NATIONAL UNIVERSITY OF SINGAPORE

DIVISION OF ENGINEERING & TECHNOLOGY MANAGEMENT, FACULTY OF ENGINEERING(M.Sc. in Management of Technology)

Enterprise Development - MT5920 (2016/17 Sem1)

Final Report

Philips LED Group1. KYAW SOE HEIN (A0103612Y)2. AHAMAD YAZEER ZEINUDEEN (A0147287U)3. MOHAMAD AZMI (A0152629B)4. WEI LAI (A0162108N)5. XU JIANQIAO (A0152727A)6. YI TIAN YU (A0152706J)

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TABLE OF CONTENTSEXECUTIVE SUMMARY..............................................................................................................3

LED PHOTOTHERAPY FOR NEONATAL CARE.............................................................................4

Problems Encountered & Drivers...........................................................................................4

GAP to Be Addressed.............................................................................................................5

Constraints.............................................................................................................................5

Tech to Address the Gap........................................................................................................6

Unique Solution (BLUE ANGEL LITE).......................................................................................6

Quantified Benefits & Features..............................................................................................8

THE MARKET SIZE & STRATEGY................................................................................................9

Business Model Canvas..........................................................................................................9

Market Size..........................................................................................................................11

Stakeholders........................................................................................................................13

MARKET STRATEGY..............................................................................................................14

FINANCIALS & FORWARD PLANNING.....................................................................................16

Product Development Roadmap..........................................................................................16

Financial & Business Planning..............................................................................................17

CASH FLOW, NPV, IRR, PAYBACK AND ROI...........................................................................19

CONCLUSION...........................................................................................................................22

REFERENCES.............................................................................................................................23

Appendix – List of Interviews...................................................................................................24

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EXECUTIVE SUMMARY

Philips LED Group leads the Philips Lighting Company’s initiative to dominate the new areas of medical application of LED in neonatal care equipment business. Addressing the gaps of developing countries where electricity and phototherapy device poor availability are major concern for infants with neonatal jaundice (yellow skin), Philips LED group would like to introduce the life-changing phototherapy device “Blue Angel Lite”.

It is proud to offer the novel solution to the treatment of neonatal jaundice with effective natural blue light stimulated technology and portable battery operated features which enable to save 60% cost for hospitals and 20% increased in number of patients treated. For parents, it will dramatically reduce the cost of treatment up to 80% and able to opt for convenient treatment at home. The treatment is independent of electricity infrastructure and much efficient than traditional phototherapy device. Thus, it brings numerous benefits to newly born babies and parents, as well as it opens the door of untapped market opportunities in developing countries.

The product consists of 453nm Blue LED, Fabric Jacket, Battery Pack and Battery Charger in simple configuration managed by Raspberry Pi module. The unit cost will be of 180USD where it can catch the value pricing of 1600USD per unit.

The potential market for first five years will be two ASEAN countries- Myanmar and Indonesia are estimated combined market size in terms of dollar value is about $98 million. In order to realize the full potential, the value product market strategy and promotion will be laid out in balance with hospitals and pharmacies in Myanmar and Indonesia. Moreover, the stakeholder and customer support will be managed closely by Philips Core Team and local distributors.

The financial projection is caculated based on potential business models- five years period (2016-2021) where earning potentials is US$47 million in 5th year alone. The project’s NPV is valued at 26.5 million with IRR of 59.6% for selling to hospitals business model. The ROI is projected to 283% in 5th year with payback period of 4 years. With the initial funding of US$3.9million, the project could turn the investment into US$67 million at the end of five year periods.

With noble purpose to serve , “Blue Angel Lite” offers the cutting edge technology of effective phototherapy treatment for infant’s Jaundice. Moreover, with its huge market potential and thorough business planning, Philips LED group is determined to achieve the business goal of generating US$67 million revenues by the end of 2021.

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LED PHOTOTHERAPY FOR NEONATAL CARE

Six million of Babies from developing countries have neonatal jaundice (yellow skin) and many of them could not get enough phototherapy. Emerging countries like Indonesia, Myanmar, and Sri Lanka are lack of power sources in some rural area to do the photo-therapy. Exposing baby to direct sunlight is also very risky because the air pollution in that countries might be harmful for the new-born babies.

