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[ Hanan] BMC Report

Fundamentals of Entrepreneurship (Universiti Teknologi MARA)

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COMPANY LOGO

BUSINESS MODEL CANVAS

PRINCIPLES OF ENTREPRENEURSHIP (ENT530): BUSINESS MODEL CANVAS

FACULTY : FACULTY OF BUSINESS AND MANAGEMENT

SEMESTER : 2

PROJECT : AROMATIC GEL PILLOW

NAME : 1. ALIFF HUSAIRY BIN ABDUL HALIM (2020611702)

2. HANAN WAFI BINTI FADZIL (2020816858)

3. AISHAH NISA BINTI FAYROUZ (2020859636)

4. NURUL SHAHIDAH BINTI BURHANUDDIN (2020859806)

5. AIN NUR SABILLA BINTI MOHD ADZRI KAPONG (2020825222)

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LECTURER : MADAM WAN HASMAT BINTI WAN HASAN

ACKNOWLEDGEMENT

First and foremost, praises and thanks to the Almighty, for His showers of blessings
throughout our Business Proposal which is one of the requirements that need to be fulfil in
the course work assessment for subject Principles of Entrepreneurship (ENT530). We
would like to express our sincere appreciation to our Principles of Entrepreneurship’s
lecturer, Madam Wan Hasmat binti Wan Hasan for her constant guidance and
encouragement, without her this work would not have been possible, and we are truly
grateful for her unwavering support.

Besides that, we wish to express our gratitude to all of our classmates who rendered
their help during the period of our business proposal project, providing us more idea for
our business and also for their elevating inspiration and kind supervision in the completion
of our report.

Finally, we would like to mention here that we are greatly grateful to each and
everybody who has been associated with our business proposal at any stage. We are very
grateful to them for the effort and initiative that they have shown in our project until
successfully completed and we hope this business proposal report can give us little bit
about entrepreneurship world.

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TABLE OF CONTENT

PAGE

TITLE PAGE i

ANKNOWLEDGEMENT ii

TABLE OF CONTENT iii

LIST OF FIGURES iv

LIST OF TABLE v

EXECUTIVE SUMMARY vi

1.0 INTRODUCTION

1.1 Company Background 1

1.2 Problem Statement 2

1.3 Opportunity recognition 3

1.4 SWOT analysis (two competitors) 4

1.5 Purpose of business model canvas preparation 8

2.0 BUSINESS PROPOSAL 9

2.1 Business Model Canvas (BMC) 10

2.2 Explanation of BMC 11

3.0 CONCLUSION 20

4.0 REFERENCES 21

5.0 APPENDICES

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LIST OF FIGURES

Figures Description

Figure 1.1 Cool-Gel Tech’s Logo

Figure 2.1 Types of Cool Gel Pillow

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LIST OF TABLES

Tables Description

Table 1.1 SWOT Analysis

Table 2.1 Business Model Canvas (BMC)

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EXECUTIVE SUMMARY

The overview of this Business Model Canvas (BMC) is we managed to get a lot of
new knowledge and information about business and entrepreneurship world. This business
is a partnership business. We began this business to provide our customer with good
quality product and to reduce the burden or problems borne by the consumer such as back
pain, headaches, stiffness, and insomnia. Our business, aromatic gel pillow has grown
quite substantially from the beginnings, and today Cool-Gel Tech has provided various
design of aromatic gel pillow for our beloved consumers.

As we know, there are many other businesses or company that sell cool gel pillow
nowadays. Thus, we decided to start-up this business and keep improvising our product to
satisfy the needs of our customers and to generate more profit and revenue. We choose to
establish our business is because there is a high demand from customers especially in
Malaysia because when temperatures climb high, they will need this kind of product to
solve all the sweaty night-time problems.

In this Business Model Canvas, we managed to analyze several information

regarding our business such as our customer relationships and target customer. The
Business Model Canvas is vital in a business because it helps visualize what is important
and forces users to address key areas and in fact, we can improvise our product from time
to time.

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1.0 INTRODUCTION

1.0 Company Background

Figure 1.1 Cool-Gel Tech’s Logo

Cool-Gel Tech company is one of the companies that sells cool gel pillow with
aromatic scent in Malaysia. Our company owns a retail store and available in digital online
platform. Basically, Cool-Gel Tech focus more on eco-friendly and premium quality
products because consumers value higher quality products. Thus, sales revenue of the
company will increase. There are several products that we produced and mostly user
friendly such as neck cooling pillow and Lumbar cooling pillow. We are currently
continually developing new products and reinforcing existing products to include a full
range of sleep products that provide each sleep personality with personalized comfort.

