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The Entrepreneurship Report

Assignment – Opportunity analysis

MKTM033

NAME AMONWAN THONGKAMKHAO

UON ID 22427988

SUBMISSION DATE 18/4/2022

MODULE ASSIGNMENT 1

WORD COUNT 2480

LECTURER Lim Keai

UNIVERSITY /

SCHOOL

UON/FACULTY OF BUSINESS & LAW

Contents

Executive Summary 1

External Environmental Analysis 2

-PESTEL Analysis tool 2

Industry Analysis 3

-SWOT Analysis 3

-Five Forces Model 4

Key People and Skills 6

Financial Feasibility 9

-Financial goals 9

-Financial analysis 9

-Fixed Assets Table 9

-Cost Estimation Table 10

– Variable Cost Table 11

-Income statement Table 12

-Potential risks, impacts on projects and support plans 12

References 13

Appendices 15

1

Executive Summary

Nowadays, organic products are made to be environmentally friendly products. The shampoo is a

cosmetic product widely used to cleanse our hair and scalp daily. There are various types of shampoos

available to meet consumers’ needs in the shampoo industry, which has several consumers who are

experiencing hair loss from using shampoos that contain chemicals. Organic shampoo is a part of solving

the hair loss problem. By conditioning the hair by using natural ingredients and without chemical

ingredients and there will be organic products available in the market which are popular among

consumers with an increasing trend because They believe that these products are safe because they are

made from natural extracts; thus, Pamela Shampoo is an alternative for consumers who like to use organic

products. In addition, consumers with hair loss problems can use this product without harm to the scalp. It

is hair nourishment caused by natural herbs and is not toxic to consumers. The financial plan is an integral

part of the business plan. The entrepreneur must calculate and review the feasibility of the Pamela brand

business, which is a hair loss shampoo business. Therefore, planning is required to assess the business

feasibility and plan accordingly. The hair care products under the brand name Pamela have undergone

research from the Ministry of Science and Technology of Thailand on herbs to nourish the hair. Source of

Funding Capital Structure and the financial cost of the business of Pamela organic shampoo of 2,500,000

baht from the source of funds of all owners. The business started to make a profit in the second year of

operation. The length of time the business will break even in about a year by considering the cash flow

statement that The rate of return that investors will receive when the business completes 5 years (IRR) is

%. The company plans to expand its market base to foreign markets and have new products in the future.

2

External Environmental Analysis

The analysis of the external environment of the shampoo industry uses the PESTEL Analysis tool, which

consists of the following factors:

– Political and legal factors of Thailand. The shampoo industry directly impacts political and legal factors.

Because the production of shampoo must meet the Thai Industrial Standard (TIS) requirements, and when

the production is completed before selling, it must be inspected by the Food and Drug Administration

(FDA) of Thailand first.

– Economic factors and economics. Data from the Bureau of Macroeconomic Strategy and Planning

(2022) reveals that the Thai economy in 2022 is projected to expand from 3.5 – to 4.5 percent, with

significant support as follows:

1) Household expenditures tend to expand favorably and support continued economic expansion

2) The improvement of the total investment Government investment tends to accelerate. and

private investment continued to expand favorably

3) The improvement of the tourism sector Because Thailand has opened the border after the covid

situation.

4) The expansion of the economy and the volume of world trade can support the expansion of

exports continuously.

5) change of trade direction International production and investment The value of merchandise

exports are expected to grow by 4.6 percent, private consumption and total investment are expected to

grow by 4.2 and 5.1 percent, respectively, average headline inflation is in the range of 0.7 – 1.7 percent

and the current account surplus in range of 5.8 percent of GDP. The Thai economy and household

expenditures are likely to expand. It can be considered a good sign for the shampoo industry because

shampoo is a product in the household sector.

– Social factors From the current health-loving trend, consumers pay more attention to using organic

products with natural ingredients, which affects the shampoo industry. Because shampoos contain

chemical ingredients, many brands have to develop formulas with more natural ingredients.

– Technology Factors Technology today is more advanced than in the past. Technology is important in the

industry for greater convenience and more significant cost savings—both in terms of production that use

3

technology in the machinery to help. Reduce the labor force and can produce more In addition, the

communication with consumers via the Internet helps to make communication more widely and more

efficient with less budget.

Industry Analysis

-SWOT Analysis Internal and External Factors to Consider Internal and external factors analysis enables

businesses to identify their strengths and weaknesses to develop, as well as opportunities and obstacles

that affect the business’s ability to lead. To apply and develop a strategy, the following tool is used for

analysis: SWOT Analysis; the details are as follows.

1. Strengths

1) Products derived from organic shampoos are primarily composed of agricultural products.

