Business Plan v1.6

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UNIVERSITY OF TECHNOLOGY, SYDNEY UTS Exo Technologies Upper Body Exoskeleton (Upper BEX) Aldrich Chan – 10161952 Farhad Reza – 10487193 Michael Kim – 10434001 Contributions on each section we equal – Please divide mark equally [06/11/09]

Transcript of Business Plan v1.6

Page 1: Business Plan v1.6

UNIVERSITY OF TECHNOLOGY, SYDNEY

UTS Exo TechnologiesUpper Body Exoskeleton (Upper BEX)

Aldrich Chan – 10161952 Farhad Reza – 10487193Michael Kim – 10434001

Contributions on each section we equal – Please divide mark equally[06/11/09]

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UTS Exo Technologies Business PlanAldrich Chan – 10161952Farhad Reza – 10487193Michael Kim – 10434001

Table of ContentTable of Content.............................................................................................................2

Table of Tables...............................................................................................................4Table of Figures.............................................................................................................4Executive Summary.......................................................................................................51 Mission Statement..................................................................................................62 Objectives...............................................................................................................63 Background............................................................................................................74 Organisational Overview.......................................................................................85 Product/Service Overview.....................................................................................96 Value Chain Analysis – Company.......................................................................107 Strengths, Weaknesses, Opportunities & Threats (SWOT).................................13

7.1 Opportunity..................................................................................................137.2 Problem & Solution......................................................................................147.3 Customer Value Proposition........................................................................15

Market Analysis...........................................................................................................167.4 Market Size..................................................................................................167.5 Market Trends..............................................................................................187.6 Market Attractiveness..................................................................................18

8 Competitive Analysis...........................................................................................198.1 Customers.....................................................................................................19

8.1.1 Segmentation – Demographic Profiling Business................................228.1.2 Segmentation – Geographic Profiling..................................................228.1.3 Segmentation – Product Usage Profiling.............................................228.1.4 Segmentation – Psychographic Profiling Businesses..........................238.1.5 Buying Influence Profiling in Roads & bridge maintenance...............24

8.2 Competitors..................................................................................................248.3 Cyberdyne HAL – 5 - SWOT Analysis.......................................................278.4 Cyberdyne Hal-5 Competitive Advantage...................................................278.5 Cyberdyne Hal-5 - Product Strategy............................................................288.6 Raytheon SARCOS - SWOT Analysis........................................................298.7 Raytheon SARCOS - Competitive Advantage............................................298.8 Raytheon SARCOS - Product Strategy........................................................308.9 UTS CAS Autonomous Sand Blaster - SWOT Analysis.............................318.10 UTS CAS Autonomous Sand Blaster - Competitive Advantage.................318.11 UTS CAS Autonomous Sand Blaster - Product Strategy............................328.12 Suppliers.......................................................................................................338.13 Entrants........................................................................................................348.14 Substitutes....................................................................................................368.15 Key Success Factors.....................................................................................37

9 Environmental Analysis.......................................................................................389.1 Regulatory Influences..................................................................................389.2 Economic Influences....................................................................................389.3 Societal Influences.......................................................................................409.4 Technological Influences.............................................................................41

10 Vision Statement..............................................................................................4311 Marketing Plan.................................................................................................44

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11.1 Product/Service............................................................................................4511.1.1 Product Development...........................................................................4511.1.2 Technical Advantage............................................................................4511.1.3 Proprietary Advantage.........................................................................4511.1.4 Packaging.............................................................................................46

11.2 Price..............................................................................................................4711.3 Promotion.....................................................................................................47

11.3.1 Advertising...........................................................................................4811.3.2 Trade conferences, expos & exhibitions..............................................4811.3.3 Direct Mail & Telemarketing...............................................................4911.3.4 Company Website................................................................................5011.3.5 Internet Advertising.............................................................................5011.3.6 E-mail...................................................................................................5111.3.7 Network Marketing..............................................................................5111.3.8 Promotion Strategy Schedule...............................................................51

11.4 Distribution..................................................................................................5211.4.1 Channels...............................................................................................5311.4.2 Direct Sales Force................................................................................53

12 Operations Plan................................................................................................5412.1 Sourcing.......................................................................................................5412.2 Production....................................................................................................54

12.2.1 Facilities...............................................................................................5412.2.2 Labour..................................................................................................5512.2.3 Inventory..............................................................................................55

12.3 Service..........................................................................................................5512.4 Administration..............................................................................................55

13 Organisation (Personnel) Plan..........................................................................5713.1 Organisation Structure.................................................................................5713.2 Compensation...............................................................................................57

14 Financial Plan...................................................................................................5814.1 Financial Assumptions.................................................................................5814.2 Financial Statements....................................................................................58

14.2.1 Profit & Loss........................................................................................5814.2.2 Capital Budget......................................................................................5814.2.3 Cash Flow.............................................................................................5814.2.4 Balance Sheet.......................................................................................59

14.3 Financial Analysis........................................................................................5914.3.1 Beak Even Analysis.............................................................................5914.3.2 Ratio Analysis......................................................................................5914.3.3 Sensitivity Analysis..............................................................................60

14.4 Offer.............................................................................................................6014.4.1 Funding................................................................................................6014.4.2 Harvest.................................................................................................60

15 Risk and Critical Issues....................................................................................6216 Recommendations............................................................................................6217 References........................................................................................................64

Table of Tables

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Table 1 UTS Exo Technologies - Upper BEX - SWOT Analysis...............................13

Table 2 Business Demographic Profile – Roads & Bridge Maintenance....................22Table 3 Top 20% of customer (Assuming product has been release and an estimation of spend).......................................................................................................................23Table 4 Buying Influence Profiling..............................................................................24Table 5 Cyberdyne HAL – 5 - SWOT Analysis..........................................................27Table 6 Cyberdyne Hal-5 - Product Strategy...............................................................28Table 7 Raytheon SARCOS - SWOT Analysis...........................................................29Table 8 Raytheon SARCOS - Product Strategy...........................................................30Table 9 UTS CAS Autonomous Sand Blaster - SWOT Analysis................................31Table 10 UTS CAS Autonomous Sand Blaster - Product Strategy.............................32Table 11 Promotion Strategy Schedule Summary.......................................................51

Table of FiguresFigure 1 Michael Porter's Value Chain model.............................................................10Figure 2 Graph of bridges by material in Victoria (Source: Vic Roads, 2009)...........17Figure 3 Graph of the maintenance expenditure $M (Source: Sumitomo, 2009)........17Figure 4 Competitive Analysis Diagram......................................................................19Figure 5 Primary targets eastern seaboard of Ausralia................................................22Figure 6 Age and Condition of Bridges (Source: Vic Roads, 2009)...........................41

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1 Executive Summary

Opportunity

Product

Company Background

Market

Competitive Advantage

Team

Strategy

Economics

Offer

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2 Mission StatementThe UTS EXO Technologies mission is to eliminate physical fatigue in labouring

tasks by providing an aid in the form of an exoskeleton suit. The suit will enhance

productivity and efficiency. The exoskeleton is locally designed, tested and

manufactured. The organisations targeted will be NSW Roads and Traffic Authority,

Vic Roads and QLD Department of Transport.

3 ObjectivesUTS Exo Technologies plan to execute a strategy that will go on for the next 5 years

in order to meet our objectives. In this 5 year strategies, targets have to be completed

or monitored to ensure a successful company. The company’s financial objectives are

to have a steady revenue growth and to achieve a break even point at the 3rd quarter of

the 3rd year, allowing the company to gain profits from this point. This will mean that

the RTA contract needs to be landed in the 1st or 2nd year. The Vic Roads contract

needs to be signed in the 2nd or 3rd year in order to achieve this break even point. The

marketing objectives are to provide dominating product innovation. To gain the

contract of the provider of exoskeleton units to the RTA, Vic Roads and the other

road authorities making the company the only market share holder. The operations

objectives are to provide high quality customer service, warranty and on time

deliverables while becoming a technology leader in this industry. The organisation

objectives are to provide technical expertise while being flexible and tailoring to

needs of the customers. The satisfied customers will then provide testimonials with

will be beneficial to marketing the exoskeleton suit to future customers.

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4 BackgroundIn Australia there are in total 30,000 road and rail bridges, of these bridges 15~20%

are steel bridges. Bridges in general are aging and is apart of an important

infrastructure towards Australia. These maintenance work on these bridges require the

old paint, rust or other build up to be removed before another application of paint is to

reapplied to the bridge to protect it for another 5 years.

