TABLE OF CONTENTS
2.0 SOURCES OF INNOVATION IN JACK FURNITURE
3.0 IDENTIFICATION AND DISCUSSION ON BARRIERS TO
INNOVATION IN JACK FURNITURE
4.1 Communication of the innovation strategy
4.2 Cascade workshops for active employee involvement
2.0 COMPANY BACKGROUND AND PRODUCT
TASK 1
SOURCE OF INNOVATION IN
JACK FURNITRE SDN BHD
1.0 INTRODUCTION
Jack Furniture Sdn Bhd, founded in 2007 is a specialized integrated
company which designs, manufactures and exports wood-based furniture. The
products are mainly dining sets, living room sets and bedroom sets. To meet
changing trends and market demands, the company are constantly improving and
diversifying their range of products and designs and additionally offer OEM
services to produce customized and other special requirements. To expand their
range, the company also source a variety of well-made furniture like sofa sets
and metal-base bedroom sets at attractive and reasonable prices.
The company 50,000 square feet plant is located in the town of Muar in
the state of Johor, well known as the furniture capital of Malaysia. Sales
turnover exceeds RM20 million (US$6.6 million) per year supported by a
workforce of 200 employees.
Jack Furniture offer the flexibility to customers to choose and mix from
their range of 500 items from different furniture categories. Minimum order is
1x40GP and delivery leadtime is 3 weeks.
The company's exclusive designs and quality finishes at competitive
prices has won them loyal customers from Europe, South America, the Middle
East, Australia and Asia.
2.0 SOURCES
OF INNOVATION IN JACK FURNITURE
Innovation has become the buzzword of the
industry in the 21st century. From business to other areas everywhere
innovation is being talked of. Several emerging businesses have proved that
innovation can be the way to the top. From Amazon to Google and Facebook, all
have proved it. Many times people use
the terms innovation and improvement interchangeably.
However, the two terms vary in their
meaning. The difference between improvement and innovation is the same as that
between evolution and revolution. Improvement is like making improvements to an
existing product or service to help it better respond to the market demand.
However, such improvements are not always
revolutionary. Improvement is just a small part of innovation. Innovation is a
much bigger term that encompasses several more things. Innovation includes
differentiation. It also means superior returns as well as improbability of
imitation. While improvements can provide a competitive advantage in the short
term, there is the danger of their being imitated by the competitors.
An innovation is a far deeper process than
simply improvement and the change it brings is also far long lasting and full
of impact. However, several times the question has been asked that where does
innovation emerge from. There can be several answers to the question since
there can be several sources of innovation.
The innovation activity of the Jack
Furniture is formed by the combination of their innovative activities. In its
formation, there are a number of factors such as: size of the enterprise (innovation
activity increases with increasing number of employees); Age of machinery and
equipment (innovation activity is growing in enterprises with newer machinery
and equipment); Education and staff qualification (innovation activity depends
on the company culture and the propensity for innovation); Access to finance
(innovation activity is increasing by facilitating access to finance), etc.
Jack Furniture show their innovative
intentions in the following categories:
·
Product innovators - they find
expression in creating sophisticated furniture, new to the enterprise;
·
Process innovators - new
production methods;
·
Organizational innovators - new
methods of work organization;
·
Marketing innovators - changes
in aesthetic design;
·
Eco-innovators - using procedures
to reduce the harmful impact of production, including reducing or replacing
materials with safer substitutes
Regarding the innovation in Jack Furniture,
it can be said that a large part of the Malaysia factories in the furniture
manufacturing sector are competitive on the market because of the still low
cost of the final product. However, most of them feel the economic need to
invest in innovation as a major way to increase their competitiveness. Their
needs are primarily related to innovations that improve the efficiency of
internal business processes. Successful innovations bring higher revenue,
increased sales or additional added value of products. A great deal of the
companies have financial support for investing in such activities.
