Assignment 3 – recommending solutions to complex challengefaced by an organization

combines TH swiftlets nest content with a deticious and and want to consume it to embrace their beauty and health Social media Instagram, Facebook, four ul Health and wellness influ

DESIGN THINKING FOR

BUSINESS

ASSIGNMENT 3 — RECOMMENDING SOLUTIONS TO COMPLEX CHALLENGE

FACED BY AN ORGANIZATION

Vo Toan Loc - $3694785 Phan Thi Phuong Loan - $4044873 Nguyen Le Thien Quynh — $3777295 Nguyen Thi Mai Tram - $4025903 Tran Minh Hieu - $3991232 Nguyen Tan Khoa - $3777326 Student Name:

Executive Summary

This report undertakes the meticulous examination of the intricate challenge faced by NutriNest, centering on the founder’s pivotal role in deciding the long-term future business growth The focal point of the predicament is the decision to either fortify the available products line or embark on innovation of new products, which perhaps shrinkage the company’s cash reserve In response, our proposed solution introduced “a premium bird nest jelly stick”, crafted with an infusion of pure bird’s nest per serving Strategically tailored for health-conscious consumers, specifically women aged 25-35 years old, this jelly stick is distinguished for its unparalleled convenience while providing sufficient nutrition as compared to traditional bird nest drink The product will be initially launched in the lucrative Taiwanese market along with NutriNest’s strategic expansion goal This report served as a compass and offered strategic insights for NutriNest to navigate the decision-making process, thereby providing a viable pathway for a sustained growth in such aggressive business landscape and within the bird’s nest industry

INTRODUCTION

Bird nest, alternatively mentioned as "the Caviar of the East" exploitation can be traced back to China roughly 1,500 years ago amid the Tang Dynasty period (A.D 618-907) It was then unveiled to the courts of China’s Emperor and served as a supreme delicacy (Epicure 2021) With time and enhanced living standards, consuming edible bird nests (EBN) has become a lifestyle choice and salubrious habit in Southeast Asia Even though EBN is not produced only in China, its consumers alone absorbed 80% of EBN fabricated globally, ranking as the foremost nation in EBN consumption worldwide (VCCI 2022) Earlier in 2020, the market size was estimated at approximately USD 10 billion, as reported by Sheikha (2021), and it is projected to reach multi- million USD by 2029 Further, adopting advanced technology will likely generate ample growth opportunities for the market (Precision Business Analysis 2023) Thanks to the Chinese market, Vietnam's bird nest industry has experienced booming growth and captured more than USD 125 million a year, but it is still aware of stiff competition from neighboring countries like Thailand or Indonesia, who are eager to enhance their market share in mainland China (VCCI 2023) In Vietnam, 42 out of 63 provinces joined bird nest farming, with over 22,000 bird nest houses

(VCCI 2023)

The story of NutriNest

The genesis of NutriNest can be linked to the faithful meeting between the current CEO, Le Danh Hoang, and Dr Elina Nugroho, an expert in the bird's nest farming industry (NutriNest n.d.) Since 2005, the company has become one of the leading firms in bird's nest farming in Vietnam Over the years, the company has been certified with the most well-invested farms aligned with ASEAN ORGANIC standard agricultural practices NutriNest has introduced 25 different types

of bird nest products to the market, from standard to high-end These products are distributed both nationwide and internationally (NutriNest n.d.) With its mission and vision of high-quality products, the business had invested heavily in R&D, and the bird's nest farm adhered strictly to hygiene and safety standards NutriNest even fosters a unique technology called SpyderShake, which utilizes a biofilm to ensure bird's nests stand intact at the bottom of the jar, preventing them from dissolving during sterilization (NutriNest Admin 2021)

Nevertheless, this market has exhibited persistent competitiveness over the years, specifically with the direct competitors - Sanvinest Khanh Hoa Bird’s Nest Sanvinest had successfully exported its first official batch of bird's nests to China and swiftly appeared in the world's leading market armed with extensive knowledge of bird's nests (Vu 2024) To thrive in the industry, NutriNest's CEO essentially decides on the trajectory of the company's future growth The primary conundrum is deciding whether to concentrate on expanding the current product portfolio

or diversity by launching new ones This audacious path might promise market share growth but treads perilously close to cannibalizing existing sales and perhaps draining the company's depleted reserves via installing new machines Thus, the CEO is confronted with complex decisions about whether potential gains from diversification will outweigh the risks and to aid NutriNest in expanding its market share in the face of evolving customer preferences

