G-8 Industries, Inc.

...

The MTA spends an average of $20 million per year in cleaning the subway of graffiti. [iii] Although the damage has significantly decreased over the years, a new form of graffiti, known as scratchitti, is creating a new crisis, as this form of graffiti is much harder to eradicate. As the costs rise to remove scratchitti, it leads to prolonged exposure of the graffiti, a factor that is known to promote more graffiti to gain exposure. The market to provide removal solutions has seen an increase over recent years, and most consumers are mostly concerned with cost efficiency.

Market entry is difficult, with several established firms creating a monopolistic competitive market and controlling a large domain in potential clientele. When evaluating our market size, New York City is an obvious entry point. According to the NYC real property tax report for 2016, there are 1,095,542 buildings across the five boroughs, including taxable and non-taxable properties.[iv] 87% of those properties are residential, while approximately 13% are commercial. The largest number of buildings is in Queens with 356,785. Brooklyn has the second highest number at 320,560.[v] However, of the roughly 15,000 graffiti complaints received by 311 annually, the highest volume of complaints come from south and central Brooklyn.[vi] This would make Brooklyn an excellent starting point for selling our product locally. Since we also have a considerable market with the MTA, we analyzed their fleet of trains and buses, which consists of 6,400 trains, 5,700 buses, and 16,300 bus stops. [vii]

While our product is technically a window glaze, our competitors are in the category of adhesives and sealants. Overall this category seems quite robust globally. After a period of stagnant growth, the adhesives and sealants market has been undergoing a period of recovery over the past decade due to global building trends. The global market was valued at nearly $22 billion in 2011, up from $19.5 billion in 2006, with the North American Market reportedly the largest, internationally.[viii] An October 2016 report from Freedonia Group projected that North American demand for adhesives and sealants would grow by 3 percent annually for the remainder of the decade.[ix] Global Market Insights, in an April 2016 report, was even more optimistic, expecting annual global growth rates for adhesives to be approximately 5 percent.[x]

Product Differentiation

Our market has a wide array of competition for CounterVand, including chemical treatments, and disposable films. We believe that CounterVand will be able to integrate itself into the market and gain its customer base on two premises: Cost efficiency and a “one and done” approach. Our product will rely on comparison to the competition to show that our price point is significantly lower when considering the nature of repeat damage that would lead to continuous expenses with similar products. CounterVand introduces a new technology that is able to withstand future damage from graffiti without the need to replace our treatment. This assertion will be marketed and supported through our warranty for the life of our product, which we will estimate to be ten years. Our presentation of our product and services will include a professional installation of our treatment, followed by a ten year warranty promising no damage to the glass being treated.

Our CounterVand Consumer

Our main source of consumers will lie in the commercial sector with a focus on business with considerable land structures. Graffiti is most harmful to businesses that depend on their store’s aesthetic value, as it directly correlates to their business’ foot traffic. Given our product’s durability, businesses with thick, expensive glass panels will benefit the most from having a permanent solution that will eliminate the need to replace the glass structure.

In addition to businesses with thick glass structures, our second focus within businesses will lie in businesses in their opening/start-up phase. While it may be more difficult to persuade existing businesses to install a permanent solution that might cost more, businesses opening a new location will have a more open mind to long term savings that they can allocate to opening costs.

Our Competition

In surveying the competition in our market, it is a monopolistically competitive market with a number of large and small players already competing. These firms can be looked at in several ways. There are a number of larger competitors with the dominant market share positions, including Solar Guard, SunTek and Johnson Window Films. There are also a number of smaller competitors, including VVivid, ASWF, TintCenter. BDF and TechnologyLK. The types of products and services existing firms provide can be broken down into either commercial or residential products/services and then, again, by the type of products and services they offer. The majority of the firms sell removable window films or the services to install and replace these films or both. In addition, there are a number of niche firms that sell window graffiti cleaning services, including chemical cleanings and window repolishing for removal of scratched or etched surfaces. The last two can be extremely time consuming and expensive.

In considering our competitive landscape, the following SWOT analysis was developed:

[pic 3]

Strengths: Low Price Point, Strong Local Market, Existing Customer Contacts, Convenience

Weaknesses: Lack of Brand Recognition, High Barriers to Market Entry, Limited Market (long lifetime, limited re-buy), need for significant start-up capital

Opportunities: Fragmented Market, High Cost Competition, Localized (Urban) Need, One-and-done, high-value solution

Threats: Established Competitors, Potential Long lead time to market, Monopolistically Competitive

As mentioned, our product has a significant differentiation from other products in the market place. It is applied at the point of purchase and will protect the window for the lifetime of the product. Our largest competitors’ window film covering solutions, while eliminating full window replacement costs, are still relatively expensive. Each film replacement costs approximately 25% of the initial window costs, once removal of the damaged film and installation of a new film are included.

The great convenience of our solution, which should last for the window’s lifetime (estimated at 10 years), is both a marketing strength and