Since Malaysia’s weather is quite hot and does not have this kind of product yet,
Cool-Gel Tech take this opportunity to produce cooling gel pillow with aromatic scent to
help their consumers to get a good deep sleep. As we started this business, there is only a
few designs for our cool gel pillow, but now we have more than five designs and several
sizes that applicable to all age. All products are user friendly which means it is safe and
does not harm the consumers. It is vital for our company to ensure the manufacture of
these products is safe to use because our customers are our priority.

Lastly, Cool-Gel Tech is currently cooperating with the most familiar platforms for
online shopping which are Shopee and Lazada and we are looking to expand our business
into the Middle Eastern East Asian markets.
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1.2 Problem statement

A Customer Problem Statement clearly elaborates on the problem that product or

services solves for customers. The statement is meant to help us understand the
experience that we are attempting to transform, or the space we are attempting to enter, by
building our new product or service. As for aromatic gel pillow, it focuses more on people
who cannot sleep well just because poor back and neck health. As we know, it is actually a
common problem for everyone especially students and workers who spends most of their
time at home during this covid-19 pandemic. It is also suitable for anyone who suffer with
stiffness and headaches.

According to Benjamin Laker’s writings in Forbes article, he says that working from
home seemed like an amazing benefit for many workers before the pandemic hit.
However, The Star articles, Diyana Pfordten said that working from home may not work out
for many Malaysians especially during the COVID-19 pandemic which can affects workers
and students because workers and students tends to spend most of their time at home and
the impact of working for hours will cause the body to become weak and lethargic. Besides
that, Scott Curtis’s writings states that neck pain is typically results from injuries. In Spine
health’s article, Curtis asserts that some of the injuries are caused by whiplash,
uncomfortable sleep, poor posture, and stress. Based on the Spine health’s article, Zinovy
Meyler’s writings state that whiplash is a neck injury due to forceful, quick back-and-forth
movement of the neck and people with whiplash problems will feel better within a few
weeks.

Next, for drivers who always feeling exhausted during long drives and need a lower
back support when they are driving, this product is highly recommended. Based on NCBI’s
journal, the writer has explained the causes of back pain and neck pain is because of the
sitting posture and disruptions imposed by the car and driving is correlated with high
activation of low-back and neck muscles. Besides that, in Sleep Foundation’s article, the
writer, Eric Suni states that night sweats or excessive sweating during sleep can reduce
sleep quality because with night sweats, they will often wake up in the middle of the night
with a layer of sweat all over their body and might feel damp or wet. Lastly, people who
suffer insomnia also suitable for this product to relieving insomnia because it leaves sleep

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disorganized. Insomnia causes people to become tired, results in low energy, and causes
irritation.

1.3 Opportunity recognition

Recognition of opportunity means proactively brainstorming a new concept for a

business venture or expansion. An organization needs some capacity to identify their
opportunities in order to achieve long-term sustainability and growth. Industries typically
adapt based on changes in culture, changes in consumer preference or developments in
technology. In providing progressive innovations to consumers, the most creative business
leaders that seize opportunities remain ahead of the competition.

As we know, business will never increase in value without growth. Yet company
growth is not naturally happening, it is the product of strategic initiatives. In order to expand
our business, we must employ three basic growth strategies which are market penetration,
product development, market expansion.

Firstly, market penetration relates to the number of potential customers that have
purchased a specific company's product instead of a competitor's product. Grow through
market penetration does not involve moving into new markets or creating new products but
we must implement this strategy by reducing our product’s price, or by marketing
campaigns to draw consumers away from rivals. As for Cool-Gel Tech, to increase our
market share, we need to make some innovation to our products from time to time. For
example, we need to increase the functionality of the product.

Secondly, in terms of product development, we will create new products to serve the
same market. As for our business, we will further expand our business by selling bedding
products such as memory foam mattress. Without entering new markets, we can sell these
new products to existing customers and grow our business. Lastly, the opportunity
recognition for Cool-Gel Tech company, in terms of market developments is we want to
move into a new city, state or even country. For instance, expanding our business to
Southeast Asian countries, Middle Eastern, or East Asian markets. Business growth
includes entering new markets for the goods or services.