The main barriers to the implementation of
such projects are several: a disconnected "science-business" link, a
lack of incentives for commercialization of scientific results, a poorly
developed technology transfer infrastructure. Bulgarian companies have a low innovative
culture. In most cases, they link innovation to new technologies and do not
give enough attention to the importance of process innovation. In foreign-owned
enterprises, there is some dynamics in the implementation of innovation.
3.0 IDENTIFICATION AND
DISCUSSION ON BARRIERS TO INNOVATION IN JACK FURNITURE
Innovative performance varies from firm to
firm and is influenced by internal, external, stimulating and restrictive
factors, which exert a significant impact on the design, implementation and diffusion
of innovation. In this context, we define the barriers to innovation as
internal or external factors to a firm that decrease or even prevent the firm’s
propensity to innovate, reduce its ability to introduce and sustain a new or
significantly improved product or process, affect innovative activity, prevent
the achievement of expected
results and impact
business performance.
Almost all furniture companies in Malaysia
shares the same barriers of innovation in their business. For example, the diminishing
supply of rubberwood (Hevea brasiliensis) and the increasing labor-cost, even
among foreign workers, has seriously impacted the low-cost stature of the
furniture manufacturing industry in Malaysia. An increasing proportion of
hardwoods from North America and Oceania are being imported into the country to
off-set the short supply in rubberwood, especially among furniture
manufacturers. In 2016, a total of 417,000 m3 of wood materials were imported
from other countries to cater to the growing demand for wood materials from the
furniture industry. From a workforce perspective, around 62% of the workers
engaged in the furniture industry in Malaysia are foreign-contract workers who
adversely affect skills retention and innovative capacities within the industry.
Against the background of declining comparative advantage, the furniture
industry needs to boost its competitive advantage in order to remain globally
competitive, by moving up along the value-chain through innovation and
value-added manufacturing.
Other than that, the complex process and
high implementation cost have often been cited as the main reasons that deter
many furniture producing nations from adopting forest resources certification.
The direct cost of forest management certification can add up to $1.50/m3,
depending on the size of the certification unit and local operating conditions,
while the chain-of-custody (CoC) can chalk up another $1.20/m3. Inevitably, it
is no surprise that the adoption of forest certification and CoC has been relatively
slow within the Malaysian forest industries, as the green premium price tag
offered for certified wood products appears to be much lower than anticipated
in the global market place. Further, most furniture manufacturers are also
reluctant to make the high initial investment to obtain the certification, as
it is perceived that the economic returns on such investment is marginal.
Furthermore, the non-binding special
privileges enjoyed by the states of Sarawak and Sabah in East Malaysia, as
stipulated in the Federal Constitution also hinders the efforts by the
Malaysian Timber Certification Council (MTCC) to implement the standardized
MyTLAS (Malaysian Timber Legality Assurance System) throughout the country.
Since forestry is a state matter under the Federal Constitution, the respective
state has the liberty to either adopt or discard any related federal
initiatives to suit their respective needs. In this context, the forest
certification efforts in Malaysia have been negatively impacted by the reluctance
of the East Malaysian states to comply with the federal government’s
initiatives.
Consequently, CoC adoption among furniture
manufacturers in Malaysia is relatively low. Therefore, the promotion of
Malaysian furniture as being green and eco-friendly is sluggish and cannot be
translated into a potent marketing tool to enhance product value.
4.0 RECOMMENDATIONS
Creating an innovative business culture
will ensure everyone in the business is working towards improving business
practices, efficiency and performance.
Thus, in this chapter this paper will
suggest on how to improve innovation culture among the employees in Jack
Furniture.
4.1 Communication of the innovation strategy
The innovation strategy sets the direction
and framework conditions. The expectations and goals regarding innovation
should be clear to every employee in Jack Furniture. Therefore, a first
important step is to communicate the innovation strategy across all functions
and hierarchy levels, for example by means of an information campaign.
