Executive Summary
The Cessabit Company is a limited liability company focusing on smartphone development. A distinctive feature of the business is its center and target audience, which is school-age children. Since almost all smartphones on the market are adapted to adults’ needs, there is a need to create a device that is convenient for both children and their parents. Such a device should combine a full-fledged smartphone’s functionality and flexibly configure restrictions, tracking, and filtering systems to ensure the child’s safety.
At the moment, the company is formed, has two founders, the head of the R&D department, and a potential investor. Cessabit Company owns the business name, corporate logo, and the motto “Maxima debetur puero reverentia,” which can be translated from Latin into English as “The greatest deference is owed to the child.” Besides, a management strategy has been developed that includes financial and marketing plans. In the research, the target audience was identified, consisting of two parts: children, direct users of smartphones, and parents, customers of this product. In this regard, an advertising strategy was developed aimed at both of these groups by emphasizing essential aspects.
At this stage, the formation of plans and strategies is completed, and the final collection of resources is carried out to launch an advertising company together with production. Besides, possible risks and upcoming difficulties that need to be addressed were analyzed. Most of them are related to the market and the enterprise’s financial riskiness. However, these problems will be eliminated by establishing collaborations with well-known brands and obtaining additional funding.
Introduction
This report is a business plan for the Cessabit business initiative. The paper is divided into several sections, each of which is devoted to one of the directions and stages of development of this initiative. They include the background of the project’s formation and its general description, management, legal structure, marketing plan, market analysis, financial analysis, and risk assessment. The report aims to demonstrate all aspects of this initiative to get a complete picture of the project.
Venture Description
Background
The prerequisites for developing this idea are the observation of students’ interaction with high-tech gadgets. Children use virtual space to communicate with each other; schools are actively promoting electronic learning tools. However, a typical smartphone offers a wide range of features that often are excessive for a child. Besides, through a smartphone with Internet access, a child can either find materials that are not intended for them or be directly exposed to danger. Thus, there arose an initiative to create a child-safe device that would provide safety with additional monitoring functionality.
General Description
Cessabit is a smartphone brand designed for use by school-aged children. These models’ main differences are software functionality, from which unnecessary elements have been removed, and hardware architecture aimed at durability. The software part uses a customized lightweight version of OS Android Go Edition, which reduces power consumption and increases the device’s speed (Android (Go Edition), n.d.). Many of the system’s functions require a parental authorization, either through a PIN or through communication with a parent device. Besides, geolocation is continuously monitored, allowing parents to quickly find a lost phone or analyze a child’s location. The smartphone has an IP68 protection class, enabling withstanding short-term immersion under water and exposure to small particles (Jansen, 2018). Finally, the device’s battery is designed for maximum service life, so its capacity is 5000 mAh.
Management
- Management Team and Structure
- Founder: Name of Student
- Head of R&D Department and Co-Funder: Arrigo Galassi
- Proposed investor: Joseph Hart
Currently, Cessabit owns the corporate logo, name, and slogan “Maxima debetur puero reverentia,” which can be translated from Latin into English as “The greatest deference is owed to the child.” These words reflect the company’s policy, which aims to ensure children’s safety and the comfortable use of smartphones and the Internet. Based on the estimated income and business potential, the founders decided to form a legal entity in the form of a limited liability company, “Cessabit Company.” With this type, each of the company members’ liability is limited to the amount of individual investment; therefore, property risks are minimal (Private Limited Company, n.d.). Besides, this status is more consistent with the organization intending to engage in professional activities.
Strategic Approach
The company is in its formation stage, intending to start production at the end of the first quarter of 2021. Currently, Cessabit does not have a loyal customer; however, at this stage, promotions are starting to work, aimed at increasing the awareness of the company’s products among the target audience. By the fall of 2021, it is planned to launch the first smartphone model, the Cessabit C1. The company’s main strategic goal is leadership in the niche of budget smartphones designed primarily for children. After consolidation in this area, it is possible to expand into adjacent markets of mobile technology for adolescents and even adults while maintaining the corporate identity of reliability, simplicity, and durability. Finally, to achieve these indicators, the company is going to invest in the development of new software and hardware tools to remain competitive and in the analytics of existing solutions.
Marketing Plan
The above product has two target groups: adults, i.e., parents and their children. The second group is the direct consumer of these products; therefore, when compiling the device, the characteristic features of the use of a smartphone by children should be taken into account. This list includes both technical characteristics, for example, resistance to external influences, and a set of applications. The main problems of software for children are content filtering algorithms designed to protect the child from unwanted exposure (Yadav and Pinaki, 2018, p. 385). Parents are the target group since they are the direct buyers of this product. Therefore, their attention should be drawn first, and they are a more critical target group. Hence, an effective marketing plan has two components. The main one is aimed at parents and addresses the importance of parental supervision over children’s smartphones. In this section, it is necessary to pay special attention to the threats that may lie in wait for the child on the Internet. The second section should be aimed at children, making the product attractive to them by following well-known trends and collaborations on relevant topics.
