SACAffordable, Customisable                                   HOMES                      Sustainable,            W5   Rafa...
Empathic design
Concept directions
Concept directions
Concept directions
Market research- Primary Research		Census Data		 Statistics from Department of Rural Development		 Interviews and reports ...
Questionnaire- Family size.- Typical income and expenses.- Awareness about the government grants.- Willingness to spend ov...
Material palletteMaterials                     CostPolycarbonate sheets (Roof)   $2-3/sq meterFRP Roof sheets             ...
Market SizeTamil Nadu:Coimbatore			Avinashi			Mettupalayam		Udumalaipet			TirrupurHuts						507				7,406					1,348				    ...
Product/ market matrix						Hut				Shop				Typical				Elderly						dwellers			cum house		village family			community	SAC Ho...
Pricing- Work in progress.- Recommended price based on limited expert interviews is around $1500.- Margin of $35 or less i...
Profit/ Loss projection
Value chain                                                                                             Types of playersUp...
Value chain                                                             Value chain and the players                     •D...
Value chainValue package and delivery to customer  Product Design & Services  Material Suppliers                          ...
Value Chain                                           What is the customer paying for?             Value Addition         ...
Value Chain - conclusions- Significant initial capital investment- High dependency on raw material suppliers	 - Albeit a n...
Competitive factors                                                             SWOT of Porter’s 5 forces                 ...
Competitive factors- Threat of new entrants (Low)	   The barriers to entry is high but we bring value addition by product ...
Protection mechanismTYPE         PROS                                   CONS                                   CommentsPat...
Business model - Teece analysis                                  Complementary Assets                   Free available or ...
Business model - Teece analysisJoint Venture Vs. Strategic AllianceJoint Venture- Significant investment from all partners...
Thank you.
AppendixFACTS AND FIGURES:	 	 - Ministry of Rural development website - http://rural.nic.in/		 - Annual Reports - http://r...
Cost analysis                                 Variable cost : SAC Home Power                $Raw Materials       1,000 Wor...
P/L - normal case                                                         Year 1 1                                        ...
P/L - worst case                                                        Year 1                                            ...
P/L - best case                                                        Year 1                                             ...
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SAC Homes - Sustainable, Affordable, Customisable Homes - Prabhu

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SAC Homes is an innovative modular house that is designed by a team of Imperial and RCA students led by Prabhu Subramanian. Follow us on @sachomesuk

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SAC Homes - Sustainable, Affordable, Customisable Homes - Prabhu

  1. 1. SACAffordable, Customisable HOMES Sustainable, W5 Rafael Fernandes Biswanath Ghose Amrita Kulkarni Ajay Pahwa Khurram QayamPrabhu Subramanian
  2. 2. Empathic design
  3. 3. Concept directions
  4. 4. Concept directions
  5. 5. Concept directions
  6. 6. Market research- Primary Research Census Data Statistics from Department of Rural Development Interviews and reports on the internet.- Secondary Research – Work in Progress Expert interviews – Mahindra Finance, Team Everest (Charity) Survey Questionnaire- Cost estimation from suppliers.
  7. 7. Questionnaire- Family size.- Typical income and expenses.- Awareness about the government grants.- Willingness to spend over and above the grant.- Other funding options – awareness.- Ideal requirements for their dream house.
  8. 8. Material palletteMaterials CostPolycarbonate sheets (Roof) $2-3/sq meterFRP Roof sheets $2-15/sq meterFRP wall panel $4-16/sq meterFRP honeycomb panel $30-150/sq meterSolar panels $0.9-$1.1 per watt (65 watts)Solar battery $80-100FRP I-beam $20-40 per meterBamboo beam Work in progressLooWatt $70 + $0.05 per monthConcrete Canvas Work in progressOther components Work in progress
  9. 9. Market SizeTamil Nadu:Coimbatore Avinashi Mettupalayam Udumalaipet TirrupurHuts 507 7,406 1,348 18Sub-standard 49,570 22,615 60,470 30,418houseHousehold 734 796 462 818shops Source : 2011 Census data
  10. 10. Product/ market matrix Hut Shop Typical Elderly dwellers cum house village family community SAC Home 9,279 - survey -SAC Home 172,352 2,810 survey -PowerSAC Home later stage -WaterSAC Home - - - surveyAnand
  11. 11. Pricing- Work in progress.- Recommended price based on limited expert interviews is around $1500.- Margin of $35 or less in year1. Scope to improve margins from year 2 due to scale.
