About Osim

INTRODUCTION

OSIM is a global leader in branded healthy lifestyle products such as massage chair, shoulder and neck massagers, foot massager and slim belt. The company is well-known in Malaysia. OSIM is a brand management and niche marketing company with a focus on the consumer. Today, OSIM Company operates a wide point-of-sales network with outlets is over 371 cities over 33 countries in Asia, Australia, Africa, the Middle East, United Kingdom and North America.“Inspiring Life” is the motto of the OSIM Company.

OSIM (M) Sdn Bhd is engaged in marketing, distributing and franchising of healthy lifestyle products. The Company operates in two segments that are retail and distribution. The retail segment is engaged in outlets and counters operated by it in selected shopping centers and departmental stores where the products are sold directly to end user customers. The distribution segment is engaged in products distributed by the Company and franchisees in overseas markets. Its subsidiaries include OSIM International Trading (Shanghai) Co., Ltd, OSIM (M) Sdn Bhd, OSIM (HK) Company Limited, OSIM (Taiwan) Co., Ltd, Nutrition Focus (USA) Inc, Global Active Limited (GAL), OSIM (China) Co., Ltd, Nutri Active Pte Ltd, Victoria House Pte Ltd and VHE China Limited.

OSIM (M) Sdn Bhd also the most trusted brand. They receive a title as International Safety Standards because harmony to worldwide health and safety regulations. The entire product designed with safety and appropriate to health and safety regulations. Furthermore, the company also good in quality performance because all their product has been approved from clinic research, medical certifications and scientific studies. Their health-care product also checked and studies scientifically by expertise and they awarded certification and recognition from independents bodies. In terms of innovation and technology,

OSIM company are worldwide technology patents and have a design right and trademark rights. OSIM is always in the frontline of innovation and the development of the most exhaustive range of products to bring the good health benefit to customer.

OSIM also receive Award-Winning Design. OSIM brand and product design awards garnered from Japan, Europe and Asia. OSIM product was awarded the Largest Health Check and Care Equipment Retail Chain by the Malaysian Book of Records and Asia Pacific Honesty Enterprise Keris Award 2002. OSIM has been recently awarded ASIA No 1 Brand in healthy lifestyle equipment by a prestigious International Survey, it is for international market research company to determine Asian most preferred brand of health-care products. Besides, OSIM has also been rated by AC Nielsen survey in 2005 as the Number One brand in seven attributes (High Quality Products, Advance Technology, Premium Brand, Innovative Design & Features, Trustworthy Brand, Good Customer Service and Good Store Ambience).

BACKGROUND AND HISTORY

The origins of OSIM International Ltd business began in November 1980 when Dr Ron Sim Chye Hock commenced his sole proprietor business of retailing an array of household goods such as knives, knife-sharpeners and mobile drying rods under R. Sim Trading Co and it was originally established in Singapore. OSIM were subsequently incorporated in 1983 under the name ‘‘R.Sim Trading Co. Pte Ltd'' to take over the sole proprietorship. Operating from OSIM International Ltd company first premises is at a shop Peoples' Park, OSIM were only selling 2 health-care related products, namely, hand-held massagers and foot reflexology rollers. By 1987, OSIM had created a distribution network of 10 outlets in Singapore, Hong Kong and Taiwan marketing household goods and health-care related products.

Dr Ron Sim Chye Hock is a founder of OSIM then felt that there was market potential for specialty home health care products in an increasingly affluent Asia. Early 1987, OSIM saw that the home health care products sector was dominated by a disparate group of equipment manufacturers with little or no emphasis on marketing and as a result there was a lack of brand consciousness among consumers. Hence, in 1989 their decided to bring together different home health-care products from different equipment manufacturers and market their product using specialty branding. For this purpose, OSIM created the brand ‘‘Health Check & Care'' to build and exploit a niche market in home health-care products. OSIM business start grew rapidly and by 1994 we had approximately 60 point-of-sales outlets in Asia.

In business strategy, they believe that marketing and strengthening of their brand equity is of vital importance. As ‘‘Health Check & Care'' was a generic name and was difficult to be registered as a trademark in many countries, in 1996 the company officially launched ‘‘OSIM'' brand name which had been using since the early 1990s. ‘‘OSIM'' is a combination of the founder's surname and the letter ‘‘O'' which symbolizes for vision to become a globally recognized brand. As at 31 May 2000, the company have registered the name ‘‘OSIM'' as a trademark in 26 countries spanning Asia (including Australia), Europe, North and South America, South Africa and Israel. There are also made trademark applications for ‘‘OSIM'' in 10 other countries.

A major tenet of OSIM marketing strategy is to have an extensive point-of-sales network and geographical coverage in their markets. Presently, they have point-of-sales outlets in Singapore located in all major departmental stores and suburban shopping malls. The company began developing their overseas distribution network in 1986 when they ventured into Hong Kong and in the following year, into Taiwan. To ride on the rapid development of the Asian economies in the early 1990s, OSIM expanded their operations to Thailand in 1990, Malaysia in 1992, Indonesia and Beijing in 1993, and Shanghai in 1994 by opening point-of-sales outlets in these countries either directly or through their franchisees and distributors. Furthermore, OSIM expanded their markets to the United States in 1997 and Dubai in 1999 through the appointment of franchisees/licensees to market and sell their products in these countries. At present, OSIM have 10 franchisees/licensees, 3 subsidiaries, 6 are affiliated companies controlled by their Controlling Shareholders and the remaining 1 is an unrelated company.

The company point-of-sales outlets in Singapore, Hong Kong, Taiwan and Malaysia are operated by Company and subsidiaries. The rest of their point-of-sales outlets are franchised outlets with the exception of outlets in the PRC for which we have trademark and licensing agreements with the owners. This is OSIM business strategy that future expansion of their point-of-sales network will be substantially undertaken by franchising. OSIM company begun to gradually move away from being a retailer to being a franchisor and, in furtherance of this strategy, they have also entered into franchise agreements with their subsidiaries, OSIM (HK), OSIM (Taiwan) and OSIM (M'sia). Further, franchising help them to expand and multiply their point-of-sales outlets to more geographical markets at a faster pace with significantly less capital exposure. Franchising is also less taxing on their management's time than operating self-owned outlets in penetrating new markets.

