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Chapter 1Business Strategy
A business strategy is the means by which it sets out to achieve
its desired ends (objectives). It can simply be described as a
long-term business planning. Typically a business strategy will
cover a period of about 3-5 years (sometimes even longer).A
business strategy is concerned with major resource issues e.g.
raising the finance to build a new factory or plant. Strategies are
also concerned with deciding on what products to allocate major
resources.Strategies are concerned with the scope of a business'
activities i.e. what and where they produce.Two main categories of
strategies can be identified:1. Generic (general) strategies, and2.
Competitive strategies.The main types of generic strategies that
organisations can pursue are:1. Growth i.e. the expansion of the
company to purchase new assets, including new businesses, and to
develop new products. The Inland Revenue has expanded from being
just a tax collector, to other functions such as collecting student
loan repayments and paying tax credits.2.
Internationalization/globalization i.e. moving operations into more
and more countries.3. Retrenchment involves cutting back to focus
on your best lines. The Americans refer to this as 'sticking to the
knitting'.
Chapter 2 Description of Venture
The business definition framework by Derek F. Abell proposes
that a business can be defined by using three dimensions: customer
groups (who we're going to serve), customer needs (what customer
need we're attempting to meet), and technology or distinctive
competencies (how we're going to meet that need). This approach
strongly stresses understanding customers and not on an industry
and its products or services. Based on these three dimensions,
Abell's competitive strategy classification scheme proposed that a
business could be defined by its competitive scope (broad or
narrow) and by the extent of competitive differentiation of its
product/service offerings.
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Based on the Abells framework we have defined our business by
answering the three core questions-
Question 1: Who are our customers?
Answer:Our prime customers are the poor people who live bottom
of the pyramid. In our surveys and observations, we have seen that
they have many problems around themselves and clothing is one of
them. For their everyday lives they need several things like
clothes, papers, tableware, cup, glass, napkins, tissue papers etc.
In fact they need all of them in a lower cost. As our customers
income level is lower than the average, we will try to provide them
their daily products at a reasonable price.Apart from that, we will
also serve in the mass market for the common people where we will
have fashionable jeans, shirts, jackets, shoes and winter wears. We
will charge a premium price for those premium products.
Question 2: What is their need?
Answer:As most of our prime customers live below the poverty
line, their major need is cheap and durable products. We have seen
that they have many problems around themselves and clothing is one
of them. For their everyday lives they need several things like
clothes, papers, tableware, cup, glass, napkins, tissue papers etc.
In fact they need all of them in a lower cost. As our customers
income level is lower than the average, their need is very small.
All they want is to save some money from the daily expenses. Our
venture will help them to get those products along with some
savings.
Question 3: How our organization is going to serve that need?
(Our Distinctive Competencies)
Answer:We will create superior customer value providing good
quality products. As we use a raw material called Bagasse, the
fibrous matter that remains after sugarcane or sorghum stalks are
crushed to extract their juice, we will have the cost
leadership.
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We can produce those products at a minimum cost. It can be a
relief for those poor people. As we have the cost leadership, we
will be able to reduce the retail price and make them available and
to the reach of the poor people. So it is feasible and economically
sustainable and we will be able to get the traditional market as
well. Our products are environmentally friendly. So there is no
risk factors involved.
Chapter 3Products Overview:
3.1 Compostable Tableware Made from 100% sugarcane 100%
biodegradable 120 degree oil and 100 degree water proof Microwave
safe
3.2 Biodegradable Tableware Made from 100% sugarcane 100%
biodegradable 120 degree oil and 100 degree water resistant Can be
used in microwave and refrigerator Variety of sizes, shapes and
uses available Healthy, Nontoxic, Harmless and Sanitary Can be
recycled and protect the resource From nature and back to
nature
3.3 Paper Cup with Handle Heat resistant Different sizes and
paper weight are available Can be printed according to customers'
requests Good paper quality Mainly exported to Japan, Europe and
USA Suitable for hot drinking, such as coffee
3.4 Disposable Tableware 100% natural fiber pulp, non-toxic,
healthy and sanitary to use.
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No toxic substance or odor is released even in high temperate or
in acid/alkali condition; 100% food contact safety.
Safe to be used in microware, oven and refrigerator. 100%
biodegradable within two months; wastes will decompose into
CO2 and water; waste can be burned, buried, or composted.
