Paper’s Objective is to attract investment resources to create the company LUOU LUOU.

Table of Contents

1. Introduction 2

1.1. Paper’s Objective 2

1.2. Problem Definition and Solution 2

2. Features, Benefits and Market Opportunity 3

2.1. Gap Analysis 3

2.2. Features and Benefits 4

2.3. Market Opportunity 5

3. Market strategy 6

3.1. Porter’s Five Forces Industry Analysis 6

3.2. Competitive positioning 7

3.3. Market Strategy 8

3.4. Generic Go-to-Market Strategy 8

3.5. Fictional Persona 9

3.6. Elevator Pitch 10

4. Financial model 10

5. Conclusions 12

6. Bibliography 14


Paper’s Objective

Paper’s Objective is to attract investment resources to create the company LUOU LUOU. The purpose of the project is to make a profit through innovative product promotion. LUOU LUOU Smart pod is a small company with a long-term focus. To achieve its goals, the company must focus on the mission behind the vision. The company’s vision is realized in three ways:

  • Simplify the daily work of medical personnel through the introduction of high technologies.
  • Ensure job creation with competitive wages.
  • Work effectively to achieve the best innovative result.

LUOU LUOU Smart pod mission

The company is focused on empowering everyone to use technology to facilitate everyday functions. We use the best human and technological resources to create excellent quality products, thereby contributing to sustainable development.

Problem Definition and Solution

Project goal: To design a company with an innovative product based on SMART technology for implementation in the healthcare industry.

Upon successful implementation of the project, the company plans to increase its production capacity.

Market: This product is designed to meet the needs of healthcare professionals. The start-up is planned in the territory of Riga, with subsequent expansion to the entire Baltic region

Outlook: The Covid-19 pandemic has given serious thought to the importance of the medical sector in the economy. The company is a good solution for redirecting the forces of medical personnel, which will allow for private partnerships with public and private medical companies.

Features, Benefits and Market Opportunity

Gap Analysis

Gap analysis can identify gaps in the market. A gap analysis method permits companies to discover how to best accomplish their business purposes (Watkins, Meiers and Visser, 2012).

Table 2.1. Gap Analysis


Current Gap

Desired Goal




Some professions require complete freedom of movement (hands) combined with fast execution of tasks

An innovative device that responds to both voice and gesture or touch


Healthcare workers, engineers and anyone looking for mobility


Sometimes it is necessary to have a handheld device on hand that releases control

Portable device that does not need special conditions for transportation, power supply or installation


Police, emergency services, healthcare workers


Modern society is focused on improving the efficiency of medical institutions

A device that allows instant access to numerous control functions




The introduction of a system of protection against fire, theft or other negative cases requires a centralized solution

A device that allows keeping abreast of the current security status of the premises with instant notification at any distance


Any SMART-house’s owner

Features and Benefits

A feature is the characteristics of the product, which defines its usability. A Benefit is the outcomes or results that users will (hopefully) experience by using your product or service (Majhi, 2021). Feature-benefit matrices help marketers ensure their messaging is consistent, relevant, and accessible to end-users (Shewan, 2020).

Table 2.2. Feature-Benefit Matrix



Benefit a

Benefit b


Voice, gesture and touch control

Allows full control of the device in three different ways

Such functions as recording,
streeming, photoes, routing etc. can be fully
controlled by voice


Device portability and mobility

Allows easily carrying the device and even use it on the way

Does not need a constant power source, requires charging once a day or less


Fire and thief alarm

In case of nearby emergency or dangerous situation,
glasses will inform owner about it


Market Opportunity

Today, more than 28,000 specialists work in software development companies in the IT sector of Latvia. In addition, about 700 computer science students graduate annually from the country’s universities, which also stimulates the industry’s growth (IT Outsourcing Destinations Overview: Estonia, Latvia, Lithuania – N-iX, 2019). The information and communication technology sector has become the third-largest exporter in Latvia after the woodworking and food processing sector (Information and Communications Technology Industry, 2021). The development of the Latvian IT market has led to the emergence of such large service providers in the country as Tieto, Evolution, Accenture Latvia, and Lattelecom Technology. Thus, the high-tech market is successfully developing in Latvia, which creates favorable conditions for the implementation of an innovative company.