To diversify their sources of revenue, in 1998 OSIM ventured into wholesale distribution of health-check and health-care products such as blood pressure monitors, thermometers and pulse massagers, in Singapore to hospitals like Tan Tock Seng Hospital and Kandang Kerbau Women's and Children's Hospital, pharmacies like the Apex Pharmacy and the Guardian Pharmacy chains, and Chinese medical halls. While wholesale distribution is currently only carried out in Singapore which contributes between 1 and 2 per cent. to their turnover in Singapore, and then the company intend to develop this business and carry out wholesale distribution in all their principal markets eventually.

As part of its business strategy to extend the control over of their business process and to exercise greater involvement and participation in the source of supply for their products, in 1995 the company entered into a joint venture with Daito Electric Machine Industry Company Limited (‘‘Daito''), a Japanese supplier

to OSIM Group, to take up a 30 per cent interest in Daito-OSIM (Suzhou) with Daito taking up the remaining 70 per cent.. Presently, Daito-OSIM (Suzhou) has a plant in the Singapore-Suzhou Industrial Park in Jiangsu, PRC that manufactures products like hand-held massagers and foot reflexology rollers mainly for re-export and distribution to the markets in Japan and USA. Under the joint venture agreement, Daito has the right to appoint 3 directors of Daito-OSIM (Suzhou) while OSIM only have the right to appoint 2 directors as they are the minority shareholder. However, Daito-OSIM (Suzhou) shall not change the scope of its business activities from that as described in the foregoing, without the consent of Daito and OSIM. Any material financial commitment which is above US$100,000 or material contract to be entered by Daito-OSIM (Suzhou) also requires the consent of Daito and OSIM. The joint venture agreement is of unlimited duration but may be terminated with the consent of Daito and OSIM. Neither Daito nor OSIM can transfer an interest in the shares in Daito-OSIM (Suzhou) without first making an offer to sell the interest to the other shareholder.

On 28 March 2000, the founder Dr Ron Sim Chye Hock was conferred an honorary doctorate in business administration by the Wisconsin International University in recognition of his prominent achievements in business.

In July 2000, pursuant to the Subscription Agreement, Investor, a wholly-owned subsidiary of Temasek Holdings (Private) Limited, subscribed for 11,600,000 new Shares, representing approximately 5 per cent. of the post-Investor Subscription and post-Invitation enlarged share capital of the Company, at the price of $0.47 per Share, representing a discount of approximately 10 per cent. to the Offer Price. The company believes that the investment by Investor is a milestone in their corporate development and an endorsement of their Group. Investor has given an undertaking not to dispose of or transfer any part of its

respective shareholding for a period of 6 months commencing from the date of their admission to the Official List of the SGX-ST. Mr Khor Peng Soon, a nominee of Investor, was appointed as OSIM non-executive Director in June 2000.

Ethics

Ethics are common believes on what's right or wrong and good or bad based on individual's values and morals, plus a behaviours' social context. Business ethics definition is ‘a normative undertaking, seeks to provide ethical insight and guidance to individuals in business, businesses as organizations, and to society'. Although there is an overlap between corporate social responsibility and business ethics, they still can be distinguishing. Corporate social responsibility is about responsibility to all stakeholders and not just shareholders where as ethics is about morally correct behaviour. Not many business organisations' directors will deny the essentialness of good, trusting relationships with customers, employees, suppliers and the community. All these are actually the elements of success that a company should rely on. Ethics in business is a very prominent issue nowadays especially in this high competitive business world. Organizations usually have a set of ethical as well as operational or business values which they wished to see in operating their business. These values guide ideas of acceptable, desirable and responsible behavior, above and beyond compliance with laws and regulations.

Ethics is formulated to enhance the standard of corporate governance and corporate behaviour. One should be ethical for motivation, good behaviour usually bring a reward. Think about it, if it were always in one's interest to be good, there would be no need for ethics. One can simply act selfishly and forget about obligation. People invented ethics precisely because it does not always coincide with self interest. Owners, employees, suppliers and customers were expected to have a good behaviour in their work place giving that issues of ethics will affect the business.

Starting from the individual ethics, it is important since everyone has their own responsibilities in their work place. The very least a person can do is to be honest about what they do each day. Bribery should not be tolerated. There is so much poverty, so much hunger across the world. Greed for revenue and profits can only transform our world into an animal kingdom. Top management level of the company should have first practice good ethics themselves in order to show a good example to the employees and lead them to become more productive and efficient.

Behaviour toward the employees, top management level of the company should practice fair policies such as adequate amount of time given to the employee to be notified if the company intend to conduct layoff exercise within the company and affected parties should be compensated accordingly. Other than that, the company is responsible for providing conducive environment which is clean and save for its employee to work in too. Employee salaries should be paid according to agreed amount based on their working hours and job classification. Privacy of employees must be respected too.

Based on the information we gathered through our interview with OSIM, their company do have ethics practices. One of the examples is, employees who were stationed out of town for training were provided with decent accommodation. Every single employee has equal chances of being promoted. Outlet supervisors must also possess high accountability and responsibility in performing duties, without abusing power and position for self-gain or other interested parties. Employees are expected to always endeavour to improve knowledge, creativity and innovation as well as team spirit. Those who are in the sales position are required to be self-motivated to achieve great sales like there's no limit to it. Proper basic personal grooming and dress in clean, smart and decent clothing at work is a must and it's considered basic manners for especially for those in sales

position working at the outlets. Strict basic grooming is required to reflect the professionalism of the employee.

Furthermore, OSIM emphasised a lot on professionalism among its employees. Employees must always carry out duties efficiently, effectively and productively in order to produce excellent service. The managers are very strict on the employee, they must always on good behaviour and punctuality. The company will always provide in-house training for their employees. In addition, the company sales force undergoes trainings like product training, salesmanship training and on-the-job training. Other than that, OSIM organise talks by health-care professionals in their corporate headquarters for their sales staff. Periodically, they will also send senior management staff overseas to attend seminars and exhibitions. Therefore, employees are expected to improve knowledge and skills to produce efficient, prompt and accurate service as well as to possess characteristics of creativity, innovation, motivation and competitiveness This show that the company practices good ethics as their provide and give chances for them equip themselves. The product of OSIM International Ltd complies with Safety and Quality Standards of International Certification Boards. The company does not compromise its products quality lightly, and this is a good business ethics practice. OSIM have the quality controls namely product quality assurance for its products and service quality assurance to ensure the staff deliver their best. Last but not least, the company take honesty into account very seriously. No one in the company should leak out the company's private and confidential information such as internal finance reports, marketing strategies and etcetera. Disciplinary action will be taken against those who leak out the information might face dismissal from the company.

