ChoiceSticks
Corn-E
Solution for substituting disposal wooden chopsticks
Florence Fok
Xxxxxxxx
5/28/2012
ChoiceSticks
Table of Contents
EXECUTIVE SUMMARY ....................................................................................................................................... 1
BUSINESS IDEA ...................................................................................................................................................... 2
PROBLEM ............................................................................................................................................................. 2
SOLUTION.......................................................................................................................................................... 2
PRODUCT CHARACTERISTICS ................................................................................................................... 2
MARKET POTENTIAL .......................................................................................................................................... 4
USERS .................................................................................................................................................................... 4
CUSTOMERS ...................................................................................................................................................... 4
SIZE OF THE MARKET .................................................................................................................................... 4
GROWING MARKET SHARE IN THE FUTURE ....................................................................................... 4
DIRECT COMPETITORS ................................................................................................................................. 5
SWOT ANALYSIS .................................................................................................................................................. 6
STRENGTH ......................................................................................................................................................... 6
WEAKNESS ......................................................................................................................................................... 6
OPPORTUNITY ................................................................................................................................................. 6
THREATS ............................................................................................................................................................. 7
MARKETING PLAN .............................................................................................................................................. 8
FINANCIAL PLAN ................................................................................................................................................. 9
CAPITAL INVESTMENTS ................................................................................................................................ 9
FINANCIAL FORECASTING .......................................................................................................................... 9
APPENDIX ............................................................................................................................................................... 9
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EXECUTIVE SUMMARY
Choicesticks are the environmental friendly disposable corn-sticks that promote social responsibility. Recently, there are news articles about the amount of wooden chopsticks disposed in Mainland China and the amount is unbelievably high. Wooden chopsticks are usually made of bamboo or wood, it is not environmental friendly to use these disposable wooden chopsticks, cutting down of them bring many harmful impacts such as desertification, global warning, silting and greenhouse effect
Choicesticks are environmentally friendly because they are made of corns that grow faster than trees and bamboo..
Using of corns will cause limited impact on the environment.
Choicesticks can be dissolved easily into the soil.
Choicesticks give you a choice to be environmentally friendly. Choicesticks is better even in terms of hygiene when compared with the traditional chopsticks and disposable wooden and bamboo chopsticks. They do not have harmful chemical and it can also act as fertilizers of plants after being used because they can be dissolved within a week. Traditional chopsticks are reused for many times and the level of hygiene is poor. Wooden and bamboo chopsticks are often being blamed for using toxic chemicals such as using sulphur for disinfection. Choicesticks give you a choice of good hygiene.
(Summaries for potential market and marketing plan etc are intentionally hidden)
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BUSINESS IDEA
PROBLEM
Disposable wooden chopsticks are being widely used in Asian countries and a huge amount of these chopsticks is consumed every year. According to a recent news article (大公報 2007-07-23
C04), around 800 billion pairs of chopsticks were used and disposed per year in China. If these chopsticks are linked together, it is equivalent to 42 times the length from the Earth to the Moon. This is an unbelievable news in terms of our treatment toward the environment. Tones of woods and bamboo were used to produce these chopsticks and millions of trees and bamboo plants were cut for the materials. Reusable chopsticks may help to release the pressure on the extinguishment of wood; however, the convenient and hygiene issues make it difficult to totally replace disposable chopsticks by re-usable chopsticks.
But reusable chopsticks are just washed with water and may become the
breeding ground for germs. There is an urgent need to find a substitute for disposable chopsticks before we receive warning in terms of the scarcity of wood.
SOLUTION
Choicesticks would be a good solution and substitute of those disposable wooden chopsticks.
Choicesticks are made of corn that grow much faster in the field and harvest in 6 months, though it is preferred to have alternate plants with purpose for the rest of the months. According to the news article (大公報 2007-07-23 C04), those wood used to produce disposable wooden chopsticks needs around 40 years to grow. Compared with wood, corn is certainly a better material even with a standard harvest on a yearly basis.