In addition, despite the recession associated with the Covid-19 pandemic, Latvia is showing good results in overcoming it. So, in 2020 in the European Union as a whole, a decline of 7.4% was predicted, in Latvia – by 5.6%, in 2021 the forecast for economic growth as a whole for the European Union – 4.1%, in Latvia – 4.9% (LSM, 2021).

Market strategy

Porter’s Five Forces Industry Analysis

The competitor’s analysis can be done as per the guidelines in Porter’s 5 Forces Analysis.

Porter’s five forces analysis is a methodology for industry analysis and business strategy formulation developed by Michael Porter at Harvard Business School in 1979 (Kawira, 2017).

Porter’s five forces include:

  • analysis of the threat of the emergence of substitute products;
  • analysis of the threat of the appearance of new players;
  • analysis of the market power of suppliers;
  • analysis of the market power of consumers;
  • analysis of the level of competition.

The methodology identifies five forces that determine the level of competition and, consequently, the attractiveness of doing business in a particular industry.

The attractiveness of the industry, in this context, has to do with the sufficient profitability of the industry. An unattractive industry is one in which the combination of forces reduces profitability. The most unattractive industry is approaching perfect competition.

Porter calls these forces the microenvironment, contrasting it with many factors included in the term macro environment (Maina, 2017).

The threat of the emergence of new competitors.

Since investments to enter the market do not require high capital investments, this threat is quite high. It is reduced only by the factor that creating a company is not the main task, the main one is to attract customers to the innovative industry. Therefore, despite the apparent attractiveness of this business, there are not many players on the market. However, there is a risk that the LUOU LUOU Smart pod will become one of the most common devices among healthcare professionals, attracting new players to the industry.

Thus, the degree of threat to the appearance of new customers can be assessed as average.

The threat of substitute services.

This type of threat exists, smart pods of other companies such as Huion, Samsung, NextTouch can be called replacement services, but there is a significant difference between them and LUOU LUOU Smart pod – the ability to control using voice, gestures, and touch. Therefore, at the moment, the threat of substitute goods can be assessed as insignificant.

The threat of increasing the power of buyers.

The threat level is very low because the LUOU LUOU Smart pod is a unique product, given the specified characteristics.

The threat of increasing the market power of suppliers can be assessed as a medium since even though the industry has high demands on suppliers, there are not so few of them.

The threat from existing competitors is minimal, given the indicated advantages of the product.

Thus, we considered the possibilities of threats to the company’s activities from the side of substitute products, new market players, suppliers, consumers, and also analyzed the level of competition.

Competitive positioning

The “five forces” Porter’s diamond model has been regarded as the major analytical framework of the competitive positioning paradigm (Kharub and Sharma, 2017).

The analysis showed the following position of the company (table 3.2).

Table 3.2. Competitive positioning analysis

Porter’s Force




The company offers a unique product for today, which has no complete analogues.

New players

High. The market is actively developing and is one of the most attractive segments. Doesn’t require high capital investments.


Low. Growing market and technology advances attract new suppliers to the industry, reducing their bargaining power


Low. Consumer power is low because the product has unique benefits for a wide range of consumers.


Low. The industry is attractive, but today the company has no competitors due to the uniqueness of the product.

Market Strategy

Competition strategy is a list of actions that a company takes to generate higher profits than its competitors. Thanks to an effective competitive strategy, the company attracts customers more quickly, incurs lower costs of attracting and retaining customers, and obtains a higher rate of return on sales.

Porter identified four types of basic competitive strategies in the industry (Bayraktar, 2017):

  • Cost Leadership Strategy or Low-cost strategy.
  • Differentiation strategy.
  • Best-cost strategy.
  • Market-niche or focus strategy.

The choice of the type of competitive strategy depends on the capabilities, resources, and ambitions of the company in the market.