In conclusion, every business organisation has strict ethics to follow. The field and practice of business ethics is now well established. Often time's senior individuals were hired in large companies and other organisations with dedicated teams to monitor that ethical standard and corporate responsibility (CR) commitments are understood and advocated. These commitments will be driven both by a set of ethical and business values set by the organisation itself, and by relevant legal and regulatory requirements that determine what acceptable conduct is. It is important to establish a standard or ethics of competence for corporate accountability which includes standards of professionalism and trustworthiness in order to uphold good corporate integrity. The experience within the country like Malaysia has exposed a critical need for the formulation of corporate accountability standards in order to establish an ethical corporate environment. It also ensures Malaysia is on the right track in turning into a first world country. Companies who are truly committed to uphold ethical conduct were found to be consistently outperforming companies who do not display ethical conduct according to research done by "Does Business Ethics Pay?" by The Institute of Business Ethics (IBE). "If you have integrity, nothing else matters. If you don't have integrity, nothing else matters." -- Alan K. Simpson

INFORMATION TECHNOLOGY USED

“Information technology (IT) by definition is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications”. More recently it is the use of the computers and IT to improve the efficiency and competitiveness of businesses that has led to technological change. Due to technological changes is so rapid, there are important implications for businesses. A business can be affected by the following technological change in production, the provision of services and in the office IT act as an effective tool to aid businesses gain and make the best use of knowledge. Some of the systems can be very tedious to set up and time-consuming to maintain. About two decades ago, most businesses agreed that effective IT strategies needed to be embedded within the business strategy. Business executives needed to possess those IT strategies as well as the business strategies in order to implement those business strategies successfully. Undeniably, IT has become an increasingly important business tool from small to big organisations, it is important for businesses to ensure that their business gets the most out of any system it introduces. In order to achieve this, you need to make sure that the IT system chosen supports the business and adds value to it.

Databases organise information for easy access, managed and updated. For example, a business might have a database of customers storing their contact information, their orders and preferences. The database is one of the cornerstones of information technology, and its ability to organise, process and manage information in a structured and controlled manner is the key to many areas of modern business efficiency. As a business, the more we understand about our customers, suppliers and competitors, the better. Hence, the gathering, storing and processing of informationusing databases cangive businessesa distinct advantage. The advantages are such as cutting down the amount of time spent managing data. Allowing businesses personnel the ability to analyse data in a many of ways. It is also a way of promoting a disciplined approach to data management. In addition, databases technology turns different information into a valuable resource and improving the quality and consistency of information. Value of information in line with maintenance and production cost. Most companies produce information on demand to place a value to it.

E-commerce is the ability of businesses to trade with the world via websites. With E-commerce, businesses are able to market and create awareness on their products a larger group of audience and business is now open 24 hours every day. This has created new opportunities for businesses that trade locally and may not trade internationally before to now expand the size of their market to worldwide. Amazon.com is one example of e-commerce as a worldwide book and CD sellers. Consumers can also make comparison on the products and search for best deals online. It allows entrepreneurs and or even individuals to sell directly to consumers. This is the opposite of conventional ways of selling at retail outlets. In other words, business transactions are now taking place online too. OSIM Directors believe that e-commerce is emerging as a very important marketing and distribution channel for businesses although the extent of the impact of e-commerce cannot be conclusively known today. OSIM have the intention of tapping into the huge potential of e-commerce and other health-care retailers may also follow suit.

Smartphone with internet access enabled and personal computers featured with office applications with office applications, save businesses time and travelling cost by enabling employees, customers, and suppliers to communicate from any location. This gives much convenience for the on-site and off-site employee to communication with each other. However, effective communication is very essential to most IT and e-commerce systems. Most of these technologies are invented to make communication between buyers and sellers faster and more reliable. On top of that, Computers can be used to process, analyse and store vast amounts of data to give the business more quality information.

The Internet can also be useful for various purposes. One of it is to make business sales message to be send out to customers especially potential ones. To get sales message out to customers and potential customers, marketing by email and on the internet offers speed and cost benefits over traditional mail marketing. Company resources are put into better use as chances of reaching out potential customers are much greater. Other types of online marketing such as social media like Facebook also provide a cost-effective avenue for businesses in reaching customers.

OSIM has registered their own website ‘‘www.osim.com'' to market themselves on the Internet to let more people know about the company and its products. It is important for a company to have a website especially for developing new products, offering new services and reaching new clients. Today's information age has leaded many people to use internet to search information and others. People can access to any website with just a few clicks. Although setting up a website might be costly, it is offset by reaching a large pool of potential customers and providing necessary information for existing customers too. OSIM is making use of the popular Facebook as a tool for them to promote their products and provide brief information and latest happenings in regard to their road shows. Job recruitment advertisement is also in their website, this will save the company's cost in advertising in other means such as the newspaper. Consumers can also sign up for the mailing list to receive special offers, promotions and well-being tips from OSIM. Last but not least, OSIM made us of IT to provide its customers order tracking if they are not sure if their package has been delivered .The order tracking service will help you track it down.

In conclusion, technological change can bring many benefits to a business. It reduces running costs, improve productivity, improved competitiveness, improved quality of service (e.g. speed of service) and reduce resources wastage. For companies who have yet to use IT to run their businesses should really consider it. Technology and business go hand in hand. Hence, technology is compulsory for business.

4P ANALYSIS

DIAGRAM 1: The Marketing Mix

Marketing mix is one of the most important aspects in marketing. The important of marketing mix are usually categories into four parts which are product, price, place, and promotion. The main purpose of this four P's marketing is to help the company to achieving their target market. Customers are not the components of the marketing mix. However, the customer is the target of all the company's marketing.

Product can be usually classified under two parts that is consumer product and producer products. Consumer product normally purchased for individuals used and these products are divided into three more categories that is convenience product, shopping product and specialty product. Secondly, the producer product, this product is purchased to use in running businesses. Beside

that, physical of the product also become the main point to attract the customers for example the packaging and size of the product.