4.2 Cascade workshops for active employee
involvement
The communication of the innovation
strategy raises awareness, but is very one-sided. Even more important, however,
is the dialogue with employees and their involvement.
Through cascaded workshops on innovation
across all functions and top-down through all hierarchy levels, the employees
are picked up. Jointly, initiated by the manager, it is to be defined,
·
what innovation means for their
field,
·
what role they play in the
innovation process and
·
what they can contribute to the
success of innovation.
·
In the best case, this results
in role models and action plans or influences the job descriptions.
4.3 Innovation Crash Courses
Everyone talks about innovation, but often
employees can't explain what that means for the company and for them and what
they can contribute. Being creative and innovative also requires information
and skills. Here, broad-based crash courses on innovation are recommended, in
terms of content and scope adapted to the needs of the employees. For example,
the content and scope of a production worker's information needs are different
from those of a group leader in marketing. Contents of the crash courses can be
for example:
·
Definition of innovation
·
How to get ideas
·
How and where to submit an idea
·
Innovation process - what
happens with an idea and what you can contribute yourself
·
Creativity techniques.
The optimum length should be between one
and three hours and reach and appeal to the widest possible audience.
5.0 CONCLUSIONS
Sources of innovation are often defined as
an impulse leading to undertaking innovative activities. It is important to
define the source of innovation because it determines the capacities the
company must have in order to timely implement indispensible innovations and to
achieve success in the market.
As discuss in this paper, sources of
innovation plays a important role in Jack Furniture. Furthermore, the
characteristics of the wood-furniture industry (e.g., less dynamic, low
technology
involvement, buyer-driven innovation and
lacking collective support from public and private institutions) and the
characteristics of SMEs (e.g., lack of capital, time and access to information)
might inhibit radical innovation conducted by the company.
However, there are many ways to fine-tune
the culture of innovation and make it positive. This does not always require
immense budgets and well-thought-out five-year plans with hundreds of measures.
Jack Furniture can also start small, harvest the first
"Low-Hanging-Fruits" and build on it.
REFERENCES
Akbar, F., Omar, A., Wadood, F., & Al-Subari, S. N. A. (2017).
The importance of SMEs, and furniture manufacturing SMEs in Malaysia: A review
of literature.
Cao, X., & Hansen, E. N. (2006). Innovation in China's furniture
industry. Forest Products Journal, 56(11/12), 33.
Ng, B. K., & Kanagasundaram, T. (2011). Sectoral innovation
systems in low-tech manufacturing: Types, sources, drivers and barriers of
innovation in Malaysia’s wooden furniture industry. Institutions and Economies,
549-574.
Ratnasingam, J., Chin, K. A., Latib, H. A., Subramaniam, H., &
Khoo, A. (2018). Innovation in the Malaysian furniture industry: Drivers and
challenges. BioResources, 13(3), 5254-5270.
Qiu, X., Cano-Kollmann, M., & Mudambi, R. (2017). Competitiveness
and connectivity in design innovation: a study of Norwegian furniture industry.
Competitiveness Review: An International Business Journal.
TASK 2
BUSINESS PROPOSAL
1.0
EXECUTIVE SUMMARY
The purpose of this business
entrepreneurship plan is as the first step as a module before starting a
business. This business plan is very important to a new company like Jack
Furniture because it may help us to maintain our business longer in the Malaysia
market.
The purposes of doing this business plan
are:
·
To show the financial strength
of the company especially when applying for loans and to convince the investors
towards providing funds or other financial institution.
·
To fulfill one of the terms and
condition that stated in ETR 300 project.
·
As a guide line for us in
setting, planning, managing, handling and controlling our business for day to
day management, budget, financial forecast, strategies, target market and even
long term goal.
·
As a master plan of an
organization that necessary to calculate the effectiveness on running such
business.
·
It is also prepared to state
clearly the information of the certain authorities’ parties to get permits or
other facilities in the mean of formation of a business.