Based on the analysis, the company intends to rely on a product leadership strategy. A differentiated marketing strategy is an effective method of achieving a competitive advantage in the marketplace; it is the most common competitive strategy and allows for long-term profitable growth. If a new strong player emerging, the company can change its course towards niche leadership (focus on healthcare professionals).

The advantage of a differentiated marketing strategy is that it allows you to sell a product for more than the price of a regular product, avoids direct competition, and reduces the negative impact on the company’s sales of market leaders. The strategy can form high brand loyalty and commitment.

Specific actions include:

1. Creation of a strong recognizable brand and high awareness of the product, namely its unique characteristics.

2. It is necessary to conduct regular monitoring of competitors’ proposals – if there will the emergence of close analogs, concentrate on the chosen niche – medical workers.

3. To form long-term relationships with clients through a system of effective communications

Generic Go-to-Market Strategy

A company’s go-to-market (GTM) strategy is one of the most important method to improve key business outcomes through market situation and business entity capability.

Go-to-market is a strategy for companies that seek to convey their value proposition to the target audience, achieve advantages over competitors, and sell a product or service. This technique is used when launching a new product. It personifies the business model and helps determine whether such a project will be in demand among the target audience or not.

There are two main ways to use a Go-to-market strategy: the sales funnel and the flywheel. The first is traditional, which focuses on generating leads and converting them into buyers. The second involves inbound marketing and aims at building long-term customer relationships (that is, nurturing sales with the subsequent transformation of a customer from a regular to a permanent one).

According to the above analysis, such features of the GTM strategy can be distinguished. First, it should be understood that consumers have a belief that product quality depends on price. That being said, there are other smart panels on the market, albeit with more limited functions. Hence, the strategy should focus on demonstrating and explaining the benefits of choosing an LUOU LUOU Smart pod.

A particular action plan involves:

  • creating a high-quality landing page that reflects the main consumer benefits, benefits, etc.;
  • organizing limited distribution until full launch to create increased interest in a new product or business;
  • content marketing – writing useful materials related to the scope of the product;
  • development of word of mouth through an affiliate program;
  • attracting opinion leaders to which the target audience listens;
  • promotion in social networks (creation of personal product pages, targeting, etc.).

Fictional Persona

The persona method is a qualitative research method. Its goal is to create multiple characters with characteristics of potential users of the product. Simply put, each character is a collective image of one target audience (Malik, 2019).


Certified plastic surgeon, microsurgeon, hand surgeon 


  Красивый парень в инвалидной коляске и девушка с кофе в бумажной чашке,  гуляя по улице — кофе чтобы пойти, лицо с ограниченными возможностями -  Stock Photo | #221494562  

Fictional name:

Raimonds Vējonis


Individual entrepreneur

Job responsibilities

Engaged in writing music soundtracks for computer games


30 years old


Goals and tasks:

He is focused and goal-oriented.

Elevator Pitch

My name is XXX and my dream is to change the world with innovative high-tech products that can improve human performance.

The Covid-19 pandemic and its associated limitations made me think about creating a handheld device that allows us to expand our control capabilities from anywhere. At the same time, the device must correspond to the concept of sustainable development – that is, it contributes to the maximum satisfaction of the needs of current and future generations.

I recently conducted research and developed a project that will allow introducing LUOU LUOU Smart pod technologies to the Latvian market.

My project builds on experiences I have gained working with several software startups as a sales and marketing specialist.

I am ready to discuss my work with everyone interested in how we will achieve success.

Financial model

In order to calculate the potential profit of the projected enterprise, it is necessary to calculate the potential income, startup costs and monthly costs.

The total cost of purchasing the necessary equipment will amount to 13,300 euros.

For this company, it is supposed to rent premises of 35 sq. m, costing 12 euros sq. m. Thus, the monthly rent will be 420 euros, plus an additional payment for utilities (payment for services is programmed at 100 euros since it differs during the heating season and in its absence). The contract is for 3 years, payment is made for the first and last month of the lease (840 euros down payment).

Also, the monthly expenses should include the costs of securing the premises under an agreement with GRIFS AG. The company enters into a contract for the purchase and installation of equipment, which includes:

  • Motion sensor
  • Magnetic door contact
  • Central with the control center.

