MA_ITB PEAK CLEAN STUDY ANALYSIS

Peak Clean

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1Peak CleanSWOTStrengthLeading player in vacuum cleaner market, holding 35% of total volume salesIonic energy-efficient with stunning design The most innovative company with standard vacuum cleaners WeaknessProduct portfolio only consists of cylinder, stick and handheld vacuum cleaners Opportunity Strong brand image and wide geographical presenceConsumer s concern of vacuums Design, color,Low noise and energy EfficiencyThreatMarket shift towards robotic vacuum cleaner manufacturer What is Peak Clean?SWOT Biggest holder of vacuum cleaner market share (35%)

PeakClean product consists of cylinder, (75% of sales, profit margin 5%) stick and handheld (17% and 8% of sales, 9% profit margin)

Had a strong brand but threatened by the robotic vacuum cleaner manufacturer

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Product AnalysisCylinderHandheldStickUprightWet&Dry Standard type

Easy to use for people who new to this kind of technology

Not the most simplest product on market Efficient power

favored by parents of toddler and seniors

served as a second vacuum cleaner RoboticLight and efficient

powered by rechargeable battery

Quick cleaner but not as clean as handheld Like Stick but bigger, heavier and more noisy

Use only at big apartment

Cheaper than stick and cylinder

only favored by small group of peopleSpecialized cylinder: wet spills

Big size, noisy and not efficient in energy usageMore efficient

used as second vacuum cleaner due to its cleaning ability

Environmental friendlyWhats in the market?

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Market AnalysisPeakeven Negative population growth Low Inflation + unemployment rate : good standard living Market for traditional vacuum will declining at future Robotic vacuum cleaners growth in 2013 : 150% Loves Innovative ,stylish and environmental friendly product Developing market Market shifting towards higher standard living Market for vacuum cleaner will increasing at future Brand is relevant for consumer, however it has to be followed by the quality of product (design and innovation)Peakland

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Data of 2013Data on PeakCleanProduct (X1000)PriceAverage PricePercentageCylinder163120.5031121.951240%Handheld1827.3888929.4117653%Stick36116.1389113.207534%

CylinderHandheldStickWhat is Going on 2013? Based on data, we can summarize :

Robotic vacuum cleaner shift stick vacuum market as the second vacuum cleaner category

Consumer buying power will increase as its predicted that GDP per capita will increase up to 9346 PMU with population up to 9.4525 Million

Consumer start moving from traditional vacuum to the higher technology

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From the data market share volume and unit sold, we get the unit sold/company. By dividing revenue with each product unit sold ,we get the price per our product. Then, we estimate the average payroll and the COGS per unit sold. From the average data, we can estimate the total payroll and the total COGS for next period with our market target. Average COGS for robotic product is 1.5 times of the average COGS of other product.

5Due to the big potential that Robotic vacuum cleaner has offer, We will employ a group of scientist to combine our cylinder technology with robotic technology in order to make more advance and clean robotic vacuum cleaner with sophisticated designOur Grand Strategy : Hire a Team Scientist

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Target (Peakeven)

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Strategy (Peakeven)Year 1Develop Cylinder product line and enhance the marketing efforts to promote the environmental friendly featureYear 2Launch our environmental friendly robotic vacuum cleaner, Enhance the marketing effort trough environmental friendly robot mascot Set the lower- than- market- forecast price for robotic vacuum cleanerYear 3If Our Robotic products are welcomed by market, we will increase the add on . Otherwise , we will decrease our price unit with the same sales target as previous year After 2 years since our Robotic launching, were ready to hold 30% of market share by maintaining out brand and innovative products which are economical and environmental friendlyYear 4EBITDA: 4502.86 k PMUEBITDA: 6939.03 k PMUEBITDA: 9535.12 k PMUEBITDA: 5513.91 k PMUOr 9053 k PMU

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Goal: focus on market share (capture market share as we diverse our product)As the development of our ionic energy-efficient and stunning design stick had finish, it will be our advantage to win over market share at PeakLand by using Blue Ocean Strategy which mean differentiation and low cost.Peakland

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What can we infer: Due to cheap price of cylinder from peakland, we could export from peakland to peakeven in order to make our product more competitive in term of priceOn the other side, the robot price is quite high at peakland so we could import them from peakevenConsidering forward integration, which mean to Acquisition The Distributor (PeakLand and PeakEvent)

Peakland

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Why dont we choose other strategy?Very tight budget

Adding another big cost after the last innovation expense will hinder the trust from the stake holder

The difference of company ideology between Peak Clean and iClean4you, makes it harder to approach

The M&A process need time approximately 1 and 2 years and the success wont be guaranteed. Lost of sense of the real market competition

We will lost the market share as the market development for traditional vacuum are standard

Demands for robotic vacuum cleaner are increasingCannot estimate the money and time will be needed.

Will be a distraction to our current productivity

Not enough experience to develop on our ownAcquiring the competitorIgnore the Robotic Vacuum prospectTry to develop On our own123

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