LED Sleeping Bag is introduced by project team to give medical treatment for baby with Neonatal Jaundice. The current commercial phototherapy devices used in those emerging countries are large and heavy. The sleeping bag is a small, lightweight and portable so it can address the power sources problem to do the photo-therapy. It is designed as baby-sleeping- bag in which light arrays are arranged in a radial pattern on reflective layers to increase light delivery and exposure to the skin. It is battery operated and uses low energy blue LEDs to overcome the electricity problem. Thus, parents can put the baby in the sleeping bag for treatment at home.

From Interviews, it has been validated our gaps with medical practitioner and parents. We find out that parents do not want to leave their babies in the hospital for phototherapy. If there are any ways to do the yellow skin treatment at home, they are willing to do that. For medical practitioner, they knew that some rural areas do not have sufficient power for traditional phototherapy devices. By using LED sleeping bag, they believe that they could overcome this problem in the future. From this validation, it is noted that the pain point for the gap is 8.

Problems Encountered & DriversIn most parts of the developing countries, even in small towns’ hospitals have traditional equipment like LED phototherapy for neonatal jaundice and radiant warmers. However, it is very common that they are often be lying idle due to the lack of constant electricity to power them up.

Another point shall be considered that the therapy equipment to patient ratios are small and parents spent so many hours to wait up at the hospital during the therapy treatment which usually takes 10 hours per session. In big cities, private hospitals settings, parents can afford to use private room where photo therapy equipment is dedicated for one baby. However, this luxury is not applicable to mothers in small towns from developing countries. Thus, there is a need for the photo-therapy equipment which can run without constant electricity and ability to operate at the ease of home settings.

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GAP to Be AddressedIt is normal for a baby’s bilirubin level to be a bit high after birth because the liver is not fully functional yet. Most newborns have some yellowing of skin – physiological jaundice. Usually, it goes away within 2 weeks. However, in serious cases, this can lead to severe jaundice and cause neurological damage to the babies. Therefore, LED photo-therapy device shall be easily accessible for every mothers everywhere.

Figure 1: Baby with neonatal jaundice (yellow skin symptom)

Constraints The infrastructural challenges in developing countries including unreliable power and limited healthcare staffs are the major constraints in accessing traditional LED-phototherapy machine. Besides, the cost of the phototherapy machine usually costs about 1600USD. Therefore, it is required to overcome the constant AC-requirement and there is demand of dramatic cost reduction to suit the needs of the infants in developing world.

People Who Need LED Phototherapy DeviceThere are certain categories of consumers who would like to receive treatment of LED phototherapy. Here are the descriptions of consumers according to our interview validation.

In the first category, mothers have to attend the infants during the therapy session often or you may opt to hospitals’ feeding. With the tiredness of labor, people would prefer to do it at home. This can be done if jaundice is not severe and level is measured by doctor daily.

There are many mothers from developing world, the distance to local hospitals is major hindrance and electricity in hospital is scarce. They need a solution for phototherapy device which can operate with DC battery pack as well as affordable treatment cost.

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Access to Electricity (% of population) (Source: data.worldbank.org)

Tech to Address the GapPhototherapy, intravenous immune globulin (IVIG) are the most widely used therapeutic modalities in infants with neonatal jaundice. It is effective solution because bilirubin (cause of jaundice) are easily broken down when is exposed to the light. The lamps with output predominantly in the blue region of spectrum (460-490 nm) are most effective. For traditional LED phototherapy machine, it is operated with constant AC power supply throughout. Therefore, it limits its ability in unstable or lack of AC in developing countries. Therefore, the innovative device with energy efficient technology are the solution to address the gap.

Unique Solution (BLUE ANGEL LITE)LEDs are widely accepted in traditional devices. The commercial phototherapy devices are

large and heavy. The new device proposed by Philips’ LED group is a small, lightweight and portable. It is designed as baby-sleeping-bag in which light arrays are arranged in a radial pattern on reflective layers to increase light delivery and exposure to the skin. It does not need to operate on continuous power-line. It is battery operated and uses low energy blue LEDs to overcome the electricity problem. Thus, parents can put the baby in the sleeping bag for treatment at home.

