Introduction Futura Cross- tech is set to become a fundamental piece of home gym equipment which is designed to help people to get in shape from the comfort and safety of their own homes while being able to interact with their friends through its online community. Futura cross-tech is a hi-tech elliptical bike that incorporates unique features which have been highlighted as great prospects lead us to use the Lean as a start-up in order to maximise the chances of creating a product that could become a successful business. The reason behind choosing this methodology is that Lean Start-up is a flexible business approach that will allow us to focus on customer needs and adapt the product accordingly. Furthermore, the product should be considered one piece of equipment that will revolutionise the market as it includes a variety of features that makes it distinctive, such as: Light weight it is the lightest cross trainer on the market with an overall weight of 8 kg.Adaptive magnetic braking designed to have a minimal impact on the customers joints and muscles.Smart waterproof bracelet activity tracker that displays on central LED monitor heart rate, calories counter and distance travelled.24 LIVE training programs that adapt to the users performance according to the data provided by activity tracker.Smartphone Application engagement with virtual community and ability to cast on media devices (smart TV) and different virtual relaxing environments (ex: Training on the beach) By using the lean start-up approach, the customers have the guarantee that they will receive the expected product in a quicker and cheaper way than the traditional business plan scenario (Blank, 2013). In addition, one aspect that has been recorded lately in the searches from google trends (see Appendix 1) is that the enormous amount of people that are working out from home complain about the absence of a product like Futura Cross-tech. (Kestenbaum, 2020.) Business Objectives. The market that Futura Cross-tech is aiming to enter is the home fitness equipment one. Currently, the forecast for UK fitness equipment market, where our product will be released is that, by 2026, it will become the largest in Europe according to Statista.com (2020), see Appendix 2. Moreover, the European commission report on the percentage of people that exercise five times or more per week, is positioning the United Kingdom on the second place establishing the market as one that offers the potential for a product like Futura Cross-tech to thrive. The company is aiming to achieve a strong position on the home gym equipment, and by considering its unique features the price tag that has been set for the product which is 135£ is one that makes it very attractive for the customers. The profit margin applied to the cost of production will be 15% for the first year. Furthermore, as the product becomes more popular, for the second and third year the profit margin applied will increase with 5 % per year. Additionally, in the first year, according to the break-even calculation (see Appendix 4) the company must sell a number of 741 pieces for the total cost and total revenue to be equal. The forecast for the overall number of sales in the first year is 1500 elliptical bikes, with an expected exponential grow to 2000 pieces or more in the following two years. Customer Value Proposition Canvas To understand better which are the needs of the market and what is the profile of the targeted customer, a Customer proposition canvas diagram tool has been generated and it can be found in Appendix 5. Furthermore, by the use if the diagram a future product can position itself in the centre of the customer values and the customer needs, as it turns the attention on the relationship between the value proposition and the customer profile (Imke, 2016). The customer Jobs are represented by the social, emotional, and practical tasks that the future buyers of are trying to resolve. From the introduction, we have identified the main purpose of purchasing the product, which is helping people to get in shape, and this represents the practical task of the customer jobs. According to The Health Survey for England in 2017 there is an estimate number of 28.7 % of obese adult population with another 35.6 % on the edge to become obese (Baker, 2019). Form the social perspective, having an online community where customers can interact, train together online or compare the results of each other, will help the buyers to motivate themselves and reach new goals in their training. Finally, training with Futura Cross-tech will enable the shoppers to increase their level of confidence, a survey conducted by One Poll in the Us revealed that people that train on a regular basis are healthier and happier. In addition, working from the security and comfort of their home, the clients will dodge the social pressure to have a certain appearance when using the gyms. (Haal and SWNS, 2020) In terms of pains, as stated in thebusiness objective the targeted persons that we are aiming for are professionals that are self-conscious about the way they look, also they have a busy schedule and lack of time can be considered a pain.The price tag that the product has is correlated with the amount of technology it has incorporated. Even