Price is the price level that business wants to sell their product to consumer. There are many parts need to be consider first before the product were decides to be sell. The considerations such as objective of the business, the degree of competitor in the industry, channel of distribution and the business image. Furthermore, there are some strategies that can help a business in order to arrive at a selling of their product such as cost-plus pricing, mark-up pricing, predatory pricing, skimming pricing, penetration pricing, prestige pricing and demand-orientated pricing.

Place is where the product put on the target market. This place refers to those points that are stores and the retail outlets where the product should be easily accessible by the customer. Next, is to the channel of distribution means the business uses to get their product from factory and make it available to consumers. Wholesaler, retailer and Distribution Company are example for channel of distribution.

Promotion is the method of the company introducing and selling products and its one of the ways to attract consumers aware of their product. There are various ways of promotion such as advertising, personal selling, sales promotions, branding and packaging, direct email and loss leaders. Promotion is important of communication between the product and the customer in order to increase the sales.

In conclusion, a marketing mix involves four P's. In another word, the four P's entire are related to each other in reaching target market.

PRODUCT

OSIM is a company that sells healthy lifestyle product. There are various type of health product that they sells such as massage chair, foot massagers, head massagers, back massagers, eye massagers, soothing gel pads, slim belts, pedometer, blood pressure monitor, personal hygiene and water purifiers. These products are help to maintain health and can give relaxing to the people.

The latest product that OSIM launched is uDivine massage chair. The uDivine was designed by Japanese Master, Sato Tsuyoshi and he is expert of Japanese Chiropractic Massage. The uDivine is the world first Human-3D massage chair and this massage chair are combined with strategically position system airbags, realistic and human contour based, delivering the most humanized, pleasurable and effective full body massage. uDivine have multi-sensory pleasures from head to toe. The design of this massage chair are intelligent design with plenty to admire and it give more living space, seamless navigation, stereo sound build-in speakers, supreme comfort and family-friendly safety function.

OSIM Company makes a consideration to the number of stage in development of new product. The first stage is the generation of ideas. The company thinks future whether the product that they create meet the objective of the business or not. Furthermore, they also make a question will the product contribute to the continued growth of their business and does the business have the spare capacity to produce the product.

Secondly, is testing the new concept. OSIM want to know is there a sufficient market for the new product. This stage of the product development

process will involve carrying out extensive primary market research to test consumer's reaction to the suggested product.

Next, analyzing the cost or revenues. Based on cost of production, they will set the reasonable price of product to be selling. OSIM also caring of what will be the profitability of the new product and how many units of the product they want to produce.

Furthermore, they make a considered of developing a prototype. The design, materials, quality and safety of the product will become paramount. A prototype of the product will be developed using the detail that the market research indicated that consumer wanted. It is essential to ensure that this stage of the development process is detailed ad extensive, since to make alterations and modification at a later date will be extremely expensive and time-consuming.

Lastly, the goal of the company for their product is to make the customer easy to recognize its brand and provide customer satisfaction. If the product does not fit the customer needs or meet the standard, the company accepts the criticism and modifies their products until it is fulfilling the needs of their customer.

PRICE

OSIM (is one of the high-end brands that sells health-care product in the market. It stands by its own name, image, quality and safety. The good in pricing strategy of the company will affect the quantity of sell and the profit-margin received per unit. In order to achieve at selling price for its product, there are some method that can be use which is cost-plus pricing, mark-up pricing, predatory pricing, skimming pricing, penetration pricing, prestige pricing, demand-oriented pricing and competition-oriented pricing.

The first procedure for setting price is to determine the objectives of pricing. Earning a profit is the main objective. OSIM Company has three strategies in setting the price of their product. OSIM used cost-plus pricing, where the total cost of producing each unit of product is calculated. After that, the percentage profit is added to this unit cost to arrive at the selling price.

Next is skimming pricing, all of their products are innovative and high technology product. So the strategies for these products usually set at the high price because it required high cost to produce the product and it design to create an up-market. Nonetheless, another pricing strategy of OSIM Company is competition-oriented pricing. Competition-oriented pricing is the strategies to set a price for a product with comparison with the competitor. Some product of OSIM were pricing based on the price charge by the competitors.

In conclusion, setting a price is not an easy job, it need certain method to set the product price. For the beginning, a listing price, varieties of discount and allowance should include when setting a price.

PLACE

MAP 1:

MAP 2:

OSIM has chosen the right place for selling their products. In Map 1 shown one of the places which OSIM outlet located, that is in Bintang Mega Mall, Miri, Sarawak. Our group got to visit this outlet to conduct interview about OSIM for this team project.

Normally in business, without a good place to promote the company product will make harder to get successful in target market even the product have a reasonable price. In other words, to reach the target market, positioning is one of the important steps for placing. The location of the product should be easier for customer to purchases the product. If the customer hard to get the product, they might give advantage to other companies which they can get it easily. However, every customer has different needs with aspect of time and place. In order to attract more customers, the location of the product should fulfill the customer's requirement. The company also can offer a delivery service in order to make the customer more convenient with their service. The place decision is considered as a long-run effect. Which mean that once the place is set, it is hard to change the location back.

First of the place that OSIM Company chooses is referring to retail outlet. This will help people more easily to purchase the product of the company. Secondly, to the channel of distribution.

OSIM have outlet over the world such as in Singapore, China, Hong Kong, China, Malaysia, Taiwan China, Australia, Bahrain, Brunei, Cambodia, Canada, India, Indonesia, Iran, Italy, Kuwait, Macau, Myanmar, New Zealand, Oman, Pakistan, Philippines, Portugal, Saudi Arabia, South Africa, South Korea, Spain, Thailand, UAE, UK, USA and Vietnam. (Shown in Map 2). These outlets sell OSIM health-care products to the states.

OSIM is headquarters located in Singapore. Singapore is a vibrant first world, dynamic city-state and strategically place in South-East Asia. OSIM form their outlet in highest standards of living area and Singapore is one of the highest standards of living in the world and it also has the world busiest port, for example international airport that is one of the busiest and best connected in Asia and is home to one of the world's premium airlines (Singapore Airlines). Thus, it has very efficient and modern logistic infrastructure.

In conclusion, the role of the place in marketing mix is also important for the business strategy. Without the proper place, it will decrease the successful in target market of the company.

PROMOTION

The last part of the marketing mix is the promotion. Promotion refers to tactics that business used to make people aware about their product, it also can be defined as the communication between the product and the customer. The message of the products can be pass out to the customer through promotion. These promotions are considers as important because through this, company can attract people to purchased their product.