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Figure 2: Concept of the Phototherapy Jaundice Device – Blue Angel Lite

Blue Angel Lite consists of 1) Raspberry Pi 3 2) Touch - LCD Screen3) Power Control Module4) LED Sleeping Fabric with Blue LEDs5) Battery Pack6) Battery Charger

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Quantified Benefits & FeaturesThe product offers the great benefits to both hospital and individual parents. The key features of the products are identified as below.• Blue LED operated (Natural Sun Simulated)• Portable, lightweight.• In-liner replaceable.• Operable with AC voltage or battery.• Low power• Low maintenance.• Most importantly, Efficient curing mechanism

In terms of power consumption, it is tested to be efficient as it can reduce 60% of consumption. This ,in turn, makes the product to be able to power by DC battery power where parents and hospitals in rural areas can rely on. Due to its light-weight, the portable features boost the quick transportation and comfortable use at home settings. The life span of the LED are designed to last more than 1000 days, resulting in low maintenance.

The cost of treatment can be dramatically reduce to US$ 260 for full treatment where traditional phototherapy equipment cost about US$445 for a treatment. It always reduce turn around time of treatment. Additionally, it complements indoor use and better treatment experience for both parents and parents. It will help parents comfortable and reduce staff overload at hospitals as the device is easy to operate by non-medical professional.

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THE MARKET SIZE & STRATEGYBusiness Model CanvasThe business model canvas is used to show how the business is going to make revenue at the complete business. There are in total two kinds of business model of the product, selling the product and renting the product.

1. Sales of the product

Key partners: Distribution partners, Manufacturing factory, Fabric Manufacture, Suppliers.Key activities: R&D, Marketing, SalesKey resources: Patents, LED knowledge, ResearchersValue propositions: Efficient Treatment, Convenience (DC operated), Less cost (low power consumption), Eco-friendly and Saving more babies from remote (which is the most important value of the product) Customer relationship: Roadshow, Baby EXPO, Medical conference

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Channels: Online, Direct Sale, Local DistributionCustomer Segments: Hospital, ParentsCost Structure: Advertising and ProductionRevenue Streams: Sales of products

2. Rent of the product

In fact, there aren’t a lot of differences between two business models. When renting the products, rent of the products become the revenue stream instead of the sales. Also, the local rent stores and pharmacies are going to be established to rent the products more conveniently.

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Market SizeThrough doing research about population, increasing rate and birth rate, our team calculates the number of babies. Also we know the

prevalence rate and the number of babies that we can cure by each machine, so the number of our machine in need comes out, multiplying the price, then we find out the market size in Indonesia and Myanmar.

Figure 3: Market Size in Myanmar

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MYANMAR 2016 2017 2018 2019 2020 2021Births Per 1000 17.26 17.14 16.99 16.88 16.74 16.64Growth Rate (%) 0.9% 0.95% 0.96% 0.84% 0.89%

Population 54,106,691 54,593,651 55,112,291 55,641,369 56,108,756 56,608,124/1000 54107 54594 55112 55641 56109 56608

Number of Babies 933881 935735 936358 939226 939261 941959Round Number 933882 935736 936357 939227 939261 941960

Ill Babies (Prevalence rate60%） 560329 561442 561814 563536 563557 565176

Num of products （1 cure max 50

babies） 11207 11229 11236 11271 11271 11304Round Number 11206 11229 11237 11271 11272 11304

Price of Our Product（$） 1600 1600 1600 1600 1600 1600

Market Size（$） $17,929,600 $17,966,400 $17,979,200 $18,033,600 $18,035,200 $18,086,400

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INDONESIA 2016 2017 2018 2019 2020 2021Births Per 1000 16.51 16.11 16.01 15.89 15.78 15.69

Growth Rate 0.90% 0.91% 0.85% 0.89% 0.89%Population 258188398 260512094 262882754 265117257 267476801 269857344

/1000 258188 260512 262883 265117 267477 269857Number of Babies 4262690 4196850 4208753 4212713 4220784 4234062

Round Number 4262691 4196850 4208753 4212174 4220784 4234062Ill Babies

(Prevalence rate60%） 2557615 2518110 2525252 2527304 2532470 2540437

num of products （1 cure max 50 babies） 51152 50362 50505 50546 50649 50809

Round Number 51153 50363 50506 50547 50650 50809Price of Our Product（$） 1600 1600 1600 1600 1600 1600

Market Size（$） $81,844,800 $80,580,800 $80,809,600 $80,875,200 $81,040,000 $81,294,400