though,the income of a future customer is often over the national average income of £30,800 (www.ons.gov.uk, n.d.), the price set for the elliptical bike can be considered a pain. On the other hand, in terms of gains the reward of training every is that the user is healthier. The client of an elliptical bike benefits from a low impact cardiovascular training that concludes in a stronger hart and a reduced risk of getting chronic diseases. In the matter of Pain Relievers, Futura cross-tech will have multiple options that alleviates customer pains, as a low interest payment plan which can be started after the 30 days No strings attached trial period. Moreover, the three years guaranty and the 24 hours live tech support for the mobile app and virtual community should prove to the potential buyers that the quality of the product is high end. Lastly, the Gain Creators that the productis profiting from is futuristic design that will make it more appealing, and the distinct feature of having adaptable brakes which protects the user from getting injured. The activity wrist tracker, is also a technologically oriented addition, helping the user to record his overall performance and to receive advise on methods to improve. Business Model Canvas The business model canvas is a lean start-up template, used to develop new business plans and it is formed from nine parts, a visual template created for the Futura Cross-tech elliptical bike can be found in Appendix 6. As the customer value proposition has been already discussed we will turn our attention to the other eight categories: The key partners are the ones that will help the company achieve the build of the product and deliver value to our customers. Impulse Group is the company responsible for producing the product with our brand on. HSBC is the financial institution that will provide the founding to start and support the company at the beginning. Also, it will be the preferred bank to have the business account where it will receive the payment for its products. For the logistic department DPD has been chosen as partner and it will deliver the products to the customers. In order toachieve the value proposition for our customers the key activities that the company will undertake are starting right from product development, where we collect the data from our customers and transform it in the finished product, advertising campaigns to create awareness among future buyers, and establishing a business environment represented by both physical and online showrooms. Our key resources are represented by warehousing to keep the stock, an office and showroom in Nottingham where we will have our company business centre, and the online business centre. The customer relationships will be mainly on the internet as we have one single location where we can meet face-to face, the company provides for its customers 24h online and telephone support with fast response to any queries. The main channel of communication with the clients will be the mobile and virtual application, however this is not going to be the only one. As the company is tech orientated the social media is another important way to interact with everyone interested in the product. Additionally, fitness events organised in the Nottingham showroom will give the company the chance to interact in-person with the fitness community. In terms of customer segments Futura Cross-tech is addressing a wide group of people that are concerned about their appearance and want to get in shape: busy people, ordinary families, and fitness enthusiasts. The cost structure can be described as the whole monetary cost of running the business, from production costs, rent of showroom and office, to the cost of creating the app and marketing campaigns. The overall structure cost estimate of the Futura Cross -tech can be found in Appendix 7. Retailing the Futura Cross-tech elliptical bike is the central revenue stream of the company. In addition, after 6 months of using the virtual community, a subscription might be introduced by adding different training programs with famous instructors from the world and other extras. The COO operation plan The chief operating officer (COO) is part of senior management and it is considered number two in command after the CEO. In our organisation the duties of the COO consist in running the business, including the tasks of producing the product, delivery service, orders, suppliers, and future partners. Costly related, the country where Futura Cross-tech will be produced is China, even if selecting another country like for example Pakistan will result in a drop in the production price in average by 25%. (www.hrw.org, n.d.) The reason to select China is that in in the last decade, Pakistan is renowned on the modern slavery that is happening on the production market, and if our company with be linked with someone like that will have a reputational damage and loss of clients. The company that has been selected for production is Impulse Group, a company with 30 years of experience producing fitness equipment based in Qingdao, Shandong province, China. Over the years, Impulse Group has been delivering products for companies from US, Germany, Spain, the UK, Australia, Russia, and Japan (Bizvibe Blog, 2018). Selecting an experienced and trustworthy partner like Impulse Group, has its advantages and one is that it lowers the hassle that the company would encou
