Product and Services Strategy

Current  Product-Service Range

Proprietary information is available to investors upon signing of a Non-Disclosure Agreement.

[enter-your-company-name-here] currently offers [product type] products for the [market segment(s)] market(s), including.

The first product developed by [enter-your-company-name-here] is called [product 1], and was introduced in [year introduced] in order to [describe Purpose].

Since then, we have introduced [product 2] in [year introduced], and then [brief history of your product line up to today].

Proprietary Technology / Intellectual Property

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Our products are protected under the following:

• [One]
• [Two[

Licensing agreements

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For our [xxx] [technology / capability] we have [OEM / licensing / royalty] agreements with [xxx] as follows:

• [give general terms of agreements].

Customer Value Proposition

What is the value we offer our customers in buying or using our services

As an example what are the financial, convenience or useful features of your products or services that your targeted customer group appreciates

Product Life Cycles

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The life cycle for [product line name] can best be described as follows: [describe life cycle position].

Due to our recent efforts to [xxx], [Product 1] is in a strong market position. We feel that for the next [projected period of time] it will continue to [xxx] and generate profits at or above expected levels.

[Product 2] will need to be [improved / upgraded] within [xx] [months / years] in order to ensure that it does not move into the decline stage.

Overall, we conclude that our products will continue to be viable in the marketplace during the next [xx] [months / years] and that [enter-your-company-name-here]’s future planning and product-related activities will ensure a strong market presence.

Product Selection  /  Development Criteria

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Because marketing is [our single largest / a large] expense and it is where [most / much] of our effort is applied, customer focus is a very important criteria. The idea is to keep our customers forever, by continually offering them a valuable product or service, thereby diminishing our costs of reaching and appealing to them. Wise product selection is therefore critical to [enter-your-company-name-here]’s success.

At [enter-your-company-name-here], we realize that development projects are growing steadily more expensive. To assure the best possible product decisions we have implemented the following criteria for evaluating and selecting projects:

[enter-your-company-name-here] provides products to assist customers with [xxx]. Our [xxx] products help reduce time, effort and expense by [x]%, and easily retail for $[x] – $[x] each.

[enter-your-company-name-here] can implement product or service using

. Other parts are fabricated [internally / by [Supplier I] and [Supplier II] / offshore in our own facilities located in [country].

New laws or government programs that may impact our product include

. [enter-your-company-name-here] will comply with these regulations by [xxx].

[enter-your-company-name-here] will add new [product type(s)] to our [product line, catalog, product literature] to meet new opportunities in [xxx].

We will use outside material providers when they have [a body of knowledge / materials] useful to expedite the development of a [enter-your-company-name-here] product. Providers are selected based upon their expertise, active participation, reputation and success in their field, plus the overall quality of their [materials / workmanship].

When beneficial, we seek to blend the [materials / ideas / components] of several [suppliers / authors / inventors] to create an optimal hybrid product delivering the greatest benefits to our customers. These 3rd parties are generally compensated by [a lump sum cash purchase / an earn-out basis / royalty].

It is our philosophy that a product must be improved by at least [x]% every [xx] months in order to maintain its competitive position, market value and price point. We must maintain our ability to adapt as the environment, market demand, our customers’ needs, and our capabilities change.

Planned Products

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[enter-your-company-name-here] plans to continually develop new products and enhance existing products. In response to demonstrated market demand, new products or services being developed in the near future include [xxx], [xxx], and [xxx].

Additional concepts / plans for follow-on [next generation] products include [xxx].

[New Product 1] development [will begin / started] on [date] 20[xx]. The targeted release of [New Product 1] is for [month], [20[xx]. Development and testing will require the following resources:

.

The targeted release of [New Product 2] is for [month], [20[xx]. [New Product 2] development [will begin / started / is scheduled to begin] on [date] 20[xx], and will require the following resources

.

Research & Development

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In response to demonstrated needs in our market, new [products / services to support new, existing or planned products] are being developed to include [xxx], [xxx], and [xxx]. These new [products / services] are particularly important to [describe prospective customers], as, to date, their choices have been limited to [note the alternatives to your product, or service for your product]. [Product / service] will make it possible to easily [describe what your new addition will provide for the customer]. Launches are planned for [month], 20[xx] and [month], 20[xx].

Much of the development time and effort at [enter-your-company-name-here] during the past [x] [months / years] has been spent on research and [product / process] development for [New Product x]. During 20[xx], [enter-your-company-name-here] spent approximately [x]% of sales revenues on R&D. Our plans for 20[xx] and beyond call for [a / an] [increase / decrease] in R&D spending to [x]% of sales.