Figure 4: Market Size in Indonesia

Market Size 2017 2018 2019 2020 2021Myanmar $17,929,600 $17,966,400 $17,979,200 $18,033,600 $18,035,200

Indonesia $81,844,800 $80,580,800 $80,809,600 $80,875,200 $81,040,000

Total $99,774,400 $98,547,200 $98,788,800 $98,908,800 $99,075,200Figure 5: Total Market Size

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StakeholdersThe stakeholders can be divided into some levels in two aspects. Internal stakeholders:

First level: Top managers or Executives Second level: Marketing Sales

External stakeholders: First level: Customers Second level: Doctors, Distributors MOH(Medical Officer of Health)

Figure 6: Stakeholders Figure 7: Power & Interest

From the power & interests matrix, it can be seen that the company should manage closely with customers, top managers or executives. It is due to their power is high and show high interests on our product. Though MOH may have low interest in our product, they should be keep satisfied because of their big power. For doctors and distributors, always keep them informed considering they are the people who keep in touch with patients. As for marketing and sales, they just administer the selling step so both the power and interest are low.

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MARKET STRATEGY

The technology to Market is the demanding journey with numerious iterative processes involved. In order to achieve the right momentum and impact on the market launch, the right approach to Market is required. Following explained the Philips Phototherpay Jaudice Care (PJC) Market Strategy approach.

Go to Market Strategy (PJC)WHAT ?The PJC is an effective phototherapy device with Blue LED technology. The technology offers best solution for treating neonatal jaundice in babies. It is DC (battery) operated, portable which required low power and low mantenance.

It is aimed for those babies in developing world where AC power inavailability is the main drawback. Thus, it is very efficient curing mechanism for treating babies.

WHO ?Customers are Head of Hospitals and Individual parents.Hospitals will require the PJC units for treating babies in most effective manner and best turn around time.Individual Parents will purchase PJC as they can enjoy the treatment at the ease of home settings. It is useful for those live in rural areas where receiving treatment is not possible.

WHERE ?PJC’s main advantage is the DC operable with effective treatment. Therefore, the market will be focused initially in developing world. In Asean Region, the targeted market will be Indonesia and Myanmar where market potential is huge and acceptance towards novel treatment is high.

HOW ?By realizing the market and consumer behaviour, PJC will reach towards customers by means of hospital endorsement. Whereas the pharmacies and local clinics are gateways to the hands of the customers.In terms of penetration, the local sales force (distributors) will be the means.

The PJC will be delievered by Philips Lighting Group – inhouse R&D will be done and production will be done by EMS company. It will involve Hardware, Software and Packaging from Philips. To reach in local markets, sales, service & support will be delivered by Local Distributors. In terms of high level support, Philips Sales force will support and distribute clinical knowledge and product training. As the solution is fully owned and managed by Philips Lighting Group, the involvement of the Philips Sales & Customer service is necessary so that customer customer engagement such as feedback and compliant can be better managed.

In terms of solution complexity, the clinical effectiveness is the utmost priority. The need for doctors judgement and close co-operation with hospitals is the important aspect thus, there will be official panel of hospitals and pediatrics for PJC launch. The panel will advise the treatment of Jaundice, monitoring and clinical queries arise from customers. In this way, the effectiveness of care and customer concern will be satisfied.

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Product Value in Market Strategy

Communicating the product value in the market strategy is subtle and the message must come across to customers to ensure success in the product launch.

For hospitals, the value lies in effective treatment mechanism as it can reduce the treatment duration. This feature is translated into 60% reduced power consumption and over 1000 days life span. It can help hospitals in treating effectively and even without AC Power, the treatment can continue. Traditionally, the AC powered phototherapy devices have limitation of treatment at the rural areas where infrastructure is poor and no power grids.

For individual parents, the benefits of PJC can be quantified as less 50% of treatment fees – estimated at US$94 where traditional treatment can cost up to US$445. The trouble of going hospitals to and fro will be reduced as the product can be easily operable at home settings. The cost of transportation can go up to as high as US$50 in some places. The comfortness and efficiency can be benefited to parents who live in rural areas. The traditional phototherapy devices are far from reach – due to its high cost, heavy weight and not operable by non-medical personnel. Promotion in Market Strategy

The value proposition statement of PJC:“The effective Phototherapy Device where skin friendly Specific Wavelength of the sun’s natural spectrum is used for treating Neonatal Jaundice in babies at the ease of parents.The sense and simplicity where 40 hours battery life, 1000 days life spans, and 50% reduction in treatment duration are the keys.”