The process in removing the old paint, rust and other foreign material is by using a

process called abrasive blasting. This process involves a motor and a compressor to

pump out at high pressure, particles that attack the surfaces of the directed area.

The problem or issues is that due to this high pressure the exit nozzle when operating

exerts a force of 100 Newtons which is equivalent to 10kg to the operator. The Nozzle

and the hose also weights about 5~10kg. The operation requires on operator and a

second operator to aid in handling the hose. It is physically impossible for the

operator to be continuously performing this task for more then 30mins as the forces

from the equipment and the vibrations that causes physical fatigue to the operator’s

limbs and body. The process is a slow process and the bridges are large.

This problem has been made aware and being a government organisation the unions

has requested that operator must not operate the equipment for any periods longer

then that of 30mins. This has meant that the productivity and efficiency is poor.

A solution is currently being developed by the UTS students and staff led by

Professor Dikai Liu in developing an upper body exoskeleton (Upper BEX), which

began July 2009. This exoskeleton will be powered and provide aid to the user. The

aided power will be that the user only provides 1-35% of force and the exoskeleton

provides the other 65-99% force.

The exoskeleton is a new niche product, thus there is no market of its own. The

primary market that this exoskeleton is aimed at is the infrastructure maintenance.

More specifically the Roads & Bridges Maintenance Market.

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5 Organisational OverviewDescribe company’s shareholder structure.

Detail the existing organisation structure.

List experience and capabilities of the current organisation.

Examine the company culture.

The organisation structure should be a flat structure with little hierarchy. This

structure promotes innovation and creativity in the employees as they have a sense of

power and there is little power struggle or intimidation from fellow colleagues or

peers.

The experiences and capabilities of the current organisation are limited to Research &

Development. The promotional, sales and distribution are limited meaning that

involvement of managers that have experience in introduction newly developed

products in to new markets as this is an opportunistic diversification and is associated

with high risks and high uncertainties. To minimise this experienced experts that have

the knowledge, creativity, intuition and strategy have been hired to minimise the risk

and uncertainties.

The company culture is very institutionalised and formal as the Research &

Development team are university professors, PHD research students, graduate and

undergraduate students. Exoskeleton design requires creative and innovative thinking

which an institutional and formal company culture does not provide. The organisation

culture needs to take one that is similar to Google. The freedom and unrestricted

policy allows the employees and management to be creativity and innovative in

design.

Presently the company has no shareholder structure that has been put in place but that

is something that will be address in this business plan in the following section.

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6 Product/Service Overview

List of current products/services.

Identify the features and benefits of existing products/services.

Describe unique product/service features and how these add significant value.

Identify intellectual property that exists in the organisation.

Outline any royalty, licensing, franchising and distribution agreements for the existing

products/services.

Describe and contractual agreements that provide exclusivity or proprietary right.

List the types of products liability insurance, amount of coverage needed and costs of

production.

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7 Value Chain Analysis – CompanyIn this section it will show the analysis of the company’s value chain and which areas

that can be focused on in order to minimise cost and increase profits. This analysis is

a general analysis as the exoskeleton is still in development yet to be introduction to

the public.

Figure 1 Michael Porter's Value Chain model

Organisation Infrastructure

An infrastructure has yet to be established as the product is currently still in the

process of being developed. A couple of criterions will be an implementation of a

good ERP system which is similar or comparable to other companies in the industry.

The other will require the company to have managing directors, strategic & product

management, legal, finance, accounting, public relations and quality assurance

departments that an work in harmony and together. These individuals and department

must have the right attitude and ethics meaning that they might not necessarily be the

best if the can not cooperate with other others.

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Human Resource Management

A good framework will be required as the costs involved in recruitment, training out

weights the cost of developing a awards or incentive program for employees &

management.

Technology

This product and service that the exoskeleton provides requires continual and constant

research and development of the existing technology, different alternatives and

potential future technologies. The exoskeleton will also require continual

investigation, assessment and analysis to ensure that maximum comfort is reached on

all users of all sizes.

If R&D cost can be kept to a minimal with out restricting the creativity,

innovativeness of the team then this area can be a huge cost saver and this inturn will

increase the margin.

Procurement

Good team and management is required in sourcing and negotiating the minimalist

price for the raw materials, goods or services. This will increase the profit margin for

the exoskeleton.

Inbound Logistics

This product & service will be made to order once the customer has placed a deposit.

This product will operate on a pull manufacturing strategy, as it is still in the

development and introduction stages. This pull system will rely heavy on the correct

ERP system to be emplaced to so customer order what is expected to be coming from

an existing order and what we need to order from suppliers. .

Operations

The operation will work on a lean manufacturing system with will most resemble that

of a pull manufacturing system. The quality assurance will rely on employees,

engineers and management to follow Six Sigma methodologies in manufacturing.

There will be no production line but a assembly shop will be required like that of a

assembly hanger for Being and Airbus.

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Having the right operation will be required to ensure that costs are kept minimal and it

is the right operation for this product.

Outbound Logistics

As the demands from customers presently are low and orders are not consistent, the

delivery of the product can be done by the engineers or even third party couriers. The

benefits of in house delivery; care will be taken, unpacking the product on delivery, re

demonstrate, educate and verification that the product is functional upon delivery.

Marketing & Sales

This product is still in the development stages and there also have not been any

competitors or similar product that has been released on to the market yet. This means

the modifying or copying is out of the question and the right plan needs to be in place

so attract buyers to commit, this will be through the use of promotions, distribution,

price, product and service.

Service

In the initial stages service such as customer support and repair service is not an issue.

The volume we expect to sell in the first few years should not excess the capacity of

the engineers and the other technical staffs’ ability to assist. Once the R&D and

production staff are spending in excess of about 25% of their time assisting in service

to existing customers a new department or division will be setup to handle the support

and repair issues.

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UTS Exo Technologies Business PlanAldrich Chan – 10161952Farhad Reza – 10487193Michael Kim – 10434001

8 Strengths, Weaknesses, Opportunities & Threats (SWOT)

Table 1 UTS Exo Technologies - Upper BEX - SWOT AnalysisStrengths Weaknesses

Simple Upper body unit-enhances arms

and torso strength and endurance Locally designed University innovativeness Locally manufactured and

assembled Australian developed and owned

Weight of the suit; no lower limb aid

Formal and institutionalised structure and culture.

No third party funding Lack of marketing & sales

industry experience to mitigate these risks make partner with an entrepreneur to this venture with marketing and sales know-how

Opportunities Threats Expand to new markets, materials

handling, medical and others Build up on existing knowledge

and technology, i.e. lower body suit.

Penetrating a new market- replacing man power with robotics

Market development Develop new feature to infiltrate

new avenues for the Exo-Suit Diversification of technology to

assist other industries

Competitors developing a similar product.

Competitor entering the same market.

Specialising too much on a market that has limited customers.

Strategy might be too narrow and neglect other potential markets.

New technologies are hard to keep up with, in respect to development cost and time.

8.1 OpportunityWe intend to monopolise New South Wales State’s road and bridge maintenance

market within 2 years after inauguration. Then moving to Queensland and Victoria,

and other states will follow suit. Time to establish our dominance in a new market

(state) should decease as clientele list expands. This will allow the University to

gather additional funding for future research. Exoskeleton can be developed,

compiling new features to our first commercial suit, sophisticating our Exoskeleton.

Ultimate vision for our innovation is diversifying Exoskeleton’s applications,

broadening market options. The success of our roads and bridge maintenance will act

as a catalyst in our interactions with smaller government organisations and private

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enterprises. Alternate sectors we intend to infiltrate are materials handling, farming,

medical rehabilitation and elderly care.

As there are no competitors today, once NSW state road and bridge maintenance has

been deemed successful, it will be easy to infiltrate other states. Only problem with

this plan would be new entrants from other universities and other researching firms.

This is a low risk at this stage as research and development of such innovations can be

lengthy and costly.

Domestically we do not see a threat from other entrants, however with Japan and

United States of America already developing exoskeletons, potentially penetrating our

proposed markets. Most of the US researchers have exclusive contracts with the

military, thus it is highly unlikely for them to change their suit’s application.

Japan’s Cyberdyne Hal 5 is a domestic suit that is already on the market and with

performance specifications that is close to ours. Competing in Australia will skew the

competitive advantage to our half. Both products priced very competitively, $10,000;

but Hal 5 possesses one significant technical advantage; Hal 5 has lower limb support.

But with income stream created from initial commercialisation; RTA NSW, we can

extend our suit to support lower half of the body.

The problem

8.2 Problem & SolutionThe problem or issues is that the road and bridge maintenance organisations face is

the level of occupational health and safety concerns about the abrasive blasting

process. The cause is the high pressure that is exerted from the nozzle when operating.

