Problem

Solution

Market

Competition

Why Us?

Forecast

Financial Highlights by Year

Financing Needed

Fitbit exist "To empower and inspire you to live a healthier, more active life. We design products and experiences that fit seamlessly into your life so you can achieve your health and fitness goals, whatever they may be". With the corporation entering a new market, fitbit care intends to continue just that. Fitbit understands that it is our need to feel safe and secure. We intend on developing a new product that you can also seamlessly fit into your life. We want to be known as the company who creates innovative products anyone can use

· Customers. By having this product available to the people, it will give them the peace of mind, leaving them feeling confident that the people they care for is safer.

· Employees. To encourage 'Intrapreneurship' as all ideas will be communicated and heard. To create an environment that is full of motivated staff and belief in enhancing the future with the use of technology and health in mind. 

· Shareholder. By successfully fulfilling the overall mission statement, fitbit care will lead the corporation to a favourable investment return. 

Fitbit care is a startup inside the corporation. This corporate venture extends on the history of the company who makes advanced technology and brings about experience to benefit and manifest a healthy life.  Fitbit has been creating products since 2007 and with full gusto, will continue to enhance wearables that change the way we move. The journey to creating fitbit care is embarking on new grounds where the change comes from the wearer feeling a higher sense of self esteem and confidence (Fitbit, 2016). 

Upon approval of the plan Fitbit care is to be created and made with in 6 months. The prototype will be tested and adjusted as per requirements. In the first year we intend on selling 

Problem Worth Solving

Vulnerable loved ones go missing all the time and it is them who need the most help. We hear it in the news and the thought of losing the people you care about the most can be traumatising. About 35,000 Australians go missing a year. Often it only takes a few seconds and they are gone. This can happen in the most unexpected places. From busy shopping centres, playgrounds, and even at the confines of your own backyard. These circumstances may occur unintentionally due to being lost or disorientated. It may also be due to an actual threat such as suspicious or malicious persons with bad intentions (Australian Federal Police, 2015).

Our Solution

In response to this particular problem, Fitbit will develop an inovative product line called Fitbit Care. This solution offers a user friendly device which allows a carer to closely monitor and contact the vulnerable with the use of GPS and 4G technology. It is available in various models which can be worn as a watch or clipped to clothing or a bag.

Functionalities of the watch/clip include:

· GPS functionality allows locations services that is linked to the app and provides recorded routes of their previous activities

· Guardian feature provides wearer voice instructions on how to locate the closest safe spot/s

· Panic/SOS button which automatically transmits the coordinates of the wearer to the app user/s

· Contingency functions allows an alternate app user to be notified if the initial app user does not respond within given time frame

· Special notifications available for when the watch or clips has been dislodged, when battery is low ot\r

Vulnerables

User; children  

Population: 4.6 million (Australia only)

Buyer: Who will Parents/Guardian with children, before and after school care, long day care centres, schools

The disabled

Population: 4.2 million (Australia only)

Buyer: Psych wards, carers, parents, hospitals

Current Alternatives

Tic tock track http://www.tictoctrack.com.au

Our Advantages

Marketing Plan

Sales Plan

Locations & Facilities

Technology

Equipment & Tools

Milestones Table

Management Team

Advisors

Key Assumptions

The values on the financial forecast are based on the goal of capturing a quarter of the children population and a quarter of the population with disability. Tear down analysis follows:

· Cost of one micro gps with geo $15

· materials to manufacture the product $17.36

· the remaining revenue cost is $35.98 

· Totalling to $68.34 to make

· The total budget for marketing and development was 200 million in 2014 and this was for 36 countries. The budget was divided to 36 areas which came down to approximately 5.5 million.

Further more, the latest statistics from ABS indicates there are approximately 4.6 million children who can benefit from fitbit care. In Australia alone, that is 26% of  the total population and it is steadily increasing.

Fitbit care is also good for the disabled. Current statistics from ABS also indicated 88% of the disabled population are limited to self care. That is a total of 3.7 million of Australian population to account for. 

By factoring these local numbers of the population, the revenue can potentially be more than the projection displayed on the graph. 

