey Results Interview with Bootbedrijf Brouwers We are five students of the University of Technology in Eindhoven. We are currently developing a business concept for a project within the subject of entrepreneurship. We offer measurement for colours, which can be used to measure the exact colour. For example you can use this to paint a part of a building, boat or car without having to paint the whole surface. In this way you won’t see any colour difference. Now we want to validate if there is demand for our concept. Therefor we want to ask you a couple questions. I takes a couple of minutes, but it will help us a lot! We have the following questions: What are you currently using to measure colours? If we want to measure colours we use colour samples. How are you currently solving problems like these? We can’t solve these problems. We use colour samples, however this is just an estimation. You can’t measure the exact colour and you always see a difference. So if we have a situation like this, we need to paint the whole surface. Do you have an idea how we could approach the market and promote our product? I should approach the market via the paint companies. I have one paint company which delivers all my paint. So if they would recommend me something I would definitely look it up. Would you have interest in our product? Problems like these occur only once or twice a year, so for me it won’t work. But I think for the bigger companies in my market I think it is interesting. What would be the maximum prize which you want to spend for our product? I think I don’t want to spend much money on it. Since the paint companies already deliver good services for almost nothing, so I would not pay much for such a product or service. Would you have interest in a partnership? (co-develop, co-finance or introduction) No I am not big enough for something like this. 25 1ZAUB0 Spectrometer Group 2


Can you estimate the market size? There are a lot of these companies I guess. But If I make an estimation for the bigger ones I think between the 200 – 300 companies in the Netherlands. In Europe I think around the 5000/6000 companies. Is this market growing and has it grown the last couple of years? I think this market is quite steady for quite some time. I also think it will not grow very hard the upcoming years. I think because this market is closely related to the amount of cars, boats, buildings etcetera. And I think this amount isn’t growing very fast in the upcoming years. What is your average net income in a year? Between the 7000 and 8000 euros. Interview Gevelgilde Waar maakt u nu gebruik van om kleuren te meten? Ik ben een kleurenonderzoeker die de kleurtrapjes en slijpproefjes niet alleen op het oog van een naam voorziet of ze vergelijkt met een kleurenwaaier, er zijn ook anderen die er een professionele kleurmeter voor inzet, de Capsure X-rite RM 200. Deze geeft betrouwbare resultaten in de kleurcoderingen NCS, RAL, RAL Classic en RAL design. Dit zijn gebruikelijke kleurcoderingen waarmee men niet alleen een indruk heeft van de objectief gemeten kleur, maar die ook kan gebruiken om in het eventuele kleurontwerp op te nemen. Van deze kleurmeter kun je het meetvlak vergroten of verkleinen en je ziet tijdens de meting waar je op richt in het kleine scherm. Zo kun je onregelmatigheden in het kleurtrapje vermijden. Hoe lost u zulke problemen nu op en tegen welke prijs? Tot enige tijd geleden vergeleek ik de kleur met een professionele kleurenwaaier, maar dan ben je voor de juiste beoordeling altijd afhankelijk van 'standaard' licht en dat is buiten natuurlijk nooit echt aanwezig! Dan weer zon, dan weer hollandse wolkenluchten! Dus dat is altijd een omschrijving 'in de orde van'. Omdat ik ook jarenlang bij Talens heb gewerkt (kunstschildersverf) en daar o.a. de eindcontrole heb gedaan kan ik goed 'kleurkijken'. Dat is echter niet iedereen gegeven, zo weten de meeste mannen niet dat bij ongeveer 20% van hen een zekere vorm van kleurenblindheid voorkomt. Vandaar de soms werkelijk 'merkwaardige' kleurkeuzen van architecten (of schilders!) Dan is vergelijken met een waaier eigenlijk zinloos en is zo'n meter, die zijn eigen gecalibreerde lichtbron heeft, nuttig! Mijn x-rite kostte ca. € 750,-, maar dat mag voor een professionele onderzoeker geen bezwaar zijn, anders

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moet je dit vak niet willen beoefenen. Maar, goedkoper is altijd beter, mits de resultaten betrouwbaar zijn en herhaalbaar en het instrument tegen een redelijk ruwe behandeling kan. Heeft u ideeën over hoe wij de markt moeten benaderen en hoe wij moeten promoten? Ik kan me voorstellen dat je het als studieproject uitwerkt, maar de relatief beperkte markt heeft er waarschijnlijk geen behoefte aan, of de eigenschappen moet zo overdonderderend beter zijn...! Maar oriënteer je eerst bij het Nederlands kleurencentrum. Zou u interesse hebben in ons product? Gezien het voorafgaande, nee, ik ben perfect tevreden met mijn geijkte, veelzijdige apparaat!

Wat zou het maximale bedrag zijn wat u over zou hebben voor ons product? De x-rite kostte ca. € 750,-, wat niet weinig is natuurlijk, maar betrouwbare resultaten mogen wat kosten en ik merk dat de objectieve kleurbenamingen en getalsmatige NCS nummers, Ral nummers of andere (extra te verkrijgen kleursystemen) bij architecten goed 'vallen'. In een redelijk aantal onderzoeken heb je de aanschaf er uit, het zijn m.i. noodzakelijke bedrijfsmiddelen voor een serieuze onderzoeker. Zou u daarnaast de intensie hebben om een samenwerking met ons aan te gaan in de vorm van co-develop, co-finance of introductie? Nee, in de zin van co-develop, co-finance, geen interesse, als het product iets kan wat de andere op de markt zijnde apparatuur niet kan of als de kwaliteit vergelijkbaar is, maar de kostprijs zeer aanmerkelijk lager, ja dan wil ik dat best promoten; per slot van rekening gaat het om de mogelijkheid zoiets subjectiefs als 'kleur' om te zetten in 'koele' getalsmatige aanduidingen die niet voor meerdere interpretatie vatbaar zijn. Weet u hoe groot de markt is voor ons product? Relatief klein, of je zou de autospuiters en uitdeukbedrijven erbij moeten rekenen, maar die hebben standaard geavanceerde apparatuur in huis en zitten niet te wachten op een nieuw apparaat, tenzij, zoals eerder gezegd, dat apparaat vergelijkbare kwaliteit, maar aanmerkelijk lagere prijs zou hebben én, dezelfde betrouwbaarheid en standaardisatie zou bezitten

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