The nozzle and the hose also provide a weight force. The operation requires on

operator and a second operator to aid in handling the hose. It is physically impossible

for the operator to be continuously performing this task for more then 30mins. The

forces from the equipment and vibrations cause physical fatigue to the operator’s

limbs and body. The process is slow and the bridges are large areas.

This problem has been made aware and being a government organisation the unions

has requested that operator must not operate the equipment for any periods longer

then that of 30mins. This has meant that the productivity and efficiency is poor.

A solution is currently being developed by the UTS students and staff led by

Professor Dikai Liu in developing an upper body exoskeleton (Upper EXOS), which

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began July 2009. This exoskeleton will be powered and provide aid to the user. The

aided power will be that the user only provides 1-35% of force and the exoskeleton

provides the other 65-99% force.

8.3 Customer Value PropositionThe customers

The customers will see the benefits of the exoskeleton and the solutions that it can

provide to problems. Problems either in the roads and maintenance or other industries

like materials handling and medical industries. The benefits will out weight the cost of

the unit. The complexity of the unit will be visually seen to give the customer added

sense of value.

The unique selling proposition will be that fact that it is a new niche product that has

yet to penetrate the market in a large scale. There are currently only 3 competitors

developing the technology and there are 2 more companies that are researching

similar technologies. This creates a unique and intriguing product that provides a

solution to problem and has benefits that out weight the costs.

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Market AnalysisAs mentioned in the previous section the targeted market initially will and the eastern

region of Australia. The market is sectioned to state and local council markets. The

specific geographic region will be QLD, NSW and VIC where ever there is a steel

bridge this primarily location where water ways are or valleys.

8.4 Market Size Australia has an estimated 30 000 road and rail bridges.

NSW has 4998 bridges and the RTA looks after all of them.

NSW government plans to spend $57.6 Billion from 2008 to 2011.

RTA NSW spent $2.2 Billion in 2008-09 fiscal, to develop, and manage roads

and bridges.

In bridgework alone the RTA spends $30 million in maintenance costs.

In 2005 Queensland government proposed to spend $350 million to replace

old bridges over the next five years, (till 2010).

Sydney Harbour Bridge’s annual maintenance cost around $5million.

Vic Roads has about 3000 bridges in total and about 17% of them are steel.

This 17% means that there are approximately about 500 steel road bridges.

The steel bridge maintenance does not finish with road bridges but also

railway bridges and pedestrian bridges.

The market initially will be regional, expanding to state and then national.

NSW, VIC and QLD together spend about $159 million, which is about 70%

of Australia’s bridge maintenance expenditure.

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Figure 2 Graph of bridges by material in Victoria (Source: Vic Roads, 2009)

Figure 3 Graph of the maintenance expenditure $M (Source: Sumitomo, 2009)

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8.5 Market Trends

Exoskeleton technology is in its introduction stages, no direct standards to

demonstrate.

An indirect correspondence to exoskeleton is industrial robots.

Robotic industry- continually growing

8.6 Market Attractiveness

Abrasive blasting is the most expensive process in maintaining steel bridges.

Time consuming, operator’s fatigue-cancelled out as exoskeleton -

shortening time to complete the abrasive blasting,

Maintenance on steel bridges are continuous, an all-year round process.

The market is moderately attractive as there are no present solutions for the

issues the face the maintenance staff. This industry spends a lot of money each

year as this industry is a necessity part of a developed nation’s infrastructure.

This means that a need is always going to be present and that there is not

going to be a decline in activity.

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9 Competitive Analysis

Figure 4 Competitive Analysis Diagram

9.1 Customers

The primary industry as mentioned that the exoskeleton will be trying to enter will be

the Roads maintenance market. This industry has a lot of occupational health and

safety requirements meaning that the processes or productivity are slow as rest

periods are mandatory as the level of forces, stresses and strain place on the muscles

mean it is physically impossible for any person to use manual labour excessive length

of periods. The classifications of customers are varied as this is a new product. The

user and influencer will find the product useful that then has to convince the decider.

The decider will ask for the aid of the screener to provide an analysis of the product in

a form of a cost benefit analysis.

The primary target market will be roads and bridge maintenance services. The

customers are government road authority organisations of each state and territory.

These organisations are RTA NSW, VIC Roads, QLD Department of Transport and

Main Roads, WA Main Roads, NT Transport Group, SA Transport, TAS Transport

and TAMS ACT.

In NSW the RTA maintains 50% of the roads and the other 50% councils and private

contractors provide the maintenance. This will be very similar in the other states and

territories. So the segmentation of business is a few but they have money to spend on

necessary equipment.

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Concentration of customers relative to the supplier industry

The product being new and a niche product marketing to a specific industry is

required. The initial industry being the roads & civil infrastructure

maintenance industry.

The product in the innovators stage meaning that the concentration of

customers are relatively few but as the product continues on the product

lifecycle the concentration of customers are endless as this product can be

adapted to any industry.

The servicing and maintenance of roads and civil structures many have a few

customers but these customer are the type that will spend large amounts of

money if they see the benefits of the product.

Volume of purchase

The volume of purchase will range from anywhere from 1 unit and above as

this number is dependant of the amount of profits the company takes in a year

and the level of productivity that the suit will offer.

The volume of purchases will vary for each industry, hospitals may require a

large volume of units for there rehabilitation wards.

Standardisation of customer

Being only an upper body exoskeleton suit there are limitations on the

capabilities. These capabilities are that the suit it self has a limited force it can

aid the user as there is no lower support structure to provide a supportive

reactive force.

The unit has been designed to meet the standard requirements of customers.

The customers are well defined but if product were to expand into other

industries alteration will be required which are also quite standardised.

For the roads and civil structure service and maintenance industry the

requirements are quite standardised with slow to reasonable pace motion that

will allow the user to argument limbs in safety working positions with little

effort.

Product saturation

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Product saturation will not be of any concern at present as this is a niche

product and it is not classified as a fast moving consumer good.

The product life cycle to reach product saturation point will be decades away.

Once the industry has reached saturation point the product can easily expand

in to other industries

Most potential customers have not used the product resulting it being

favourable.

Customers’ knowledge about suppliers’ cost structure.

For this product the customer has little to no understanding of the cost

structure that is involved in the R&D, testing, verification, supplier

manufacturing and assembly of the product.

Threat of backward integration by customers

Customers will not be able to backward integrate as the amount of technical

knowledge required are beyond most customers. The amount of coding and

design and testing costs out weights the cost of purchasing a turnkey suit.

Customer cost savings or enhanced satisfaction from the supplier’s product

The cost saving will be the efficiency and productivity using the suit compared

to without the suit.

The cost saving in minimising the health and safety incidents when users use

the suit to aid in the daily operations as an aid.

Customers’ capacity for surpluses or shortages

As this product will be a made to order product, a fast production time will be

require with minimal waiting periods.

As this is a niche product it is uncertain what if there is any seasonality in

sales or demand. The mostly likely demand will be period will be at the end of

financial year when companies have money to spend.

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9.1.1 Segmentation – Demographic Profiling BusinessTable 2 Business Demographic Profile – Roads & Bridge MaintenanceBusiness Type Construction & maintenance service

Turnover n/a as it is a government organisation

But the NSW RTA spend $30 million a year on road

maintenance

No. Employees n/a

Geographic

Location

Eastern Australia – NSW, QLD & VIC

9.1.2 Segmentation – Geographic Profiling

Figure 5 Primary targets eastern seaboard of Ausralia.

9.1.3 Segmentation – Product Usage Profiling

Product usage ranking – Roads & Bridge Maintenance

The product will be used at an estimate time period of 1 month, however once

one steel bridge have finish the road authorities will proceed to another so the

usage will be all year round.

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The customers are mostly government roads authority departments which

roughly look after 50% of the maintenance works.

The other major organisation is the local councils who look after 45% of the

maintenance

The other 5% are private contractors.

Table 3 Top 20% of customer (Assuming product has been release and an estimation of spend)Average Spend per Order $10,000

Average Orders per Year 5

Average Duration of Customer n/a

The usage classification of customers will be “A class” types that are loyal customers,

there will also be “D class” users which are the non users

9.1.4 Segmentation – Psychographic Profiling Businesses

The value and criteria points to influence sale

Compile with WorkCover, OH&S and Australian Standards

High quality

Reasonable price to performance.