Revenue by Month

Net Profit (or Loss) by Year

Use of Funds

There will be a number of expenses that need to be covered such as research and development, marketing cost, general administrative expenses and the largest of all, revenue. 

· Cost of revenue. It consists of product costs, including costs of contract manufacturers for production, shipping and handling costs, warranty replacement costs, packaging costs, fulfillment costs, manufacturing and tooling equipment depreciation, warehousing costs, excess and obsolete inventory write-downs, and certain allocated costs related to management, facilities, and personnel-related expenses and other expenses associated with supply chain logistics. Personnel-related expenses include salaries, bonuses, benefits, and stock-based compensation.

· Research and development. These expenses are related to developing new products and services and improving existing products and services. These expenses consist primarily of personnel-related expenses, consulting and contractor expenses, tooling and prototype materials, and allocated overhead costs.

· Sales and marketing. These expenses consist primarily of advertising and marketing promotions of Fitbit products and services and personnel-related expenses, as well as sales incentives, trade show and event costs, sponsorship costs, consulting and contractor expenses, travel, Point-of-Purchase display expenses and related amortization, and allocated overhead costs.

· General and administrative. These expenses consist of personnel-related expenses for Fitbit finance, legal, human resources, and administrative personnel, as well as the costs of professional services, any allocated overhead, information technology, and other administrative expenses.

Sources of Funds

Projected Profit & Loss

Profit and Loss Statement (With Monthly Detail)

Balance Sheet (With Monthly Detail)

Cash Flow Statement (With Monthly Detail)

The production and success of a product, including the Microsoft Surface Book, all start as a simple idea. How well a company plans and what strategies are used to introduce, package, price and distribute a product all contribute to the position and overall success. Companies must strategize, analyze and position products prior to the production process which is all a part of a products life cycle.

Product Life Cycle/ Introduction Stage

There are four stages to the life cycle of any given product. The cycle consists of an introduction stage, growth stage, maturity stage, and decline stage. Generally during the introduction stage, sales remain low. During the introduction stage the surface book can be promoted at special events before the launch date. Basically at the introduction phase there will not be a rush to profit because this is a learning process for consumers. Giving them time to get to know the product. Although marketing the product is quite pricey in the beginning stages of launching a product, such as the Surface Book, it will be well worth it once sales boost and the market sees use for the product. The effort to promote the product and have the product demanded by the consumer is always the goal. The marketing plan for the Surface Book has been explained very well. It markets how light weight it can be and the exceptional performance of the product. When marketing this product, the numerous selling points to be made clear to consumers so it is more likely to catch their eye to boost the chances of them purchasing the product. “Microsoft Support Lifecycle policy provides consistent and predictable guidelines for product support availability when a product releases and throughout that product’s life (Lindsey, 2013)”. All products that go into the market have a beginning and an end and follow through the four stages of the life cycle.

Growth Stage

The primary promotional objective of the growth stage is to persuade the consumer to buy the product rather than substitutes (Kerin,, Hartley, & Rudelius, 2015). During the growth stage, sales and profit can increase tremendously.

The growth stage is the time when customers start to experience the Surface Book and they are able to build an opinion of the product based on personal preference. This is when the customer can get to know the product more. As marketing still continues for the product, customers that have purchased the product can promote and recommend to peers based on their personal experience with the various features the product has to offer. The growth stage can be an experience stage where the customer can compare to what the introduction stage had to market.

Maturity Stage

Next, after the introduction and growth stages, is the maturity stage. The maturity stage is when sales and profit start decreasing. By this stage in the cycle customers have chosen to buy and try the product. They have either decided to become loyal customers and continue to purchase the product or/and accessories, or have decided that the product was not up to par, or not useful to them. At this stage it is tough to keep profit shares stable, there is a lot of competition in the market that grows as new products are produced and introduced. In the first couple of stages the target is to market and promote the product, but by the maturity stage profits and sales begin to decrease significantly. However, during the maturity stage the advertiser can send out coupons or special discounts for the product.