·
This business plan can be
utilize to convince the suppliers the ability of paying back on credit and the
ability to carry out a project of services from customers or the tender board.
·
To improve any weaknesses arise
by comparing the actual performance of the firm with its master plan. It is to
see whether it is a favourable or unfavorable situation.
2.0
COMPANY BACKGROUND AND PRODUCT
Our company’s name is Jack Furniture. Our
business is focused in Muar Johor. We have registered our company on 12 January
2007. Our business start to move on 6 January 2007 and this date are same as
our company date of commencement.
Vision
Our vision is to be the only company is the
best in producing furniture base which manufacture and produce smart table in
this furniture industry particularly in domestic area .
Mission
Our first mission is to make sure that our
product will be available through all Malaysia. In addition, we know that
furniture is the primary elements which are more familiar nowadays. Besides
that, we hope we will be supplying furniture to the entire world soon besides
the best organization to manage the business. Lastly, to achieve customer
satisfaction by putting Customer's Priority First and build their trust.
Our business is provided the furniture
product based on good quality of materials. Our Smart Table consists of a few
compartments that can separate different papers that are use for different
purposes. We use glass as our material at the surface of the table to make it
transparent. We also provided other compartments under the glass.
There are a few reasons why we choose this
particular business:
·
The first reason is we want to
reduce the space we use on the table. This is to make sure our stuff will not
be messed-up.
·
The second reason is we can
keep our documents especially papers in efficient way. Thus, it is easier for
us to find the needed papers.
·
The third reason why we choose
this business is that we can refer to our reference books easily because our
table is transparent. We can place our books on the sliding wood which situated
under the transparent glass.
Below are diagram of our Smart Table
product:
Figure
1: Smart Table by Jack Furniture
3.0
MARKETING
Marketing can be defined as the activities
that are carried out systematically to encourage and increase sales of products
or services as long as the activities are in line with religious and ethical
practices. Marketing is one of important factors that can help the company to
increase the sales of its products. Consequently, this can transformed the
company’s profit to increase significantly. Besides that, the customers need
and want also can be fulfilling if the marketing project of a company works.
For example, variation of the company product can make the customer satisfied
and felt that their needs are fulfilled. The variation done by the company is
good marketing strategy because every customer has different taste and by doing
this strategy; this can increase the support from the customers to the company.
Thus, the company sales can be improved.
3.1
Product Description
Table
1: Product Description
|
Type of business |
Produce furniture (Table) |
|
Name of company |
Jack Furniture |
|
Name of product / Brand name |
Smart Table |
|
Colour |
·
Black ·
Brown |
|
Size |
(90cm x 78 cm x 123 cm) |
|
Target Customer |
·
Researchers ·
Journalists ·
Lecturers ·
Students ·
Officers |
|
Raw materials |
Wood - Acrylic plastic - Sliding door
lock - Paint - Screw - Drawer slide - Wooden stick |
|
Feature |
Modern design |
|
Design and Packaging |
Standard cartons with environmental foam Packing tape dispenser |
|
Price / unit |
RM172 |
3.2
Target Market
Target market was refers to a group of
customers or buyers with similar traits that the organization want to attract
through their product’s offering. There are several reasons why a business
decides on a specific target market. The first reason is that it is impractical
and impossible for a business to offer a product that can satisfy the needs and
wants of the entire population. The second reason is that most businesses
community has limited sources in terms of time. This limitation means that the
businesses community must focus its activities on attracting a core group of
customers. So, by producing this product will make the highest potential to
purchase the good or product offered. The existence of a target market does not
mean that the business should ignore the other groups of customers that exist
in the same market. These other groups may be the secondary market and may
bring income to the business. However, the main income is derived from the
primary target market. As circumstance, a business may also change its target
market.