  12. 12. Profit/ Loss projection
  13. 13. Value chain Types of playersUpstream Downstream FinancialResearch – Product & Suppliers – Suppliers – Assembly / institutions Marketing market & services raw compliment Production Distributors design /Govt. & salesmaterials materials ary assets house grants Index • The SACs • Other players
  14. 14. Value chain Value chain and the players •Design SAC •Special •Suppliers Home promotion •Raw •Financial s - fairs •Transport /moduleR materials D •Services P institutio M •Charities D •Other •Market ns / grants agencies & Overall / NGOs •Assembly Package •Media DesignResearch Development Production Marketing Distribution Index • The SACs • Other players
  15. 15. Value chainValue package and delivery to customer Product Design & Services Material Suppliers Customers Assembly/Production House Financial Institutions Index • The SACs • Other players
  16. 16. Value Chain What is the customer paying for? Value Addition Players (or holders of complimentary assets)Sustainable homes Designers (The SACs)(durable & sanitized) Raw material suppliersAffordable homes Designers (The SACs)(via grants & private finance) Financial institutions / Government grantsComplimentary assets Designers (The SACs)(loo-watt, community, additional revenue Complimentary asset supplierssource)Brand Name Marketing(on-going purchase & growth)Availability Distributors – Work in progress
  17. 17. Value Chain - conclusions- Significant initial capital investment- High dependency on raw material suppliers - Albeit a number of suppliers are available in Indian market - Complimentary assets are not available locally in India- Market acceptance challenges - Surveys in progress to close this gap- More research needed on financial options and distributors.- More thinking and research needed!
  18. 18. Competitive factors SWOT of Porter’s 5 forces Supplier Power  Many suppliers available locally  Complimentary assets not available locally  Can supply to competitors Threat of New Entrant Internal Rivalry Substitutes Uniqueness of product  Less competition  Product differentiation Protection  Price sensitivity of  Quality and perceived mechanisms customers value-additions Relationship with  Specialised market –  Competitive price suppliers high ‘barriers to exit’ Complexity High capital Buyer Power  Potentially large volume  Potentially contribute to design Index  Switching cost • The SACs  Customer Loyalty  Price sensitivity • Other players 
  19. 19. Competitive factors- Threat of new entrants (Low) The barriers to entry is high but we bring value addition by product differentiation and patented innovative designs. Complexity and modest margins make the venture unattractive for an entrant but there is huge potential of economies of scale.- Supplier Power (Low to medium) Many local suppliers of raw materials available. However, complimentary assets are not available locally. Collaborative partnerships with suppliers will promote exclusive arrangements.- Buyer Power (Medium) Buyers can choose a competitor over SAC Homes; but switching costs are high. We propose to involve our buyers to customise and contribute in design development. Also, affordable financial arrangements can incentivise a buyer.- Threat of substitutes (Low) Continue to live in huts or sub-standard houses or choose a competitor. Perceived value-additions offered by SAC Homes will make it more attractive proposition.- Internal Rivalry (Medium) Only one direct competitor identified (WorldHaus). SAC Homes will provide a unique product. There can be a potential price pressures but the huge market volume provides economies of scale.
  20. 20. Protection mechanismTYPE PROS CONS CommentsPatents • Novel Idea • Long time before patent is granted Cost might be a • Long duration of Protection • High cost of getting a patent deterrent in the short • Attractive to Banks & term but patents are Investors critical for funding and • High Valuation long term protectionTrade • Easily distinguished • Right to prevent unauthorisedMarks use of Trade Mark. • Indefinite subject to renewal • Low CostsTrade • NDA with suppliers & • Once lost, it is lost forever. Manufacturers • Susceptible to independentSecrets • Negligible cost discovery • Can be protected with patentsComplexity • Low protectatbility as Idea can No clear advantage easily be imitated for SAC homesSpeed to • Sufficient Critical Mass in short • Different ways of offering the Unfavourable due to time product . large capitalMarket • Fast pull effect with low cost and • Large capital required during requirement during easy finance early phase early phases • Friendly and customisable solution
  21. 21. Business model - Teece analysis Complementary Assets Free available or unimportant Tightly held and important Difficulty to make Profits Holders of Assets Profits H I G HImitability INNOVATORS Highest Bargaining Power L PROFIT PROFITS O • Create entry barriers via IPR • Create entry barriers via partnering with the supplier W • Direct supply of materials to us for assembly of SAC • Profit sharing depends on Homes negotiation with the partner Competition Strategy Collaboration Strategy - Outsource building blocks - Partner with suppliers, eg (loo watt, solar panels etc) Ikea leveraging their marketing, - In-house design and assembly distribution channels and deep - In-house marketing, pockets service and support - Shared risks leading to dilution in profits
  22. 22. Business model - Teece analysisJoint Venture Vs. Strategic AllianceJoint Venture- Significant investment from all partners- Creation of a a new separate companyStrategic Alliance- Gaining Capabilities- Easy acess to target markets- Sharing the Financial Risk- Wining the Political obstacle- Achieving synergy and competitive advantage
  23. 23. Thank you.