Decline Stage

The final step in the four-step cycle is the decline stage. The Surface Book has been marketed and promoted, but by this time no one is buying the product anymore. Throughout this final stage, customers are trying to see what is new in the market, instead of what is already circulating through the market. There can be benefits during the decline stage though. The manufacturer can look to cheaper production systems that will not interfere with the maintaining profits. The decline stage usually will not bring in any new customers, but at this time they can start thinking of new ways to improve the product. Which is how the Surface Book came about. Which also led to the idea and production of the next Surface Book 4 which is soon to be launched to the market.

Packaging The Product

Packaging adds value to a product as it enhances the product aesthetics and reassures customers that the product has been made using the highest standards possible (Klimchuk & Krasovec, 2013). The packaging of the Microsoft Surface Book will be designed to provide necessary information about it. The product will be new in the market, and the extent to which information is provided in the packaging will determine whether customers will purchase it. The presence of adequate information will convince the consumer to purchase the product over other competing products in the market, therefore adding value in the form of competitive advantage. The unique aspects of the Microsoft Surface Book that will be brought to the attention of the consumer include its 13.5” display which has 6 million pixels. This information will appeal to customers as its closest competitor only has 4 million pixels. Another selling point includes the usability of the Microsoft Surface Book, as it can be used as a regular laptop, or the keyboard can be removed for it to be used as a tablet.

Packaging may also add value by showing the personality of the product. Personality refers to how customers perceive the product (Klimchuk & Krasovec, 2013). In this case, the Microsoft Surface Book is a product that is associated with speed and innovation. The packaging will be designed in such a manner that it displays the innovativeness of the product. This will assist in appealing to the target market, as the product will reach out to them through the communication of aspects that they are interested in. Attractive packaging communicates to the customer that the brand is valuable, and that the company has invested its time and resources in pulling together a valuable product. The materials used, colors, shape, and texture of the packaging should capture the emotions of the customer. The packaging should have a visual appeal that communicates the product’s value to the customers. The best way to go about this is to have a graphic representation of the Microsoft Surface Book on the packaging so that consumers can see its sleek design.

Packaging also adds value by protecting the product. The sale of Microsoft Surface Book products will take place in third-party stores that are beyond the control of Microsoft, and the company needs to ensure that the products will not be damaged in any way. The product packaging determines the customer experience as damaged products will reduce customer satisfaction, resulting in a high number of product returns. The Microsoft Surface Book is an electronic product that is sensitive to falls, water, and other environmental agents that may compromise its functionality. As such, the packaging needs to be resilient enough to withstand any damages that may occur when shipping, storing, or handling the product. The packaging should also protect the product from damages that are associated with falls that may occur when the product is being shipped or handled. The addition of value is in form of customer experience, which will be enhanced if the product can be accessed by customers without any faults or damages, therefore increasing customer satisfaction and brand loyalty.

Analyzing the Appropriate Pricing Strategy

One of the most important decisions for a company to make is choosing a pricing strategy. All companies must be aware of any factors that could affect their business such as Wal-Mart vs. Germany. In the textbook example given, antitrust authorities prohibited Wal-Mart to lower their price on some items; this strategy was used to lure customers where they would then spend money on other items. Since Germany prohibited Wal-Mart from lowering prices they could not compete with the local discount stores and were forced to leave Germany due to low profits (Kerin, Hartley & Rudelius, 2015). Assuming that there are no variables that affect our pricing strategies such as Wal-Mart then we should concentrate on two strategies.

Types of Pricing Strategies

There are many types of pricing strategies but after doing some research we believe it is in our best interest to use psychological pricing, and price skimming. During the initial life cycle of the product, and as the cycle changes we should adjust our strategy accordingly.

Psychological pricing is a form of pricing through the use of number manipulation. Psychological pricing is based on the theory that people are more likely to purchase an item when they perceive it to be cheaper. For instance, a product may be $10.00 but by placing the price at $9.99, this may increase the likelihood that consumers will purchase a product because they perceive it to be cheaper. Most retailers use the formula (Retail Price = [(cost of item) ÷ (100 - markup percentage)] x 100). For example, if you have a product that cost you 15 dollars to make, and you would like to mark up the product by 45% then you would end up having to charge $27.00 for the product. (Humayun, 2014).

