PICOOC US Expansion Report

PICOOC - Private and Confidential – AUGUST 2014
INTERNAL DISCUSSION PURPOSES ONLY. NOT FOR CIRCULATION.
OPPORTUNITY CREATES SUCCESS
A corporate development assessment of PICOOC
NEWHUADU BUSINESS SCHOOL – SUMMER 2014

PICOOC
CORPORATE DEVELOPMENT – EXPANSION ASSESSMENT
INTRODUCTION EXECUTIVE SUMMARY SECTION ONE SECTION TWO SECTION THREE
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TABLE OF CONTENTS
Introduction The US Market analysis of Smart Health Technology as it relates to PICOOC
Executive summary Broad overview of current trends and our recommendations
Section one Western sources of demand for PICOOC and market analysis for entry
Section two An analysis of competitors, solutions, and best practices for PICOOC to adopt
Section three Go-to-market strategy and corporate development recommendations

PICOOC
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Our goal is to help PICOOC achieve long term success by successfully entering the US market
and revising their corporate development plan to stay ahead of market trends.
Situation
• PICOOC, as a start-up tech company with limited infrastructure and
revenue, is seeking to enter the US market and take advantage of the high
amount of target consumers located there. The hurdles towards achieving
this is the current lack of understanding of the US market for smart scales
and wearable devices.
Team
• The New Huadu Business School (NBS) internship team of Ajinkya
Patwardhan, Brandon Adsitt-Weiner, Reid Chanon, and Francis Chen
have been placed at PICOOC to conduct research and develop a go-to-
market plan.
Approach
• Using a combined approach of primary and secondary market research,
including three weeks spent onsite at PICOOC’s headquarters, the NBS
team systematically evaluated the wearables and smart scales industry,
competitors, products and operations to determine a competitive
positioning roadmap.

PICOOC
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TABLE OF CONTENTS

PICOOC
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Executive Summary
The Health Tracking
Technology Industry in the US
is a billion dollar industry. The
market consists of a
combination of individuals
trying to lose weight and
individuals tracking their
exercise habits. The market is
expected to grow to 8 billion
USD by 2018 . There are
several large competitors that
are already in the market or
planning on entry.
Our recommendation is that
PICOOC should enter the US
health management market
targeting persons with a high
interest in weight
loss/management, particularly
through potential partnerships
with the dieting industry for
the existing scale product,
broadening into the wearables
niches as the technology and
product is created.
The assessment will cover the
following and conclude with a
go to market plan and
recommendations for in house
corporate development.

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TABLE OF CONTENTS

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SEC 1. WESTERN SOURCES OF DEMAND AND MARKET ANALYSIS
Industry
knowledge
Specific Analysis
Broad Analysis
What opportunities in the
wearable and smart scale
market exist for PICOOC?
Who are the existing and
future competitors and
where are they focused?
How big is the market, who
leads it, and who are the
target consumers?
Who leads the market for
obesity prevention and what
G&S do they provide?
What other sources of
demand can PICOOC take
advantage of to launch new
products
What are the most common
diseases and which can be
controlled or mitigated by
our product?

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The technology wearables market can be segmented from tech wearables to health and fitness
devices, and finally to the largest niche category which are health wristbands and wristwatches
for health and fitness use
MarketSegmentation
The 2012 wearables market was estimated to be worth 2.5 billion USD and projected to
increase up to 8 billion USD by 2018. This includes the consumer, healthcare, and enterprise
markets. Wearables or wearable computing or wearable technology includes products such as
smart glasses, wristbands and watches, shoes, and other up and coming technologies such as
e-textiles.
The number of wearable health and fitness devices is projected to increase
to 170 million in 5 years, with sports, fitness, and personal health based
devices to number around 90 million leaving 80 million health and medicine
based devices to round out the market.
However, the largest segment of the market in 2012
was wristbands and wrist watches, with wrist wear
accounting for 850 million dollars of total revenue in
2012.