  24. 24. AppendixFACTS AND FIGURES: - Ministry of Rural development website - http://rural.nic.in/ - Annual Reports - http://rural.nic.in/sites/annual-report.asp - Explanation of schemes under Rural housing - http://rural.nic.in/sites/programmes-schemes-rural-housing.asp http://census2001.tn.nic.in/pca2001.aspxCOMPETITORS: - Worldhaus - http://worldhaus.com/ - MIT 1K house - http://web.mit.edu/1khouse/contents.htm - $300 house - http://www.300house.com/POTENTIAL RAW-MATERIAL SUPPLIERS - Everest - http://everestfibre.com/ - Concrete Canvas - http://www.concretecanvas.co.uk/
  25. 25. Cost analysis Variable cost : SAC Home Power $Raw Materials 1,000 Work in progressAssembling 150Solar battery 100Solar panels 55 14w energy saver bulb, mobile charger, mini-fanLoo Watt 70Logistics 50Marketing 20Support 20Cost 1,465Sale price 1,500Margin 35 Variable cost : SAC Home $Raw Materials 1,000 Work in progressAssembling 150Loo Watt 70Logistics 50Marketing 20Support 20Cost 1,310Sale price 1,350Margin 40
  26. 26. P/L - normal case Year 1 1 Year Year 2 2 Year Year 3 3 Year Year 44 YearUnit sales 300 250 1,600 1,400 3,500 2,750 8,000 4,500Contribution Margin per unit 3535 38 37 43 42 47 46Total Contribution 10,500 8,750 60,800 51,800 150,500 115,500 376,000 207,000Fixed Costs Salary Salary 16,000 16,000 19,000 19,000 22,000 22,000 25,000 25,000 ITIT 20,000 20,000 15,000 15,000 10,000 10,000 5,000 5,000 Others Others 3,000 3,000 5,000 5,000 7,000 7,000 10,000 10,000 Finance Cost @@ 12% Finance Cost 12% 2,400 2,400 3,000 3,000 2,400 2,400 2,400 2,400 Prototyping Prototyping 37,500 37,500 30,000 30,000 25,000 25,000 20,000 20,000 Inventory Inventory 20,000 20,000 25,000 25,000 20,000 20,000 20,000 20,000 Regulatory Regulatory 10,000 10,000 5,000 5,000 5,000 5,000 2,000 2,000Total Fixed Costs 108,900 108,900 102,000 102,000 91,400 91,400 84,400 84,400Break Even Point 3,111 3,111 2,684 2,757 2,126 2,176 1,796 1,835Revenue from Homes 450,000 375,000 2,400,000 2,100,000 5,250,000 4,125,000 12,000,000 6,750,000Revenue from other Modules 00 00 142,500 123,750 382,500 311,250Total Revenue 450,000 375,000 2,400,000 2,100,000 5,392,500 4,248,750 12,382,500 7,061,250Cost Of Sales - Homes 439,500 366,250 2,339,200 2,048,200 5,099,500 4,009,500 11,624,000 6,543,000Cost Of Sales - Modules (30% margin) 00 00 99,750 86,625 267,750 217,875Total Cost Of Sales 439,500 366,250 2,339,200 2,048,200 5,199,250 4,096,125 11,891,750 6,760,875Total Contribution 10,500 8,750 60,800 51,800 193,250 152,625 490,750 300,375Total Fixed Costs 108,900 108,900 102,000 102,000 91,400 91,400 84,400 84,400Net Profit / Loss before tax -98,400 -100,150 -41,200 -50,200 101,850 61,225 406,350 215,975
  27. 27. P/L - worst case Year 1 Year 1 Year 2 Year 2 Year 3 Year 3 Year 4 Year 4Unit salesUnit sales 200 300 1,200 1,600 2,000 3,500 3,000 8,000Contribution Margin per unitContribution Margin per unit 35 35 37 38 41 43 42 47Total ContributionTotal Contribution 7,000 10,500 44,400 60,800 82,000 150,500 126,000 376,000Fixed CostsFixed Costs Salary Salary 16,000 16,000 19,000 19,000 22,000 22,000 25,000 25,000 IT IT 20,000 20,000 15,000 15,000 10,000 10,000 5,000 5,000 Others Others 3,000 3,000 5,000 5,000 7,000 7,000 10,000 10,000 Finance Cost @ 12% Finance Cost @ 12% 2,400 2,400 3,000 3,000 2,400 2,400 2,400 2,400 Prototyping Prototyping 37,500 37,500 30,000 30,000 25,000 25,000 20,000 20,000 Inventory Inventory 20,000 20,000 25,000 25,000 20,000 20,000 20,000 20,000 Regulatory Regulatory 10,000 10,000 5,000 5,000 5,000 5,000 2,000 2,000Total Fixed CostsTotal Fixed Costs 