According to (Anderson, E. T., & Simester, D. I., 2003) which are researchers at MIT and The University of Chicago, people are more likely to purchase an item that ends with then number nine. Anderson and Simester conducted research by pricing women’s clothing with prices set at $34, $39, and $44; they concluded that the clothing priced at $39 sold the most even more than the cheaper same item priced at $34. With this information available we believe it is safe to assume that if our product price is set at $27, we could still make decent profits by bumping the price up to $29.99.

Price skimming

Price skimming is used to set prices on new products that have a competitive advantage in that market, and this can be due to little or no competition or innovation of new features on a product. By price skimming, one can set the price of a product higher and capitalize on the fact that the product has innovative features that beat its competitors. But again as we mentioned above the pricing strategy should change as the life cycle changes, so the more competitors enter the market or innovations are copied, then we should adjust the price in order to stay competitive. Price skimming tends to be focused on the early adopters. This population is made up of about 14 percent and it consists of innovators that like new ideas, products and features, these are the people that buy a product as soon as it comes out. Attracting early adopters is key to a product lifecycle, if early adopters accept it then the next target group is the early majority (Kerin, Hartley, & Rudelius, 2015). Price skimming further backs up the decision to raise the price from our initial $27 to $29.

Channels of Distribution

Depending on the type of company, or product, the channel of distribution can vary. As for laptop computers, or more specific, the Microsoft Surface Book there are many ways to get this product to buyers. Marketing channels make it possible to get this product out to buyers. The Microsoft Surface Book is purchased through indirect channels. Indirect because “intermediaries are inserted between the producer and consumer and perform numerous channel functions (Kerin, Hartley, & Rudelius, p. 389).” When searching for a new laptop it is highly unlikely to make a purchase from the actual producer. Walmart, Best Buy, Target, Amazon all act as marketing channels for Microsoft products, including that of the Surface Book. There is not a Microsoft Store to purchase this item from. Laptop computers, other than Apple, are produced, purchased by a retailer and then sold to the consumer. Having this product available at different locations and available for purchase online adds value to the product. Easy access makes the product more well-known. A useful, well-known product can somewhat market itself. Microsoft uses somewhat of an intensive distribution system; however, it is also quite selective due to the type of product. A laptop can only be sold in so many stores making the distribution channel somewhat selective as well.

Although the life cycle of a product only has four stages, each stage is complex. A lot must go into the planning of a products success. The introduction sets the tone and positions the company to then proceed to packaging ideas, pricing strategies and the selection of distribution channels best suited for the product, the Microsoft Surface Book. If planned correctly each step in the cycle can add value to the product, however it can also go the other way. If the correct packing ideas, pricing techniques or distribution outlets are not utilized to the full potential the product can fail. Microsoft Surface Books have been quite successful thus far, because of proper planning and utilization of the four stages of the life cycle of a product.

References

All businesses, both large and small, up and coming and existing, must continuously analyze their position and strategies in the business world to maintain productive marketing structures, boost sales and maintain opposition with competitors. Especially in the innovative, always changing world of technology; weaknesses, strengths, threats and opportunities must be well-known to move ahead and maintain a positive brand for any successful company. Microsoft has had to do just that, strategize based on its weaknesses, strengths, threats and opportunities, to produce its latest competitive, yet successful, Surface Book.

Microsoft Background, Industry and Products

Microsoft is an American based company grounded in Redmond, Washington United States and was founded in 1975, by Bill Gates and Paul G. Allen. After running the company for five years, Microsoft came up with an operating system named MS-DOS, better known as the Microsoft Disk Operating System ("Microsoft.com", 2015). MS-DOS is still used today. Microsoft developed numerous products that have maintained success; Windows, Microsoft Office, Internet Explorer, and Xbox are just a few (Bellis, 2014). In 2001 at the Comdex Show in Las Vegas, Bill Gates described a vision of his for the future of computers, and introduced a prototype Microsoft Tablet device, predicting that it would be the most used type of PC sold in America (Ranger, 2013). In 2012, Microsoft’s CEO Steve Ballmer introduced the world to their Microsoft tablet called the Surface, a product designed to take over laptops as a tablet capable of touch screen features that were designed entirely to exploit the capabilities of the new Windows 8 operating system. The surface has been around for a few years now, and it has been the product of choice for Computer Aided Drafting (CAD), picture editing, and drawing (Chapman, 2016).