Which is a natural extract free of chemicals; it gives consumers the impression that the shampoo is gentle

on the scalp. There are no noxious substances

2) There are user reviews. Businesses have kept track of actual user changes since the dawn of

time. This includes not only the business’s actual customers but also a large number of people who use it

and see results. It instills confidence in other interested parties and assures that it will work.

3) Consulting services for a product, For those who have never purchased a product but are

interested in discussing the details first, complimentary consulting services are available. This is a chance

for new target groups to become acquainted with the product. Additionally, it tracks existing customers to

compare the effects of the changes. This is to ensure that customers are aware of positive developments.

Assist customers in remaining brand loyal.

4) Organic product expertise Because the proprietor collaborated with researchers to

independently invent and develop the formula. They are also individuals who have personally verified

that it works. This results in cost savings associated with product innovation and development.

2. Weaknesses

1) the product is still relatively unknown in the business. However, when searching online, for

example, through Google, the shampoo brand is nowhere to be found on the first pages, despite the fact

4

that Google is the most frequently used search engine. Additionally, I rarely see reviews or hear much

discussion about it. which the business is still failing to market as effectively as it could

2) Products that are more expensive than competitors, for example, when comparing the price of

organic shampoo to that of competing brand shampoos. It was discovered that the product is still more

expensive than competitors. Price is a significant factor in how consumers make purchases. As a result,

businesses should be prepared to adapt at this point.

3. Opportunities

1) Health-conscious consumers: As a result of the health-conscious trend, consumers are more

interested in healthy product choices. By purchasing products that contain more natural and organic

ingredients, consumers can focus on their health naturally and treat various symptoms with herbs rather

than adding more chemicals. Therefore, it is an opportunity for organic plant-based products to present

their strengths to consumers.

2) Visual representation is critical. “You only get one chance to make a good first impression” is a

catchphrase that emphasizes the critical nature of the term “image.” In any era, image quality is critical,

and hair loss is one issue that undermines consumer confidence and degrades a person’s image. As a

result, the consumer segments for this type of product are pretty diverse.

3) Marketing is a term that refers to digital marketing. That applies marketing principles and

incorporates various technologies to reach out to additional consumers or customers. Because marketing

will no longer be limited to the offline world, because people’s lifestyles are changing, communication

with customers via television, telephone, or newspaper may no longer reach customers or target audiences

or online media. As the world evolves, it is critical to the transition to digital marketing. The shift in the

customer journey resulting from increased online activity necessitates determining the channels through

which to communicate with consumers (TouchPoints) (GAble, 2018).

4. Threats

1) The industry has a large number of competitors – The industry has a sizable number of

competitors. Both of the former competitors in the market have an advantage in terms of Brand

Awareness due to their long tenure in the market. This allows customers to become familiar with the

brand and new competitors to easily enter the market, as this is not a complicated business.

5

– Another tool that analyzes the external environment is the Five Forces Model, which analyzes the

factors that affect the competitive environment of a particular business. Which are detailed as follows:

1. Competitive Rivalry Among Current Competitors – The competition in the hair loss shampoo industry

is relatively high. Due to many competitors in this industry, some of them are long-standing competitors.

There is fierce competition in marketing that creates awareness among consumers. How awareness is

created within the region varies from time to time. In the past, it focused on advertising through television

but now focuses on online advertising such as in Search Engines or Social Media. Each person has a

different marketing investment.

2. Threat of New Entrance – If new competitors want to enter this type of business, they can quickly enter

because shampoo does not require much investment in product innovation and development. In addition,

the problem of hair loss is easy to find information on the causes and prevention methods, so the threat

from new competitors is relatively high.

3. Threat of Substitute Products – The threat of substitution is relatively high as other forms of hair loss

products do not come in the form of a shampoo, such as a spray. In addition, baby shampoo can be a

substitute product. Although baby shampoo does not have properties to reduce hair loss, baby shampoo

does not contain chemicals, which most consumers believe that without chemicals is a thing. Good

because it does not hurt the scalp. Therefore, many consumers use baby shampoo instead of shampoo to

reduce hair loss. There is also a way to nourish the scalp from the inside to the outside and take vitamins

that help nourish hair and reduce hair loss, such as vitamins that contain various brands of biotin.

4. Bargaining Power of Suppliers – Suppliers of this type of business include packaging manufacturers,

producing various natural extracts. , Those who produce the scent of shampoo and many more. These raw

materials do not have a monopoly on who is the sole manufacturer in Thailand. Therefore, the number of

Suppliers is quite large. The bargaining power of the Suppliers is relatively low.

5. Bargaining Power of Buyers – Buyers have relatively high bargaining power due to the number of hair

loss shampoo products. There are quite a lot of competitors in this type of industry, so buyers have the

right to choose the product.