3.2.1
Geographic
We have chosen Muar and Johor Bahru for our
business location base on a few aspects that has been considers which are the
infrastructure, the system of transportation and the environment. Furthermore,
the location is strategic because our premise located in the middle of routes
to north and south of the peninsular Malaysia. Our premise was easy to find
because it’s located near the highway and main road. In addition, all the
locations have become modern with the presence of many facilities for its
community. This gives advantages for our company to sell our SMART table in
Muar and Johor Bahru.
3.2.2
Psychographic
People will buy this SMART table to carry
out their works more easily, save their time and space. Our product is suitable
for people who are still studying or already working. Our unique table will
fulfill the wants of our target market because our table has the functions for
writing articles, journals etc. Therefore, a person who works in writing field
will get advantage when he/she using our SMART table to do his/her job.
3.2.3
Demographic
The main target market for our business is
the adult community especially officers, researchers, lecturers, journalist and
even students in universities and high schools. These people usually busy with
their paper work and some of them are too busy in handling their tasks. Their
papers and books are everywhere. These people are concern with their time. This
SMART table is not only for people from high class income but also for people
from middle class income. It is because the price of our table is suitable and
affordable to people with different level of income. Therefore, we are trying
to take this opportunity to capture them since our SMART table can help them to
solve the problems. Besides that, their needs will be fulfilled as they can
store and arrange their papers in a proper way and easy for them to do
research, write a journal and so on.
3.3
Target Market
Market size is the total potential purchase
that is expected from the target market. We had identified our target market in
Muar and Johor Bahru.
As for Muar, there are 53 industrial and
offices and 22 educational institutions in the area. The average number of
industry officers and people from educational institution who use the table to
do their job is 13250 and 19800 people respectively. We target 25% of people
from each of the category will purchase for the table per month.
As for Johor Bahru, there are 45 industrial
and offices and 10 educational institutions in the area. The average number of
industry officers and people from educational institution who use the table to
do their job is 11250 and 11100 people respectively. We target 25% of people
from each of the category will purchase for the table per month.
Total marketing size = RM 1 421 236 + RM
961 136 = RM 2 382 372
3.4 Marketing Strategies
We defined our product as a furniture
product. This is because our product is a table that has many advantages. It
means we sell furniture product to the customer. SMART table has a typical
characteristic for our company. This is because to make sure that our product
is in high quality. A few characteristics are:
·
Our product can fulfill the
customer’s need
·
Determination of the price that
appropriate with the quality of the product.
·
For the important of the
quality of the product, we use high quality materials.
·
Our SMART TABLE has a
compartment to store papers in a good arrangement
As a manufacturer, the best way to achieve
the target market is via pricing strategy. This strategy is very important to
achieve our sales forecast. The price that our company offers is cheapest and
we believe that customer is willing to pay for the price. The price that we
offered is economical depends:
Cost based pricing
Cost to make our product with sales pricing
that we offered is stable. It is because the raw material location is far from
our factory.
Price of SMART TABLE = cost + mark-up
= 121 + (42% X RM121)
= RM172
Promotion strategies are important in order
to inform our product to the customer. This is to make sure all the customers
know about Jack Furniture. To inform them that we make a product that has a
high quality and the pricing that offered are affordable.
As a new company, advertisement is an
important rule. To make sure that our product to be well known in market, we
have to plan a few systematic strategies that are:
1)
Personal sales
A salesman will promote our product face to
face with the retailer.
2)
Pamphlet
We distribute our pamphlets within the area
of our target market. Pamphlets are financially viable and sustainable,
convenient to carry around and to sell at readings and capable of being printed
to order, saving on storage costs.
3)
Advertising
Printed Media such as Magazines (Business
Magazine)
4)
Sales Promotion
We provide short term incentives or special
offer to encourage purchase or speed up the purchase decision.
Examples: - Free delivery service
– Discounts and allowances (Retailer)
4.0
FIRM AND MANAGEMENT
Operation unit is one of the most important
parts in the business organization because the through the operations of its
product it will lead to a business growth. From this operation of our business
company, we can also maximizing the profit gain.