[enter-your-company-name-here] is regularly examining roles that new products will play in the growth of the company. In order to promote the speed and effectiveness of our future new product development efforts, [enter-your-company-name-here] management is committed to the following:

.

These commitments will span a period of [x] [months / years] and cost in the range of $[x].

In addition to our existing products, we [have developed / plan to introduce] [product or product-related service name] follow-on [product(s) / service(s)], with launch dates anticipated in [quarter and year]. [New Product / Service name] is a [type and nature of the product / service] and we expect [immediate / swift / global / gradual / relatively rapid / relatively slow] adoption in the [market name] market.

[New Product / Service name] represents a / an [easily-implemented / quickly installed / low-cost / viable alternative] solution to the problem of [customer problem your product / service solves]. [Type of customers] prospective customers can now easily [what they can do with or because of your product].

Other [enter-your-company-name-here] products include

, which we expect to [note your expectations for these products in the immediate future].

Testing

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[x] products listed in the Current Product section have been tested for ability to be manufactured and [are currently ready /  by (month, 20xx) will be ready] for market

To validate manufacturing feasibility for [product name], the following [tasks / operations] were tested in our pilot production process:

Pilot testing indicates standard unit production will be [xx] hours per [xxx] units. Processes have been validated to ensure optimally cost-effective, quality output.

Final tests were successful with regard to [all / most / etc.] evaluation criteria. Results are available on a need-to-know basis, as indicated for proprietary information. Testing was conducted during the period [month, year] through [month, year], at [xxx] facilities.

Volume testing will be accomplished by [xxx].

The following [product / process] requires additional pilot testing prior to volume testing:

.

These products are expected to be ready for market within [x]-[months / years], contingent upon current products generating sufficient cash flow to support additional product development.

Joint Development Efforts

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[enter-your-company-name-here] [is working in / has completed] joint development efforts with [xxx] and [xxx]. Financial and technical responsibilities [are / were] also shared in a joint development project with [xxx]. A pending project may be entirely funded by [xxx], who will [hold / relinquish to us] all rights to the resulting [product / technology].

A joint development project with [xxx] has been discussed, but has not yet begun. This project will require [technical input / development efforts / research] from [xxx], [xxx], and [xxx].

Exhibits

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For additional details, the following product-related documents are included in Supporting Documents. [insert list of documents.]

• Inventory, Production Costs & Capital Investment
• Key factors in the [fabrication / manufacturing / assembly] process include [xxx].
• Raw / prefabricated materials, components, and subassemblies required for production include [xxx].

Our key suppliers include

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• Supplier I        Plastic assembly
• Supplier II        Packaging, warehousing & fulfillment
• Supplier III Computers & Equipment

Unit price

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[enter-your-company-name-here] currently builds [qty] of [product name]s.  The price for each [product a] is $x, the price of [product b] is $x, and the price of a [product c] is $x.  The prices of these [products] are not expected to increase during the three- to five-year period reflected in the financial projections.

We take advantage of economies of scale by taking advantage of [xxx].

In comparison to other companies, [enter-your-company-name-here]’s products are [reproduced / completed] quickly and economically by [describe how your process or production techniques accomplish this].

Comparative analysis shows these figures to be [higher than / lower than / in alignment with / significantly better than] competitor costs. This is due to the fact that [xxx], so our overall costs [are typically stable year round / fluctuate by season / rise and fall with the stock market / increase or decrease depending on market demand].

Unit Cost

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At [enter-your-company-name-here] we will [fabricate, assemble, subcontract, etc.] the following [key parts, components, subassemblies, etc.]:

The following breakout lists the material and labor expenses required to build a [product name]:

Inventory costs

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The fact that [enter-your-company-name-here] custom builds [product]s to each individual’s specifications means that there is no inventory of [product name]s in stock. The company does maintain the necessary inventory of [xxx] materials necessary to build and ship one week’s worth of orders (approximately xxx products).

The cost of [quantity and number units] of the [xxx] materials is $xxx. The cost of maintaining this perpetual inventory is $xxx per month for space at a nearby storage facility. 