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1.4 SWOT Analysis

S W O T

Strengths Weaknesses Opportunities Threats

High quality Do not have Improves Increasing raw

product membership card functionality of the material costs
Cool-Gel products
Tech Affordable price New to industry Intense competition
Produce variety of
Product with designs
aromatic scent
Expand the
Owned a physical business globally
store and online
shopping platform

Participate in
monthly sale

Strengths Weaknesses Opportunities Threats

Wide range of Costly Improve market Emergence of new

products value competitors
Malouf Maintaining a
Delivers positive brand Lower the Economic
nationwide reputation products cost slowdowns

Owned a
corporate
headquarters

Strengths Weaknesses Opportunities Threats

Excellent Do not have their Increase physical Larger competitors

customer’s own website presence get majority of
experience market share
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Moustache Reliable product Not having enough Improve online Consumers’

virtual marketing marketing expectations are
Fast delivery experience techniques rising

Table 1.1 SWOT Analysis

i. Strengths

SWOT Analysis Strengths are those of the organization's functionality and areas
where we can perform better than our industry rivals. As for Cool-gel Tech, we produced a
high-quality product with affordable price. Thus, it can be consumed by all range of
customers as it is such a good investment and worth for our customers. Besides that,
Cool-Gel Tech is one of the start-up company that sell cool gel pillow with aromatic scent
where the scent itself is commonly known as sleep remedies. Not just that, Cool-Gel Tech
apply brick and mortar as we sell our product in physical store and online shopping
platform. One of the advantages for having a physical store is it will be easier for our
customers to look, touch or hold the product by themselves. Thus, they will be more
satisfied. However, for online shopping platform, we can reach more customers day by day
since people nowadays spend most of their time on the internet and mostly prefer buying
things online rather than offline shopping especially during this pandemic Covid-19.
Furthermore, Cool-Gel Tech actively participate in monthly sales promotions on online
shopping platforms in order to attract customers' attention. For instance, Cool-Gel Tech
provide discount and cashback promotions. Customers will love this because they can
spend money and get some in return. It is almost like paying less and then getting extra
money to get other valuable products.

For Malouf company, their strengths are they can deliver nationwide. So, it is easier
for people to reach their products. They also provide variety of products for their customers
such as pillows, bedding, mattress toppers etc. Furthermore, Malouf company has already
owned a corporate headquarters located in Logan, Utah, and distribution centres are
located strategically across the country and they are getting stronger day by day. Next,
Moustache’s strengths are their excellent customer’s experience. An outstanding customer
experience is one that keeps customers coming back, while spreading the word about their
experience. Besides, their product’s quality is reliable which means trouble-free product
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that continues to satisfy its customers for a long period of time. Lastly, they provide fast
delivery to their customers as it can boost customer satisfaction and loyalty.

ii. Weaknesses

Weaknesses are negative and internal factors that affect the organizational
successes. Cool-Gel Tech is a new company in the industry and because of that it takes
time to expand the business itself and most probably peoples are not familiar with this
brand. Secondly, Cool-Gel Tech does not provide membership card for our customers.
Sometimes, it is necessary for a business to provide membership cards because it keeps
the customers coming back to enjoy the advantages and benefits that the we deliver while
Malouf company’s weaknesses are all of their products are costly compared to Cool-Gel
Techs’s products which produced a high quality product but with affordable price.
Furthermore, Malouf’s weaknesses are when they need to maintain as a positive brand
reputation. Since Malouf company is a well-known brand, it shows consumers’ trust and
confidence to buy their products. Thus, they must ensure it measures the key components
that drive brand equity. Lastly, Moustache company facing a bad virtual marketing
experience and they even do not have their own website to promote all their products. So,
it will be difficult for people to notice their brand.

iii. Opportunities

Opportunities apply to advantageous external variables that could offer a competitive

advantage to a company. As for Cool-Gel Tech, we have been looked up for this
opportunity to create or produce more different products in terms of design because design
is one of the importance things that customers looked up for. So, we can generate more
profit and sales for our company. For example, as for students and workers, they can use
cooling gel seat cushion for their office chair as it is incredibly comfortable, Sciatic seat
support pressure relief and tailbone. It features a layer of gel-filled cells on its upper
surface. Such cells react to the temperature of the body and absorb excess heat from skin.
Thus, we take this opportunity to provides various design for cooling gel seat such as
zipper design because with a zippered cover, consumers can change according to their
liking. It means that they can select the loft that fits best for their sleeping style.

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Next, Cool-Gel Tech take the opportunities to improves the functionality of the
product. This is because, function is simply the primary purpose of the product in order to
satisfy the needs and wants of the customers. For instance, for people who suffers with
stiffness and headaches, they usually using the wrong pillow type which will weaken pain-
sensitive structures and produce waking symptom. Therefore, aromatic gel pillow can help
reducing stiffness and headaches. These products provide an adequate pillow that
supports neutral cervical lordosis which can prevent symptoms of cervical waking and
improve the quality of sleep by optimizing the sleeping position. Cool-Gel Tech will take
this opportunity to improve the functions of this product by providing multi-functions of cool
gel pads such as for yoga cushion. Furthermore, Cool-Gel Tech decided to improve the
quality of the aromatic scent and providing more scent for our consumers. The aromatic
scents can help the users to release stress because the sense of smell plays an important
role in the physiological effects of mood, stress, and working capacity.