Improvement on efficiency, productivity

Backed by WorkCover, OH&S, worker and unions

Sales cycle

Direct or door to door sales

Demonstration

Negotiations (Go on for a few months before a final approval)

Closing of sale

Initial deposit

Order, manufacture parts (up to 1 month)

Assembly (2 weeks)

Quality assurance and validation (2 weeks)

Delivery (1 – 2 weeks)

Tutorials and instructions (1 week)

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Final payment at the end of the month.

9.1.5 Buying Influence Profiling in Roads & bridge maintenanceTable 4 Buying Influence Profiling

User Roads maintenance labours

Decider Financial Department manager, Board of directors

Screener Accountants, Financial department, Engineers, Legal

9.2 Competitors

There are a number of competitors but each of the exoskeleton suits are design for

specific functions or applications. The industry is new and the competitors are

complacent and are just researching and developing the suit according the specified

applications or industries. It is too early to tell what directions the competitors will

take as there are no one designs that has been label the optimal design. On an overall

perspective the competitors are favourable as they are no ruthless competition

between company and products. Each of the products has the unique features that

differentiate the product from the next. The exoskeleton industry is still in the

innovative stage of the product life cycle and the concentration of each competitor is

at different markets from medical, material handling, maintenance and military. Being

still in the innovative stages the industry consolidation is non existent as each

company is still in the R&D phase and now innovative design has been agreed on.

Competitive posture

Competitors are more complacent, as most are in its development stages.

Most competitors are trying to establish their own position within the market

by differentiating exoskeleton’s applications to their competitors.

Market capacity

Most of the developers have not released their exoskeletons, with the

exception of Cyberdyne.

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The market or product cycle is still in the initial innovative stages meaning

that demand is not high and the is product is not a fast moving consumer good

the order is place before build.

The market share of competitors is still relatively new so there is no real data

to draw from about market share.

Vertical Integration

At this stage it is highly unlikely that competitors will have mass number of

suppliers or start to vertically integrate its supply chain, as this will increase

capital costs.

Number of competitors

There are 3 indirect competitors,

UC Berkley/ Lockheed Martin’s HULC,

SARCOS/Raytheon’s XOS Exoskeleton, and

Cyberdyne’s Hal 5.

Pricing basis

Demand based pricing is applied to this industry. These exoskeletons are

tailored to perform constricted tasks, eg, military or to aid mobility.

Mergers and acquisitions

SARCOS an American robotics company initially developed the system. The

rights for the system have been brought out by Raytheon, which is an

American Defence contractor.

There has been virtually no mergers or acquisitions in this industry as this

industry is still largely in the research and development stages and all

competitors or companies are venturing on their own path.

Exit Barriers

Some companies who are contracted to military industries like Raytheon and

UC Berkley find it harder to exit the market.

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Exiting barriers for companies are relatively easily and if a contract is

involved then usually it is a timed period contract or there is an underlying

agreement that the knowledge gained by the contracted company must be then

pasted back to the company.

Differentiation

Each competitor’s exoskeleton offers different features and applications to on another.

Industrial and commercial aid

The UTS upper body exoskeleton suit is primarily targeted at the

Roads and civil structures servicing and maintenance industry with the

potential of expanding into abattoir industry.

Military

University of California, Berkley (UC Berkley)/ Lockheed Martin’s

Human Universal Load Carrier (HULC) only supports the lower body

to aid backpack loads on soldiers.

Raytheon’s XOS Exoskeleton is a full body suit that emphasises gains

in overall body strength, endurance, and it has also been developed to

be agile, creating “Iron Man” like soldiers.

Personal Mobility Aid

Cyberdyne’s HAL 5 is a full body suit that aids mobility to the public.

Unlike the Raytheon’s suit this is a weaker suit that handles less

weight.

Competitor resources

Competitors are regional organisations with links to its local national

governments.

Concentration

New market with only one system available, Cyberdyne’s Hal 5 exoskeleton

suit. Hal 5 is only available in Japan with a limited run of 400 suits, (2006).

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9.3 Cyberdyne HAL– 5 - SWOT AnalysisTable 5 Cyberdyne HAL – 5 - SWOT AnalysisStrengths Weaknesses

Allows physically week or injured people to gain more mobility and perform rehabilitation exercises.

Incorporation of an additional upper body system in HAL-5 allows user to lift up to 40 kg more than they normally could.

Hal-5 only weights 21kg making and since it is self supporting the wearers don’t feel the weight much.

The availability to lease Hal-5 will allow the user to exchange the Hal-5 for newer version as the technology improves.

Once charged the Hal-5 can only operate for 2 hours and 40 minutes.

The Hal-5 mainly build for people with disability

Opportunities Threats Further development will allow

HALL-5 to use in rescue mission and allow user to again access in over debris-strewn and rugged terrain.

Competitors may develop more efficient and less expensive device.

Delay in releasing product with advance technology may cause initial market loss.

9.4 Cyberdyne Hal-5 Competitive Advantage

Product portfolio is strong as Hal-5 could be used for various purposes.

The reasonable pricing makes Hal-5 attracts more customer.

The frame of HAL-5 structure is made from aluminium alloy making it more

durable than any other similar products.

The ability to hire Hal-5 allows user to exchange the Hal-5 for newer version.

This gives a strong competitive advantage over other exoskeleton Robotic

system.

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9.5 Cyberdyne Hal-5 - Product StrategyTable 6 Cyberdyne Hal-5 - Product StrategyProduct Strategy How?Product positioning(Target Market, Pricing)

Lower cost & to the rehabilitation, medical and age health care industry.

Product proliferation

N/A

Value Hal-5 is a full-body suit with electrical actuators designed to help elderly and disabled people to work

Design (aesthetics) Hal-5 a sleek appearances that is futuristicInnovation Lightweight, components are not bulkyService Still in the process of developing but it would be assumed that

the servicing will be included into the price of the unit for a period of time. Or if they lease the equipment then the servicing will be a contractual agreement of maintenance.

Distribution Direct selling, made to orderPromotion Trade expo, conferences, word of mouth, journal, magazines,

press release, YouTube and InternetGeographical Locations

Japan

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9.6 Raytheon SARCOS - SWOT AnalysisTable 7 Raytheon SARCOS - SWOT AnalysisStrengths Weaknesses

Raytheon is a major military contractor, with 2007 sales of $21.3 billion.

Full body suit, aids lower and upper body.

Most like the Marvel comic character, “Iron Man”.

Enhances strength and endurance with substantial agility.

Technical specification significantly advanced than any other exoskeleton.

Lightweight aluminium used in construction, weights 68kg.

Technology too advanced for release anytime soon.

Power supplied via fixed source. Bulky design.

Opportunities Threats Potential to develop a fictional

character to life. Ultimate combating suit.

As Raytheon has a contract to develop the suit for the US Army.

Hal 5 already on the market providing similar application.

UC Berkley’s HULC has a simpler design may be released much sooner than Raytheon.

9.7 Raytheon SARCOS - Competitive Advantage

Provides a higher ratio of user force to the end force as this is for military use.

This fully body suit allows the operator to move 200 pound (approx. 91 kg)

weight with minimal effort.

In terms of innovation and technology, Raytheon is a world leader.

Military funding

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9.8 Raytheon SARCOS - Product StrategyTable 8 Raytheon SARCOS - Product StrategyProduct Strategy How?Product positioning(Target Market, Pricing)

Expensive, Military, Heavy Duty, Industrial use.

Product proliferation

N/A

Value Satisfying the customer by the performance, efficiency and productivity aspect of the operation.

Design (aesthetics) Original and futuristic design that engineers a comic book hero to life.

Innovation User only has to provide little force on to the sensors and the exoskeleton suit will provide the additional force. A force of 200 pounds can be easily be provided by the exoskeleton suit.

Service Still in the process of developing but it would be assumed that the servicing will be included into the price of the unit for a period of time. Or if they lease the equipment then the servicing will be a contractual agreement of maintenance.

Distribution Direct selling, made to orderPromotion Trade expo, conferences, word of mouth, journal, magazines,

press release, YouTube and InternetGeographical Locations

United States of America

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9.9 UTS CAS Autonomous Sand Blaster - SWOT AnalysisTable 9 UTS CAS Autonomous Sand Blaster - SWOT AnalysisStrengths Weaknesses

Autonomous No# 1 productivity rate Operating 24/7 Eliminates work cover, health &

safety hazards and issues.

Relies on a track guide to run on Autonomous sensors may miss

surfaces that need to be sand blasted.

The robot will still need to be operated by 2 men.

The robot might not be able to reach certain areas or angles.

The autonomous robot might get jammed.

Opportunities Threats Accepted quickly as the better

alternative of to original manual method.

