S-Cart - Background of Company

1.0 Introduction to the Company

1.1 Company Background

K-Trend would be a new start-up company, founded by Koh Peik See and Khoo Wai

Mun. It will be located at an office space, 580 square feet, in Suntech, Bayan Baru, Penang. KTrend will plan to register as a company in 2011. K-Trend consists of a balance management

team with skills and knowledge in handling different tasks from different departments.

S-Cart - the intelligent self-checkout trolley will be the first product that K-Trend would

invest in. The idea was a result from the analysis of the growth rate of hypermarkets in

Malaysia, environmental needs ("Go Green" Campaign) and potential customers' needs. It is

hoped that S-Cart will bring added value to the shoppers and the hypermarket management in

terms of performance and cost. In order to ensure S-Cart provides added value to the customer

and the shopper, research conducted to get feedbacks from customers and shoppers was used to

evaluate the hypermarket customer satisfaction rate and acceptance of the S-Cart idea

1.2 Business Intent and Clear Indication of Intended Business

Activities

As a start-up business, K-Trend would focus on the retail industry by designing

solutions for them through research on market opportunities as a mean to further enhance

product design. Currently K-Trend is focusing on feasibility study for the business. Based on

the business feasibility study, it has been found that the cost to introduce S-Cart is still high in

year 2010. This is due to the costs of RFID tag (current price is at RM0.35 per tag). According to

Neelima Sagar (2009), the adoption of RFID in retails sector would increase in near future (2011

& 2012) while Ari Juels (2004) forecasts that the price of RFID tag would drop to RM0.16 in

next 2 years. Meanwhile, RFID tags would be widely used for each of the product in

hypermarkets. Based on the indication, K-Trend decided to introduce S-Cart in year 2011.

Hence, there is no funding is required in year 2010, and hope to acquire funding in year 2011.

K-Trend would design products for mini markets or hypermarket throughout Malaysia.

For maximizing on company's revenues, K-Trend would outsource its development of prototype

to China. The main reason for outsourcing to China is due to the fact that China offers the

lowest costs in terms of manufacturing and has massive skilled technology resource pool. In the

future, most of K-Trend's product designs will be evaluated before outsourcing to Asian

countries, whereby a marketing team would be in-charge of marketing and opportunities

research to further expand the business revenues.

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The concept of S-Cart is formed through research carried out on market needs,

environmental needs and the needs of the current trend in shopping. K-Trend is taking the

opportunity to design a solution for hypermarkets in Malaysia and also a solution for consumers

to have a pleasant shopping experience. It is hope that, the availability of S-Cart will enable

shopping convenience for Malaysians with population size of 27,730,000 throughout all

Malaysia cities.

Few business activities are involved, including market research, product design,

prototyping test, quality check, marketing programs and after sales services. From the initial

stage, K-Trend would do some market research through surveys and interviews, to acquire

potential customers before proceeding to develop S-Cart. 10

The development of S-Cart activities is shown in Figure 2.1:

Figure 2.1: Activities involved in the development of the S-Cart 11

1.3 Growth Strategies

Competitive Strategies: K-Trend would be sustains itself in the competitive

environment by using Michael Porter's competitive strategies. There are three approaches to outperforming other competitors in the industry namely, overall cost leadership, differentiation, and

focus. (David A.DeCenzo & Stephen P.Robbins, 2005, pp. 105)

Cost Leadership: K-Trend would offer the lowest price of products and services to compete

with competitors. To be lowest price leader, K-Trend would price the products lower than the

competitors about 3% -5 %.

Differentiation: Product uniqueness is a value-added feature to the consumer. It is evaluated

and analyzed from the competitors' products. K-Trend would then design solution for potential

customer which will be unique when compared to the competitor's existing product.

Focus: Target on specific niche market will be based on the needs of the current trend and the

environment, as K-Trend is focused on designing solutions specifically for the retail industry,

including mini markets, supermarkets and hypermarkets in Malaysia.

To sustain itself in the competitive environment, K-Trend plans to follow a few strategies:

1. Comprehensive study on customer behavior before