Besides, we have also decided to take this advantage to expand our business
globally. Thus, it helps to increase sales growth while improving the return on capital and
reinvestment rate of a business. Different from Malouf company where their opportunities
are to lower their products cost to attract their customers and compete with other brands
who provides the best quality with lower price product. However, refer to Malouf’s
weaknesses that I have mentioned before, where it is hard for them to maintain as a well -
known brand, so they take this opportunity to improve their market value of their products
by enhance or improvise the quality of Malouf’s products. As for Moustache company, they
also need to increase their physical presence by opening a retail store and focus on where
their target audience live. They also want to improve their virtual marketing skills because
as we can see, it is hard for people to find Moustache’s products especially because they
do not have their own website.

iv. Threats

The major competitor for Cool-Gel Tech are Malouf and Moustache company. So,
there is intense competition between them. This means, they need to prove their products
are the best among all in terms of market value, design, etc. This includes start-ups and
established firms that may expand into the market. Increasing raw materials cost for Cool-
Gel Tech product is one of the major threats. This is because it will affect the market price

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of the product. As for Malouf, in order for them to fulfil their opportunities, they might face
economic slowdowns especially during Covid-19 pandemic, from closing down productions
or operations to a drop in consumer confidence, COVID-19 continues to impact businesses
and the way they operate. Next, there are two threats for Moustache company which are
consumers’ expectations are rising, and larger competitors get majority of market share.
For examples, consumers as a whole buy 100 cool gel pillow, and 40 which are from Cool-
Gel Tech company, so this means that Moustache’s competitor which is Cool-Gel Tech
company holds 40% market share.

1.5 Purpose of business model canvas preparation

In order to create new or document current business models, Business Model

Canvas (BMC) is a strategic management and lean start up template that a business can
use. It is a visual chart of elements representing the value proposition of a business or
product, infrastructure, consumers, and finances. In other words, it defines how we make
money and what position is in the supply chain. For example, a company can generate
revenue by focusing more on their customer segments or target customers and at the
same time the company can sustain the business itself. Besides that, the purpose of
business model canvas preparation is to identify a business idea or concept quickly and
easily. For example, in business model canvas template, we must identify in terms of value
propositions for our product in order to attract customers to buy our product.

Next, the purpose of business model canvas preparation is to connect with the
business itself and thus receive input on each business model and its components. It does
not require any deciphering of its intuitive nature and is therefore easy to understand and
consume. It offers a simple and transparent guide that can be used internally across
departments, as well as with advisors, investors, and partners externally. The BMC is a
perfect starting point for the exploration, construction, ratification, and growth of the
business models of the organization.

Furthermore, to think about the flow of the business in detail is one of the purposes of
business model canvas preparation. By breaking down our business into the nine building
blocks which are key partnerships, key activities, key resources, channels, value
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proposition, customer relationships, customer segments, cost structure, and revenue

streams, we can develop a great idea about the business. Perhaps the visual
representation gives you a fresh perspective. That is very self-explanatory. It is like how
you can remember things when you research by writing something down. This method
allows us to better understand what we sell and why, who our client is, and who we count
on to get it done. It gives us a deeper view of our organization overall.

2.0 BUSINESS PROPOSAL

Cool-Gel Tech sell products with high quality at a very affordable price. The
affordable price comes with a world class quality of craftmanship. When user gets their
hands on the product, they will instantly feel the chillness of the cooling gel padding which
are intended to control the temperature while sleeping. Pillow is the gateway to opening a
hidden realm of blissful sleep. Gel pillows make perfect sleeping partners because of their
softness, comfort, and breathability.

Figure 2.1: Types of Cool Gel Pillow

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This prototype is reversible, which means that it will benefits the buyer all year around. For
warmer environment, users are likely stay cool with a gel layer on one side that helps to
diffuse heat and encourage air flow which is very beneficial most sleepers especially in a
hot country like Malaysia. On cooler nights, simply turn it over and take comfort within foam
padding that cradles users’ back, holding their neck and shoulders in an optimum sleeping
spot. One thing to remember is that the substance used for the cooling gel is licensed as
hypoallergenic to CertiPUR-US, which means it is resistant to dust mites and other
allergens.