Microsoft Surface Book

The Surface Book was introduced in 2015 alongside the Surface Pro 4, however the Surface Pro 4 was designed for people looking to run it as a laptop, because it has the capabilities of running desktop programs. The Surface book is capable of running all the same programs as the Surface Pro 4, and the same programs as the Surface 3. These programs include video editing in Premier Pro, which is one of the most utilized video editing software. It can also handle other professional software such as Adobe Creative Cloud (ACC), a program manager that manages various programs such as picture editing, drawing, and video editing programs. ACC is one of the most common used program by photographers, film editors, and architects. If you are familiar with any of these programs, then you will understand that these programs may not run smooth on any laptop since they use a high degree of CPU usage which requires a significant amount of RAM.

The Surface Book has a 13.5” display which has 6 million pixels unlike one of its main competitors the MacBook Pro 13, which has 4 million pixels. Another feature is that you are able to configure the Surface Book in three different configurations. You may use it as a regular fold up laptop, detach the keyboard (to make it lighter) and use it as a tablet or there is the option to leave the keyboard, which also folds behind the screen to give it a nice angle when used on a flat surface. An additional key feature is that the Surface pen has 1024 levels of pressure sensitivity. As you press harder on the tablet, it may apply more ink to a picture drawing giving a similar effect as a marker or a pencil used on paper. The pen has no lag effect; this means that as soon as you draw a line, it produces the line instantly. Lag is one issue that is encountered on previous touchscreen devices and some of Microsoft’s competitors ("Microsoft", 2016).

SWOT analysis

A SWOT analysis for Microsoft and the Microsoft Surface Book lies in its dominance of operating systems in the market. It is estimated that over 90% of the PCs run various versions of Microsoft Office. With regards to the Microsoft Surface Book, it has a more powerful display of 13.5-inch Pixel and a resolution of 3,000 x 2,000 which is superior to those of Apple, its closest competitor, as the latter company has 13.3 Pixel and 2560 x 1600 resolutions (Purkayastha & Sharma, 2016). The company’s main weakness is its lack of innovativeness, as its products compare dismally to those of its competitors in terms of creativity. Microsoft Surface Book’s main weakness is its high price that may deter many customers from purchasing it, considering that other companies like Apple and Google have similar versions of the Microsoft Surface Book at lower prices. Microsoft’s main opportunity is the increased demand for devices that have high functionality. Consumers for technological devices have been on the lookout for devices such as the Microsoft Surface Book that can enhance usability. The main threat Microsoft is facing is the emergence of competitive products in the market. Consumers’ choice of technology devices is swayed by price and functionality, and the Microsoft Surface Book may face stiff competition from similar products by other manufacturers. Another threat is the production of counterfeit products that make their way into the market, a factor that will negatively affect the success of the Microsoft Surface Book due to loss of sales to the counterfeit products (King & Peterson, 2013).

Competitive Analysis

Identifying competitors and highlighting their strengths and weaknesses is a critical part of the strategy and positioning analysis. One of Microsoft’s main competitors is Apple, a company that has dominated the technology industry since the 1970s. Currently, Apple holds the largest market share in the technology industry as it stands at 33.3%. On the other hand, Microsoft’s market share is currently at 25%. Secondly, Apple has higher profitability than Microsoft, as it accrued 37.4 billion in the first quarter of 2016, while Microsoft accrued 17.7 billion, a figure that is 60% lower (Yahoo Finance, 2016). However, Apple’s products are highly priced when compared to Microsoft, a factor that gives Microsoft a competitive advantage over Apple. The Microsoft Surface book will face strong competition from Apple’s MacBook Pro. The iPad triumphs over the Microsoft Surface Book with regards to portability, as the latter is thicker. However, the main advantage of having a Microsoft Surface Book is that its functionality surpasses the iPad, as it has keyboard functionality, and it can run full desktop applications like Microsoft Office and Photoshop. Microsoft’s main advantage over Google is that it has a higher market share, but Google is a strong competitor to Microsoft as both companies target similar customers (King & Peterson, 2013). Currently, Google’s ChromeBook Pixel is considerably more affordable, as the Microsoft Surface Book may cost $2,000 while the ChromeBook Pixel can be purchased at $1,000 (Yahoo Finance, 2016).