108,900 108,900 102,000 102,000 91,400 91,400 84,400 84,400Break Even PointBreak Even Point 3,111 3,111 2,757 2,684 2,229 2,126 2,010 1,796Revenue from HomesRevenue from Homes 300,000 450,000 1,800,000 2,400,000 3,000,000 5,250,000 4,500,000 12,000,000Revenue from other ModulesRevenue from other Modules 0 0 0 0 105,000 142,500 240,000 382,500Total RevenueTotal Revenue 300,000 450,000 1,800,000 2,400,000 3,105,000 5,392,500 4,740,000 12,382,500Cost Of Sales -- HomesCost Of Sales Homes 293,000 439,500 1,755,600 2,339,200 2,918,000 5,099,500 4,374,000 11,624,000Cost Of Sales -- Modules (30% margin)Cost Of Sales Modules (30% margin) 0 0 0 0 73,500 99,750 168,000 267,750Total Cost Of SalesTotal Cost Of Sales 293,000 439,500 1,755,600 2,339,200 2,991,500 5,199,250 4,542,000 11,891,750Total ContributionTotal Contribution 7,000 10,500 44,400 60,800 113,500 193,250 198,000 490,750Total Fixed CostsTotal Fixed Costs 108,900 108,900 102,000 102,000 91,400 91,400 84,400 84,400Net Profit // Loss before taxNet Profit Loss before tax -101,900 -98,400 -57,600 -41,200 22,100 101,850 113,600 406,350
  28. 28. P/L - best case Year 1 Year 1 Year 2 Year 2 Year 3 Year 3 Year 4 Year 4Unit salesUnit sales 200 300 300 1,200 1,600 1,600 2,000 3,500 3,500 3,000 8,000 8,000Contribution Margin per unitContribution Margin per unitContribution 35 35 37 38 38 41 43 43 42 47 47Total ContributionTotal ContributionTotal 7,000 10,500 10,500 44,400 60,800 60,800 82,000 150,500 150,500 126,000 376,000 376,000Fixed CostsFixed CostsFixed Salary Salary 16,000 16,000 19,000 19,000 22,000 22,000 25,000 25,000 IT IT 20,000 20,000 15,000 15,000 10,000 10,000 5,000 5,000 Others Others 3,000 3,000 5,000 5,000 7,000 7,000 10,000 10,000 Finance Cost @ 12% Finance Cost @ 12% 2,400 2,400 3,000 3,000 2,400 2,400 2,400 2,400 Prototyping Prototyping 37,500 37,500 30,000 30,000 25,000 25,000 20,000 20,000 Inventory Inventory 20,000 20,000 25,000 25,000 20,000 20,000 20,000 20,000 Regulatory Regulatory 10,000 10,000 5,000 5,000 5,000 5,000 2,000 2,000Total Fixed CostsTotal Fixed CostsTotal 108,900 108,900 102,000 102,000 91,400 91,400 84,400 84,400Break Even PointBreak Even PointBreak 3,111 3,111 2,757 2,684 2,684 2,229 2,126 2,126 2,010 1,796 1,796Revenue from HomesRevenue from HomesRevenue 300,000 450,000 450,000 1,800,000 2,400,000 2,400,000 3,000,000 5,250,000 5,250,000 4,500,000 12,000,000 12,000,000Revenue from other ModulesRevenue from other ModulesRevenue 0 0 0 0 105,000 142,500 142,500 240,000 382,500 382,500Total RevenueTotal RevenueTotal 300,000 450,000 450,000 1,800,000 2,400,000 2,400,000 3,105,000 5,392,500 5,392,500 4,740,000 12,382,500 12,382,500Cost Of Sales - HomesCost Of Sales - HomesCost 293,000 439,500 439,500 1,755,600 2,339,200 2,339,200 2,918,000 5,099,500 5,099,500 4,374,000 11,624,000 11,624,000Cost Of Sales - Modules (30% margin)Cost Of Sales - Modules (30% margin)Cost 0 0 0 0 0 0 73,500 99,750 99,750 168,000 267,750 267,750Total Cost Of SalesTotalTotal Cost Of Sales 293,000 439,500 439,500 1,755,600 2,339,200 2,339,200 2,991,500 5,199,250 5,199,250 4,542,000 11,891,750 11,891,750Total ContributionTotalTotal Contribution 7,000 10,500 10,500 44,400 60,800 60,800 113,500 193,250 193,250 198,000 490,750 490,750Total Fixed CostsTotalTotal Fixed Costs 108,900 108,900 108,900 102,000 102,000 102,000 91,400 91,400 91,400 84,400 84,400 84,400Net Profit // Loss before taxNet Profit Loss before taxNet -101,900 -98,400 -98,400 -57,600 -41,200 -41,200 22,100 101,850 101,850 113,600 406,350 406,350

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