Business Idea Assignment:Producing Recyclable Face Mask At Low Price

Question

Task: This is a group assignment that builds on the work completed in Assessment 2.
The objective of Assessment 3 is to develop skills that enable you to evaluate which idea (from Assessment 2) has the highest chance of success, and to then prepare a pitch that presents a compelling business case to secure financial backing. This facilitates an appreciation of what potential investors will be evaluating before they commit to project investment. In summary, there are two parts to Assessment 3. The first requires the group to prepare a 1500-word business report that compares then selects which business idea to present from Assessment 2. The second involves everyone in the team pitching the idea to secure development capital. Each of these is detailed below:

Idea Selection (15%)
The structure of 1500-word business report should be set out as follows:
1. Idea Evaluation (Develop an evaluation framework to compare the ideas developed individually in Assessment 2)
2. Idea Selection (Describe and justify how the best idea was selected)
3. Improvements (Identify any gaps that need to be addressed before the idea is pitched to an investor)
4. Revised Business Model (Amend the business model canvas to incorporate the above revisions)
5. Cash flow projections (Prepare ‘best case’ and ‘worst case’ cash flow projections for the first two years. Remember to state your assumptions about the key drivers of cash flow in each scenario)

Answer

Introduction
The report analyzes the four types of different ideas generated in the previous assignment and evaluate it based on its potential demand and the chances of efficient and profitability it will offer to the customers and the business. Moreover, the report states the best idea that has been selected and the reason behind it. The report further suggests improvements that is needed in the selected idea along with cash flow projections in next two years.

Idea Evaluation

Table- Idea Evaluation
Source- Stevanovic, Marjanovic&Storga (2015)

Idea Selection
From the evaluation of the four ideas of launching a new and innovative product based on different factors such as choice, convenience, community, completeness, compatibility, coolness and customer’s cost it can be said that choosing reusable smart mask with changeable filters as the most convenient and profitable business option. The recycled face mask business idea chosen is seen to be high convenient and attractive for the user to be used without much training, unlike to other business ideas that requires some kinds of help. Further, it is seen that there is a huge urgency in using face masks among the population to fight the recent Covid-19 pandemic going on in the world. In such a period the use of mask has increased among the population along with the cost of purchasing such masks. Moreover, the changeable filter will prevent loss of breath or uneasiness that is caused by other disposable and non-disposable masks at similar or high cost. Feng et al., (2020) has stated that with the severe and acute risk of Covid-19 the guidelines have recommended the health care workers and general public to make use of the mask for their protection. This has led to an increase in the demand for face masks over the world. However, there are many nations that are avoiding the use of masks and asking people to only use it in time of limited supplies. Moreover, people and health workers are unable to wear masks for longer time due to the uneasiness it causes and difficulty in breathing. Such issues has further increased the emergency for producing smart masks that can allow timely ventilation with changeable filters and reused again and again and sold at low price. Moreover, most of the masks available in the market are disposable masks or reusable masks at very high price that becomes unaffordable for the public. Keeping these factors in mind it is highly beneficial to implement this business idea more than other innovative ideas that can be initiated in future as well. Moreover, with the spread of health risk and threat from such virus will make masks a habit for individual to adopt.

Improvements
The gap of sustainability can be addressed before the idea is pitched before the investor such as making use of recycled products. Sustainability is an important criteria to be considered and improved in the business idea of manufacturing smart mask because with the environmental damage taking place in the market it is important for any business idea to be environmental friendly and hold social responsibility. Sustainability can be added to the smart mask by using recycled plastic for face mask, which is yet another demanded product now.Improving based on sustainability will help the business to prosper easily over time. Plastics are a big issue now and taking an initiative to recycle plastic will be a great social responsibility. The plastic will be recycled and mix with cotton fibers to make the masks that are soft and long lasting unlike only cloth masks. The recycling initiative can be done with machines where the plastics will be recycled to be used in masks again and again. This will be the best way to reduce environmental damage caused by plastics and to come up with a sustainable product (Dezeen, 2020). Moreover, this will offer a better socially responsible investment for the investors to invest in this business idea.Aggarwal (2013) stated that sustainability effort has the potential of initiating positive performance of the company and attain high profitability. This is because it helps in the attainment of the trust of the potential customers, as the products are aimed to improve the quality of life of the people.

Revised Business Model
The successful implementation of the given idea and the changes suggested will only see few alteration in the business model canvas projected such as partners, activities, value proposition, resources and cost. The business will see an increase in its number of partners needed for the launch that is government. Support from the government will be effective help to the business in making their recycling plastic process plan successful. The activities for making the idea successful will now include recycling of plastic so that it can be used in the mask. The new sustainable mask will also help in adding a value proposition that is it does not get wet easily due to plastic. Moreover, now there will be addition of precious plastic machine as resources for implementation of the new idea. Now there will be addition of two new types of costs that is training and machine costs.

Cash Flow Projections for Two Years
Worst Case Scenario

The assumptions for worst case scenario cash flow is that the cost of salaries and benefits, maintenance and online marketing will increase in second year. Moreover, the company also needs to provide more discounts in the second year (Bidder & Dew-Becker, 2016).

Best Case Scenario
In best case scenario the assumptions are that cost of recycling machines, online marketing and maintenance charges will reduce and salaries will be same for second year (Ruback, 2010). Moreover, there will be no discounts given on product in the second year that will increase cash inflows.

Conclusion
In conclusion it can be stated that the business idea of producing recyclable face mask at low price will be one of the most effective idea in the given emergency situation. Moreover, with improvement of sustainability effort the product will become most efficient one to be launched in near future.

References
Aggarwal, P. (2013). Impact of sustainability performance of company on its financial performance: A study of listed Indian companies. Global Journal of Management and Business Research (C: Finance) Volume, 13.
Bidder, R., & Dew-Becker, I. (2016). Long-run risk is the worst-case scenario. American Economic Review, 106(9), 2494-2527.

Dezeen. (2020). Recycled plastic turned into face shields and hands-free door handles to fight coronavirus. Retrieved 15 May 2020, from https://www.dezeen.com/2020/04/08/precious-plastic-coronavirus-recycled-face-shields-respirator-masks-handles/ Feng, S., Shen, C., Xia, N., Song, W., Fan, M., & Cowling, B. J. (2020). Rational use of face masks in the COVID-19 pandemic. The Lancet Respiratory Medicine, 8(5), 434-436.

Ruback, R. S. (2010). Valuation when cash flow forecasts are biased. Harvard Business School Finance Working Paper, (11-036).

Stevanovic, M., Marjanovic, D., &Storga, M. (2015).A model of idea evaluation and selection for product innovation. In DS 80-8 Proceedings of the 20th International Conference on Engineering Design (ICED 15) Vol 8: Innovation and Creativity, Milan, Italy, 27-30.07. 15 (pp. 193-202).