Recyclable; renewable; reuse to make paper; reduce the need for
petroleum-based material. 120C hot oil and 100C hot water
resistant. Stackable; easy to separate; smooth and strong; leak
proof; edge
trimming can be omitted for auto lines. More than 200 items are
for your selection; customized moulds are
available per marketing requirements
3.5 Bagasse Plate Sizes are available from 6 inch to 10 inch
100% natural fiber pulp, non-toxic, healthy and sanitary to use. No
toxic substance or odor is released even in high temperate or
in
acid/alkali condition; 100% food contact safety Safe to be used
in microware, oven and refrigerator 100% biodegradable within two
months; wastes will decompose into
CO2 and water; waste can be burned, buried, or composted
Recyclable; renewable; reuse to make paper; reduce the need for
petroleum-based material 120C hot oil and 100C hot water
resistant Stackable ; easy to separate; smooth and strong; leak
proof; edge
trimming can be omitted for auto lines More than 200 items are
for your selection; customized moulds are
available per marketing requirements
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3.6 Boards It can also be used for making boards resembles like
Plywood or
Particle board It has wide usage for making partitions,
furniture etc. It is eco friendly method as it does not involve any
harm to the
timbers in the world, like plywood. It is known as Bagasse Board
It is a good substitute for plywood.
3.7 Sugarcane Denim FabricSugar Cane Jeans are constructed of
fibers derived from the plant Sugar Cane. Sugar is made from sugar
cane, which seems simple enough, but not everyone knows that sugar
cane and its byproducts contain essential amino acids and enzymes
necessary to fuel and rejuvenate our bodies. Likewise, byproducts
from sugar cane are used to fuel automobiles in Brazil in order to
have a less harmful impact on the environment rather than found in
burned fuels of a purely fossil origin. Following these facts in a
rather philosophical approach, the textile specialists at Sugar
Cane were the first in the world to produce a selvage denim fabric
made from woven cotton yarns and sugar cane fibers.
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Chapter 4Office Equipment and Personnel
4.1 Building and Equipments
We will buy a land in Thakurgaon andthere, sugar fiber is
available at a large scale from local sugar mill. We will establish
a manufacturing unit covering acre) areas.
4.2 Furniture
Furniture includes objects such as tables, chairs, desks,
fusually kept in a house or other building to make it suitable or
comfortable for
Office Equipment and Personnel
Building and Equipments
in Thakurgaon and establish our main industry , sugar fiber is
available at a large scale from local sugar mill. We will
establish a manufacturing unit covering 14 Katha (10,080 square
feet, or 0.2314
ts such as tables, chairs, desks, fire proof file
cabinetsusually kept in a house or other building to make it
suitable or comfortable for
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industry there. Over , sugar fiber is available at a large scale
from local sugar mill. We will
atha (10,080 square feet, or 0.2314
le cabinets etc. usually kept in a house or other building to
make it suitable or comfortable for
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living or working in. We are using metal and wooden furniture.
In all the office rooms or cubicles we are putting green plants and
other small decorations.
4.3 Generator
In electricity generation, an electric generator is a device
that converts mechanical energy to electrical energy. The reverse
conversion of electrical energy into mechanical energy is done by a
motor; motors and generators have many similarities. We are using
electric generator of 400 KVa as a backup service which will give
us 24 hours.
4.4 Transport
We will hire 2 Microbus and 2 vans to transport our employees
and carrying raw materials. These vehicles will also be used to
take our office employees and for other official use. The vans will
be used to carry the Bagasse from nearby sugar mills. All of those
transports will be leased.
4.5 Personnel
We will have around 50 workers at the beginning and around 12
officials. Workers will be appointed considering their merit and
skill and local workers will get the preference. We will try to
have at least 10 experienced workers who can train others for a
short period of time. On the other hand we will need some officials
to run the operation starting from the floor supervisor to the
managers. We will need marketing, sales, finance, production,
accounting and HR personnel to run the organization. We will also
need 5-6 security guards as well.
4.6 Background of Entrepreneurs:
This is a Type I social business company. The business will be
primarily financed by venture capitalists (hypothetical).The name
and designation are:
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Name Designation
Farzana Islam & Shamiul Haque Director - Planning &
Operation-Production
Md. Golam Ahasan Director - Marketing & Sales
MD. Saiful Islam Sourav Director Finance
Md Atiqur Rahman Director - HRM & ITTable 1
Chapter5Industry Life Cycle
Industry Life Cycle refers to a concept relating to the
different stages an industry will go through, from the first
product entry to its eventual decline. There are typically four
stages in the industry lifecycle. They are defined as:
5.1 Introduction or Fragmentation Stage
Fragmentation is the first stage of the new industry. This is
the stage when the new industry develops the business. At this
stage, the new industry normally arises when an entrepreneur
overcomes the twin problems of innovation and invention, and works
out how to bring the new products or services into the market.
Product innovation declines, process innovation begins and a
"dominant design" will arrive.
5.2 Growth Stage
Growth is the second stage of the industry lifecycle. It is the
stage at which a new industry emerges. During this stage,
competitors start to realize business opportunities in the emerging
industry. The value of the industry also quickly rises. Economies
of scale are achieved, forcing smaller players to be acquired or
exit altogether. Barriers to entry become very high, as large-scale
consolidation occurs.
5.3 Maturity Stage
Maturity is the third stage in the industry lifecycle. Maturity
is a stage at which the efficiencies of the dominant business model
give these organizations competitive advantage over competition.