Labor costs

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[enter-your-company-name-here] has [xxx] employees, including the officers and owners of the company. The [x] [designers / assemblers / builders] [enter-your-company-name-here] has hired are each paid a salary of $xxx/year.  When [enter-your-company-name-here] obtains the financing, then [xxx] additional [designers / assemblers / builders] will be hired at  individual salaries of $xxx/ year.  Based upon previous years, [enter-your-company-name-here] has generally given [5-10]% salary increases to non-owner employees every year. We expect to continue giving a similar percentage for the next 3-5 years.

Capital equipment purchases and maintenance costs. 

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The machinery used to design and build [product name] is sufficient for current production levels.  However, if demand increases to our projected level, then [xxx] additional workstations will be needed for [xxx] new employees. The investment for the machinery and computer equipment for each workstation is $xxx.  Upon funding, this equipment will be ordered and placed into service within [xx] [days / weeks /  months].

Additional Space Requirements

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The new equipment to be purchased will require additional [office / production floor / materials storage] space.

To meet this requirement, management is considering:

• leasing additional space in a unit adjacent to the present facility
• moving the entire facility to a larger facility
• moving the administrative offices out of the current facility and leasing office space elsewhere for management and administrative staff .

The best option for [enter-your-company-name-here] is to move our offices [down the street / to Bendigo / upstairs]. The new office space is approximately xxx square feet.  The terms of the new lease are $[xxx] per month for [xx] months, and should meet our needs for at least the next [xxx] months..

Facilities

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The manufacturing facility [is / will be] located in [xxx].

This location [provides / will provide] necessary space for [initial / current] production and expansion to meet projected demand over the next [xxx] [weeks / months / quarters / years]. Our current production capacity, including internal and external production, is [xxx] units per [day / week / month / year].

Due to anticipated increased demand for up to [xxx] units per [week / month / year], additional facilities will be needed by [month], 20[xx]. Selection of the future site includes the following considerations:

The acquisition cost for land and improvements is $[xxx], which will be allocated in [xxx] increments over a period of [xxx] years. [enter-your-company-name-here] already owns / has access to / requires [xxx] of additional [land / storage space / assembly space / shipping and receiving ] and supporting staff.

Within our facility, an efficient production process hinges on proper layout of [xxx].

Equipment will be deployed as follows:This equipment is used in the processes as described and configured above to ensure that yields, lead-times, and costs stay on track to provide projected gross margins.

Staff

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Line employees include [xxx] specialists and [xxx] general production labour. Staff employees include [x]. To protect proprietary interests and information, the following policies will be enforced Packaging & Transportation

These last steps in the manufacturing process are important in establishing the desired image for the consumer. Of the standard packaging treatments available, the best choice for [enter-your-company-name-here]’s needs will be [custom boxes / bubble pack / shrink wrap / poly bags…]. Since this is a readily available form of packaging and a simple packaging process, considerable savings can be realized.

[Type of packaging] is more widely used, but in order to convey [a unique selling image / strong market position] we [are considering / will begin / have begun] using [describe the type of packaging].

Our competitors use [type of packaging] as well, but by using distinctive graphics, [photos included in Supporting Documents] we maintain our unique identity.

Fulfillment

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Fulfillment is an important part of customer satisfaction. [enter-your-company-name-here] utilizes [our xxx group / an external resource, xxx] to monitor and manage the delivery, billing, warranty service and repair of our products. This helps to ensure customer satisfaction and repeat sales.

To improve operating efficiencies, we plan to use [fulfillment company name] as our fulfillment company. Their facility is “state-of-the-art” and their customer record is excellent. By outsourcing this function, we can avoid hiring additional internal employees, or expanding our telephone and computer systems. We will also save on shipping costs due to the higher volume discounts [fulfillment company name] earns serving multiple businesses from one location.

During the past [xxx] [months / years] this [group / vendor] has demonstrated outstanding ability to [xxx].

Their capacity is sufficient to handle our anticipated fulfillment needs for the next [xxx] years.

Transportation will be via [truck / train / air cargo].

Comparative costs show that [xxx].

Shipping Terms

Since 20[xx], [enter-your-company-name-here] has managed it’s shipping department as a profit center. [enter-your-company-name-here] products are shipped to our [distributors / end-users] via [F.O.B. Origin / F.O.B Destination / F.O.B. Buyers Factory / Other].

We use the following as our primary carriers:

Ground:        [x]

Second Day:        [x]

Overnight:        [x]

During the last [period of time] we have taken advantage of several discount programs, including [xxx] to lower our average shipping costs by [xx]%. Future volume increases will allow us to take advantage of the following discounts,

, thus further lowering our average shipping costs.

Our shipping department provides other unique services, including: [List services.]