nter in the next step of operations. Once Futura Cross-tech is produced, it enters the next step, which is delivering it to the UK, a process will be carried out by the producer, and the shipping price will be integrated in the production one. Impulse Group owns an Authorized Economic Operator license, a World Customs Organization certification which means that the goods produced by this company are renowned to be good and it will save precious time and money to be processed between customs (European Commission, 2016). As stated before in this paper, the minimum number of elliptical bikes the company need to sell in the first year of business is 741 pieces and a contract of minimum 750 bikes per year will be signed with Impulse Group. The Chinese partner usually produces the desired merchandise in batches of 100 pieces and it will get our products by sea fright to the port of Southampton, from there it will be collected from our logistic partner DPD. Furthermore, the feature that allows the elliptical bike to fold in order to save space in our customers homes, is one that helps when comes to boxing. The product and the dimensions of a parcel containing Futura Cross-tech should be L=120 cm W- 40 cm, as this would maximise the loading on a Euro-sized pallet which standard size is 120 x80 cm. The showroom the company is renting in Nottingham, on Carrington Street has been chosen because it has a storage room of 150 sqm and provides more than enough space for storing 100 Futura Cross-tech bikes. The next step in operations is now the actual sale process represented by the way the company will receive the orders for the product. There are two ways a customer gets his hands on Futura Cross-tech. The first one, an option that will probably be used by the people living in Nottingham and surroundings, is by taking a trip to the store, test the product in showroom and taking it home straight away after purchase. The second possibility is the one that will bring the biggest part of the company revenue and it is the online ordering, an option that will be found on the company website and the process of buying the bike will take no more than 2 minutes. After the order will be initialized, the customer receives an automated email informing that as soon as the payment is received, which usually takes up to 24h from that moment, their product will be dispatched. Next step is when the bike is dispatched, and the customer receives another e-mail with the DPD tracking number, and from there its up to the delivery company to deliver. In addition, even if in the starting business plan, we have not included possible partners the situation might change triggered by the success of the product which will draw different retail organisations to want to commercialise Futura Cross-tech. Decathlon for example, a retailer with 46 locations around UK (Retail Bulletin | Daily UK Retail News, 2019) is selling own products and different brands that are popular among fitness and sport enthusiast and would be a perfect fit for our company. Since each of their store benefits from a large storage area this will provide the means to bring even more finished products with no hassle of having to sort a storage space increase. Business Development Ideas The use of the Lean start up has been chosen to be able to mould the elliptical bike according to future owners. After the minimum viable product (MVP) will be produced, it will enter in a testing procedure to determine if the company should pivot and change or go ahead with the build. First stage is represented by an event organised in a small indoor sports arena, where we will invite 50 personal trainers to assess our product and give their honest opinion of the utility of the product and training programs. Second stage consists in displaying the MVP in several shopping centres, where customers will be surveyed to determine if it will be future success or the company should do any minor changes. The big test for the company is not acquiring customers as we know tech orientated equipment usually generates interest among shoppers. Because the product is one that aims to become an extension of the owner and adapt to its needs the real threat for the company will be customer retention. According to Aspinall et al. (2001) 54% of the companies are considering different programs to retain their customers, as it is very common that a loyal customer would buy a better version of the product or refer it to his social bubble. Moreover, a brand affected customer can increase the revenue of a company by purchasing cross selling or up-selling products designed to enhance his experience of using Futura Cross-Tech (Reichheld and Markey, 2011). A future development that the company taken in consideration, is creating training programs with celebrities that would be accessed in the mobile app for a monthly fee. This will produce another source of revenue, increasing the profit of the company as people will associate the image of Futura Cross-tech with the celebrities they follow. Summary Before the product idea has come into place a market research has been conducted to measure