It has a head start into the market ensuring allowing it the system to potentially capture a large portion of the market before the final design is released on the exoskeleton.

The autonomous robot has the time to debug or fix any problems and issues.

Unable to capture large enough customers.

The system is unable to autonomously sand blast all bridge designs.

The system can not autonomously complete the job to a level that the customer requires.

Set up time too long Track that need to laid do not fit

9.10 UTS CAS Autonomous Sand Blaster - Competitive Advantage

Fully autonomous

Eliminates health and safety hazards and issues.

Able to run 24 hours and 7 days a week.

Automated robots are very accepted in today’s society were as an exoskeleton

is still relatively new and might not be take on board as quickly as an

autonomous robot.

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9.11 UTS CAS Autonomous Sand Blaster - Product StrategyTable 10 UTS CAS Autonomous Sand Blaster - Product StrategyProduct Strategy How?Product positioning(Target Market, Pricing)

This is a substitute product/service. Middle range in price and target market will be RTA road maintenance contactors.

Product proliferation

N/A

Value Satisfying the customer by the performance, efficiency and productivity aspect of the operation.

Design (aesthetics) N/AInnovation The first solution to the problem and issues that face the roads

and civil structures servicing staff of health and safety as there is too much stress on muscles on holding the nozzle of the sandblaster.

Service Still in the process of developing but it would be assumed that the servicing will be included into the price of the unit for a period of time. Or if they lease the equipment then the servicing will be a contractual agreement of maintenance.

Distribution Direct selling, made to orderPromotion Trade expo, conferences, word of mouthGeographical Locations

Australia

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9.12 Suppliers

For the upper body exoskeleton suit there are a large range of suppliers to select from

as the components as simple of the shelf parts. It is only when the whole system is

integrated that the product become complex and differentiable to other products. The

suppliers of this product are favourable as there seems very little a supplier can

monopolise in the intellectual property side of things. They have very little in the

means of a bargaining chip. The only chip they can hold is the technologic

manufacturing knowledge, which for this product only requires the fundamental

processes.

Concentration of suppliers relative to buyers

The suppliers for this niche product and industry are not limited. The quality

and standards of the suppliers might not to meet the level required.

There are many suppliers which are favourable for this niche product and

industry.

Differentiation of the supplier products

The components used in this product are commodity type parts and not highly

differentiated components.

These parts are easily purchased of the shelf with reasonable price ranges.

Other components may need to be manufactured but this manufacturing

process does not require any special of differentiating technical processes.

The components are all simple but together it creates this niche complex

product.

Switching costs of buyers

As the suppliers/manufacturer is third party contractors the assets such as

equipment, labour force and other cost are not assets to the company.

The contracts can be given to tenders that provide a reasonable price and

quality standard for the technological process. This means that switching from

one supplier/manufacturer to another is simple with minimal cost.

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The costs associated with switching will be the production and suppling

contractual agreements. Contractual agreements are easily over come as a

reason for terminating a contract is that the supplier is not meeting quality

standards.

Other cost which is of minimal risk is the changing of suppliers/manufacturers

the technical knowledge lost, in other situations a new innovative

supplier/manufacturer could improve the component resulting in an improved

product.

Threat of forward integration by suppliers

There is too much initial capital required, in R&D, testing, verifications and

incorporating components from other companies, this will mean that the threat

of forward integration by supplier will be unlikely.

9.13 Entrants

The UTS Upper BEX is a unique product in the market and hence gives it a unique

competitive advantage. However there are other technologies that might overshadow

this Upper BEX. Competitors develop different technologies that may pose as a treat

to this suit .The barriers stopping new entrants are not so extensive as there is no

current established industry in the market. We believe that a major barrier is the large

amount of R&D and capital required for new. The potential entrants are Honda,

Berkley University, Raytheon and Cyberdyne. These companies already have

products in this industry but they are all concentrated in different markets.

Economies of scale

Since the volume of sales is relative low as this is a niche industry there is no

economies of scales that exist at this time for this industry. As the demand

increase and production level increase a economies of scale can be developed.

But at the present stage the exoskeleton and the road and civil structure

maintenance industry have no economies of scale, due to the low volume.

Brand preferences

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Customers are not loyal to any specific brands but reputation of the institution

may help to gain the market share

Capital requirements

A large amount of capital is required. The capital will be invested mostly for

Research and Development this capital will come in the form of cost of

development and the time cost to develop the product. Meaning that no minor

entrants will appear only major entrants.

Switching costs

Switching cost may vary among customer. For example if we lease it to the

customer the switching cost will be comparatively low whereas if the

customer bought the product the switching cost is fairly high.

Distribution channel

The distribution channels of the product will mainly based on face to face

selling with the customer.

The distribution channel are not blocked by competitors but potential

customers could be lost if competitors get to customer first.

Delivery and service

As the product will be manufactured based on customers orders, the industry

will be easily able to deliver and meet the support and service demands to its

customer.

Quality and reliability

The product has a high reliability in terms of performance. However the safety

standards of Australian Industries require the product to be maintained every

year.

Qualifications and experience

Deep technical expertise and resources is required to design and manufacture

product making it a bit difficult for the new entrants.

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Proprietary knowledge

Intellectual property within the industry is well- protected.

9.14 Substitutes

The Upper BEX is a new niche product in a new niche industry and does not have a

market on its own. The upper exoskeleton suit would be classified as a substitute

technology for another industry which we will be focusing on primarily the roads and

bridge maintenance industry. The other competing substitutes technologies within the

road & bridge maintenance industry will be the human being, full body Exoskeleton

Robotic suit and an autonomous robot the main substitutes competing in the road

service and maintenance industry. Even though some substitutes may have higher

profitability, the rate of improvement in a price to performance ratio is not feasible

and switching cost will be relatively high making the treat of substitute product

moderately low. The substitute products have there advantages and there

disadvantages. The autonomous robot is good as it can run 24 hours a day an 7 days a

week. The accuracy and the ability to perform tasks in specific areas or angles maybe

limited for the robot. The full exoskeleton suit maybe too bulky, expensive and too

much equipment for the task and might be ignored.

Industry switching costs

For substitutes like full body Exoskeleton Robotic suit and auto-mated robot

the switching is fairly easy and will not require much capital as they have the,

established an installed base and the R&D team which has similar technical

expertise.

Rate of improvement of substitute product

Recent Technological advancement in the robotic industry has allowed the

industry to develop product for various purposes. Advancement in the full

body Exoskeleton Robotic suit and auto-mated robots is advancing very fast

and making it possible to perform task more efficiently and accurately.

Competitive advantage

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Full body Exoskeleton Robotic Suit has a strong competitive advantage over

the Exoskeleton Robotic Arm as the Exoskeleton Robotic Suit allows the user

to perform various task and provides more safety for the operator.

Automated robot does not required a human being to operate but is able to

perform task same as the Exoskeleton Robotic Suit.

Profitability of industry producing substitutes

For the Full body Exoskeleton Robotic Suit the profitability is fairly marginal

whereas for the automated robot it is a bit profitable as it will eliminate the

labour cost.

9.15 Key Success Factors

There are 3 major success factors for success in this industry. Theses success factors

are customer satisfaction, innovation and quality.

Customer satisfaction – A major success factor for winning contracts will require the

company to provide excellent customer satisfaction service. The personnel require

will have to be focus on providing excellent customer service. The service will

involve listen and understand customer’s needs and tailoring the product to suit

them. It will also require staff to be able to communicate in a non technical

language, and able to technical language in to simple terms. They will need to

build rapport with customers. Communicate with customers regularly to ensure

the product is function as design, also address concerns, issues or new updates that

may be of interest.

Innovation – Another major success factor will be the company’s innovation position

and progress. The R&D team will have to be continually researching and

developing new concepts. Example or innovations not necessarily requiring a

whole new system design will be new modification, new component, new

materials, new modular attachment system or new functionality. The innovation

does not have to be the best design but meets what the customers need and will up

lift the status of the company as being an industry leader or a technological leader.

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Quality – The final major success factor will be the company’s attention to design

detail and ensuring that the design is optimal at every stage of product lifecycle.

Customers will be subconsciously assessed the quality even after the purchase of

the product. If the quality does not meet expectation over the life time of the

product, the bad experiences will stay with these customers. The first impressions

are assessing the quality of build, manufacture, assembly, reliability and product.

Then the assessment during the product life will be the design of functionality,

serviceability, maintenance requirements and other design issues.

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10 Environmental AnalysisThe sections below are an analysis of the environment that could influence and affect

the exoskeleton. In summary the regulatory, economic, societal and technological

influences are all favourable but need to be closely monitored as the favourable

situation can change into an unfavourable situation.