This report is generated to tackle NutriNest’s critical challenges by employing the Design Thinking principles to propose potential solutions The D-school and Stanford model (figure 1 & 2) will be applied to systematically explore the problems and meticulously analyze the issue through the triple lens of feasible, desirable, and viable This allows any proposed solution to be not only sound in practice but, at the same time, resonate with users while aligning with the

© © ® 9 e 9 ©

Figure 1: The Design Thinking Model (D-school)

k and observe where your

for feedbac 1 0 41 users’ problems exist

ai@)

PROTOTYPE IDEATE Build real, tactile Generate 2 renge of representations for a crazy, creative ideas range of your ideo:

B Wicked Problem

Considered one of Vietnam's leading bird's nest farming companies, NutriNest is currently confronted with a strategic dilemma concerning its business growth As Mr Hoang - NutriNest's CEO shared, there is uncertainty about whether to expand the current product lines or venture into

characterised as a wicked problem where the inherent uncertainty makes solutions seem elusive (Head & Alford 2008) Despite the higher risk associated with developing new products, NutriNest has the potential to embark on innovation and launch new products for export markets, which will pose long-term advantages by tapping into new market segments and generating additional revenue streams Critically, amid the many choices available, modern and young customers need a way to effectively consume bird nests without wasting time preparing because

of their hectic lifestyle Due to that problem, how might NutriNest satisfy its target customers with products that blend nutritional value, daily consumption, and portability for their busy, ongoing routine?

C Value Chain

collaboration, and cross-functional perspectives, prototyping and testing, and implementing and evaluating outcomes Referring to Appendix 1, inefficiencies begin in its procurement stage where raw bird’s nests must be sourced from ministry approved farms For NutriNest to meet export expectations, EBN must be sourced at a higher price due to taxation laws With the rapid increase in farms, governments needed tighter regulations on the amount of the EBN harvested and sold (Ministry of Agriculture 2023) Moreover, its importance lies in traceability as a part of export regulations Its new introduction in 2023 has given little time for farmers to register farms Additionally, farmers do not feel inclined to register their farms, while those few farms that have registered offer EBN for a premium price above market value (Tuoi Tre News 2023)

D Customer Persona

and well-being tips

% = Prefer for a premium products that

pure ingredients that align with

her health-conscious choice

GENDER : WOMAN Homls-cr re xckemirEml

LOCATION :TAIPEL,TAIWAN 4k vajues transparency

Information on the packaging

and artificial ingredients

Figure 3: NutriNest’s customer persona

In the iterative design thinking process, persona aids in testing systems and constructing the functionality of products that the users will be willing to use (Vinh & Rakib 2021) By crafting detailed and relatable representations of our targeted users, the persona assists the design thinker with tangible reference points to empathy and understanding the diverse needs and behaviors of the target audience Ling Chen might view this product as a suitable alternative, adding to her hectic lifestyle The product's intensity on health, transparency, and reliable bird's nest sourcing information is believed to appeal to her age group, resonate, and wellness-oriented mindset The premium quality and unique offering make it a standout option for Ling Chen, aligning perfectly with her desire Bird's nests can be promoted for their natural beauty and health benefits, stressing their historical use and scientific evidence Crafting marketing strategies for bird's nest products that assimilate her bustling lifestyle can capture her attention Marketing bird's nest products that meet Ling’s busy schedule can pull her in even more NutriNest can practice Ling features to tailor its marketing to health-conscious customers and emphasize its product's value

E Empathy Map

Empathy Map

What does she say?

Prioritizing health and beauty is essential for

pressure marketing professions

drowning in key performance indicators | am

ready to pay a TH for things | know will

phố to BH Hà meals because of a busy schedule

is to find the right healthy products since discerning

truly ‘healthy esis amidst the vast array of options available

combines TH swiftlets nest content with a deticious and

and want to consume it to embrace their

beauty and health

Social media (Instagram, Facebook,

four ul

Health and wellness influencers

Organic stores, restaurants, and wellness

stores

Health and beauty workshops

Search for information online

Acces bird net's provider onine

What does she think ?

rm of consumption to align

What does she feel?