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2.1 Business Model Canvas (BMC)

Key Partners Key Activities Value Customer Customer

Propositions Relationships Segments

Shopee Marketing Affordable Online customer Universal

Lazada Advertising High-quality via internet Students
Logistic couriers Customer Service Variety Workers
AEROFOAM Manufacturing Durability Walk in customer Family
Yongjia Sales Eco-Friendly to physical shop
Polyurethane Beneficial People who
spends most
of their time at
home

Key Resources Channels

Supplier Store
Innovations Online store
Warehouse Social media
Labor Website
R&D Email
Dropship

Cost Structure Revenue Streams

Manufacturing cost Online shopping website

Logistic cost Physical store
Inventory cost Interest income
Advertising cost Royalty income
Utilities cost PPC income

Table 2.1 Business Model Canvas (BMC)

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2.1.1 Customer Segments

Customer segmentation is the practice of grouping consumers into categories

based on similar interests, so that the businesses can sell each category efficiently and
accordingly. Cool- Gel Tech’s customer segments are universal as it is applicable to all
kind of demographics including age, gender, occupation, and location such as urban,
suburban, or rural.

Age is one of the most important factors for customer segmentation for our product.
In this case, our product can be used in all categories of age including new-born, toddlers,
teenagers, adults, and elderly. Plus, men and women viewpoints also have no effect on
our product as it is applicable to both genders. Next, income is also one of the main
variables that define the price of the product whereby students, workers and others could
afford to purchase the product because of the affordable pricing. Lastly, the location of hot
country such as Malaysia, Indonesia, Thailand and many other gives an advantage for our
product to be well-known as a product that helps to ensure a better sleeping or resting
experience among users during a hot weather. After all, the current issue of COVID-19
which forced workers and students to work or learn from home could attract attention for
consumers that are seeking for more comfort at their workplace.

It is generally recommended to use a pillow to feel relaxed and comfortable in bed

or in any sleeping spot. Customers could spot a huge difference between our product and
other ordinary pillow sold by other companies. The cooling gel padded pillow with aromatic
scent tend to generate a refreshing and chilling experience to all users in their sleep or
resting position. Because of the universal capability of our product, it Is very important for
us to focus in attracting new customers. For any organization, potential clients or new site
users need effective communication to make them aware of the capabilities, goods, and
services at their fingertips. Creating meaningful and convincing product experience will
guarantee satisfaction among customers which can ensure them to come back for the
product.

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2.1.2 Value Proposition

A value proposition is a commitment made by a business to a consumer or market

segment. The proposal is an easy to understand explanation of the reason why consumers
should purchase a product or service from that specific company. A value proposition
should specifically illustrate how a commodity serves a need, articulate the details of its
added advantage, and state the reason why it is better placed on the market than
comparable goods. The perfect value proposition is to the point which speaks to the
greatest decision-maker of the consumer. Cool- Gel Tech produce affordable, high quality,
variety, durable, eco-friendly, and beneficial cooling gel pillow with aromatic scent to
ensure better sleeping and resting experience.

Firstly, the product is considered as affordable because of low cost of products that
allow us to sell at a cheaper rate. This includes a production and logistics methodology that
tightens any reduction in additional running costs. Customers tend to purchase a product
that sells for a lower price compared to other competitors in order to obtain the maximum
buying satisfaction. Next, the affordable pricing comes with a high quality craftmanship of
our product whereby all the materials and substances used in manufacturing the pillow
foam and cooling gel padding are incorporated with features that have the potential to
satisfy user demands and offer customer loyalty by enhancing products which are
guaranteed to be clear from any flaws or defects. In addition, the cooling-gel pillow comes
with a variety options in terms of shape and usage which increases the likelihood of buyers
choosing a suitable match to their desires. Furthermore, the pillow foam and the gel
padding are very durable as it does not wear out easily and would not have to be bought
often. Hence, our product is regarded as efficient to customer whereby it is confirmed to
last for at least three years. The durability of our product Is also eco-friendly towards
natural, social, and economic benefits while maintaining human health and the
environment over their entire life cycle from the production of raw materials to final
combustion. Lastly, our cooling- gel pillow technology produces healthy benefit such as
assisting consumer in falling asleep quickly, calming insomnia, improving mental health,
avoiding metabolic diseases etc.

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2.1.3 Channels

A distribution platform is a network of undertakings or intermediaries through which

a product or service travels before it reaches the final customer or the final user. The
distribution networks may include wholesalers, dealers, distributors and even the
Internet. There are various types of communication that entrepreneur can channel
through their customer including physical and electronic channels. Due to the technology
development in the modern era, there are many other platforms that our organization
can use to promote our business.

Cool-Gel Tech applies click-and-mortar which is a form of business model that

has both online and offline activities which usually includes websites and retail stores. A
click-and-mortar corporation can give consumers the advantages of fast internet sales
and conventional face-to- face service and is thus theoretically more efficient than the
conventional "bricks and mortar" form of enterprise that applied offline only. The type of
business model is often known as clicks-and- bricks. With the technology of internet,
almost 70% of shoppers use the Internet at any point of the buying process for
surveying, comparison, or ordering. Recognizing this opportunity, we have partnered
with existing online platforms and created our own website to supplement their physical
store platforms. In most cases, shoppers can order on the store's website, buy online,
and then mail or pick it up at the store's location.