10.1 Regulatory Influences

There is little that will affect the exoskeleton in terms of regulatory influences. The

only issues will be the federal regulation on WorkCover and occupational health and

safety regulations. As the product develops in the growth stage the government,

International Standards, Australian Standards or the Medical board may government

that standards must be used in design but this will not take affect until late stages of

the product cycle. The companies that are market leaders and have a member on the

committee can also influence the desired outcome to benefit the company.

Licences and permits

For the time being the licensing has no real affect as this product will only be

sold in Australia and the trade agreements mean that there are no intellectual

property issues that have to be considered, as there are patents in place.

Local content requirements

The design a functionality of the exoskeleton has to comply with WorkCover

& Occupational Health and Safety standards.

10.2 Economic Influences

The economic influences will have some affect as organisations as they are reluctant

to invest in ideas when they have a budget. Organisations are more willing to invest

towards the end of financial year as they would have been budgeting for the whole

financial year coming to a realisation that the have funds to invest. If these funds are

not invested their organisation or department returns the funds back to finance and

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this funding does not roll over to the next financial year but it actually will decrease

their budget for next year.

Inflation

As this exoskeleton is marketed to companies and not the general public

inflation should have little impact on the sales.

Foreign exchange rate increase

As the initial target market is domestic and not foreign the exchange rate

increases has little to no impact. The only affect will be some components may

be manufactured overseas which could mean a higher price for goods but

components a commodity type product meaning sourcing of a cheaper

alternative will be easy.

Disposable income level increase

As if companies have more disposable income they will more likely consider

any purchases.

GDP growth

If there is a growth in the GDP there should be a growth in the industry as

companies tend to spend more.

Globalisation

Globalisation will be favourable for this industry but this is a long term goal

that won’t be reached anytime soon.

Seasonality

The exoskeleton industry and the roads maintenance industry has no

seasonality changes as once a project has been completed another project will

take its place.

In the exoskeleton industry as it develops there might be some seasonality

towards the end of financial year were businesses spend more.

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10.3 Societal Influences

There will be more societal influences as the infrastructure is aging, growing concerns

with the environmental impact, regional population changes and also access to skilled

labour. These societal influences will be beneficial as it creates more pressure,

requirement and demand for the exoskeleton as a solution to problems that currently

face.

Aging population

As the exoskeleton suit expands in to other markets like rehabilitation the

aging population that need aid will be favourable.

Regional population changes

This is favourable as currently and in the future more of the population will be

expanding and migrating to regional city like the Central Coast, Wollongong

and Newcastle. These regional town are the areas where older type bridge are

located as in the past funding has been given to area that have higher traffic

flow. As more and more of the population migrate it will create a pressure on

the Road authorities and local councils to maintain the bridge for safety.

Increasing urban density

An increase in urban density will have little to now affect on this industry.

Aging Infrastructure

An aging infrastructure will be favourable to the exoskeleton industry and the

roads maintenance industry. The aging infrastructure will be more constant

work will be requiring from the exoskeleton suits.

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Figure 6 Age and Condition of Bridges (Source: Vic Roads, 2009)

Health & fitness

As society is aging and becoming physically unfit the exoskeletons can aid

them in fitness or mobility.

Access to skilled labour

This is favourable as this allows the requirement of any type of physical

person and not restricted to that of a body builder. The exoskeleton allows a

skinny, less muscular or even an operator of the female gender to be able to

provide enough force in holding the equipment without fatiguing.

10.4 Technological Influences

The technological influences can be good or bad. It can be good as it can increase the

pace of innovation and the pace of the process innovation. It can be bad as it can

create competitors or substitutes which might over shadow the exoskeleton.

Pace of product innovation

The progress of innovation is relatively at a pace which is exciting as

customers and journalist are become intrigued and are more inclined to

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purchase the product. Other technological advances will be beneficial to the

exoskeleton, but this needs to be closely monitored as a favourable situation

could turn in to a unfavourable situation.

Pace of process innovation

The rate of process innovation is not applicable at present due to the low

volume but as the exoskeleton change in to a growth stage this will be

beneficial.

Pace of distribution innovation

This is not applicable as sales will happen at trade shows and direct selling.

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11 Vision Statement

Rewrite Mission Statement describing the business at the end of the planned

period.

The statement should answer the following questions:

Who are the customers?

What are the customers needs?

How do we solve the customers’ needs?

Hoe does the organisation get there?

In 5 years the UTS Exo Technologies will be able to aid bridge maintenance services

by eliminating the fatigue and OH&S issues and improving productivity by cutting

the process time by 20%. The exoskeleton would be supplied nationally. The

continuation of research and development projects will guarantee that UTS Exo

Technologies will be leaders in the industry and technology.

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12 Marketing Plan

List the major marketing activities and the schedule for implementation.

Nominate the people responsible for each activity and the expected completion

dates.

List the major product and process development activities and the schedule for

implementation.

Nominate the people responsible for each activity and the expected completion

dates.

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12.1 Product/Service

Describe the product/service and it eventual end uses.

Include photographs or relevant diagrams.

12.1.1 Product Development Emphasise unique product/service features and how these add significant

value.

Estimate how much time and money is required to complete, test and

introduce the product/service or process – assess costs of labour and materials.

Outline the competencies or expertise that exist or are needed to complete

development.

0435567590

12.1.2 Technical Advantage Assess the degree to which the product/service supersedes existing ideas –

relative advantage.

Determine if there is a first over advantage or lead time advantage.

Assess the potential for setting the industry standard in the selected market.

12.1.3 Proprietary Advantage Describe any contractual agreements that provide exclusivity or proprietary

rights.

Detail any patent, trademark, copyright or intellectual property that is owned

or being sought.

If the intellectual property has been transferred to another entity shoe the

consideration paid for it. Outline any royalty, licensing, franchising and

distribution agreements.

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Identify who owns the intellectual property and the cost of protection.

12.1.4 Packaging Examine the product layers (generic, expected, augmented and potential).

Show how the product is presented to the market.

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12.2 Price

Discuss pricing strategy for the product /service showing how the purchase

may change over time.

Assess the degree of control over market prices and costs.

Compare pricing to competitors and substitute pricing.

Examine use of pricing variables (capital purchase or monthly rental,

maintenance contracts, credit terms, volume discount policy, introductory

offers).

12.3 Promotion

Assess the degree of difficulty in understanding the product/service.

Determine the best form of communication to address the complexity of the

message.

Show how to reach the target market.

Explore if promotions can build volume during seasonal slow periods.

Develop and test the brand for the business and products/services.

Collect endorsements and testimonials from existing customers.

We believe that the concept an exoskeleton suit will not be a difficult one for the

customers to understand as it just enhances the force exerted by the used by a

specified percent. Visually the exoskeleton looks complex and may deter customers

from purchasing the technology. Continual demonstrations and exhibitions will be

required as this it the best form of communicating the benefits of the exoskeleton. The

leasing service will be even easier to understand as the is act as a trial system for

customers as this technology is new and customer are not aware and reluctant to

invest in a technology with out first hand experience.

As the exoskeleton is a new product trying to enter a new market, it would require

using various promotional activities and tactics to gain market share. Planning and

performing strategic promotional activity we will be able to raise awareness amongst

the customers about the exoskeleton and eventually will help us to expand our

business. The more specific strategies will be advertising, trade conferences, expos,

exhibitions and direct selling in order to reach the target market.

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The promotion or communication strategy initially will be to business build then

proceed to brand building. These promotion strategies will create discussions and

awareness in other markets. This can mean that the exoskeleton can be introduced in

to a new market earlier or provide an awareness in future markets. Depending on the

feedback or response we receive from a particular market group. This inturn can

increase volume of sales.

The exoskeleton would not have much of a seasonal cycle. It may however be

beneficial if the to be more active towards the end of financial year as companies have

money to spend. The promotional activities will be ongoing and maintained as a

flighting schedule with pulsing schedules towards every quarter and especially

towards the end of financial year.

12.3.1 Advertising

Australian Manufacturing Technology magazine is a monthly publication by

Australian Manufacturing Technology Institute Limited. A full colour advertising

page for the whole year will cost $2800. The expected response rate for this

promotion will be 10%.

YouTube demonstration videos uploaded monthly to create awareness in the public.

The cost will be free and expected response rate for this promotion will be 2-5%.

Press releases will be created and printed half yearly. The cost will be varied as press

releases will be over all avenues of media, from websites, magazines, trade journals

and printed media. The cost will be free and expected response rate for this promotion

will be 2-5%.