Help myself save time and effort

* Feeling relieved after discovering a nutritious, pre-packaged food item with an

excallent nutritional value

Satisfied with the product since the price is reasonable in relation to the value

gained and can be afforded on a monthly basis

5 Product

* Delicious

enjoyable experien

delivers the ‘oxpected health value within an acceptable

price range without compromising quality or taste

Although bird's nest is already a part of my cletary intake, I desks â

more convenient for st-paced

lifestyle, such as ready-to-eat products Seine ot aaa time to cook

supplement that can prot and beauty benefits

Gain

Ti 'y Bird's Nest Produ:

Figure 4: Customer’s Empathy Map

Evaluation

Consider products in the market, seek for a product with high nutrition value, convenience, eco-friendly Website with detailed product information, images, and certificates Customer experiences a social proof on the website and social mí Nutrtionsts, health mean or doctors

Consider product's descriptions, ingredients, certificates

Compare alternative products

lealth

‘ager to nourish inner glow and vibrant

look with bird nest

Worry that a hectic Ufestyle will

tí affect their health

Reluctant to spend time prepare the bird

nest

‘Affaird about the nutrition value in the

EBN products

Desire to add bird nest to their daily use

the EBN products’ nutrition value

per tor

‘Willingness to consume bird nests regulary

h Confuse by the variety of EBN products Overwhelme with value nutritions, ingredient ethical, and eco friendly Tired with the research process con about the diversity ih ae —

IN products and struggle to

product a includes n ae

\ce and also eco friendly

Purchase

Discover a product that contains all

three key features and purchase it to

experienc

Ea packs or starter

iment process with ch S

pee options like credit cards, mobile

wallets, and ontine bank tran:

Convenience delivery options

Tracking order status

Receive sample packs or starter Conduct more earl ic this Pin Decide to make a purct product Exciting about discovering the ideal product

Stress about the payment process and

potential delivery detays

‘onfidence if the checkout process is smooth and secure Anticipation for receiving the bird nest product

inoy by the complicated payment PESS 6oEta cern about the actual

quality of the produet

What does she do?

Ling actively seeks healthy products to avoid asthenia Notably, she prefers a nutrition

‘ovide both rejuvenation

« Ready to Eat Eliminate siteniave preparation for healthy products

and oducts: Effective and

Retention

Dotight with the purchased product and consume this product daily for a healthy body and radient look Brand's Loyatty program Brand's personalized content Customer experience survey and feedback

Repeat purchase = products within a specific timefram Receive points, we discounts, and

at access to ne' customers

Happy with the product value Enjoy consuming the product daily for

I i Willing to use the loyalty program's offers

Confident to recommend this products

to other customers The actual products may not beas good xpected, leading to disappointment and a need to search for other products

Figure 5: Customer’s Journey Map

The motivation for purchasing bird nest products is to enhance beauty and health, but customers may be skeptical about the nutritional value To overcome these concerns, customers can use various channels such as social media, health and wellness influencers, and online platforms to seek suitable products After satisfying experience with the product, they may also consider repurchasing the product to inquire special offers from the brand’s loyalty program, and ultimately recommend the brand to others

WHAT IF ?

A Strategy analysis

In analyzing the strategies and trends for the final designed product of an edible bird's nest (EBN) company (Appendix X), two potential strategies emerge: improving current products or adding new products to the product line Focusing on improving current products, particularly targeting specific segments like the elderly and children, could help maintain the company's market share and financial stability This approach allows the company to allocate resources to enhance marketing campaigns and maintain timely payments to suppliers However, it may limit growth opportunities and could result in falling behind competitors who offer a wider variety of products

to customers

On the other hand, adding new products to the EBN company's product line emerges as a compelling strategy While this approach requires significant initial investment in research and development (R&D), it opens up new revenue streams and expands the company's target customer base, particularly by appealing to health and beauty enthusiasts By introducing innovative products that cater to evolving consumer demands, the company can position itself as

a leader in the dynamic EBN market Although there is a risk of new products competing with existing ones, careful market research and product differentiation can mitigate this risk Embracing innovation and responding to changing consumer trends through new product development is essential for the company to secure its future success in the industry