Demographics

The Surface Book targets all demographics, especially people that are always on the run. For people frequently on the run, the battery of this surface book lasts longer than any other laptop or tablet. This Surface Book not only targets people in business, but any person interested in technology or those solely searching to have a product for convenience purposes. Having an additional charging station on a Surface Book, can be one more reason to purchase one.

Psychographics

As years go by, the competition in the technology industry is growing. The demand for new systems and more convenient laptops is constantly expanding. Consumers are always looking out for new devices in the market, at a lower price and better quality than the last. The Surface Book is a 2 in 1 device, a laptop and a tablet. The Surface Book was released in October of 2015. Consumers were able to preorder this Surface Book and have it delivered to the convenience of their home, but also had the option to purchase this Surface Book online or at any retail store, such as the Microsoft store, Walmart, Best Buy, Amazon, etc. The Surface Book advertises the velocity of speed, innovation and convenience. Microsoft’s competitors, Apple and Dell, do offer similar products, but do not advertise the same exact qualities.

Behavioral Factors

There are many factors in behavior for a consumer. They want to know how much it is going to cost them, what kind of quality will they be getting in a product, how often will they need maintenance, and what special promotions or deals can they receive. The Surface Book is guaranteed to be one of a kind and the way the device is presented can sway a consumer’s decision to choose this product. The convenience of the Surface Book is how Microsoft maintains the products success.

Geographic

All technologies have grown in popularity and productivity over the years. Online shopping and preordering has made a dent in sales. Being able to order almost anything online, has made consumers more aware of the competition out there. In the past it was not as convenient to buy, like now. The product can be delivered to the footstep of a customer’s home. Being able to market to the right people and customer base taking age, profession and lifestyle into consideration is important. Many want the newest thing out there, and this may vary depending on profession, age, or whether they are a student in need of the latest and greatest technology to complete projects and papers to the best of their ability. The features that the Surface Book promotes is nothing like any other laptop in the market. Targeting all people is the concept of this device. Showing how efficient and reliable this Surface Book can be, showing the consumer how less stressful their lives can be by utilizing the surface book for what it is worth.

Positioning Statement

Microsoft’s Surface Book is convenient, reliable, efficient and offers many applications that help make daily uses of this device more successful and less stressful. It runs quicker, does not lag when using the pen, and can be used in tablet form, with the keyboard folded under or at a normal laptop positioning. Marketing to a wide variety of people; from college students to a business owner, a photographer to a marketing director. Offering programs such as Premier Pro and Adobe Creative Cloud, which are much a necessity to modern photographers and marketing departments and directors. These programs alone are two great selling points for the Surface Book’s, making photo editing and drawing quicker, easier and less complicated. While putting albums, pamphlets or new brochures together these programs can save time and can aide in creating professional end products for a company. Other companies may offer a product that is same in shape or size and even compare in price, however the convenience of this Microsoft product, offered programs and battery life keep the Surface Book in its own niche of technological devices. The Microsoft Surface Book offers portability, productivity and substantially more power and battery charge than that of the competitors’.

Microsoft has been a prosperous company for over forty years, and with the proper maintenance in regards to strategy and position in the technology realm they will have continued success. The Surface Book is just one of many efficient products produced by such a highly ranked company. Staying competitive, and marketing the many reasons why their products are more productive than those of the competitors, Apple or Dell, will keep them above the rest. Who does not want the latest and greatest piece of technology at a reasonable price?

References

Bellis, M. (2014). Microsoft - History of a Computing Giant. Retrieved from

http://inventors.about.com/od/CorporateProfiles/p/Microsoft-History.htm