if Futura Cross-tech will be assessed as a future success or a failure. The product attractiveness should be unbeaten, as it comes with unique features and is also tech orientated which is a plus and would probably attract a significant number of potential investors. From the market size perspective, it is obvious that is has not been reached a saturation for home gym equipment and therefore the launch of a product like ours would be received with excitement by future customers. In terms of competitors, Futura Cross -Tech has a competitive advantage as there are no other elliptical bikes with the same characteristics and because the product is hard to replicate considering the technology it includes. Finally, to retain the competitive advantage the company will have to closely monitor their customer base and identify the trends of the market that will allow them to shape the product according to the customer needs. Reference List Blank, S. (2013). Why the Lean Start-Up Changes Everything? [online] Harvard Business Review. Available at: https://hbr.org/2013/05/why-the-lean-start-up-changes-everything.Kestenbaum, R. (n.d.). The Biggest Trends In Gyms And The Fitness Industry. [online] Forbes. Available at: https://www.forbes.com/sites/richardkestenbaum/2019/11/20/the-biggest-trends-in-gyms-and-the-fitness-industry/?sh=6edb9ea17465 [Accessed 17 Jan. 2021].Anderton, K. (n.d.). New AI Helps People Exercise At Home During Pandemic [Infographic]. [online] Forbes. Available at: https://www.forbes.com/sites/kevinanderton/2020/05/15/new-ai-helps-people-exercise-at-home-during-pandemic-infographic/?sh=37bf155117de [Accessed 15 Nov. 2020].Haal, M. and SWNS (2020). Study finds that people who work out are happier, healthier and more ambitious. [online] New York Post. Available at: https://nypost.com/2020/09/10/study-finds-that-people-who-work-out-are-happier-healthier-and-more-ambitious/ [Accessed 17 Jan. 2021].Statista. (n.d.). EU: share of people who are regularly exercise or play sport 2013-17. [online] Available at: https://www.statista.com/statistics/591463/share-of-people-who-are-regularly-exercise-or-play-sport-by-country-european-union/ [Accessed 17 Jan. 2021].Imke, S. (2016). Applying the business model canvas: a practical guide for small business: design, align, and test your ideas. Monument, Colorado: Ksi Enterprise.Baker, C. (2019). Obesity Statistics. commonslibrary.parliament.uk. [online] Available at: https://commonslibrary.parliament.uk/research-briefings/sn03336/#:~:text=The%20Health%20Survey%20for%20England. [Accessed 17 Jan. 2021].www.ons.gov.uk. (n.d.). Average household income, UK Office for National Statistics. [online] Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2020provisional#:~:text=The%20provisional%20estimate%20of%20median. [Accessed 17 Jan. 2021].www.hrw.org. (n.d.). Pakistan. [online] Available at: https://www.hrw.org/reports/2001/Pakistan.htm.Bizvibe Blog. (2018). Top 10 Gym Equipment Manufacturers in China (2018). [online] Available at: https://blog.bizvibe.com/blog/healthcare-and-fitness/top-10-gym-equipment-manufacturers-in-china [Accessed 17 Jan. 2021].European Commission. (2016). Authorised Economic Operator (AEO). [online] Available at: https://ec.europa.eu/taxation_customs/general-information-customs/customs-security/authorised-economic-operator-aeo/authorised-economic-operator-aeo_en.Retail Bulletin | Daily UK Retail News. (2019). Decathlon aims for 50 UK stores by 2021 | Retail Bulletin. [online] Available at: https://www.theretailbulletin.com/sports-and-leisure/decathlon-aims-for-50-uk-stores-by-2021-05-07-2019/ [Accessed 17 Jan. 2021].Aspinall, E., Nancarrow, C. and Stone, M. (2001). The meaning and measurement of customer retention. Journal of Targeting, Measurement and Analysis for Marketing, 10(1), pp.7987.Reichheld, F.F. and Markey, R. (2011). The ultimate question 2.0?: how net promoter companies thrive in a customer-driven world. Boston, Mass.: Harvard Business School. Appendices list Appendix 1 Google trends search. Source: Forbes.com Appendix 2 Forecast for the fitness equipment European market by 2026. source: Statista.com Appendix 3 People exercising 5 or more times a week in Europe. Source Statista.com Appendix 4 Break even calculation. Break even calculation Year 1 Year 2 Year 3 Selling price134.703 136.094 127.875LessVariable costs100 98 86 Contribution34.70 38.09 41.88 Fixed costs25700 26200 32600 Break-even = Fixed cost / Contribution740.563 687.77 778.507 Break even units (rounded off)741 units 688 units 779 units Sales price134.703 136.094 127.875 Break even (in revenues)99815.2 93632.8 99614.6 Appendix 5 Customer value proposition canvas Appendix 6 -Business model canvas Appendix 7 Cost structure Gym Cycle Costs Cost structure Year 1 Year 2 Year 3 Fixed costs£ £ £1Salary to staff10,00020% +1200020% +144002Rent of premises5000 5000100% +100003Marketing and promotion8000 6400 50004Insurance2000 2000 20005Transport expenses200 500 10006HR expenses500 300 200ATotal fixed costs25,700 26,200 32,600 Variable costs (per unit) 1Material50 45 402Labor25 28 223Delivery chargers10 8 104Overheads15 17 14 100 98 86 Production units1500 1700 2000BTotal variable cost150000 166600 172000 Total cost (A + B)175,700 192,800 204,600 Total Cost per unit117.133 113.412 102.3