Since the patient’s safety and effectiveness are the top concern in medical devices industry, the right message across will be carried to the clients where PJC are tested to validate the clinical requirements. The economical sense, user friendliness and reduction in treament time are the key factors in doing so.

In terms of promotion, the hospitals and doctors endorsement are the strongest in medical device industry. Therefore, the very first step will be collecting clinical confidence from doctors with the loan units from Philips. The white paper shall also be developed by research scientists and clinical professors to examine the values of PJC. Marketing and awareness campaign will be conducted at the various paediatric conferences, hospitals NCU awareness campaigns, clinical roadshows, baby fairs and so on. By familiarizing the benefits of PJC, the parents will entrust their newborns fully with PJC. Overtime, the social media and PR campaign will be followed by advertising and magazine articles. Ultimately, words of mouths between the parents will throttle the values of PJC for effective treatment. In babies affairs, parents tend to look for cautious solutions for the best. Therefore, by promoting values right with clinical validation, the success in Market Strategy can be achieved.

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FINANCIALS & FORWARD PLANNINGProduct Development Roadmap

Prototype (Version 1): The lamps with output predominantly in the blue region of spectrum (460-490 nm) are most effective. Working supplies by AC/DC power and can be rechargeable. The new device proposed by Philips’ LED group is a small, lightweight and portable. Thus, parents can put the baby in the sleeping bag for treatment at home.

Version 2: Adequately improve the LED power and duration to increase the treatment efficiency. Protect some key body parts. Version 2 is a ready-product with some additional features such as LCD, WIFI, data storage and data base.

Version 3: Taking the advantages of the heat produced by the product to tackle the problem of the incubation.

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Financial & Business Planning

The business plan for 5 years for the period of (2017-2021) has been planned out and presented here. As described in the business planning, there are two models of business come into consideration – “Selling to Hospital” and “Renting to individual Parents”. Together with business plan for 5 years, the information on NPV, payback period and ROI will be compared between two business plans to present to potential investors.

Selling to hospitals

5 Year PlanYear 1 Year 2 Year 3 Year 4 Year 5

Price per unit $1,600.00 $1,600.00 $1,600.00 $1,600.00 $1,600.00

Number of units 1000 2000 10000 20000 40000Sales $1,600,000.00 $3,200,000.00 $16,000,000.00 $32,000,000.00 $64,000,000.00

Cost of Good Sold (COGS) $546,600.00 $773,250.00 $1,866,562.50 $3,233,203.13 $5,841,503.91

Gross Profit $1,053,400.00 $2,426,750.00 $14,133,437.50 $28,766,796.88 $58,158,496.09Unit cost $546.60 $386.63 $186.66 $161.66 $146.04

Selling,General & Admin ExpensesManufacturing $1,950,000.00 $3,315,000.00 $4,309,500.00 $5,171,400.00 $6,205,680.00

Office Lease $220,000.00 $264,000.00 $316,800.00 $380,160.00 $456,192.00Marketing $200,000.00 $300,000.00 $540,000.00 $648,000.00 $842,400.00

Sales $300,000.00 $480,000.00 $720,000.00 $1,296,000.00 $2,332,800.00R&D $550,000.00 $200,000.00 $0.00 $0.00 $150,000.00

Overhead $410,000.00 $512,500.00 $640,625.00 $800,781.25 $880,859.38Total SG&A $3,630,000.00 $5,071,500.00 $6,526,925.00 $8,296,341.25 $10,867,931.38

Earnings (EBITDA) ($2,576,600.00) ($2,644,750.00) $7,606,512.50 $20,470,455.63 $47,290,564.72

Capital expenditures $1,350,000.00 $800,000.00 $0.00 $0.00 $0.00Total Capital Expenditures $2,150,000.00

Annual Funding Required $3,926,600.00 $3,444,750.00 $0.00 $0.00 $0.00

Total Funding Required $7,371,350.00

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Renting to parents

5 Year PlanYear 1 Year 2 Year 3 Year 4 Year 5

Rent Price per unit per patient $300.00 $300.00 $300.00 $300.00 $300.00

Number of rental transactions 5000 8000 14000 40000 60000

Sales $1,500,000.00 $2,400,000.00 $4,200,000.00$12,000,000.0

0 $18,000,000.00

Cost of Good Sold (COGS) $900,000.00 $990,000.00 $1,089,000.00 $1,197,900.00 $1,317,690.00

