Business Case - truongnhatbui/purifiers GitHub Wiki

  1. Market Situation The global air purifier market was valued at USD 6.3 billion in 2022 and is projected to grow significantly, reaching USD 13.4 billion by 2030, with a compound annual growth rate (CAGR) of 11.4%. Currently, HEPA air purifiers dominate the market. However, customers have identified significant shortcomings in existing HEPA purifiers, including limited filtration of VOCs, odors, and viruses, high maintenance costs, and noise levels. The growing awareness of air quality issues and health concerns—particularly related to allergens, VOCs, and viruses—provides a pressing market need for innovative solutions in this space.

  2. Market Opportunity The market opportunity lies in the unmet demand for HEPA air purifiers that address the key customer pain points of limited filtration capabilities, high maintenance costs, noise, and ozone generation. As consumers become more health-conscious, there is an increasing demand for purifiers that offer a comprehensive filtration solution, reduce maintenance costs, operate quietly, and avoid ozone emissions. Additionally, businesses are seeking efficient air purification systems for their workspaces. By addressing these gaps, Perfect Purifiers LLC (PP LLC) has an opportunity to capture significant market share in a growing industry.

  3. Envisioned Solution The envisioned solution is a new line of HEPA air purifiers that offers a more advanced filtration system, reduced maintenance costs, quieter operation, and ozone-free performance. The solution will include three models:

Basic Purifier: Reduced noise and ozone emissions.

Better Purifier: Includes improvements in motor strength and ozone reduction.

Ultimate Purifier: Includes enhanced HEPA filtration, noise reduction, ozone-free operation, and additional air freshener and cleaning options.

The team arrived at this solution through market research, customer feedback, and technical assessments, ensuring that each product feature addresses specific consumer pain points. This solution offers a comprehensive approach to air purification, making it more attractive than current alternatives that fail to meet customer expectations in these areas.

  1. Objectives and Assumptions Market Objectives:

Increase PP LLC’s market share by 10% within the first two years.

Expand revenue by 25% through new product offerings.

Achieve a reduction in product returns by more than 50% with the improved product line.

Business Assumptions:

The demand for improved air purification technology will continue to grow as health concerns about air quality rise.

The new line will capture interest from both individual homeowners and commercial businesses.

Product pricing will remain competitive within the market, while still ensuring profitability.

  1. Costs Product Solution Costs:

Initial Prototype Development: $80,000 for three distinct prototypes.

Production Costs: Estimated at $150,000 for full-scale production of the new purifier line.

Marketing and Launch Costs: Estimated at $100,000 for marketing, advertising, and launch events.

Required Resources:

Engineering Team: Required to implement product improvements and design.

Marketing Team: To develop promotional campaigns and launch strategies.

Manufacturing Resources: For scaling production and managing supply chains.

Beta Testing Resources: For product validation and customer feedback.

  1. Strategic Alignment This product solution aligns with PP LLC’s strategic goal of expanding its market share by introducing an innovative air purifier line that addresses the specific needs of consumers and businesses. By introducing new features, improving filtration capabilities, and reducing maintenance costs, the product supports the company’s vision to become a leader in the air purification industry. The improved product line also aligns with PP LLC’s long-term goal of enhancing customer satisfaction and loyalty through innovation.

  2. Timing Project Timing:

Design Phase: January to February

Development Phase: March to April

Beta Testing and Launch Preparation: May

Launch Date: June 1, aligning with the peak season for air purifiers due to seasonal health concerns and environmental conditions.

The timeline is strategically set to meet market demands during the summer months, when air quality concerns are most prevalent.

Investment Strategy:

Initial Investment: $30,000 to cover the costs of team resources and product development during the Conceive and Plan phases.

Long-Term Investment: Additional funding of $150,000 for production and marketing to ensure a successful product launch and subsequent scale-up.

  1. Cost vs. Benefit Analysis Costs:

Initial product development and prototyping: $80,000

Production and marketing for initial launch: $250,000

Total costs for the first year: $330,000

Benefits:

Projected annual returns of $200,000 per product model for two years.

With a projected market share increase of 10% and revenue growth of 25%, PP LLC expects an increase in annual revenue of approximately $1.5 million from the new line.

Expected ROI: Over 200% in the first two years.

If the company does not proceed:

PP LLC risks losing ground to competitors in a growing market, missing out on a lucrative revenue opportunity.

Consumer dissatisfaction with existing products could erode PP LLC’s brand reputation.

  1. Risks Supply Chain Disruptions

Mitigation: Build strong relationships with multiple suppliers and maintain buffer stock to prevent delays.

Delays in Product Development

Mitigation: Establish clear milestones and regularly review progress with the development team to ensure deadlines are met.

Market Competition

Mitigation: Focus on differentiating the new product line through advanced features, reduced maintenance, and improved filtration.

  1. Initial Investment and Recommendation Initial Investment:

$30,000 to cover product concept approval, team resources, and initial prototype development.

Long-term Investment: An additional $150,000 for product manufacturing, marketing, and sales support.

Recommendation: Proceed with the product development and launch of the new line of HEPA air purifiers. The market opportunity, alignment with customer needs, and strong projected returns make this an attractive investment. The proposed solution not only addresses critical customer pain points but also positions PP LLC for continued growth and leadership in the air purification market.