B Rapid Growth and Shifting Trends in the Asian Supplement Market

In the current market trends, the Asia Pacific market for supplements valued at USD 57.27 billion

in 2022, is rapidly growing, with a projected compound annual growth rate of 12.6% by 2030 (Lim 2022; Grand View Research 2022) This boom is driven by several trends including Holistic beauty, High-protein craze and Fun and Functional trends

Consumers are increasingly seeking holistic approaches to beauty, moving beyond supplements

supplement" is a rising trend, emphasizing the incorporation of beauty-enhancing ingredients into enjoyable food formats like gummies and bars (Passport 2022a) The beauty-enhancing properties of bird's nest extracts including anti-aging, whitening and anti-wrinkle effects (Bai et

al 2023; Kim et al 2022; Kim et al 2021) could be leveraged via skincare products such as face mask (Benjakul and Chantakun 2022)

Another potential solution could be the development of a bird's nest facial mask This product could leverage the beauty-enhancing properties of bird's nest extracts, offering consumers a convenient and effective way to incorporate these benefits into their skincare routines By tapping into the growing interest in natural and holistic beauty solutions, a bird's nest facial mask could cater to consumers looking for skincare products that align with their wellness-focused lifestyles

Additionally, protein-rich diets are gaining traction, fueled by their association with health and well-being (Passport 2022a) Bird's nest products, with their unique and high valued glycoprotein content which provides high nutritional and functional properties for human health benefits unlike the other protein sources considering both animal and plants sources (Yan et al 2021), could capitalize on this trend by emphasizing this nutritional advantage There is also a trend towards trendy and fun-to-eat products with added health benefits like curcumin, ginseng, or cordyceps (Lou 2021)

C China: King of Nests, Taiwan: Strategic Entry Point

In terms of potential markets, China is the largest market for bird's nests, accounting for over 80% of the global market share (Vietnamplus 2022) However, its intense competition from

10

Indonesia, Malaysia, and Thailand makes it challenging for newcomers (Kuo 2022; Vietnamplus 2022) Taiwan offers a more promising entry point Consumers there are willing to invest time and effort in seeking food and drinks with health benefits and are open to trying new products and services, making them receptive to new offerings with EBN ingredients (Kang 2017; Passport 2023a) Taiwan's consumers are known to prefer chewy snacks (Q-Q products) such as jellies and gummies (Passport 2023b; Quartly 2020), which makes products such as beauty-in-a- jelly appealing to consumers

Considering these factors, using the I like, I wish, I wonder tool (Appendix Y), the most potential concepts for the final designed product could be:

consume product with the beauty benefits of a beauty supplement This product could target health and beauty-conscious consumers, leveraging the trends of "fun edible beauty" and the demand for high-protein products

among mainstream consumers This product could be positioned as a convenient and healthy option, appealing to a broad audience

WHAT WOWS ?

A Product Prototypes

The ideation stage revealed insights that customers of bird nest products encounter three primary challenges: nutritional value, time expenditure, and dull packaging Regarding this issue, a new product, the Premium Bird’s Nest Jelly Stick, has been designed to assist consumers in resolving their concerns This product will target the Taiwanese market due to the country's rich cultural heritage around ingesting bird nest, ideal market scenarios and openness to distinctive health and wellness products This simple, ready-to-eat jelly is packed full of natural deliciousness, precisely capturing the iconic flavor of bird nest for a youthful and vibrant glow

11

Firstly, this product is a sensory experience formed from the finest, ethically sourced bird's nest offered from NutriNest Vietnam Pure bird nest, collagen, and essential amino acids combined with freshly squeezed fruit extracts are all mixed up in one serving to nurture radiant beauty and healthy body Besides, the jelly is available in three flavors - the original bird nest flavor, peach, and pineapple - giving consumers a greater variety By using this jelly, customers may be able to forget tedious preparations and immediately enjoy the moment of pure delight

Furthermore, consumers with hectic schedules might embrace their convenience with this ready- to-eat jelly Customers can replenish their inner glow anytime, anywhere with an individual serving package that fits properly in their pocket, gym bag, or purse and weighs 20g each stick, which contains 3g of pure liquid bird nest In addition, the wide range of distribution channels - from offline, such as supermarkets, convenience stores, and wellness shops, to online, such as websites and e-commerce platforms - allow customers to easily access the products Thanks to it, enjoying a daily dose of beauty could not be simpler