Gross Profit $600,000.00 $1,410,000.00 $3,111,000.00$10,802,100.0

0 $16,682,310.00Unit cost $180.00 $123.75 $77.79 $29.95 $21.96

Selling,General & Admin ExpensesManufacturing $1,250,000.00 $1,250,000.00 $1,375,000.00 $1,512,500.00 $1,588,125.00

Marketing $50,000.00 $62,500.00 $93,750.00 $23,437.50 $29,296.88Sales $50,000.00 $55,000.00 $6,875.00 $1,718.75 $2,148.44R&D $550,000.00 $200,000.00 $0.00 $0.00 $150,000.00

Overhead $210,000.00 $262,500.00 $367,500.00 $551,250.00 $661,500.00Total SG&A $2,110,000.00 $1,830,000.00 $1,843,125.00 $2,088,906.25 $2,431,070.31

Earnings (EBITDA) ($1,510,000.00) ($420,000.00) $1,267,875.00 $8,713,193.75 $14,251,239.69

Capital expenditures $800,000.00 $400,000.00 $0.00 $0.00 $500,000.00Total Capital Expenditures $1,200,000.00

Annual Funding Required $2,310,000.00 $820,000.00 $0.00 $0.00 $0.00

Total Funding Required $3,130,000.00

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CASH FLOW, NPV, IRR, PAYBACK AND ROI

The business models of (Selling to Hospitals) and (Renting to Parents) are both great in cash flow analysis. Both NPV of models are considered to be profitable as well as their payback and ROI looks promising. These figures are based on estimated market size of Indonesia and Myanmar. From the business models, “Selling to Hospitals” is more profitable than “Rent to Parents”- with better payback period and greater revenues. The former could earn as much as 43.7 million “estimated number units sold will be 40000” in 2021 with positive cash flow. Meanwhile, the latter could earn about 14.2 million in 2021 with 60,000 rental transactions.

Selling to Hospitals- ModelSELLING MODEL

Year Cashflow Present Value Balance0 ($2,150,000.00) ($2,150,000.00) ($2,150,000.00)1 ($2,576,600.00) ($2,147,166.67) ($4,726,600.00)2 ($3,444,750.00) ($2,392,187.50) ($8,171,350.00)3 $7,606,512.50 $4,401,916.96 ($564,837.50)4 $20,470,455.63 $9,871,940.41 $19,905,618.135 $47,290,564.72 $19,005,017.33 $67,196,182.84

NET PRESENT VALUE $26,589,520.52

Internal Rate of Return 59.65%Payback Period 4 years

1 2 3 4 5 6

($10,000,000.00)

$0.00

$10,000,000.00

$20,000,000.00

$30,000,000.00

$40,000,000.00

$50,000,000.00

$60,000,000.00

Cashflow of Selling Business

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ROI Calculation (Selling)Year 1 Year 2 Year 3 Year 4 Year 5

Cost $5,526,600.00 $6,644,750.00 $8,393,487.50 $11,529,544.38 $16,709,435.28Sales $1,600,000.00 $3,200,000.00 $16,000,000.00 $32,000,000.00 $64,000,000.00

ROI ($) ($3,926,600.00) ($3,444,750.00) $7,606,512.50 $20,470,455.63 $47,290,564.72ROI (%) -71.05% -51.84% 90.62% 177.55% 283.02%

-10000000

0

10000000

20000000

30000000

40000000

50000000

60000000

ROI ($) - Selling Business

Series1ROI ($)

Renting to Parents- ModelRENTING MODEL

Year Cashflow Present Value Balance0 ($800,000.00) ($800,000.00) ($800,000.00)1 ($1,510,000.00) ($1,313,043.48) ($2,310,000.00)2 ($420,000.00) ($317,580.34) ($2,730,000.00)3 $1,267,875.00 $833,648.39 ($1,462,125.00)4 $8,713,193.75 $4,981,796.81 $7,251,068.755 $14,251,239.69 $7,085,384.82 $21,502,308.44

NET PRESENT VALUE $10,470,206.20

Internal Rate of Return 57.31%Payback Period 4 years

200

1 2 3 4 5 6($2,000,000.00)