Plus, Cool-Gel Tech includes social media as a channel to reach our customers
as it is an interactive computer-based technology that encourage the development or
exchange of content, thoughts, career preferences and other modes of speech across
virtual communities and networks. Almost 100% of people in the world engage with
social media in their daily life in order to get the latest information and news around the
globe. Hence, it is very advantageous for our organization to promote the product via
social media application such as Facebook, Instagram, Twitter etc. In addition, we also
constantly send reminders and offers via email in order to always refresh the thoughts of
our product to the customers

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Lastly, our organization also implements the service of dropship agent as a

representative to maintain the connection between our customers. This is because, most
of the dropship agent has a wide relationship connection between families and friends
which can boost the popularity and recognition of our cooling gel pillow products. After
all, the dropship agents are also considered as one of our customers as they are buying
the product from us to sell it at their desired price in order to gain profit from our loyalty.

2.1.4 Customer Relationship

Customer relations explains how a business can interact with its clients in order to
enhance the customer experience. This involves offering responses to short-term
roadblocks as well as proactively designing long-term strategies that are targeted for
consumer satisfaction. Customer interactions are aimed at establishing a mutually
beneficial partnership with the customer that continues past the initial transaction. The
methods that Cool-Gel Tech applies in maintaining customer relationship is by face-to-
face, online, and the presence of third party which is dropship agent. The channel option
chosen by our organization also plays a vital role in customer relationship management.

Cool-Gel Tech should be able to identify the desires and needs of customers in
order to grow a circle of business-customer relationship to ensure the customer will
come back for our product. As identified in the channel section, our organization utilizes
social media platforms as a medium to interact with consumers and promote the product
widely. When customers recognized the frequent promotion and offers made from the
company, they tend to get interested and get attracted to the product. Based on a
research, 61% of consumers avoid buying from a brand if they have terrible customer
service. Our organization follow the best strategies to create customer relationships by
offering a great deal of experience that draw clients back to our product and decreases
the chances of a customer churn. Through providing the quality customers expect, it will
save them from going to other brands.

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2.1.5 Revenue Stream

Revenue Streams are the different avenues from which a company receives profit
from selling products or delivering services. The types of income recorded by a
corporation in its accounts depend on the types of operations carried out by the
company. In order to categories sales at a high level, there are operating sales and non-
operating revenues. Operating income represents the percentage gained by the
company's main market activities. Sales of products or services are the main operating
profit for our organization. Non-operating profits applies to revenue received from side
business operations. For example, interest income, royalty income and pay-per-click
income.

The core operating revenue for Cool-Gel Tech is the revenue from sales of
products and service charges. Both sales and service revenue are gained through our
direct physical store sale and mostly from online shopping platform. This is the most
commonly used method by organization in mainstream industry which involves selling of
product whereby buyer owns it and can do anything they want either use it, sell it, or
even destroy it.

For non-operating revenue, Cool-Gel Tech also invested in various types of

business and assets whereby this account shall report the interest received on assets
such as debt securities, common stock or even preferred stock which can be considered
as dividend. Next, our organization holds the copyright of the product, but permits third
parties to use the product for a fee especially for dropship agent or even reseller. Hence,
it is a royalty income which is a legally binding offer paid to our organization for the
perpetual use of our original products including copyrighted works, trademarks, and
natural resources. Last but not least, our organization also gain from Pay-per-click (PPC)
which is an internet promotion model used to direct traffic to websites where the
advertiser pays the publisher when the virtual advertisement is clicked on the online
shopping platform.

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2.1.6 Key Activities

Key operational activities reflect what the organization must do to make the
business model work. These operations can involve the development of a commodity or
the provision of a service or even a combination of both. Activities are any practice that
the company participates in for the primary purpose of making a profit. Company
functions cover operations, marketing, engineering, problem-solving and administration.
They are the most critical steps Cool-Gel Tech has to take in order to function efficiently.
Like core Tools, they are expected to set up and deliver a value Proposition, enter
customers market, sustain client relationships, and gain income.

Cool-Gel Tech focuses on the manufacturing of a product, our practices include

learning more about consumers and new production strategies to enhance the product.
One of the tasks could be to do is by market testing to figure out if consumers are
satisfied with our pillow or whether there is any improvement or enhancement in order to
best meet their needs.