PICOOC
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Obesity related illnesses generate health complications that are a multibillion dollar industry to
both prevent and treat. Introducing a way to mitigate health expenses and create a healthier
lifestyle is PICOOC’s value add. This should be PICOOC’s target market.
Obesity-related Illness’s Health care cost Healthcare Cost
2013 estimated healthcare cost $254 Billion
2030 estimated healthcare cost $861 to $957 Billion
(USD)
Average annual Healthcare cost per capita $7,990 (USD)
Preventable Illnesses make up 70% of U.S. illness cost.

PICOOC
The United States spends the most in the world for healthcare costs and with per capita
adjusted spending is the market with the most to offer for PICOOC
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PICOOC
Both adults and children are affected by obesity-related Illnesses, this provides an opportunity
for PICOOC to tailor their form of health solution for both an adult consumer or a child.
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Adult (age 20 or above) Overweight and Obese (25 BMI ↑) Obese (30 BMI ↑)
Men & Women 154.7 million 78.4 million
Men 79.9 million 36.8 million
Women 74.8 million 41.6 million
Children 2 to 19 Overweight & Obese (25 BMI ↑) Obese (30 BMI ↑)
Boys and Girls 23.9 million 12.7 Million
Boys 11.8 Million 6.3 Million
Girls 12.1 Million 6.4 Million

PICOOC
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Exercise trends for the US reflect the high rates of obesity with a very low rate of national
average exercise. This provides an opportunity for PICOOC to address affected target
consumers and create a technology solution that promotes a healthy lifestyle
Exercise Statistics of Americans who work out regularly
2014
Percentage of
Americans
National average of Americans that exercise regularly 49.6%
U.S. adults exercise 30 minuets each day Less than 5%
Exercise for at least 30 minuets or higher, 3 days week 49.6%
Exercise one or two days per week 18.5%
Haven’t exercised within the last week 31.3%
Americans yearly income of $90,000 that exercise 54.3%
Percent of obese Americans that do not exercise 40.4%

PICOOC
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Many competitors offer health programs for overweight and obese Americans to establish or
maintain a healthy lifestyle, but these do not provide a technical solution. PICOOC could
leverage any one of the following companies’ customer base to build sales volume
U.S. Programs: U.S. News & World
Report: Best Diet
Potential Advertising for
PICOOC Latin:
Weight Watchers #1 Commercial Diet Website
Magazine
Groups
Jenny Craig #2 Commercial Diet Website
Groups
Biggest Loser #3 Commercial Diet Website
Books
Slim Fast #4 Commercial Diet Website
Products

PICOOC
An underutilized yet very large demographic are people who suffer from Chronic Diseases
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45% of U.S. adults
have a chronic Health
condition
25% of U.S. adults
have high blood
pressure
11% of U.S. adults
have Diabetes
7% of U.S. adults
have a heart condition
75% of health care
dollars
The United states has a multitude of
chronic diseases that afflict millions
Many result from a combination of lack
of exercise and poor diet

PICOOC
25% of Americans Suffer from High Blood Pressure
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25% of U.S. adults
have high blood
pressure
Costs USA $47.5 Billion
per year
CDC says “Lifestyle
change are just as
important as medications
47% have condition
under control

PICOOC
11% of Americans have Diabetes
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According to CDC “Diabetes can be
treated and managed by healthful
eating and regular physical activity”.
Estimated cost in the United States
is $245 Billion

PICOOC
7% of Americans have a Heart Condition
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Cost the United States
108.9 Billion per year
Risk for Heart Disease Include:
Diabetes
Overweight
Poor Diet
Physical inactivity

PICOOC
Many Chronic Disease sufferers share a lack of health habits which contribute to their diagnoses. PICOOC’s
Latin offers a chance for these chronic sufferers to manage the underlying causes of their disease
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Heart
Conditions
High Blood
Pressure
Diabetes
Lack of diet
and exercise

PICOOC
Most Chronic Disease sufferers track measurements about their bodies to both help
themselves and provide more detailed information to their healthcare provider
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84% of Adults with chronic conditions use a pen
and paper or rely on their memory to track their
physical condition.
That is 91.7 Million Adults who track their health
and could benefit from an electronic health
tracking device.

