Company (an existing company) and new Product Description:
CETCA-SMA, as a member of China Electronics Technology Group Corporation (CETC), the company is a high-tech enterprise specializing in R&D, production and service of products such as special mission aircraft, UAS and intelligent low-altitude system. The company is the core development platform of Intelligent low-altitude system and GA business of CETC. Under this company, the new product that we establish is agriculture spraying drones, also known as unmanned aerial vehicles, are unmanned aircrafts for the protection of agricultural and forestry plants. This type of unmanned aerial vehicle is composed of three parts which are a flying platform (fixed wing, helicopter, multi-axis aircraft), navigation flight control, and spraying mechanism. It’s sprayed by ground remote control or navigation flight control, and can spray medicine, seeds, powder, etc.
This remote-control agricultural spraying drone has a small and powerful body. It can carry 8-10 kg of pesticides, spray pesticides at low altitude, and can complete one acre of land every minute. Also, its spraying efficiency is 30 times that of traditional labor. The aircraft adopts intelligent control, and the operator controls it through the ground remote control and GPS positioning. The downward airflow generated by its rotors helps to increase the penetration of the mist to the crops, and has a good control effect. Greatly improved the safety of pesticide spraying. Moreover, it can also carry out real-time monitoring of agricultural diseases and insect pests by mounting video devices. The new agriculture spraying drones that we create have low altitude, low drift, can hover in the air, no special take-off and landing airport is needed, and the downward airflow generated by the rotor helps to increase the penetration of the mist to the crops. The spraying operator avoids the danger of being exposed to pesticides and improves the safety of spraying and other advantages. In addition, the electric unmanned helicopter spraying technology uses spray spraying to save at least 50% of pesticide use and 90% of water consumption, which will greatly reduce resource costs. Compared with oil-powered, electric drones have smaller overall size, lighter weight, lower depreciation rate, lower labor cost per unit operation, and easier maintenance.
2.SWOT analysis that explains why this product is a valid choice for the company.
SWOT analysis represents the method a firm uses and views itself and the associated market through the firm’s Strengths, Weaknesses and outside Opportunities, Threats, in order to fairly assess the organization’s current position before the management’s making decisions on any new strategy. SWOT analysis is so crucial because it is the basis on which the management handles problems such as setting up marketing objectives, identifying target market and positioning of the new product. In our business analysis case, the company CERCA-SMA has highlighted strengths, which overshadow its weaknesses, while opportunities and threats both exist in the long run. The following details and explanations are updated among several founders and investors during last month’s meeting of BOD and were recorded in the minutes.
Strengths: core business, R&D, patents, pioneer of the technology.
During the IPO, CETCA-SMA had financed $20 million, which enables the expansion of its R&D team, focusing on new models of agriculture spraying drones. The distinguished team constitutes 5 previous employees from Amazon and Google, 3 scholars from different agriculture labs in academic institutions and many other excellent innovators. Also, R&D department has registered 22 national patents from body design to battery efficiency, which brings huge intangible assets to the company. Last but not the least, the volume of carrying tank of pesticides is so far the industry’s largest.
Weaknesses: brand awareness, lacking celebrity endorsement, sunk cost for R&D, undeveloped supply chain.
Right now, CETCA-SMA has only two product lines, Mantis and Eagle, under which there are several brands having not even hit 10% brand awareness percentage, according to SurveyMonkey. Unlike other competitors, CETCA-SMA is still seeking one or two proper celebrities to dramatically increase brand awareness in a 3-month period. Also, the marketing department of the company is trying its best to negotiate some of the big customers and could not yet finalized the deal because of weak supply chain.
Opportunities: food safety concerns, growing potential buyers, increasing export orders.
The market of UAS is conservatively estimated by $14 billion in 10 years from now, and the segment of agriculture spraying drone contributes $4 to $6 billion, due to the globally increasing concerns of food safety. The potential buyers such as agricultural research institutions and different kinds of food providers are still foreseeably climbing, especially from countries like India, USA and Denmark. CETCA-SMA knows that these opportunities are out there for all competitors to seize, the one who wins the market share will always move in advance.
Threats: Uncertain regulations, entering competitors, scarce lithium.
In China, the direct regulation party for Unmanned Aircraft Systems is Civil Aviation Administration of China, under which there are several departments have authoritative power over rules and restrictions. Even the prospect of laws is uncertain, due to the market size estimation there are still thousands of companies entering in the foreseeable future. Secondly, CETCA-SMA has created battery resource committee, whose primary mission is to deal with lithium scarcity and search for efficient substitutions.
From above SWOT analysis, if the company sustain its strengths, notice and try to lessen its weakness, carefully deal with entering competitors and keep an eye on the regulation changes, the new product agriculture spraying drone is certainly a valid choice for the company while the business is growing.
4.Target market and positioning of the new product
5a.Marketing Mix Strategy (Product, Price, Distribution, Promotion) and
5b.your justification for the chosen strategies