PRODUCT CHARACTERISTICS
Choicesticks are made of corns, which are environmental friendly, hygienic as well as recyclable.
Choicesticks are environmentally friendly in a sense they can substitute wood and reduce solid waste.
In terms of hygiene, Choicesticks is hygienic in a sense it needs not use toxic chemicals such as Sulphur to disinfect them. Choicesticks can also be dissolved easily and act as necessary nutrients for plants.
These features give Choicesticks a secondary usage as plant fertilizers. After finishing the lunch boxes,
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A recycling system will also be established for Choicesticks for being plant fertilizers. Certain amount of refund will be given to the restaurants that support recycle programme.
Once the
Choicesticks are collected, they will be grinded into powder as soil fertilizers to be sold to farmers.
Many restaurants in Hong Kong such as Genryolcu Sushi, Genki Sushi and most of the restaurants in
Asia and China use disposable chopsticks. When the recycle programme is held, we can collect huge amount of used Choicesticks and grind it into valuable fertilizers.
A labeling system will be used to support the recycling system. Restaurants using Choicesticks and supporting our recycling programme will be given a label (Last Page of Appendix) to stick at their front doors. If the customers see this label, they will know that the restaurants are environmentally friendly ones and provide hygienic chopsticks that give them confidence and goodwill toward the restaurants.
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MARKET POTENTIAL
USERS
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CUSTOMERS
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SIZE OF THE MARKET
In 2006, Japan consumption of an average of around 22.4 billion pairs of both wooden and bamboo chopsticks per year, of which 99.1% are imported from China (Appendix 5.1). China is certainly the world of factory of producing most of the consumption of chopsticks in the world.
China has
produced 24 billion pairs of wooden disposable chopsticks and 6 billion pairs of bamboo disposable chopsticks per year for export. For internal consumption, China has produced 25 billion pairs of wooden disposable chopsticks and 7.2 billion pairs of bamboo disposable chopsticks. So, it can be assumed that the total consumption in the world to be produced is approximately 66.2billion pairs of chopsticks of either kind. Of which, the total annual consumption for disposable chopsticks other
China is around 30 billion pairs. With this existing market, if Choicesticks can take 0.5% of the target market, excluding China, we will have 150,000,000 pairs of sales per year. More importantly, the size of this market is predictable and quite stable in this mature industry.
GROWING MARKET SHARE IN THE FUTURE
The market share of Choicesticks in the relevant industry will be growing in the future with the continuous promotion of environment issue. Incentive of people to support environmental friendly products shall be increasing in the foreseeable.
It is easy to forecast that the market share of
Choicesticks will be increasing at a fast pace, especially after the 4th year, when the brand name is built and become the common chopsticks being used in restaurants. It is expected that Choicesticks will have 5% to 10% market share of the target market excluding China, which is equivalent to 1.5 to 3 billion pairs per year.
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DIRECT COMPETITORS
Disposable wooden chopsticks and reusable chopsticks are obviously the direct competing products with Choicesticks. Disposable wooden chopsticks have an advantage of being lower price than Choicesticks; however, they are not environmental friendly and hygienic when compared with
Choicesticks. Disposable wooden chopsticks are made of wood which takes 40 years to grow and deforestation will cause lots of environmental problem such as desertification, global warning, silting and green house effect. Disposable wooden chopsticks are often blamed for its poor quality, too.
Many of them use toxic chemicals such as using sulphur for disinfection, and these chemicals will affect the health of human beings.
For Choicesticks, it is environmentally friendly since corns can have a harvest on a yearly basis and cutting down of corns will not bring harmful impacts on the environment. Although Choicesticks shall have a higher cost to restaurants, it is still worth unless restaurants place no emphasis on social responsibility as well as environmental protection. For reusable chopsticks, they are believed to be even more environmental friendly and cheaper than Choicesticks. They can certainly be reused for many times by simply washing them after use. However, according to an article (http://news.sina.com
2007-11-10), washing reusable chopsticks indeed waste a huge amount of water and cleaning chemical.