The objective of promotion of OSIM is to increase the sales and the popularity of the company. There are many promotion ways such as advertising, personal selling, and sales promotions.

Moreover, OSIM Company usually advertises their products online and through brochure and conducts many road show events. Online advertising is cheaper compare to other method. Customer can go to the website of the company for free and find out about the company. However, for the brochures are only given when the visitors have visited the outlets or going to its road shows. The minimum cost of promotion will help the company to lower down the expenses.

Besides that, OSIM Company always used top international celebrities and artiste as a model of their product. For example the new product uDivine massage chair, OSIM use artiste Andy Lau as endorser. For the World's first little massage sofa they make Lin Chi-Ling as a model of the product. This can help the company to get the target audience immediately by fan of the celebrity.

Nevertheless, they aim for popularity. They advertise themselves in order to get popular in the world. They make global sponsorship for sport event for example badminton. This way can help the company name well known in world. The information of their product itself is transmitted by the mass media in order to get the attention of the public. This promotion way also free since the public discusses about the company itself.

In conclusion, no matter how good the product with reasonable price, without promotion, the marketing strategy also consider as a failure. In order to succeed, the company should promote their product widely with minimum cost.

COMPETITOR ANALYSIS

Carrying out competitor analysis to gather more information may incur cost time, money and effort, but there are many benefits to knowing more about what is the business competitor is doing. Competitor analysis is the second part of the external environments. The purpose of preparing a competitor analysis is to assist a business in understanding further about the competitors' strategies in order for it to take necessary measures and action plans to overcome the competition that it is facing from its competitors. The competitor analysis also provides the company to serve as an insight about its competitors' weaknesses and threats in order to position itself in a more competitive position over its competitors.

Two major competitors that were identified to post a direct competition to OSIM are Ogawa World Berhad (OGAWA) and Gintell. OGAWAis a Malaysian health and wellness retail store established in 1996. It has successfully grown into the leading player in the design, development and marketing health and wellness equipments in Malaysia.OGAWAis a committed brand in encouraging a healthier lifestyle. Through the creation of innovative products of the highest quality,OGAWAis the number one choice for many homes and families today. Gintell was established in 1996 as well and it has expanded its business and distribution network with more than 60 outlets throughout the country in just 12 years. Its business includes massager, slimming, exercise and wellness products. Today, Gintell is recognised as one of the leading healthcare chain stores in Malaysia. Over the years Gintell has invested not less than 30 million Ringgit in brand building effort. Continuous efforts in brand building, marketing strategies combined with extensive market research are key factors behind the success of the company. With over 70 showroom spread nationwide in Malaysia, Gintell are ready to provide excellent service, convenience and meet its customer needs. Both these companies give OSIM much competition in the health and wellness sector, this affect OSIM market shares greatly. However, OSIM still have advantage on its side as it has more outlets store and has already penetrated more markets than both Ogawa and Gintell.

The partnership of Gintell with Panasonic provides avenue to strong research and development (R&D) capability and advanced technology. This will provide further opportunities forGINTELLto offer more quality healthcare products to consumers through its expanding retail network. However, OSIM Research & Development Team, which was formed in 2002 will also explored new ideas, new concepts and obtained customer feedback. OSIM is going to work closely together with its manufacturers to meet their customer expectations in terms of needs and wants. This action taken by is an example of itself practicing to produce products that is market oriented and not product oriented. On another point of note, GINTELLis the fastest growing company in the Malaysian healthcare industry. On 1st January 2006,GINTELLwas also delighted to be appointed by Panasonic Malaysia as the exclusive authorised dealer of the Panasonic Real Pro X Massage Lounger. Panasonic was the No.1 selling brand in Japan in 2005 and it was also the first massage chair in the world to receive an endorsement from the American Chiropractic Association (ACA).

The cooperation between Gintell and Panasonic gives OSIM a greater competition.

Ogawa has been looking for synergistic products that can help boost revenues and add more depth to its offering while complementing its existing products in terms of target market, demographics and retail habits. From a marketing perspective despite of OSIM well acceptance in general, OGAWA is well accepted too among a demographic of those willing to spend to ensure the health, wellness and comfort of themselves and their family members. OGAWA is a trusted name and one that has a certain status and prestige attached to it. Cardiovascular disease has lead to the existence of V-Patch. According to V-Patch Medical Systems Pty Ltd Founder and CEO, Mr. Peter Taylor, the V-Patch addresses an important need in mainstream cardiology. The system builds on the existing global practices of early identification and subsequent treatment of at-risk cardiac patients. It does so in a far more cost effective manner, utilising established telecommunications infrastructure and capturing critical patient data as and when cardiac events occur. “Patients have full mobility and do not need to be admitted to a hospital for observation as they wear slim-line disposable “patches”. These are connected to a small device (known as v-pod) with built-in intelligence that collects analyses and transmits to treating physicians, by utilizing existing cell phone networks and the internet,” Mr. Taylor said. Ogawa is optimistic about prospects from VPatch will explore market like V-Patch due to the needs of the markets it operates in and the exclusivity of this modern product. OSIM may consider looking into this opportunity as well.

Both Ogawa and Gintell promotion and price are more a less the same. OSIM range of products may be priced a little a higher than its competitors, OSIM has better quality assurance and it also has better customer satisfaction over its products. As a summary, OSIM should continue to take advantage of its strength may seek to turn competitor threats into its own opportunities.

SWOT ANALYSIS

Within the company's control Out of the company's control

Internal analysis External analysis

Diagram1:

Based on diagram 1 is the meaning of SWOT which the S; strength and W; weakness are within the company's control, it also known as internal analysis while the O; opportunities and T; threats are out of the company's control, external analysis. SWOT analysis is a must in order to create effective business plan or strategy. For instance, usually before managers attempt to assess both their organization and its environment, strategies goals will be establish first. A common framework for this assessment is called a SWOT analysis. This process involves determining organizational strengths and weakness and environmental opportunities and threats.

SWOT analysis is very necessary to business owners because a SWOT analysis is an essential aspect of strategic business planning and should always be performed in line with the initial creation of a company's business plan. As individuals, we acknowledge the importance of scheduling an appointment for an

annual Physician's check-up to protect our health. Similarly, successful business owners and managers know the importance of scheduling an annual SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis to ensure best business health. On a regular basis, annual SWOT review were prepared to update the business plan making sure that the business plan will remain a relevant, breathing document that the firm and the employees can follow as a guide.