Our organizations start off with manufacturing of products by hand and

machinery before final product is sold to a customer upon completion which typically
happens on a large-scale equipment and skilled labor production line. In order to save
cost and time, we manufactured our product locally using a high labor skill and the most
efficient equipment possible. Next, our organization applies marketing approach which is
a practice that undertakes to facilitate the acquisition or distribution of a good or service.
Marketing entails advertisement, marketing and distributing goods to customers or other
companies. The promotion of our product is carried out by the associations on behalf of
the organization. The advertisement is also made via internet through social media,
websites, and online shopping platform in order to reaches more audiences in virtual
world. After that, our organization focuses in selling products and services in exchange
for money or reward or service. Product transactions are when a buyer orders a product
or service that meets their needs. The number of items sold over a given period of time
tends to assess the sales of products. Last but not least, Cool-Gel Tech provides the
best customer service towards all buyers and consumers as we offer warranties and a

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free-return or exchange for customers that are unsatisfied with our product to fulfil clients
demands and need.

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2.1.7 Key Resources

Key resources help the organization to set up and deliver a value proposition,
reach out to customers, establish partnerships with consumer segments, and gain
revenue. Various core resources are required depending on the form of business model.
The resources are a core thing that the organization uses to produce the finished
product. Where or what services used and how the organization procure them will have
a dramatic effect on the overall business plan. Main resources can be physical,
economical, academic, or individual. Primary capital may be purchased or rented by the
organization or obtained from primary associates.

Physical assets are tangible resources that a business uses to create its value
proposition. A producer of pillows such as Cool-Gel Tech requires specialist
manufacturing plants as a main resource. This production plants shall require property,
machinery, buildings, and other facilities. In order to innovate, our organization have
changed how we manage and utilize our physical capital which is the warehouse. As an
example, our organization use human and machinery tools in our manufacturing process
to increase precision, speed of production and reduce costs.

These are intangible resources like Intellectual Property (IP), brand, patents,
copyrights, and partnerships. Intellectual property properties are difficult to build, but
they may provide significant value when generated successfully. For Cool-Gel Tech,
innovations are the most crucial resources in an intellectual aspect of our organization
whereby all the research and development are conducted in the warehouse in order to
create more unique product or even improvise our existing product.

Our organization treat our labor workers very kindly as employees are the most
important core resources of most organizations. Not only do staff help manage the
organization but they also connect with clients, help grow the business by innovating and
maintain the expertise and experience that separates the business from the other.
Hence, to ensure that employees that they maintain high levels of customer
engagement, knowledge, innovation, and customization.

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2.1.8 Key Partnership

Key Partners are the partnerships an organization have with other company,
government, or non-consumer organizations that allow their business model to function.
These may be the partnerships the company has with the retailers, distributors, trading
partners etc. These relationships that an organization have would certainly develop the
powers and supports that will help the company thrive in ways that would be impractical
for an organization to do it solely.

Cool-Gel Tech has succeeded to obtain a partnership with 2 of the most popular
online shopping platforms in Asia which are Shopee and Lazada. Consumers are
continually adjusting the way they like to buy products whereby traders are struggling to
keep up. Shoppers browse, compare and order from web platforms, marketplaces,
smartphone applications, physical shops, and social sites. E-Commerce revenues have
several benefits over a long-term approach to win over consumers. At the same time,
our organization also hires courier services such as Poslaju, NinjaVan, J&T Express and
many other companies to focus primarily on delivering and transporting products to
customer. Our organizations’ product needs to be signed and physically delivered, and
we rely on courier services to make this happen. Many courier services that work with
regular clients offer routine services for less than it would cost to pay for individual
deliveries of all products.

Our supplier is also considered as a partner in the business as they offer a

product or service to another organization. The role of a supplier in to Cool-Gel Tech is
to supply high-quality goods from a producer at a reasonable price to be manufactured
in our warehouse. AEROFOAM which is one of our suppliers is one of the leading
producers of bedding goods based in Malaysia and one of the industry's leaders.
AEROFOAM promotes the country's primary natural product by using 100% pure
Malaysian rubber as the primary raw material including latex mattresses, pillows,
cushions, spring mattresses, sofas, headboards, and other bedding accessories.
Meanwhile, the cooling gel padding equipment has been supplied by Yongjia
Polyurethane which is located in China. The company is specialized in manufacturing of
state-of-the-art high-pressure polyurethane machine and allied solutions which enables

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Cool-Gel Tech to generate a high- quality cooling gel padding to be combined with the
high-quality pillow.

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2.1.9 Cost Structure

The cost structure refers to the specific types of expenditures that a corporation
incurs and is usually comprised of fixed and variable costs. Fixed costs are costs that
remain constant regardless of the amount of output the business makes, whereas
variable costs change with the level of production. Operating a business must incur
some kind of expense, whether it is a retail business or a service provider.