Printed media will be printed in batches initially 100 Presentation folders will be

printed off. Each Folder includes 5 full colour single sided inserts with 1 business

card attached. In additional 150 business cards will be printed off as spares or for

other prospective clients. The total cost for all the print media coming to $950

including GST. This is to ensure that there are enough copies to distribute to potential

customers, contractors, consultants and other companies the might be involved in the

market. The delivery of the printed media will be addressed to the managers of

specific departments, and this will be done on a half yearly basis. The expected

response rate for this promotion will be 5%.

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12.3.2 Public Relations

Public relations will be a big part of building public awareness. The company will

start off will soft introduction of the product through the use of YouTube if it become

popular we will then precede with phase 2 by distributing press kits to journalist and

other media companies gaining coverage in journals and newspapers. The 3rd phase

will require the come to gain radio and TV exposure. This exposure is not form of an

advertisement but a whole section slotted just to discuss and promote the exoskeleton.

The radio and TV stations will have to be selected correctly targeting at the audiences

who sit in companies as board members, CEO, CFO, COO, directing mangers and all

the other influencers. The stations that might be considered will be 2GB, 2UE & 60

minutes. This will require a recruitment of the right person who will continually

distribute press releases to journals and other relevant media. The expected response

rate will be about 10% and the cost will be apart of the salary of the sales and

marketing team.

12.3.3 Personal Selling

As this product is a niche and new the company will concentrate more on personal

selling to ensure that message get to customers. The expected response rate can not be

made but the cost will be included in the salary of sales and marketing.

12.3.4 Trade conferences, expos & exhibitions

UTS Exo Technologies will need build company presence develop public awareness

through the forms of demonstrations and present in expos, exhibitions and

conferences. A list of event schedules, locations, dates, costs and other details are

listed below. The conclusion of the expected responses of each of the promotional

strategies is also included in the end of each of these sections.

National Manufacturing Week in Sydney occurs every 2 years and the next

date will be on the 11th -14th May 2010 at the Sydney Showgrounds &

Olympic Park. The cost of a 3m x 3m stall will be around $5000. This cost

includes the signage, carpeting, stall setup and other promotional media. The

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expected result response rate for this promotion will be 35% of the customers

that approach for more information.

QLD Transport & Urban Development Conference 2010 occurs on the 25 th

May 2010 at the Brisbane Convention Centre. The cost will be $750 per

person. The estimated response rate is uncertain but the benefit is that

awareness has been developed.

VIC Major Projects Conference occurs on the 17th August 2010 at the

Melbourne Convention Centre. The cost will be $850 per person. The

estimated response rate is uncertain but the benefit is that awareness has been

developed.

NSW Major Projects Conference occurs on the 27th October 2010 at the

Sydney Convention Centre. The cost will be $850 per person. The estimated

response rate is uncertain but the benefit is that awareness has been developed.

12.3.5 Direct Mail & Telemarketing

A small portion of promotional strategies will be telemarketing. The marketing and

sales team will call potential clients to setup appointments for demonstrations and

create awareness of the exoskeleton. The cost of telemarketing or appointment setting

will be negligible as the sales and marketing team will be calling and look for

potential clients in the down time and this will be included as there role and in their

salary. The expected response rate will be 5-10%.

Direct mail will be sent to companies that the sales team could not setup a

appointment with. A mailing of information pack will be sent out to these customers.

The expected response rate will be 2-5%.

As mentioned in the previous section the printed media will already organised and

will be used where needed at the appointed demonstration meetings or the delivery of

the information pack to prospective companies.

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12.3.6 Company Website

Prior to launch of the exoskeleton a company website will be constructed to provide

clients, information on the company, product and services while maintaining a

professional image. The website will contain demonstration videos and images which

will show customers or the potential enhancements and benefits it can offer. Details of

the exoskeleton will be provided. The company’s service and maintenance plans for

the product will be included and easily accessible on the website. The contact detail

will be made simple and easy to find for those that want to find out more about the

product. The website will be regularly updated with new information on events that

the company or the product will be involved in, the new updates, upgrade or

development on the exoskeleton. The website will be updated with testimonial from

existing customers or even journal reviews. The cost will be negligible as the roles

will require the staff to update the website when it information arises or there is a

need and this is incorporated in to the salary. The expected response rate will be 20%.

12.3.7 Internet Advertising

In order to promote and gain awareness to the company a subscription for advertising

to be placed in to web in relation to specific or related keyword searches. This

subscription will primarily be with Google Ad words and other websites such as:

Industry websites

Trade websites

Technology journals, website and forums

Google Ad words

Although response rate might be uncertain and an estimate will be 10%, it is

important to have some internet presence. The cost will be a minimum start up fee of

$20 and depending on the level of presences required on the internet charge will

increase. In the initial development and introduction stages the monthly budget will

be $50 per month.

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12.3.8 E-mail

E-mails will be another strategy will be to email potential clients information

regarding the company, product and services. This email will contain an introductory

letter, in this letter it will include company information (who we are) and product &

service (what we do). The e-mail will also include company website, contact phone

number, email and maybe an attached PDF of the company brochure. The e-mail

might include press releases about development on the company or the product. There

is not specific cost attached to this. The expected response rate will be 10%.

12.3.9 Network Marketing

In the initial year of setup the company’s presences will have been built some intrigue

and discussions. The concept of network marketing in its best form will be word of

mouth to family, friends, colleagues, peers or any other social networks who will then

promote the product and service through discussions and passing interest. An

incentive program or a mates rate program to create more of a viral promotion in the

network marketing strategy. The cost is negligible. The expected response rate can not

be measured.

12.3.10 Promotion Strategy ScheduleTable 11 Promotion Strategy Schedule Summary

Promotional Strategy

Expected Response

RateSchedule Estimated Cost

Advertising - industry magazines 10%

Monthly $2800 per year for a 1 page full colour ad in industry magazines

Advertising - YouTube 2-5% Monthly The cost will fall under the staff salary

Advertising - Printed media (Presentation folders, brochure & business card)

5%

Half Yearly $950 for 100x presentation folder, 5x 100x brochure insert & 250 business cards

Trade expos & exhibition - National Manufacturing Week 35%

11th – 14th May 2010 $5000 for a 3m x 3m stall, signage, stall furniture and other services required

QLD Transport & Urban Development Conference 2010

n/a25th May 2010 $1000 entry fee, airfare

and accommodation costs

VIC Major Projects n/a 17th August 2010 $1100 entry fee, airfare

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Conference 2010 and accommodation costsNSW Major Projects Conference 2010 n/a 27th October 2010 $850 entry fee

Telemarketing 10% Ongoing process The cost will fall under the staff salary

Direct mail 5% Ongoing process The cost will fall under the staff salary

Company website

20%

Constructed prior to exoskeleton launch and to be monitored and updated regularly.

The cost will fall under the staff salary

E-mail 10% Ongoing process The cost will fall under the staff salary

Internet Advertising

10%

Internet advertising will commence prior to the launch of the exoskeleton and will keep going throughout the year

$50/month as a monthly set budget with Google Ad.

Public Relations

10%

Ongoing process The cost will fall under the staff salary.And printed media mentioned covered.

Personal Selling n/a Ongoing process The cost will fall under the staff salary.

Network Marketing n/a No specified schedule n/a

12.4 Distribution

Determine how the customer will buy the product/service? –direct sale,

wholesale, retail, channel partners, broker, catalogue or direct mail.

Assess the degree of control over the distribution channels

Does access to customers and how they buy determine the location for the

business?

The distribution channel classification will take on a business channel as most of the

characteristics fit that of the business market.Table 12 Business Market Channel Characteristics

Characteristic Business Market

Purchase Volume Moderate to largeNo. of Customers FewerCustomer Location Concentrated (Head offices)Method of Buying ProfessionalBuying Influences MultipleNegotiations ComplexDistribution DirectPromotion Personal Selling

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The business channel usually has 3 major groups the producer, reseller and

government. As the product is new and the public has little knowledge of the benefits

and advantages, the company with initially start off being the producer and reseller.

Once the company has setup and personal selling to organisations they will also start

to personal sell to distributors so that the product can expand and cost can be cut from

the company. The reseller will take on the cost of the purchases the goods and will

have a charge fee period were they can try to sell this product to potential customer.

This system is like that of car dealers with the manufacturers, where the dealers have

about 3 months of no charge before the manufacturer charges for the goods. This

charge free period will be in summary accounts receivable of about 90days.