A comprehensive SWOT analysis will help business identify areas where its capabilities and resources are strong and potential to capitalize on opportunities is the greatest. Of course, business will need to take into account of its financial strength and corporate culture before executing any new strategy. Most importantly, involve the employees! If business fails to communicate the goals and objectives that presented from the SWOT analysis, the employees will be working in the dark. Set aside a half day for a structured brainstorming session specifically focused on the results of the SWOT exercise. Seek for staff input on development of new goals to fulfill the strategies and ask how they can help businesses to get there. The employees are the engine that drives the train of the business, and they are an essential part of implementing SWOT strategies.

SWOT can assist company to plan strategies by following these seven steps. For the first step is select a facilitator, the facilitator can be someone who works at the company (typically a high level manager) or hiring an outside consultant. Step two is creating a SWOT Team, simply grouping a group of employees, from different business units and job functions. Teams are normally at least five people and can be as large as the whole company. Step three is selecting the place for the SWOT analysis which can be an open meeting environment for a small group or off-site company for the larger group. Step four is assembling the means for the group use example like a number of flip chart,

easel and markers. While the step five is performing the external scan with using the SWOT technique to identify how the firm is going to prepare themselves against the competition. Step six is summarizing. Look for common themes and summarize the items into a more filtered through list in the meeting progress. The final step is analyzed and prioritizes. The purpose of this step is to allow business to take advantage of opportunities and those that should be addressed quickly in order to avoid immediate or potential threats.

The diagram 2 shows the SWOT analysis of the OSIM International Ltd. The strengths of the company are experienced large network of outlets showcasing a diverse range of products across different geographical markets, the brand of OSIM have 608 of outlets across geographical presence of North Asia, South Asia Africa, Europe and Middle East, the brand of Brookstone have 301 outlets in America, the brand of GNC have 154 outlets in the South Asia markets while the brand of RICHLIFE have 97 outlets in China markets. The world is OSIM's market with over 1,100 outlets in more than 360 cities across 31 countries in 6 continents namely Asia, Oceania, Africa, the Middle East, Europe and North America. This explains that the company had successful proven track record with established brands and strong partnerships with shopping mall owners. Whether at Times Square in Hong Kong, Changi International Airport in Singapore or Harrods in London, OSIM Global Retail Concept platform gives a singular image, one that is welcoming, attractive and inspiring

On another point of note, the company has two weaknesses that were identified and they keep striving to improve on over the years. Firstly, is the change in consumer taste. Sales of OSIM's products are relied on consumer demand and are affected to changes in consumer tastes. There is no guarantee that its efforts in niche marketing, brand management and product innovation would enable the group to meet the evolving consumer tastes. Secondly, is vulnerability to downturns in economic cycles. OSIM's healthy lifestyle products are more exposed to reduced demand in times of downturn as they may not be considered as essential health products.

After expecting the internal environments of the SWOT analysis, the external environments also should be taken in to account by the company. Beginning with the opportunities, OSIM are well-positioned to tap on improving global economic outlook and likely to gain from growing wealth and urbanization in China.

Lastly, OSIM International Ltd may face threats too. The threats that the company meet are vulnerable to health epidemics and terror activities. The appearance of health epidemics and terror activities may greatly affect sales and the economic growth. A majority of its outlets are located within high traffic malls and airports, any health epidemic or terror activity is likely to lead to a decrease in consumer traffic in these areas and followed by a decline in its sales. The continuous success of the Group has been attracting counterfeit products traders. As results, the company also face threats of the subject to market competition and negative media publicity caused by lower cost, but often of inferior quality products which also resulted in short term business impact. Each of these two factors is related to one and other.

In the conclusion, SWOT analysis is important to the company. The company should improve the strength and the opportunities of the company whereas reduce the weaknesses and the threats of the company.

GROUP STRUCTUREas at 11 February 2011

Diagram 3:

• Key Subsidiaries

• Key Associated Company

• Joint Venture

Based on the diagram 3, this is the group structure of OSIM International Ltd as at 11 February 2011. It has 8 companies which can classify to 6 key subsidiaries, 1 key associated company and 1 joint venture.

The 6 key subsidiaries which is yellow in color is OSIM International Trading (Shanghai) Co Ltd, OSIM (Taiwan) Co Ltd, OSIM (HK) Co Ltd, OSIM (China) Co Ltd, OSIM (M) Sdn Bhd, and Global Active Limited. OSIM International Ltd is the shareholder with holding 100% shares in the 4 subsidiaries which located in Shanghai, Taiwan, Hong Kong and China. OSIM International Ltd having 87.57% of share in Global Active Limited

Moreover, OSIM International Ltd only have one key associated company, OSIM Brookstone Holdings, Inc which is green in color and one joint venture, Daito-OSIM Healthcare (Suzhou) Co Ltd, which is blue in color. OSIM International Ltd are holding 55.57% share in OSIM Brookstone and only holding 30% of share in Daito-OSIM Healthcare (Suzhou) Co Ltd.

ORGANISATIONAL CHART

An organizational structure is the specification of the jobs within an organization and the ways they relate to one another. In the other way to understand this structure is in terms of an organizational chart. An organizational chart is a pictorial representation of a company's structure and reporting relationships. It gives a great deal of information and can help organizational users understand the overall structure of the organization and its strategy.

The organizational structure of this can be classified to tall organization because it has many layers running from the top of the organizationexample likeChief Executive down to the bottom of the organizationexample like assistant accountant. In the tall organizational structure, there is a narrow span of control like each manager has a few numbers of employees only under their supervision. This shows that employees can be closely supervised and this had created rigidity and bureaucracy in the team.

OSIM International Ltd provides international services and businesses across the globe. Chart 1 show the few layers in organization chart of the, OSIM International Ltd. This basic form of organizational structure in OSIM International Ltd is international structure. The company has many departments, such as the finance, accounting and corporate services department, marketing department, human resources and administration department, operations department, information technology department, customer services department and product training department and etc.