$0.00

$2,000,000.00

$4,000,000.00

$6,000,000.00

$8,000,000.00

$10,000,000.00

$12,000,000.00

$14,000,000.00

$16,000,000.00 Cashflow of Rent Business Model

No. of Year

Cash

ROI Calculation (Renting)Year 1 Year 2 Year 3 Year 4 Year 5

Cost $3,810,000.00 $3,220,000.00 $2,932,125.00 $3,286,806.25 $4,248,760.31Sales $1,500,000.00 $2,400,000.00 $4,200,000.00 $12,000,000.00 $18,000,000.00

ROI ($) ($2,310,000.00) ($820,000.00) $1,267,875.00 $8,713,193.75 $13,751,239.69ROI (%) -60.63% -25.47% 43.24% 265.10% 323.65%

Year 1 Year 2 Year 3 Year 4 Year 5

($4,000,000.00)

($2,000,000.00)

$0.00

$2,000,000.00

$4,000,000.00

$6,000,000.00

$8,000,000.00

$10,000,000.00

$12,000,000.00

$14,000,000.00

$16,000,000.00

ROI ($)- Renting

ROI ($)Polynomial (ROI ($))

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CONCLUSION

As the technology advances, it could bring numerous benefits to the world in terms of healthcare as well. Thus, by utilizing advancement in LED technology, Philips LED would contribute world’s healthcare from neonatal care. It is a fact that infant mortality rate is considered high in ASEAN region (Laos 52.97, Cambodia 50, Myanmar 43.55, Indonesia 24.29) per 1000 live births. Among other reasons, Neonatal Jaundice contributed severe conditions in newly born babies. These countries are lack of infrastructural support for electricity grid and economically could not afford for traditional phototherapy device for Jaundice treatment. To address the gap, the Philips LED group develops “Blue Angel Lite” which could operate with battery and offer effective treatment with low device cost as well as convenient to parents.

With its lightweight, energy-efficient, battery operated and effective treatment, it could touch the lives of 5 million babies in Myanmar and Indonesia in the first five years (2016-2021) of operation. It is true that Philips LED group is working towards the goal of treating as many as 35 million babies around the world by 2030. It would be proud to serve the noble cause for the world.

The initial investment needed to implement the product would require modest US$3.9 millions with potential of turning every one dollar into seventeen dollars by 2021. The project NPV is positive with huge market potential as the consumer acceptance will pick up within 3 years. Moreover, the expansion of other ASEA countries, EMEA and Europe will be implemented by core team members and will execute at its maximum potential to achieve greater revenues streams for Philips Corporation.

The focus is clear, consistent, yet ferocious to discover the untapped markets of ASEAN Neonatal Care in early years of operation. It is crystal clear that the Blue Angel Lite would bring strong pillars for Philips’ products and potential cumulative earnings of US$74 millions by the end of 2021. Therefore, with its noble purpose and undeniable market potential, it is recommended that the project should be implemented and supported by all means possible so that greater achivements will attend to Philips Company.

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REFERENCES

1. Energy Efficiency: Growth Opportunities for Smart Windows, Frost&Sullivan. March 2012.2. http://www.prnewswire.com/news-releases/smart-windows-market-estimated-to-reach-91-billion-usd-in-revenue-by-2020---industryarc-analysis-570087781.html

3. World LED Lighting Markets (2015 Update), Frost&Sullivan. May 2015Strategic Analysis of the LED Lighting Market in Southeast Asia), Frost&Sullivan. May 2016

4. US Neonatal and Infant Care Equipment Market, 9837-54, Frost & Sullivan, Febrary 2015

5. http://www.usa.philips.com/healthcare/medical-specialties/mother-and-child-care

6. Newborn Jaundice by Neil K. Kaneshiro, MD, MHA, Clinical Assistant Professor of Pediatrics, University of Washington School of Medicine, Seattle, WA. (https://medlineplus.gov/ency/article/001559.htm)

7. http://asean.org/resource/statistics/statistical-publications/

8. Indonesian Medical Devices Regulation, Directorate of Medical Device Production and Distribution service, Ministry of Health, Republic of Indonesia

8. ksoehein.weebly.com/.../medical_equipment_import_procedure_for_myanmar.docx

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Appendix – List of Interviews

Over all interviews from beginning.