The location of the company will be near industrial areas and areas that the innovative

companies are set up like that of Silicon Valley. Even though the primary

organisations aimed at may not be near by, the demonstrations at the organisations

location so an attitude of “we will come to you” were the issue, problem or sale is big

or large. The main reason for the strategic location choice is to be near the

components head officers as any implications or redesigning issue allow for quick and

easy consultations when needed. In NSW the ideal location will be Hornsby as the

main component equipment will have to be designed around are the motors. The

motor supplier currently is Maxon Motor which is based in Hornsby.

Strategy

The company will sell the product outright directly to the customer and also a leasing service of the product will be available to customer during the initial phase of the company. The company decided to introduce the leasing service in order to gain the trust of clients who are not so keen in investing in new products. The leasing service will be a win- win situation for both the clients and company as the client can return the product when lease ends or upgrade to a newer version of the product once its available. As for the company, it will able to penetrate the market more effectively and expand the business.

Location

Since the company is not concentrating on customer from a specific area, there are no ideal locations for the company that will be closer to the customer. In order to reduce operating cost the company will be located close to the suppliers. The location of the company will have minimum effect on the customer service as within the company there will be a delivery service. This service will mainly be used to distribute sold

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product and for technical staff who will be visiting the customers for the maintenance of the product.

12.4.1 Channels

Describe how distributors or sale representatives are selected and when they

will start to represent the product

List the distributors and show their allocated geographical areas.

Show the expected distribution margin or commissions paid

Use the call rate and expected close ratio to produce the sales volume forecast.

Project the cost travel, training, support, samples, merchandising, and point of

sale material for channel.

As the initial sales volume of the company will be fairly small, an official marketing

department will not be necessary until the company expands. Once the company is

launched, all the sales issues will be initially handled by either the technical staff or

the managing director. Once the company expands and have a larger sales volume, the

company will launch a marketing department dedicated to provide efficient and

quality service to the customer.

12.4.2 Direct Sales Force

Estimate the number if sales people required and their compensation package-

salary plus commission and incentive plan

Use the call rate and expected close ratio to produce the sales volume forecast.

Project the cost of travel, training, support, samples, merchandising and point

of sale material for channel.

Once the company is launched, the managing director will be responsible for handling sales department that includes managing sales, calling up leads and following up the initial calls. The technical stuff will be more focused on installing and maintenance of the product. As the company expand it will hire more stuff to overtake the sales department. The managing director will than overlook the companies operation and provides assistance if required by any department.

13 Operations Plan List the major sourcing, production, service and administrative activities and

the schedule for implementation

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Nominate the people responsible for each activity and the expected completion

date.

13.1 Sourcing

Identify which parts of the manufacturing process will be out-sourced.

Justify the make or buy decision

Outline the criteria for selecting criteria for selecting contractors/ suppliers and

their terms

Assess the reliability of supply.

Determine supplier delivery times

Calculate the material component of the cost of goods sold

Identify alternative sources of supply

Estimate the stock holding of raw material required for a buffer.

13.2 Production

Prepare a diagram to show the manufacturing process and operating cycle.

Estimate the time required to make the product

List the variable production expenses; (labour, freight, maintenance, rework);

and express as a percentage of total unit cost

Explain how seasonal distortion in demand, supply and labour are managed

Outline the methods of quality control.

13.2.1 Facilities

Describe the facilities necessary to start production or any improvements

required

List any special equipment necessary for manufacture

Discuss whether equipment and office, manufacturing or whether warehousing

space will be leased or purchased

Used capacity requirements planning to ensure equipment and plant capacity

can meet forecast

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13.2.2 Labour

Determine the availability of labour and the relevant award structure

State whether the labour is unionised and if there are any industrial relations

issues

13.2.3 Inventory

Explain the approach to inventory control dor raw material, work in progress

and finished goods

Assess the if a manual or automated system is required for inventory control

13.3 Service

Describe the necessary customer support and training requirements

Outline the process for repairs and maintenance of the product. Is it

outsourced?

Define service, guarantee, return and warranty policies

How do these policies compare to major competitor and industry standards

What system is used to handle warranties and returns?

Explain the process for manufacturing for managing customer complaints and

how feedback is used to improve service and product development areas

What are the cost of support, training, repairs, and warranties?

13.4 Administration

Prepare a diagram to show the flow of the formation through the

administration system

Explain how orders are received

Show when and how are customers invoiced

Provide policies, procedures and controls used for collecting accounts

receivable. Determine if this function is outsourced to a collection agency

Describe method controlling due dates for accounts payable

Prepare the cash conversion cycle timeline chart for the product

Examine the effect of seasonality on the cash conversion cycle

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List the administrative costs

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14 Organisation (Personnel) Plan List the major organisation and recruitment activities and the schedule for

implementation. Nominate the people responsible for each activity and the

expected completion date

14.1 Organisation Structure

Prepare an organisation chart detailing job titles and employees’ name. if a

position is vacant list the job title

List key position description and responsibilities

Provide brief biographies of the key members of the management team listing

relevant experience and expertise

Determine which functions are outsourced and list who provides these services

14.2 Compensation

Prepare a table of salaries, benefits and bonuses for the organisation

Detail how reward systems are linked to company performance

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15 Financial Plan Acquisition of funds-list the type and source of funds required and date that

the money is needed

Allocation of funds- show how and when the funds will be used

Nominate the people responsible for raising and spending the funds and the

expected completion dates.

15.1 Financial Assumptions

List the financial assumptions used to construct the business plan.

15.2 Financial Statements

15.2.1 Profit & Loss

Show the historical profit and loss statement

Construct the following profit and loss statements

o Forecast year 1 by month

o Forecast years 2 and 3 by quarter

o Forecast years 1 to 5 by year

15.2.2 Capital Budget

Construct the following budget for capital for capital expenditure;

Forecast;

Year 1 by month

Years 2 and 3 by quarter

Years 1 to 5 by year

15.2.3 Cash Flow

Construct the following cash flow statements;

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Forecast;

Year 1 by month

Years 2 and 3 by quarter

Years 1 to 5 by year

Identify the time to reach positive cash flow.

15.2.4 Balance Sheet

Show the historical balance sheets.

Construct the following balance sheets;

Forecast;

Year 1 by month

Years 2 and 3 by quarter

Years 1 to 5 by year

15.3 Financial Analysis

15.3.1 Beak Even Analysis

Separate fixed, variable, and semi variable costs.

Determine contribution margin, breakeven sales volume and time to breakeven.

15.3.2 Ratio Analysis

Prepare liquidity, capital structure, profitability and activity ratios for historical data

and projected years 1 to 5.

Compare ratios to the industry benchmarks.

Examine trends in ratios.

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15.3.3 Sensitivity Analysis

Show the sensitivity of returns to major key performance indicators such as price and

volume variances

15.4 Offer

15.4.1 Funding

Indicate how much money is required by the business

Present the timing for the capital draw downs

Specify the type of finance required;

Debt; identify what collateral is available

Equity; identify what shareholding is available

Show how the business will meet debt repayments or dividends payments.

Show the method used for opportunity business valuation

Prepare an internal rate of return for investor

Describe the percentage dilution of ownership that result from the initial and any

subsequent investments.

Indicate if board positions are available

15.4.2 Harvest

Present the exit strategy for the investor showing the investment will be harvested

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Identify potential purchasers where products/ services has a high strategic potential

Superimpose the timing of harvest plan on the funding plan

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16 Risk and Critical IssuesList risks and problem faced by the business and strategies for overcoming them

Risk will originate from the weaknesses and threats in swot analysis, the competitive

analysis and pest analysis.

Identify critical issues and strategies for addressing them. Issues will be found in the

marketing, operations, organisational and financial plans.

Divide the risk and issues by major categories; marketing, operations, organisational,

and financial.

17 RecommendationsDistil the most significant activities to be undertaken from the marketing, operation,

organisational and financial action plans.

Prepare a list of activities and milestones and ensure these deliver the financial and

strategic objectives.

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18 ReferencesThe Roads and Traffic Authority NSW, 2009, “Information Paper to Councils,

Regional Roads to Local Government 2009/2010”, viewed 10th October 2009, www.rta.nsw.gove.au

Vic Roads, 2009, “Victoria’s Arterial Bridges: Critical Links for Transport Efficiency, A Strategy for Managing the Performance of Bridges on Victoria’s Arterial Road”, viewed 10th October 2009, www.vicroads.vic.gov.au

http://www.amtil.com.au/UserFiles/File/AMT/MEDIA%20KIT%202010%20for%20web.pdf

http://www.nationalmanufacturingweek.com.au/en/home/

http://www.nswconference.com.au/mp/index.htm

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