The board of directors in OSIM International Ltd, comprising by eight members, is made up of four executive directors, one non-executive director and three independent non-executive directors. The founder, Chairman and Chief Executive Officer, Dr Ron Sim Chye Hock, theChief Financial Officer and Company Secretary, Mr. Peter Lee Hwai Kiat, the Executive Director and Chief Operating Officer (HQ & South Asia), Mr. Charlie Teo Chay Lee and the Executive Director and Chief Operating Officer(China), Mr. Richard Leow Lian

Soon are the executive directors. The non-executive directors are Ms Teo Sway Heong while Mr. Tan Soo Nan, Mr. Sin Boon Ann and Mr. Colin Loware the independent non- executivedirectors.

The role of board of directors is to protect the shareholders'assets and ensure they receive a decentreturnon their investment, approve the broad policies, strategies and financial objectives of the company and monitor the performance of management, overseeing the processes for evaluating the adequacy of internal controls, risk management, financial reporting and compliance, approving the nominations of board directors and appointment of key personnel, approving annual budgets, major funding proposals, investment and divestment proposals; and assuming responsibility for corporate governance. The board will meet periodically throughout the year to ensure that the company is ongoing with a better growth in profit.

ACTIVITIES OF FUNCTIONAL AREA WITHIN THE ORGANISATION

Human Resource and Administration Department

Human Resource management involves in development of bonds between the employee and the employer. The human resource management is responsible for hiring people and assigning employees to certain jobs corresponding to their talent. They are also responsible for recruiting, and train the employees so that they can perform better in their specific field. They need to develop an understanding of the employees and help motivate them to give their best. They also identify and fill in areas that suffer lack of knowledge and insufficient man power.

The objective of administration department is to ensure smooth operations in administration work, human resources, personnel and office security and to provide managerial services and support to ensure activities conducted under OSIM International Ltd are beneficial.

These two departments is the fundamental to every company.

Marketing Department

Marketing is a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders while the role of marketing is different to marketing department.

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The role of marketing department is to make sure that the company has a marketing focus in everything that it does. It will work very closely with production to make sure that new and existing product development is tied in closely with the needs and expectations of customers.

Other than this, the marketing department also responsible on creating meaningful messages through words, ideas, images, and names to create a professional image. In OSIM International Ltd, the marketing department is responsible for ensuring that messages and images are delivered consistently by every member of the organization.

Brand Management Department

Branding is a process of using names and symbols, like coca-cola or McDonald's golden arches, to communicate the qualities of a particular product made by a particular producer. Brands are designed to signal uniform quality; customer who try and like a product can return to it by remembering its name or its logo. The aim of brand management is to create a brand that will build this long-term relationship - an unshakeable bond - between the company and its customers.

OSIM is the most trusted brand and they had changed their old logo which already used for 15 years to a new one which cost over billion.

Customer Service Department

Customer service duties are carried differently in terms of product, company and service. Some examples of customer service duty are answering phone calls on customer inquiries and questions about a product, customer account service information, billing information, ordering product and services or purchasing an item. Mostly customer services are involved in Telemarketing.

The main purpose of customer service duty is to take care of customer after they purchase a product and also to provide information on the product. it needed in order to create a good customer relationship in order to improve the sales of the company by having the customer to stay on the product.

International franchise

A simple definition of franchise is Chain stores. It is used to distribute goods widely, avoiding liability and investment over the chain. Some examples of famous franchise are MacDonald, subway, Seven-eleven and many more. Names of these companies can be found worldwide. Franchising is differentiate into 2 parts one which is the franchisor meaning the head or the investor or distributor and franchisees the chain stores. The success of the franchisor depends on the franchisees. This is because franchisees have greater expectation of reward in terms of investment compare to a direct employee, franchisees have higher stake in the business. As practiced in retailing, franchising offers franchisees the advantage of starting up quickly based on a proven trademark, and the tooling and infrastructure as opposed to developing them. In OSIM International Ltd is available to everyone once they achieve a standard level.

Finance and Accounting Department

The financial department is responsible in handling the financial aspect of the company balance sheet, profit and loss account and other accounting books of the company while the accounting department strives to help the small business owner save time, money and frustration. It take on the hard bookkeeping tasks from full cycle accounting to project work, payroll to annual informational tax form prep; in this way, it makes us can concentrate on the more important tasks, like growing the business and increasing income.

A good accounting and financial management helps keep the business under control; it also provides the owners, management and others with the information and the confidence to make the bold decisions and take the opportunities to help the enterprise grow.

Sales Department

Sales department is responsible to package, advertise, and promote the product once the new product is release or designed by the production department marketing. Sales are also responsible for persuading the consumer to purchase the end product, manufactured through marketing's research. The Sales Department's selling strategy could involvemail shots, travelling sales representatives, telephone sales and devising the sales interview. In OSIM International Ltd, all sales assistants are in order to achieve their target by permanently.

Information Technology

Information technology or IT in short form consists of computer software, information system, computer hardware, programming languages and data construct. Any media distribution is considering a part of IT. In a company, IT performs 2 specific tasks such as IT discipline and IT competencies. Such task is separated into installing application or software to designing a complex network system to store information data base. Task such as Data management, engineering computer software, Networking and software design are perform by IT profession as well. Functions such as renders data, information or any visual format is consider as an Information Technology.

Operations

Operation can be defined in words such as function or instruction. While in business operation it is divided in to 2 parts. One which is the Manufacturing operation and other is Operation Management. In Manufacturing operation Functions as Human resource, Information technology, Maintenance, Supply and distribution, safety and health, emergency respond and other infrastructure departments. The second operation in business operation would be Operation Management. In operation management, it is concerned in Managing such as overseeing a problem, Designing and redesigning business operation in production of goods or services. This operation is to ensure an efficient business operation by using as little as resources needed and also effectiveness.

Research and Development

The aim of research and development is to improve existing products, create new and better products, improve production methods, and create effective processes. This will enable the organisation to reduce costs, increase profitability and remain ahead of the competition. As not all research will lead to new/improved products/processes companies will need to allocate a specific portion of their budget to research and development activities.

Product Development

Product development is an important department in a company. Developing a new product is to expand or diversify product lines, in OSIM International Ltd, all products' name started with U. Example like uDivine, uKimono and uSoffa Petit and etc. Product development is a long and expensive process, and many firms have research and development (R&D) departments for exploring new product possibilities.