Cool-Gel Tech bears manufacturing cost by summarizing the cost of all the
materials consumed in the manufacturing process. The costs are divided into three
categories which are direct production costs, direct labor costs and overhead
manufacturing. Direct production are the raw materials our organization used in
manufacturing which become part of the final product. The direct labor cost is the cost of
employees’ wages that can be readily associated with the manufacturing unit or known
as labor expense for assembly workers on the assembly line. Manufacturing overhead is
any cost of output that is neither direct material cost nor direct labor cost which includes
all charges to help our organization production. In addition, our organization also must
maintain the cost of utilities such as electricity, water, wastage, and other expenses for
the manufacturing warehouse. Lastly, the logistics costs are all expenses borne by our
organization from raw materials to consumer orders and every move in between which
has to be made throughout the supply chain such as trucking companies, third-party
logistics providers, shipping carriers, freight brokers, and a variety of other vendors.

In marketing perspective, Cool-Gel Tech incurs expenses relating to the

promotion of our industry, organization, brand, product, and service. This cost includes
advertisements in news media and internet locations such as banners, social media,
online shopping platform and direct mail advertising. The method of promoting is an
action of drawing public attention towards all audience through online and offline
mediums which owes its growth to the continuous advance in international commerce
and manufacturing organization.

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3.0 CONCLUSION

The business model canvas or as known as BMC helps Cool-Gel Tech to design
business models intently and promptly which is a valuable method to connect all relevant
parties in a common language as seen in the start-up report. However, as Steve Jobs
once said, "Basic can be tougher than complicated." Considering the promising qualities
of BMC, it is only just a tool whereas the usefulness of the component relies heavily on
its inputs. It is useful to help develop new products or services from a logical and
emotional viewpoint across its nine fundamental elements. It allows our teams to
brainstorm perspectives, suggestions, and thoughts on the product, to allow the partners
to share awareness and to create clear metrics for strategic innovation.

By doing the business model canvas for our business which is Cool-Gel Tech, it
can be concluded that we have learnt on how to run the business properly and
efficiently. Plus, we also had the chance to gain more knowledge in entrepreneurship
which could probably be handy for our future. BMC really assisted in our business
through identifying the problem or issues in the organization which can enhance the
management and productivity within. The business modal canvas also can be used to
produce a business proposal because all the information can be interpreted into making
a good business plan as our organization had figured out all the weaknesses, strengths,
threat and opportunities in the industrial market. Based on SWOT analysis, the business
model canvas would be more effective if our organization uses it to reinforce our vision,
mission, and goals. The SWOT will at least have a viewpoint and, at the highest, will
show similarities and areas of operation compared to the competitors in the market.
Hence, both BMC and SWOT analysis provides an informative look at Cool-Gel Tech
which is followed by a list of techniques and methods that our organization should adopt
to boost our cooling gel pillow business.

Overall, we hope that our product can give benefits to the customers in terms of
health and comfort. We also would like to expand our product across the border by
entering the global and be recognized as one of the best companies that produces
cooling gel pillow. Most importantly, we hope that our business can sustain development
and keep running for a long period of time. Our goal is to manufacture the best quality of
product and providing the best customer service to all of our audience around the globe.

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4.0 REFERENCES

Afuah, A. (2003). Business Models: A Strategic Management Approach. New York: McGraw-Hill/

Irwin.

"Business Models: Do the right thing". blog.bizzdesign.com. Archived from the original on 2015-
04-02. Retrieved 2015-03-28.

"Business Model Canvas for User Experience". grasshopperherder.com. 2012-06-19. Retrieved

2012-06-20.

"Can I use the Business Model Canvas or Value Proposition Canvas in my own teachings or
public projects?". support.strategyzer.com. Retrieved 2015-03-22.

"Internal Communication Canvas". eee.do. 2016-04-28. Retrieved 2016-05-28.

"Lean Model Canvas vs. Business Model Canvas". practicetrumpstheory.com. Archived from the
original on 2014-04-26. Retrieved 2014-04-25.

Osterwalder, Alexander (2008-07-02). "What is a business model?". business-model-

design.blogspot.com. Archived from the original on 2008-09-06. Retrieved 2018-10-17.

Teece, J. D. (2010). Business Models, Business Strategy and Innovation. Long Range Planning,

Business Models. Peters field: Harriman House Ltd 43(2), 172 194. Retrieved
http://dx.doi.org/10.1016/j.lrp.2009.07.003 Watson, D. (2005).

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5.0 APPENDICES

A ppendix 1: User's review on cooling gel pillow

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A ppendix 2: Competitor's product

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A ppendix 3: Cooling gel pillow benefits

A ppendix 4: Cooling gel pillow prototype

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A ppendix 5: Element of product

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A ppendix 6: Lumbar cooling pillow

A ppendix 7: Neck cooling pillow

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A ppendix 8: Sleeping cooling pillow

A ppendix 9: Leg positioner cooling pillow

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