6

Key People and Skills

The company’s business is small. It has a simple structure. The skills required for each function are

identified, and the responsibilities are allocated to each department so that the organization’s operations

can be carried out well. Divided into Managing Director and a team of 3 departments consisting of the

production team and the raw material procurement department. Marketing and Sales and Research and

Development teams

Skills for each position and assignment of responsibilities

– Managing Director

Position skills

1. has leadership. Have a system of thought and vision

2. Able to see the overall picture of the organization as a whole

3. Has good communication skills and good negotiation skills.

4. Able to work well under pressure

5. a person who loves to learn, Study and develop yourself.

6. Being honest and working with ethics

Duties and Responsibilities

1. Determine the organization’s vision, strategy, and operational goals in line with the company’s policy to

provide the company with competitive advantages and sustainability.

2. To advise subordinates to perform their duties to achieve the goals and objectives of the organization.

7

3. Monitor an overview of the operations of subordinates and make recommendations for achieving the

goals.

4. To control the work of subordinates to create cooperation and work in the same direction to achieve the

goals of the organization

5. Participate in promoting the image and building the organizational culture by building good

relationships with all departments, both inside and outside the organization.

6. Build and maintain relationships with merchandising companies, research institutes, and dealer shops.

– Production department and raw material procurement department

position skills

1. Have good negotiation skills with suppliers.

2. have good communication skills

3. Able to inspect raw materials thoroughly and carefully quickly.

4. A person who loves to learn, Study and develop yourself.

5. Being honest

Duties and Responsibilities

1. Contact suppliers or contact through agriculture directly to obtain raw materials for research and

development to create new products.

2. Procurement of quality raw materials Bring the components of various raw materials to create products.

3. Inventory control and check the quality of the products to always maintain good quality.

– Marketing and Sales Department

position skills

1. Have good knowledge and attitude about organic products

2. Knowledge of marketing strategies

3. Knowledge of social media, able to search for new ways to sell all the time.

4. Can communicate and coordinate both internally and externally

5. Enthusiasm, Responsibility, patience, and good human relations

Duties and Responsibilities

1. Make a marketing plan Expand customer base, offer prices, accept orders, Greet or care for customers

until the customer purchases a product or service.

2. Bringing products to the market to be known. Bring products out to various distribution channels.

8

3. able to advertise Public relations, media, and online communication

4. Increase sales online and through a dealer and shops. Evaluate sales of distribution channels

– Research and Development Department

position skills

1. Graduated in Medicine, Pharmacy, or related science.

2. Able to plan and assess the situation in advance

3. having knowledge and technical expertise in organic product development

Duties and Responsibilities

1. Research and develop new products to get good quality products and meet the organization’s goals.

2. Always check the quality of the products according to the organization’s standards

3. Test the properties of raw materials

9

Financial Feasibility

– Financial goals

There is a positive return on the net present value of the project. The project’s return (Internal Return) rate

is greater than the financial cost, with a payback period of 2 years after the start of operation.

– Financial analysis

source of funding capital structure and the financial cost of the business of hair care products 2,500,000

Baht obtained from the source of funds of all owners.

Table 1 Fixed Assets Table

Investment type Price (Baht) Total (Baht) Source (Baht)

Owner’s equity Creditor

Asset

Factory location rental

fee

250,000 250,000 250,000

Storefront rental fee 220,000 220,000 220,000

Depreciated fixed

assets

Design and decoration

costs

50,000 50,000 50,000

Office equipment cost 35,000 35,000 35,000

Total depreciated fixed

assets

85,000 85,000 85,000

Total assets 555,000 555,000 555,000

Pre-operation expenses

10

Registration fee 3,000 3,000 3,000

Circulating fund 700,000 700,000 700,000

Total pre-operation

expenses

730,000 730,000 730,000

Total initial investment 1,285,000 1,285,000 1,285,000

Capital Structure Ratio 100% 0%

Table 2 Table of Estimation of Earnings with 5% Yearly Increase in Profitability for Years 1 – 5

Earnings

forecast

Year 1 (Baht) Year 2 (Baht) Year 3 (Baht) Year 4 (Baht) Year 5 (Baht)

Revenue from

sales of hair

loss shampoo

3,200,000 3,360,000 3,528,000 3,704,400 3,889,620

Total income 3,200,000 3,360,000 3,528,000 3,704,400 3,889,620

Table 3 Cost Estimation Table

Fixed cost Year 1 (Baht) Year 2 (Baht) Year 3 (Baht) Year 4 (Baht) Year 5 (Baht)

Depreciation 17,000 17,000 17,000 17,000 17,000

Labor salary

increase

5%

1,800,000 1,890,000 1,984,500 1,993,725 2,093,411.25

Total fixed cost 1,817,000 1,907,000 2,001,500 2,010,725 2,110,411

11

Total income 3,200,000 3,360,000 3,528,000 3,704,400 3,889,620

Variable cost Year 1 (Baht) Year 2 (Baht) Year 3 (Baht) Year 4 (Baht) Year 5 (Baht)