PICOOC
PICOOC can currently track the following health indicators with their health monitoring device
instead of having potential customers record their data on paper or mentally
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PICOOC Latin Features
Body mass Index (BMI)
Basal Metabolic Rate (BMR)
Body Fat
Muscle Mass
Body Water
Bone Mass
Mood
Visceral Fat
Activities
Diet Habits & Advice
Exercise Advice

PICOOC
PICOOC should include the following health indicators in their future products to appeal to a
greater share of the market and have more versatility to the consumer
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PICOOC’s
potential
features for
future
products
Heart Rate
Monitor
Sleep
Patterns
Share Data
with
Healthcare
provider
Blood
Pressure

PICOOC
There are several ways to target those who suffer from Chronic Diseases in an effort to inform
them about the benefits of electronic health measuring devices
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PICOOC
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TABLE OF CONTENTS
Introduction Our approach and defining PICCOC’s situation
Executive summary Broad overview and recommendations
Section one Western sources of demand and market analysis
Section two Competitor analysis and best practice adoption

PICOOC
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Industry
knowledge
Specific
Analysis
Broad
Analysis
How can PICOOC learn
from existing and
emerging
competitors?
Who are the existing
and future
competitors and
where are they
focused?
Why is FitBit the
industry leader?
How will Apple and
Google’s plans to
enter the space affect
the market?
What lessons can
PICOOC take from it’s
competition
What should PICOOC
track internally to
improve it’s product
development process?
SECTION 2: COMPETITOR ANALYSIS AND BEST PRACTICE ADOPTION

PICOOC
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PICOOC should adopt industry best practices and seek to replicate the success of it’s existing
and emerging competitors
Competitor
Analysis
Analyze competitors
products
What brands are dominant
Integrate competitors
features
PICOOC’s
Differentiation
Strategy
Product & brand
Dominance
How Competitors are
marketing there product
Goal
Reach out to consumers
Advertising
Pricing
Design
Quality customer service
after sale

PICOOC
PICOOC Latin has many of the same features as there competitors but they should also
consider some of there competitors features to be integrated in there product.
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PICOOC
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Brand recognition and marketing presents an opportunity and challenge for the largest players
in the market as well as PICOOC
Key players
Nike (US)
Jawbone (US)
Fitbit (US)
Adidas (GM)
Withings (FR)
Name % Own Familiar
with
product
purchase
within 12
months
Familiar with
product, not
interested in
buying
Heard of it,
don’t know
much about it
Have not
heard of
this product
Nike
Fuelband
13% 13% 11% 20% 43%
Fitbit (Zip,
One, Flex)
7% 11% 11% 16% 55%
Adidas
miCoach
Series
6% 9% 11% 15% 59%
Jawbone
UP
5% 6% 10% 13% 66%
Withings
Pulse
5% 5% 6% 9% 75%
Other
brand of
health
monitor
9% 8% 8% 14% 62%
Emerging competition
Apple (US)
Google (US)

PICOOC
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PICOOC must isolate the features that are both affordable to implement and important to
consumers and integrate them in their product when entering the wearables market in the US
Product Name Key Features Price (USD)
Withings Pulse 24/7 tracker, heart rate and blood
oxygen level measurement, sleep
cycle analysis, activity badge feature
to promote competition in conjunction
with social media, personal coaching
119.95
Jawbone UP 24/7 tracker, food and drink tracking,
sleep analysis (quality x quantity),
alarm, social media integration
149.99
Adidas miCoach Smart Run 3GB music storage, color touch
display, heartrate monitor, GPS,
miCoach app provided 100s of free
training plans, audio/visual/vibration
based coaching
400.00
Nike Fuelband 24/7 tracker, hourly move reminders,
integration with “Nike Sessions”
workout plans
99.99
Fitbit One 24/7 tracker, wake alarm, minute by
minute data logging and tracking, 14
day battery life, food consumption
monitoring
99.95