Quality assurance and Engineering

In larger company that are in web Development Company such as Google, Facebook, YouTube or any other more, or a company that produces software, a Quality Assurance engineer in short is QA is needed is ensure all system or program works perfectly and its function are going according to plan. All maintenance functions are performed by QA engineer. One of the job of a QA is software testing it is involve in software testing, examine the server which the user normally don't see. A QA engineer is to find out errors to it can be fix before it happens. They trouble shoot any errors that a user can make.

Future Plans

Having a future plan for the company will help its business and future and current employees with useful guidelines as well as a direction for the company. Future plans are needed as well as to ensure that there is sustainable growth for the company. OSIM put much emphasis on ‘Leadership, Innovation and Execution' of which these three elements will engine its future growth. Some of the future plans are to continue to build a sustainable growth, profitability and positive operating cash. OSIM is recognised as a leading brand in an independent survey conducted by international market research company, Synovate, and supported by International Enterprise Singapore (IE Singapore), OSIM came up as the Number 1 Healthy Lifestyle products brand in consumers' minds across Asia. OSIM, as a brand, has become the global leader in the provision of healthy lifestyle products. It wished to develop and design new products for healthy lifestyles that are aimed at improving the overall well-being of its customers. OSIM will continue to build its brand based on its consumer's health. As Asia's leading branding, OSIM aims for greater heights as to become a global leader brand as well in provision of healthy lifestyle products.

As almost all of the companies would seek to increase their profits. It also the same with OSIM and they wished to increase their profits as well. In order to achieve higher profits, one of the ways is to increase their product sales, they planned to open up more retail outlets in every countries that they have set their presence in. This is due to OSIM sales are dependent, to a large extent, on the number of point-of-sales outlets and their advertising and promotion efforts, and may be affected by consumer demand for its products in the various markets that OSIM operate in, which may be brought about by political, economic and social changes. North Asia, comprising China, Hong Kong and Taiwan, has become an

important market for OSIM, accounting for a substantial 59% of the company's gross sales (OSIM Sets New Records, Eyes TDR & Greater China Growth, 2011). This contribution was expected to grow even further if OSIM's China expansion plans in 2011 do come into materialisation. Specifically, the company plans to add another 50 to 80 OSIM outlets in China this year to its existing 270. OSIM also wished to venture out the developing markets. It will continue to build its brand based on its customers' health in the coming years. As for short term plans, OSIM will continue to have road shows in the future as often as possible and achieving monthly sales target.

Furthermore, OSIM, which first ventured into the Taiwanese market in 1987, has also submitted an application for the offering and listing of 85 million Taiwan Depository Receipts (TDRs) at a temporary indicative offer price of NT$20.80 per TDR. Poised for completion in mid April 2011, this move will undoubtedly lead to a greater significant presence of its business in North Asia. Meanwhile, the estimated proceeds from the aforesaid dual listing of NT$1,768 million has been earmarked by OSIM for the developing of specialty retail outlets for personal care and sports-related products so as to expand the scale of its business in China. OSIM are also searching for brands and companies to take over as part their measure to consolidate its position as Asia's leading brand for healthy lifestyle products. Such measures were taken by OSIM as it plans to increase its range of healthy lifestyle products. These were the plans for OSIM for its future business activities. “A man who does not plan long ahead will find trouble at his door”, by Confucius. Planning the future of a company is very vital for its long term sustainability.

Conclusion

In brief, this report has covered the background and history of the company, ethics practices of the company, examples on how widely was IT used in the company, 4Ps analysis, competitor analysis , SWOT analysis, organisational chart, functional areas within the company, and the company future plans. After much research has been done about OSIM, we as a team conclude that OSIM is considered quite a successful business. This is because OSIM has already become Asia number one brand when it comes to health and wellness industry. The company has come out with very good strategies and it was carried out properly and extensively. Code of ethics and guidelines were set by the management level and it was strictly followed by top management level down to even most junior employee. OSIM target audience is those who seek a healthy modern lifestyle and also those in middle to higher income group.. The top management of the company are comprised of highly capable and experienced people which reflects the success of the company.

Throughout the entire project, we found out that OSIM has many other key subsidiaries and one key associated company and also another one joint venture. This shows that the company has grown its business till very big. In addition, the company has practiced good ethics to the customers, employees, suppliers and the company itself. Good ethics has brought the good image to the company. Thus, OSIM are very well received and acknowledge by the people. It also leave OSIM with a very good reputation which can incorporated as the company strength and marketing strategies.

Furthermore, the Information Technology used by the company has brought a lot of advantages to them especially in terms of operating cost. IT helps the employees to perform their work more efficiently and effectively. By engaging itself into E-commerce has given the business a greater chances in reaching more potential customers as the e-commerce has no geographical boundaries as well as the internet usage globally is on the rise especially in Asian region.

The four Ps analyses help the company to take into consideration from what it got by making those analysis. It is then use for preparing effective marketing strategy. Besides the four P's analysis, the competitor analysis also helps the company in order to compete with their competitors as they would have an idea what are some of their competitors' strategy and planning. SWOT analysis serves as a reference to the business to identify its strength, weakness, opportunities and threats. Both strength and weakness are internal factors of a company which can strengthen and improved respectively. Opportunities and threats are more of external factors. Threats faced by the business can sometime being turn into a very promising opportunity. In short, four Ps analysis, competitor analysis and SWOT analysis come hand in hand to better prepare a company to plan its future directions.

This report also showed that the company is well-structured in order to perform daily activities efficiently. Different functional areas play different roles in their departments to provide systematic progress of working and to succeed an organization. Every single of the departments is important to the company as they have their own duties and responsibilities.

Throughout the entire process of doing this project, we faced a lot of challenges such as difficulty to get a place to interview. We also faced lack sources to refer to in particular the company information. What we obtained from the website was very limited due to many of information we needed is considered as the company top most confidential information. The company's detail is very confidential since the interviewee of the company only can tell us their company basic details through the interview. They cannot give the hardcopy of the company's information or else they will face stern disciplinary actions.

By doing this project, it has taught us to be independent especially those who are not local Mirian. We have travelled on public bus to reach our destination. We also learned to communicate with people especially during the process of finding a place to interview. We also help each other when we met challenges and to fulfil the shortcomings of each other. Cooperation and team work are needed which is very important of which it affect the quality of our works. Through this project, we learned to delegate the tasks to each of the team member.

Last but not least, the most important note of this doing team project is that it allows us to have better understanding on we have learned in our lectures. We not only have theoretical knowledge, but also have practical knowledge which only can be obtained through doing the project.

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