2 Okt 2022

ENTREPRENEURSHIP

 




TABLE OF CONTENTS

 

TASK 1. 4

1.0      INTRODUCTION.. 4

2.0      SOURCES OF INNOVATION IN JACK FURNITURE. 4

3.0      IDENTIFICATION AND DISCUSSION ON BARRIERS TO INNOVATION IN JACK FURNITURE.. 6

4.0      RECOMMENDATIONS. 8

4.1     Communication of the innovation strategy. 8

4.2     Cascade workshops for active employee involvement 8

4.3     Innovation Crash Courses. 9

5.0      CONCLUSIONS. 9

REFERENCES. 10

TASK 2. 11

1.0      EXECUTIVE SUMMARY.. 11

2.0      COMPANY BACKGROUND AND PRODUCT. 11

3.0      MARKETING.. 13

3.1     Product Description. 13

3.2     Target Market 14

3.3     Target Market 15

3.4     Marketing Strategies. 16

4.0      FIRM AND MANAGEMENT. 17

4.1     Organizational Chart 19

4.2     Man-powering Plan. 19

4.3     Incentive. 20

4.4     Schedule of Renumeration. 21

5.0      FUNDING REQUEST. 21

5.1     Financial information. 21

5.2     Operation Cost 22

5.3     Operation Budget 24

6.0      CONCLUSIONS. 24

 

 

 

 

 

 

 


 

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.

 

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