The production

cost of the

product is 5%

per year

120,000 126,000 132,300 138,915 145,860.75

Utilities 5% per

year

72,000 75,600 79,380 83,349 87,516.45

Advertising

media

public relations

Marketing fee

2%

45,000 45,900 46,818 47,754.36 48,709.44

Total variable

costs

237,000 247,500 258,498 270,018.36 282,086.64

Excess Profit = Total income – Variable Costs

Break-even

point calculation

Year 1 (Baht) Year 2 (Baht) Year 3 (Baht) Year 4 (Baht) Year 5 (Baht)

Excess Profit 2,963,000 3,112,500 3,269,502 3,434,382 3,607,533

12

Table 4 Income statement Table

Income statement

Year 1 (Baht) Year 2

(Baht)

Year 3 (Baht) Year 4 (Baht) Year 5 (Baht)

Total income 3,200,000 3,360,000 3,528,000 3,704,400 3,889,620

Change variable

cost

237,000 247,500 258,498 270,018.36 282,086.64

Excess Profit 2,963,000 3,112,500 3,269,502 3,434,382 3,607,533

Change fixed cost 1,817,000 1,907,000 2,001,500 2,010,725 2,110,411

Profit before

income tax

1,146,000 1,205,500 1,268,002 1,423,657 1,497,122

30% tax change 343,800 361,650 380,400.6 427,097.1 449,136.6

Net profit 802,200 843,850 887,601.4 996,559.9 1,047,985.4

Table 5 , Potential risks, impacts on projects and support plans (Remedy)

Problem Effect Solution

1. There are many competitors

entering the market.

climb

To have market share

add more

Product development and

promotion

to attract the attention of

customers

2. Economic Depression

(Covid-19)

There are fewer customers

coming to the store to buy.

Increase online sales channels

3. Slow distribution Deteriorated products Increase the efficiency of

distribution faster.

13

References

Bank for export and import of Thailand. (2019, June 2). Product of USDA Organic and

Bioagricert(Online). Retrieved April 15, 2022, from http://www.oleaforganic.com/content-สนิคา้ออแกนิก

ตามมาตรฐานของUSDAOrganicและB4-1042-14339-1.html

Matzler, KurtandHiterhuber, Hans H. (1998). How to make Product Development Projects More

Successful by integrating Kano’s Model of Customer Satisfaction into Quality Function

Deployment.Technovation. 18, 1: 25-38.

Sauerwein, E., F. Bailom, K. Matzler and H. H. Hinterhuber. 1996. “The Kano Model: How to

Delightyourcustomers”. International Working Seminar on production economics, Austria, 19-23.313

-327.

Sorawit Khammok. (2015,August17). Organic Product. Retrieved April 3, 2022, from

http://flkhammok.blogspot.com/

Steve Ungvari. (2020, November 20). TRIZ Within the Context of The Kano Model or Adding the Third

Dimension to Quality(Online) Retrieved April 10, 2022, from

https://triz-journal.com/triz-within-context-kano-model-adding-thirddimension-quality/

Tanagorn. (2018, May 21). What is SEO?. Retrieved April 11, 2022, from

SEO คืออะไร? อธิบายง่ายๆ ให้คนไม่รู้เรื่องอ่านรู้เรื่อง

Theory of Love. (2021,June23). Hair loss problem. Retrieved April 14, 2022, from

http://theoryoflove.space/3806-2/

Viorganic. (2018, May 1). About Organic (Online). Retrieved April 16, 2022, from

http://www.viorganic.com/about-organic.html

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Appendices

15

Questionnaires for sample interviews

Questions in the interview of the sample group who use organic shampoo but still suffer from hair loss

use the information obtained from the analysis interview And used to think of strategies in various

marketing planning. to meet the needs of customers as much as possible

Issue 1: The behavior of the sample group towards purchasing shampoo to reduce hair loss.

Question 1: What products have you used before? What brands are there to solve hair loss problems?

And what factors affect the purchase of that brand?

Question 2: What is your current brand? Why did you choose this brand? And buy from which channel?

Question 3: How do you primarily find information about hair loss products?

Issue 2: Marketing mix factors (4P’s) that the sample group takes into account when choosing a shampoo

to reduce hair loss

Question 4: If you were to buy a hair loss shampoo, which factors would you choose from?

Question 5: Which product-related factors influence repurchase?

Question 6: What is the approximate price of hair loss shampoo that you think is reasonable?

Question 7: What online marketing promotion activities would you like to have?

Question 8: What motivates you to try new brands you’ve never bought?

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