Finally, as part of NutriNest's dedication to cherishing both its valued consumers and the environment, this product will have an attractive, contemporary design in eco-friendly packaging that represents the company's desire to both please customers and minimize its negative effects

on the environment

When all things are considered, the Premium Bird’s Nest Jelly Stick is a viable product that not only satisfies the target market's demands for a tasty and nutritious bird nest, easy consumption, and attractive packaging, but also aligns with NutriNest’s mission to offer customers high-quality products that have the least negative

combination of these three valuable

qualities - nutrition, ease of use, and

sustainability - into a bird nest jelly

stick makes it distinguishable from

other products currently on the market

FOR A HEALTHY SKIN AND INNER GLOW d

NutriNest Bird’s Nest Premium Jelly Stick (30

HY SKIN AND INNER GLOW

14

Figure 7: 3D Protypes of Premium Bird’s Nest Jelly Stick

B Assumption Testing

When determining the fundamental hypotheses that make a new product idea appealing, an assumption testing metric must be implemented before creating a proposal for a product that can help NutriNest solve the wicked issue and meet the demands of their target customers in Taiwan Subsequently, the likelihood of these assumptions turning into reality may be evaluated with the available data (Appendix 5)

To determine whether there is sufficient demand among young, affluent Taiwanese customers for

a premium, ready to consume bird's nest product, an in-depth analysis of the market demand and rivalries hypothesis is essential Through questionnaires, competitive assessments, and research studies, their perception will become visible Aside from that, are consumers willing to spend extra on items made of pristine, ethical bird nests? Price trials and willingness-to-pay evaluations will provide more precise guidance for the ultimate price strategy decision Focus groups, social network engagement, and brand awareness surveys are required to identify if a brand complies with the target audience's standards about health and beauty Furthermore, it's crucial to evaluate the repurchase rate utilizing sales data, customer feedback, and product sample initiatives to discover if consumers find the flavor and declared wellness advantages of the product to be sufficiently appealing to justify a repeat purchase

The possibility of effectively launching an innovative product that could offer distinctive features addressing various needs and concerns of Taiwanese consumers can be enhanced by comprehending, enhancing, and tailoring according to their desires for bird's nest products

WHAT WORKS?

Customer Co- Creation: Including Customer co-creation tools inside the design thinking

framework promotes consumer engagement in developing a solution that effectively meets

customers’ needs

15

The company can hold specific activities to engage customers offline and online

wellness centers, high-end restaurants/cafes, and

gift shops/boutiques in luxury hotels and resorts

or shopping malls/supermarkets to engage target

and non-target customers to collect information

due to a no-selling zone before launch We

collected consumer feedback after displaying and

accommodating samples to improve our solution

and engage customers

1 Flavors voting Promote the premium bird's nest jelly stick by hosting a poll where customers may choose

their favorite flavors or combinations This

generates excitement and anticipation for the upcoming launch while including customers in decision-making

2 Interactive Packaging Design

visualizing the product's cultural and high- quality attributes The winning concept might

be turned into a limited-edition product

Consequently, NutriNest can utilize this result to refine the product, fostering a sense of being a top

contributor among participants to understand customer expectations, insight, and preferences

16

Learning Launch: In the Learning and launch phase, the objective is to develop a cost-effective experiment that allows clients to try out the new product after an upgraded duration This will enable you

to valjdate critical assumptions using market data

Concept: Introducing a premium Bird Nest Jelly Tailored for Taiwanese Consumers, Emphasizing Beauty and Health

Critical Assumption Testing _Hxpected outcome:

$150 for bird nest jelly box (30

sticks)

Time frame: 4 weeks Sample size: 10000 sticks

the bird nest texture (Original, Peach, Pineapple)

the profit

How will we execute research to validate our assumptions? What prototype

The objective is to understand | will be employed? What happened during the experiment?

customers’ tastes and

the illustration of Value

stores that appeal to our specific consumer base

they can touch, understand the process of manufacturing, and finally experience the jelly

any further development

Week 3 & 4:

17