Peter is a scientist who specialises in material sciences. Since the recent coronavirus outbreak, he has soon been aware that there was a shortage of supply of surgical masks in Hong Kong and the price for those available marks has been exceedingly high. Therefore, he designed a reusable mask using 3D printing technology such that the masks can be produced in a relatively simple way. In addition, Peter has produced a highly effective mask filter developed from a material that he owns the patent. This filter only fits with the mask he designed. Peter soon founded his own business with a small workshop for manufacturing the reusable marks and the filters, while selling these products both online and through a small number of retailers. The mask is sold at a relatively low price of HK$100 each while a filter is sold HK50 per package of 20 pieces. In fact, he also distributed the 3D printing file of the reusable masks freely online so that everyone could print it on their own 3D printers. Recognising the especially high level of shortage of surgical marks for the kids, he set the target market segment for this age group and by doing so, he also avoided the direct competition with many other competitors in the adult segments. On the other hand, with a limited budget on marketing, he promoted his products mostly through the social media. Peters products have been well received soon after they were launched. As a result, Peter is considering expanding his business further through increasing the production capacity and selling into other market segments. However, he is concerned if he is able to handle various issues associated with the growth of his business. Also, as there are more local companies which start producing surgical marks in Hong Kong, he is worried if his expansion plan would lead to the rivalry actions of these competitors, who are much more resourceful than him.

1. Explain the way(s) through which Peter recognised the business opportunity for starting his business.

2. Which type(s) of business model has been adopted by Peter when launching his business? Explain briefly.

3. With reference to the Business Model Canvas, please help Peter to draw an initial business model with a consideration of various components involved.

4. Identify the generic (business-level) strategy that Peters new venture has used when it was launched and briefly comment if this strategy is appropriate.

5. Please advise Peter on the appropriate and cost-effective ways of marketing his products in addition to promoting them through social media.

6. What are the common issues and challenges that Peter and his firm might face when his business grows? How can he deal with these issues and challenges effectively?