PICOOC
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PICOOC must look at the competition on the horizon and take steps to adapt by being
compatible with their offering and offering some product differentiation
Apple
enters the
market
PICOOC
maintains a
similar design
aesthetic
Product
integration
with Apple
products
Offer features
that are more
unique
Aim to undercut
their price

PICOOC
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The underlined market trends are ones that PICOOC has already adopted, but PICOOC needs
to take steps to stay ahead of market trends they haven’t yet integrated into their products
Current market trends
•Calorie counting
•Weight counting
•Sleep analysis
•Physical fitness
•Steps tracking
•3D interfaces
•Wrist wear
•Social Network integration
(gamifying/progress tracking)
•Flexible interface
•Graph analysis
•Plastic construction
•Bio-monitoring
•Sports Performance
•Personalization
•Prescriptive monitoring
Emerging Market trends
•Nutrient advice/incorporation
•Circadian rhythm/sleep pattern
analysis
•Mental fitness
•Gait measurement
•Self-documenting progress
•Do-It-Yourself (choice for app
interaction)
•Biometrics
•Customized
•Predictive

PICOOC
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For a startup to succeed in a market dominated by big players the requirement is differentiation
of product and services offered
Differentiation
Software
Customer
Support

PICOOC
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Providing more appealing software is a key method of differentiation, this can be achieved via
offering more effective technology and incentivizing use and making the app user-friendly
Software: Offering effective
prescriptive analysis, gamifying
the user experience and creating
a user friendly integration with
social media are ways to
differentiate most easily achieved
on the software side.
Software/App
Differentiation
Offering fitness
plans (prescriptive
interaction)
Gamifying the
user experience
Social media
integration

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Another method of differentiating yourself in the market is to provide better customer service to
expedite complaints and make the user experience more satisfactory
Providing quick answers to
customer questions in a
variety of formats (live, online
FAQs and through email) is a
good way to build customer
loyalty and demonstrate high
quality customer service.
Customer
Service
Differentiation
Providing a better
live chat for
support
Having quick
turnaround on
customer service
emails
Having an English
website paired to
log data

PICOOC
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TABLE OF CONTENTS
Introduction Our approach and defining PICCOC’s situation
Executive summary Broad overview and recommendations
Section one Western sources of demand and market analysis
Section two Competitor analysis and best practice adoption

PICOOC
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SECTION 3: STRATEGY AND CORPORATE DEVELOPMENT RECOMENDATIONS
Industry
knowledge
Specific Analysis
Broad Analysis
What should PICOOC plan
for a successful US/EU
market entry?
PICOC should create
partnerships with
established brands to
mitigate the difficulty of
market penetration
Top weight loss companies
and home health providers
in the US
Top weight loss companies
and home health providers
in the EU
Why not enter the market
directly?
Methods for creating
relationships with
international partners

PICOOC
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PICOOC should plan to partner up with either weight management companies or home health
care companies for successful US Market Entry
• PICOOC has an excellent product, but needs to partner in order to help penetrate the US
market successfully.
• “82 percent of executives believe that alliances will be a prime vehicle for future growth”
(Kalmbach and Roussel, 1999)
• PICOOC lacks the brand recognition and funding of its competitors
• PICOOC should partner with firms that specialize in weight management and home health
care.

PICOOC
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PICOOC should form a partnership in order to gain a competitive advantage. Partnering with a
company either to accentuate DTC sales, or to create a complimentary product are both
strategies required for market entry
• 50 percent of firms involved in alliances market their goods
internationally versus 30 percent of non-allied participants”
(Cooper and Lybrand Study, 1997)
• Partnering with large firms will allow PICOOC to obtain
new technologies needed to compete with the large
players in the US Market
• Since PICOOC is a smaller firm, having financial assistance
in an overseas market will allow the company to absorb
losses easier in case of bad sales
• Partnering gives PICOOC an advantage against other
foreign competitors and allows the firm to even out the
playing field against domestic competitors.
Easier to Market Products
Obtain New Technology
Reduce Financial Risk
Gives Competitive Advantage
Benefits of Partnership

