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0 INDUSTRY, CUSTOMER AND COMPETITOR ANALYSIS

1.1 INDUSTRY OVERVIEW

Industry analysis is basically a business research which typically acts like a

wonderful tool to know the potential of a particular industry. Industry analysis

comprises of reviewing the economic, political and market factors which influence

the way any industry develops. Malaysia, historically, has sustained one of the

highest rates of growth in the world. Malaysia has a rapidly developing

manufacturing sector. Since 1988, real GNP has grown at an annual average rate of

growth of 8.5 percent (World Bank, 1996). Provisional data in the Statistics

Department from March 2017 showed that, Malaysia’s manufacturing sector

continues to grow, with sales jumping 13.8% to RM65.9 billion compared to the

same month a year ago. In 2018, Malaysia’s manufacturing sector continues to grow

4.9%. According to the newspaper article, private investment is expected to record

a high growth of 5% in 2019, following capital expenditure in the manufacturing

sector and technology-intensive and services. The budget of 2019, will allocate a

sum of RM314.5 billion in expenditure compared to an allocation of about

RM290.4 billion in 2018 (Berita Harian, 2018).

Motion Backpacks offers backpacks for a specific need with in the backpack

market. There are no backpacks currently in the industry that has a support system

using suspended technology that can glides up and down specific for traveller and

hiking use. The average person tends to go about 5 to 10 pounds over the suggested

weight amount for the average backpack. With a regular backpack items within the

bag have to be situated just right in order for the backpack to function properly.

Motion bags would offer a support system for consumers back.

Bags have evolved from simple strap and pouch to more complex activity specific

bags.

Activities that involve the use of a bag are climbing, hiking, school, sports, and

everyday activities. There are also two different designs such as simple backpacks

with shoulder straps and hiking backpack that can load a large weight. Even though

bags have evolved for many uses there is still no one offering a bag that has a

support system for hiking use.

The Porter Five forces chart (see figure 1) explains the business environment

surrounding Motion Backpacks. It shows both the opportunities and threats

associated with the new venture. Also shown in the chart are customers,

competitors, substitutes, suppliers and industry/regulatory forces and how they

influence the expected success of Motion Backpacks.

Our customer base will mainly be consisting of college students and adults who

love hiking and travelling. We see a great opportunity to enter the market in this

target of college students and expect to see great success. There are currently 40

million students across the nation who use a backpack and we plan to target college

students (but not limited to all students) who have a constant need for good

backpack gear. As we focus on college students we hope to capitalize on the

independent financial situation that they have and to create a need for a backpack

that will be cost effective and quality reliable. We will enter this part of the market

and create a need for college students to use a frame supported backpack and the

benefits associated with our specific brand and prices.

There are currently 5-10 major backpack companies that are in the market but they

vary in quality and pricing. The well established companies offer name brand
 proven reliable gear, but their market power has lead them to increased pricing.

Competitors’ equipment ranges in size and quality but their does not yet exists a

company ready to enter the market with collapsible hard frames. Our company will

also offer sizes suitable for climbing sports, school, and climbing. We will enter the

market offering the best quality backpacks for students at the lowest cost available.

We expect to maneuver well around competitors and be able to open up part of the

market share where much growth is potential.

The substitutes in the backpack industry are generally based on gear that does not

have strong frames. Regular school backpacks do not include a frame and end up

causing discomfort, ware, and heavier loads for students, travellers and hikers.

Another substitute would include a larger backpack for more avid campers and

sportsmen. Our product will prove to fit the category of best gear for all around use.

Though similar products on the market exist, pricing is considerably unaffordable

to students. The substitutes are too weak, too expensive, or too large.

Because other patents of backpack frames exist, we will plan to use an existing

frame model and eventually design a unique design that will correspond to our great

value. There are multiple major suppliers that exist including Global Sources- China

and Wholesalers from Alibaba.com- South Africa. Since there are so many options

we will probably choose an overseas supplier that offers low cost of goods. We plan

to use whichever supplier is the best cost at the time, and this may shift depending

on shipping costs, currency, etc.

1.2 OPPORTUNITY ANALYSIS

Opportunity analysis is a detail review of the prospect for a product within a

potential market. In Malaysia usually our company found a lot of blogs that advice

the hikers or travellers to carry out only important things in their backpacks.
 Sometime a new beginners tend to bring a lot of stuff and make their backpacks so

much load and it can cause back pain. In addition, a woman, they need to carry a

lot of things such as clothes, travel kits and scarf for Muslim so they cannot avoid

to bring a lot of things, thus Motion Backpack can make their life easier to bring

anything’s in one backpack.

1.3 COMPETITOR ANALYSIS

Figure 1.2 Osprey Backpack

Figure 1.3 Osprey Hiking

Osprey is a huge brand backpack that owned by Michael Pfotenhauer in 1974.

Osprey first manufacturing in Colorado and they had faced challenging in United

States later then, they began working with Korean manufacturers that owned and

managed facilities in Vietnams until now. Suspension is a system of frames, stays,

back panels, load lifters, hip belts and harnesses that connect the pack to the wearer.

Suspension systems serve dual purposes: First, effectively transferring the weight
 of the gear carried to the appropriate structures of the human body; second, the

suspension allows the pack wearer to move freely and naturally with the pack

instead of against it when hiking, mountain biking, running or scrambling. It takes

the right combination of design and fit to develop a suspension system that allows

the user to move freely and naturally.

Figure 1.4 Deuter Backpack

Figure 1.5 Deuter Hiking

1.4 CRITICAL RISK