Competitor Analysis
Market analysis
The smartphone market is quite busy and saturated, so the competition is exceptionally high. Three corporations are currently at the top of the market: Apple, Samsung, and Huawei (O’Dea, 2020). These companies have consistently occupied the first lines of the sales lists for many years. Besides, there are enough manufacturers of relatively inexpensive devices on the market; for example, the Chinese brands Xiaomi and Vivo. Thanks to such a wide variety, the consumer has the opportunity to find a model that meets all their wishes, from technical characteristics to design solutions. However, very few complete devices on the market are intended for the younger age group. The market analysis revealed only two similar products – VTech KidiBuzz and Monqi Kids (Buying a mobile phone, n.d.). However, they have several differences from future Cessabit products.
Difference from Competitors
First of all, Cessabit products are full-fledged smartphones, but their functionality can be flexibly customized to ensure the child’s safety. Almost all devices on the market are designed to work with adult users. Consequently, Cessabit products occupy an intermediate, underdeveloped niche, combining the functionality and hardware components of full-fledged smartphones, enclosed in a convenient shell for children and parents.
The main competitors of Cessabit in this context are the aforementioned VTech KidiBuzz and Monqi Kids, as well as their counterparts. However, Cessabit smartphones have an advantage over Vtech products, as the latter is closer to gaming devices (Dreher, 2019). KidiBuzz also stands out for its bright children’s design, which looks more like a toy than a serious project. Although such a solution will be attractive to the younger age group, schoolchildren will instead reject such a phone, especially in comparison with parental devices. Finally, Monqi Kids is a direct rival and competitor to Cessabit, as it occupies almost the same niche. Similar to the proposed initiative, Monqi products are designed standardly for smartphones, but with equipment specially designed for children (Buying a mobile phone, n.d.). However, Monqi Kids is more geared towards use by children aged six and over, which gives Cessabit a chance to reach a higher age bracket and a more relevant market.
Financial Analysis
At the moment, additional funding is expected to fully start production, presumably from Mr. Joseph Hart, the leading potential investor in Cessabit. The combined personal and investor funds should collectively provide a sufficient amount to rent equipment to produce the first series of smartphones. Additional financing is needed to ensure an adequate rental amount for four years in advance. This is the period required for the full implementation of the first series of products on the market. In three years, the revenue is projected to allow the purchase of the leased equipment, which will enable a broader and more efficient production, with a focus on improving the software and hardware parts.
Besides, the financial management strategy implies collaborations with well-known brands. These companies include Disney and its animation division. To draw additional attention to Cessabit, joint projects are planned, dedicated to one topic, for example, a new planned cartoon. This collaboration and the use of well-known characters and images will attract additional interest in the products, making smartphones more enjoyable for children.
Risks and Challenges
There are several risk factors associated with this initiative. First of all, it should be noted that there is quite a lot of competition in the market. Even with little to no chield-friendly brands, new smartphones may go unnoticed by other companies’ flagships. To eliminate this problem, a comprehensive advertising campaign is envisaged with the involvement of brands popular among children. This ad will have two components, targeting adults and children, focusing first on safety features and second on convenience and comfort.
Secondly, the initiative involves the deployment of a reasonably large-scale production, which includes many components. Thus, Cessabit is a risky financial venture, which can presumably be remedied by attracting additional investors and sound financial planning.
Third, there is a risk of a technology gap forming due to the speed of technology development. For a product to be relevant, it must meet at least the minimum technical and software parameters similar to smartphones in a related price range. To keep up with the progress, it is necessary to analyze the existing market and its trends continuously. Besides, it is essential to purchase modern equipment despite its increased cost.
Reference List
Buying a mobile phone for your child.
Dreher, B. (2019). 5 best cell phones for kids, recommended by experts.
Jansen, M. (2018). Just how tough is your phone case? We break down IP ratings, military standards.
O’Dea, S. (2020). Smartphone market share worldwide by vendor 2009-2020.
Private Limited Company: Advantages & Disadvantages. Web.
Yadav, S. and Chakraborty, P. (2018) ‘Using Smartphones with Suitable Apps Can Be Safe and Even Useful If They Are Not Misused or Overused’, Acta Paediatrica, 107(3), pp. 384-387.