Not only have that, reusable chopsticks are not convenient and people seldom brought their own chopsticks to restaurants. Same as lunchbox, people seldom bring their own lunchbox to restaurants for meals to go. Convenience is a critical issue in our society, at least in the existing stage. It is not expected that people will bring our own lunchboxes and cutlery for meals in the foreseeable future.
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SWOT ANALYSIS
STRENGTH
Choicesticks has applied Registration of Design in the Intellectual Property Department of HK.
The Designs Laws in HK protect the design of the appearance of products. Though the registration of the design does not protect the “way” the product is made, it protects the owners from having others to manufacture, import, use, sell or hire the design products. The protection is renewable on a 5 year basis with the maximum period of 25 years.
Same as music, books and articles, many products and designs are easy to be copied to a certain extent in terms of ideas and words. But the copyright laws can help protect the originators from preventing others to copy. Like DVD players, the way of making Choicesticks is not a secret. But the
Designs Laws in HK protect the originators from others to copy. It is believed that the idea and concept of Choices are good, and it certainly needs to have some form of protection.
WEAKNESS
The management team of CORN-E has no experience in manufacturing chopsticks. The methods of producing such low-priced items were learnt through research. None of the stakeholders has experience in producing chopsticks. However, it is believed that the production of Choicesticks can be sub-contracted to chopstick manufacturers.
The process of making Choicesticks shall be
comparable to making wooden or bamboo chopsticks except the raw materials.
OPPORTUNITY
Unlike the good old days, the world is getting more concern on environment. The side-effect of disposable wooden or bamboo chopsticks is highlighted to a great extent. The issue will only be even fiercer since the wood and bamboo did take tremendous time to grow. In China, the production of wooden chopsticks has used up forest resources about 5,000,000 m2, which is 18% of the whole forest resources used per year. By using our product, the problem of desertification, air pollution problem and global warming can be eased. Moreover, the China Chopsticks Organization also mentioned that it is difficult for countries to recycle disposable chopsticks. Even for Japan, their recycle plan is only on
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THREATS
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MARKETING PLAN
PRODUCT
Choicesticks are corn-made chopsticks being packed in a plastic bag on a per pair basis. The cost of such plastic bag per disposable chopstick is around HK$0.06 per pair. Though the market is optional for buyers to purchase disposable chopsticks with or without plastic bags, Choicesticks have no such option. The reason is that one of the key features of Choicesticks is hygienic. Choicesticks will be packed in a vacuum bag even at an additional cost. Choicesticks will also be sold at a price higher than the traditional wooden and bamboo chopsticks.
PRICE
For the wooden chopsticks, the market price is HK$0.25/pair and our Choicesticks which is made by corn will be set at a price of HK$0.3/pair. Currently, there is no similar product under the same raw materials and Choicesticks will be considered unique. The price is therefore set at a premium. It seems that there is an increase in cost for restaurants;. Each order will be set at 1,000 pairs at a price of $300.
PLACE
Instead of selling directly to users, Choicesticks will be landed at restaurant groups like Genryolcu
Sushi, Genki Sushi, Maxim, Café De Carol and Fairwood etc. Those fast-food shops demand stable quantity of disposable chopsticks and they can replace the order with Choicesticks. It also saves time in penetrating the market when compared to visiting shop by shop. Once the fast food shops are penetrated, Choicesticks might step further of being sold in retail groups like JUSCO.
PROMOTION
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FINANCIAL PLAN
CAPITAL INVESTMENTS
According to our financial statement, HK$2.5 million is needed for implementing Choicesticks project; this amount includes our capital investment which is over our minimum capital needed. As our
Choicesticks are made in China that uses the existing machine, we can save the cost of buying machine; therefore our capital expenditures can be lowered. The structure of the deal can be discussed and
CORN-E is open for ways of cooperation.
FINANCIAL FORECASTING
Normal Scenario – Year 1
Normal Scenario – Year 2
Normal Scenario – Year 3