The cost of the kit is 315 euros.

The monthly subscription fee is 19 euros.

Thus, the total cost of starting the company is 13300 + 840 + 315 = 14455 euros.

For the implementation of the project, it is planned to attract credit funds for 9000 euros (about 60% of the total cost). The annual interest rate on the loan is 6%, the interest is calculated from the remaining amount. The loan repayment period is 60 months (5 years). If additional sources of income are available, early repayment of the loan is expected.

The monthly payment is 174 euros. The overpayment of the loan is 1440 euros. Payments for the entire term of the loan 10,440 euros. End of payments 05.10.2025.

For the employer, the monthly payroll costs (director, project manager, and sales manager) are € 11,664.46 (including VSAOI for the employer).

The next step is to calculate the estimated income.

The average monthly income is 12,420 euros (for 3,000-4,000 euros).

We plan to increase the market share annually at the level of 5%. Then, in the first year of the project, the income will be 149040 euros, in the second – 156,492 euros, in the third – 164,316.6 euros, in the fourth – 172,532.4 euros, in the fifth – 181,159.1 euros.

Then the company’s cash flows can be calculated as follows (table 4.1.)

Table 4.1.

Company cash flows









Net profit







(loan + equity)









Cash flows






Let’s make calculations of the main financial indicators based on discounted indicators.

Let’s take the value of the return on equity capital of 15%, then the return on debt will be 9%. Equity capital 6000 euros, borrowed capital – 9000 euros. Tax 21%.

Then WACC = 10.59%

Let’s make calculations to assess the effectiveness:

NPV = -I + = 30678,94 euro

Further IRR – the value is 52.76%

The payback period exceeds two years, but less than three years. Let’s make a calculation:

The profit for two years will amount to 810.71 euros.

Then the balance will be 15000-810.71 = 14189.289 euros.

Let’s calculate the number of months: 14189.289 / 16374.13 = 0.86 years (or 10 months).


1. Writing an attractive investment proposal is a task that requires an integrated approach and knowledge of not only the launched product, but also the industry, strategy and competitors.

2. The current investment proposal is designed to create a company to promote the innovative product LUOU LUOU Smart pod.

3. The advantage of the company is a unique innovative proposal that can interest both a wide audience and find its application in a narrow specialized niche. The main key factor for the company’s success is the creation of a strong and recognizable brand focused on sustainable development.

4. The cost of opening a company is 15,000 euros. The total payback period is three years and ten months. NPV = 30678.94 euro


  1. Bayraktar, C.A., Hancerliogullari, G., Cetinguc, B. and Calisir, F., 2017. Competitive strategies, innovation, and firm performance: an empirical study in a developing economy environment. Technology Analysis & Strategic Management, 29(1), pp.38-52.
  2. Kawira, B., 2017. Effects of porter’s five forces on strategy formulation: A case study of Standard Chartered Bank Kenya (Doctoral dissertation, United States International University-Africa).
  3. 2021. Information and Communications Technology Industry. [online] Available at: <> [Accessed 9 April 2021].
  4. Maina, J., 2017. Effects of Environmental Factors on Performance: A Case of Barclays Bank (Doctoral dissertation, United States International University-Africa).
  5. Majhi, D., 2021. Learning to Build a Feature-Benefit Matrix. [online] Available at: <> [Accessed 9 April 2021].
  6. Malik, A., 2019. Persona based marketing strategies: creation of personas through data analytics (Doctoral dissertation, University of Oulu).
  7. 2019. IT Outsourcing Destinations Overview: Estonia, Latvia, Lithuania – N-iX. [online] Available at: <> [Accessed 9 April 2021].
  8. Shewan, D., 2020. Features vs. Benefits: Here’s the Difference & Why It Matters. [online] Available at: <> [Accessed 9 April 2021].
  9. Watkins, R., Meiers, M.W. and Visser, Y., 2012. A guide to assessing needs: Essential tools for collecting information, making decisions, and achieving development results. World Bank Publications.

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