N0 Date of interview Interviewee Interview done by

1 29/08/2016 Mabel Ling Ahamad Yazeer2 9/9/2016 Joanne Ng Ahamad Yazeer3 7/9/2016 Jeffrey Sum Ahamad Yazeer4 14/09/2016 Johnny Teng Ahamad Yazeer5 12/9/2016 Budiman Sastra Ahamad Yazeer6 6/9/2016 Anthony Ahamad Yazeer7 21/09/2016 Praskah Rao Ahamad Yazeer8 20/09/2016 Angel LED Ahamad Yazeer9 22/09/2016 Dr Shadheela Ahamad Yazeer10 24/8/2016 Dr. Mark Thong Kyaw Soe Hein11 9/1/2016 KC Yap Kyaw Soe Hein12 9/9/2016 Dr. Nyo Yin Than Kyaw Soe Hein13 14/09/2016 Phoo Pyae Kyaw Soe Hein14 15/9/2016 Zaw Paing Win Kyaw Soe Hein15 20/9/2016 Dr. Hein Htet Kyaw Soe Hein16 21/9/2016 Dr. Zun Zun Yadanar Kyaw Soe Hein17 26/9/2016 May Fong Kyaw Soe Hein18 28/9/2016 Than Than Trahan Kyaw Soe Hein19 28/9/2016 Zaw Thet Kyaw Soe Hein20 22/8/2016 Yang Lei Wei Lai21 29/8/2016 Xi Pu Wei Lai22 13/9/2016 Esther Chua Xu Jianqiao23 23/8/2016 Jun Hao Xu Jianqiao24 22/8/2016 Budiman Sastra Xu Jianqiao25 7/9/2016 Yang Jiongcheng Xu Jianqiao26 15/9/2016 Tai Yew Kim Xu Jianqiao27 19/9/2016 Sun Ling Xu Jianqiao28 26/09/2016 Tan Keng Hoe Xu Jianqiao29 29/09/2016 Wu Junhua Xu Jianqiao30 29/08/2016 Ammar Syawie Mohamad Azmi31 30/08/2016 Agus Lamo Mohamad Azmi32 3/9/2016 Anhar Solehudin Mohamad Azmi33 11/9/2016 Yanes David Mohamad Azmi34 15/09/2016 Arief Budiman Mohamad Azmi

240

35 18/09/2016 Rabie Maretan Mohamad Azmi36 25/09/2016 Retno Purnomo Mohamad Azmi37 23/08/2016 Ran Qingyun YI TIANYU38 23/08/2016 Gan Suntang YI TIANYU39 24/08/2016 Jia Zhuting YI TIANYU40 24/8/2016 Liu Yaqiang YI TIANYU41 5/9/2016 Deng Xin YI TIANYU42 6/9/2016 Zhang Chi YI TIANYU43 7/9/2016 Yao Bin YI TIANYU44 11/9/2016 Xu Can YI TIANYU45 19/09/2016 Yao An YI TIANYU46 20/09/2016 Miss. Xu YI TIANYU47 28/09/2016 LIU QING YI TIANYU48 28/09/2016 Mr. and Mrs. Zhang YI TIANYU

Interviews from 17th - 30th September

N0

Date of interview Interviwee Interview done by

1 21/09/2016 Praskah Rao Ahamad Yazeer

2 20/09/2016 Angel LED Ahamad Yazeer

3 22/09/2016 Dr Shadheela Ahamad Yazeer

4 20/09/2016 Dr. Hein Htet Kyaw Soe Hein

5 21/09/2016 Dr. Zun Zun Yadanar Kyaw Soe Hein

6 26/09/2016 May Fong Kyaw Soe Hein

7 28/09/2016 Than Than Trahan Kyaw Soe Hein

8 28/09/2016 Zaw Thet Kyaw Soe Hein

9 19/09/2016 Sun Ling Xu Jianqiao

10 26/09/2016 Tan Keng Hoe Xu Jianqiao

11 29/09/2016 Wu Junhua Xu Jianqiao

12 18/09/2016 Rabie Maretan Mohamad Azmi

13 25/09/2016 Retno Purnomo Mohamad Azmi

14 19/09/2016 Yao An YI TIANYU

250

15 20/09/2016 Miss Xu YI TIANYU

16 28/09/2016 LIU QING YI TIANYU

17 28/09/2016 Mr. and Mrs. Zhang YI TIANYU

260