All activities in this operation will be
done according to plan so that it will meet with our customer’s expectation. In
this term of office, we are ensuring that the production of our table will be
produced continuously to fulfill the increasing demand from public. This
operation states the information about the cost of product, salaries of
workers, operation flow chart, operation hours, operation budget and list of
suppliers for raw materials and machines.
In the operation unit, we applied a
systematic technique and management in order to ensure that the business will
be more efficient and effective in producing table. Therefore, it can fulfil
the demand for customers’ needs and wants by providing the best services to
them and indirectly the business can gain the optimum profit.
4.1 Organizational
Chart
Figure
2: Organizational Chart
4.2 Man-powering Plan
Figure
3: Man powering plan
4.3 Incentive
To upgrade our quality services at Jack
Furnitre, we have give incentive to our staff so that they can work more
efficiently and impressive consists to our mission and vision. The incentive
that we have been agrees to give to sour staff as follows:
1.
Working period Our
working period
is from Monday until Saturday and we spent Sunday for leaves. Our staff will
start work from 8.00 a.m until 4.00 p. m. It means that our staff duty for 8
hours including an hour for rest and pray.
2.
Annual leaves
The factory will
give annual facilities leave to our staffs.
3.
Medical leaves
We will only
give medical leave to staff after they get authentication or Medical
certificated from government or private hospital. Emergency leave only will be
given to staff that have an emergency case. It depend on the results that made
by administration.
4.
Maternity leaves
Maternity leaves
for women staff is about 60 days.
5.
Medical facilities
Companies will
recover the medical cost for all staff.
6.
Bonus
Bonus will be
given to all staff if business gets a maximum profit for that Particular Year
Bonus will be paid to all at the end of year with one month’s salaries payment.
7.
Allowance
Jack Furniture
will also give allowance such as transportation. It will be given to certain
staff based on the task that they have done.
8.
EPF
Jack Furniture
already contributes about 12 % to all staff from their monthly salaries.
9.
SOCSO
Our company has
prepared social safety policy (SOSCO) for all staff if they have got into
accidents while doing their work. About 2% will be deducted for SOSCO.
4.4 Schedule of
Renumeration
Figure
4: Schedule of remuneration
5.0
FUNDING REQUEST
Financial management is a decision-making
process concerned with planning, acquiring and utilizing funds. It can be used
as a statement to check and evaluate and organization is performance that is
crucial to its development, growth and survival. The financial manager is the
man or woman that is responsibility to in charge with the financial management.
5.1
Financial information
The estimated cost to start the business is
about RM 500, 000.00. The sources of fund are contributes from partners as
opening capital and loan from financial institution:
Figure
5: Financial Information
Contribution of the capital by the
partners:
Figure
6: Financial Information
5.2
Operation Cost
5.3
Operation Budget
6.0
CONCLUSIONS
We are grateful to finish this business
plan. We have gone through lots of new experiences and it is very beneficial
for all of us in participating in this business. We hope that our business will
be progressed smoothly in the future. Our target is that we want to achieve
high profit in the involvement of this business even though there are many
rivals exist. Unfortunately, with the good cooperation with all the
subordinates we manage to compete with the rivals as fair and square.
We also hope that with our dedication and
hard work, we will achieve our vision to become the only company is the best in
producing furniture base which manufacture and produce smart table in this
furniture industry particularly in domestic area. Before that, we should also
shows our effectiveness in doing our job and to make sure that our product will
be available through all Malaysia. In addition, we know that furniture is the
primary elements which are more familiar nowadays. Besides that, we hope we
will be supplying furniture to the entire world soon besides the best
organization to manage the business.
We will provide full responsibility and
commitment; there is no doubt that we will achieve all these things. We are
also encouraged to take any chance that directly or indirectly in order to
increase our business performance in the future undertakings.