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3% market share and 1.8 billion in revenue
• The company offers meetings where people can receive professional
advice and tips on how to lose weight as well as twenty four hour access
to mobile and network devices.
0.7% market share and $400 million revenue
• A company that purely focuses on food, food packages and meal plans
that help promote weight loss.
0.7% market share and $400 million revenue
• Medifast weight loss program requires that clients to follow established
meal plans and diets.
PICOOC should partner with one of these top weight loss companies

PICOOC
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PICOOC should partner with one of these top home health care providers
4.85 % market share
• Number one leader in providing home health care services
4.76 % market share
• Provide home health and hospice services to more than 350,000
patients from more than 420 community locations nationwide
2.10% market share
• One of the top home health care companies

PICOOC
The following companies are not the market leaders but might be more prone to partnering with
PICOOC
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RANK
TOP 20 HOME HEALTH CARE
COMPANIES
NATIONAL
MARKET SHARE
1 AMEDISYS 4.85%
2 GENTIVA 4.76%
3 LHC GROUP 2.10%
4 ALMOST FAMILY 1.88%
5 VISITING NURSE SERVICE OF NEW YORK 1.10%
6 KINDRED 1.03%
7 CHE TRINITY HEALTH 0.98%
8 INTERIM 0.94%
9 BAYADA 0.79%
10 ACCENTCARE 0.78%
11 ENCOMPASS 0.73%
12 NURSE ON CALL 0.67%
13 CARESOUTH 0.51%
14 MSA 0.51%
15 HCR-MANORCARE 0.45%
16 BROOKDALE SENIOR LIVING 0.44%
17 INTREPID 0.43%
18 CATHOLIC HEALTH INITIATIVES 0.38%
19 SUTTER HEALTH 0.36%
20 ADVANCED HOME CARE 0.34%

PICOOC
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There are several methods available for PICOOC to partner and gain access to international
markets
•Partner with a weight loss company
• Sell to Fitness Clubs/ Gym Chains
• Used by Home Health Providers
• Sell in Specialized Stores
• Have an affiliate program
• Partner with Amazon
• Sell at a discounted rate to members or as a
supplement of a weight loss program
• Make it an official product of a fitness clubs or gym chains
• Make it the official product of home health chains
• Target consumers more likely to purchase the product
• Offer commission to affiliates that help sell the scale and
spread popularity
• Sell products online to reduce costs

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Partnering is a cheaper and easier way to enter the US market compared to buying a company
or building one.
Cost
No cost to build overseas
facilities
No cost to buy out large
companies
Shared costs and risks
Less overseas staff required
Complexity
Shared
infrastructure
Brand image already
established
Joint marketing
efforts easier
Supply chain easier to
manage
Local support easier to
set up

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The roadmap for development would begin with PICOOC preparing its products for US
markets, finding and negotiating partnerships and then entering into the US market
2014 2015 2016 Future
US Product preparation Partner Negotiation Market Entry
• Converting to American units
• Establishing English support
• Translating APP to English
• Preparing for Android market
• Finding the right partner
company
• Negotiating terms
• Combining resources
• Joint marketing

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NewHuadu Business School
Mrs. Tina Zhou, IMBA Administrator
Telephone
Email
Delivery Team
Ajinkya Patwardhan
The University of Houston, Bauer College of Business
ampatwardhan@outlook.com
Brandon Adsitt-Weiner
State University of New York at Binghamton
badsitt1@Binghamton.edu
Francis Chen
UC Irvine
chenfc@uci.edu
Reid Chanon
Texas Tech University
reid.chanon@ttu.edu
Consulting Manager
SP Bourgeois, Daedalus Advisory Services
+1 917 719 6371
spb@daedalusservices.com
CONTACT INFORMATION

PICOOC US Expansion Report

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