The competition in the industry is rather aggressive because there
are many competitors and product substitutes. Price,
competition,
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and cooperation take on a complex form. Some companies may shift
some of the production overseas in order to gain competitive
advantage. Growth is no longer the main focus; market share and
cash flow become the primary goals of the companies left in the
space.
5.5 Decline Stage
Decline is the final stage of the industry lifecycle. Decline is
a stage during which a war of slow destruction between businesses
may develop and those with heavy bureaucracies may fail. In
addition, the demand in the market may be fully satisfied or
suppliers may be running out. In the stage of decline, some
companies may leave the industry if there is no demand for the
products or services they provide, or they may develop new products
or services that meet the demand in the market. In such cases, this
will create a new industry.
Now, analyzing the industry, we have come to conclusion that the
industry in is stillin its introduction stage or right at beginning
of the growth stage. Currently, competition is not so high. In
Bangladesh there are not any cloths, and tissue producers in the
market who is for social business. As it is a social business we
have not got any competitor though it will increase in near future.
Capital intensity
Table 2
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is also moderate as well. Economies of service differentiation
can be achieved in this stage. Currently, people are interested to
join in social business. They are coming with innovative ideas.
More & more companies are trying to come up with something. So,
there is an opportunity for grabbing a large share in this market
if planned & promoted effectively.
5.6 Analysis of Competitors
In Bangladesh there are no social businesses regarding the sugar
fiber can. As we produce cloths, bed cover and tissues and other
materials, our main competitor will be the company of every single
product. But as we are doing social business, our organizational
motive is different. We are not for profit maximization purpose.
But while selling the products we have to consider how other profit
maximization companies are setting up their prices. We have to set
much less price than them.
List of current companies Bashundhara tissue Bangla Tissue
Garments industry ( if they are interested in social business )
Though all of them are doing business for profit maximization,
as a new company we can consider themselves as our competitors
because we are also making profit. But as time goes by, we can
easily establish a monopoly in the social business market.
Chapter 6Marketing Strategy
6.1 Market Segmentation:
In our market definition we included all the poor people of
Bangladesh who has the least chance to use our product. Slum
people, Village people, rural areas, Garments workers, are our main
target customer. In Bangladesh we can see different income people.
But we have selected 5 income level people from the bottom of
income level
Upper class
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Upper Middle class Middle class Lower Middle class Lower
class
To help them to make their living standard better is our main
purpose through providing quality product in cheap price. Slum
people are our main customer.Because their living standard is below
the poverty line, they are not conscious about the modern life.
They do not have quality cloths or good sanitation system. As we
are producing tissue we want to make them used to with toilet
tissue. We have also targeted poor businessmen who can buy plastic
container from us for their business purpose like chotpoti seller,
biriyani seller etc.
6.2 Target location:
There are different people who can take our products. They are:
Slum areas Rural areas Village areas
6.3 Size of the organization:
This is one of the most practical and easily identifiable
criteria. It can also be good rough indicator of the potential
business for a company. However, it needs to be combined with other
factors to draw a realistic picture.
Companies with less than 50 employees Companies with 50 200
employees Companies with over 200 employees.
Chapter 7 PESTEL Analysis
P E S T E L analysis is generally referred while evaluating an
industry analysis in any country. It deals with the six factors of
the country, where any specific industry is operating its business.
Moreover, it highlights the effects of the four factors on the
industry & its business. The 6 alphabets in the word P E S T E
L have 6 meanings according to its abbreviation. They are:
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Political Analysis Economic Analysis Social Analysis
Technological Analysis Environmental Analysis Legal Analysis
7.1 Political Analysis
The government has very lengthy policies regarding opening of a
new venture. Since our venture is a completely new entrepreneurial
effort, the procedures may become even tougher.
So far, according to the context of local market, there is no
pressure of political groups for our business plan. The local
community groups are also interested about this new venture. But
for expansions, we might have to face a lot of pressure.
Political instability, which is not very uncommon in Bangladesh,
may restrict new companies to open their business, so the future
market potential is quite low.
The government policy regarding the business like IT, software
firms are very much relaxed. So we might have the upper hand
here.
7.2 Economic Analysis
Bangladesh is considered as a developing economy which has
recorded GDP growth above 5% during the last few years. Although
three fifths of Bangladeshis are employed in the agriculture
sector, three quarters of exports revenues come from garment
industry. The biggest obstacles to sustainable development in
Bangladesh are overpopulation, poor infrastructure, corruption,
political instability and a slow implementation of economic
reforms.
So far, its good. Day by day, standard of living is being
degraded. Urban people are getting less involved into a high
standard living. The GDP growth (annual %) in Bangladesh was
reported at 6.19 in 2008, according to the World Bank. Annual
percentage growth rate of GDP at market prices based on constant
local currency. Local & rural businesses are increasing.
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Peoples buying power in our country is increasing day by day.
People are becoming more techno friendly and laid back. So current
market trend is very good for this business & this trend will
continue at least 5-6 years. After that, with the change of time,
market pattern may also change. Services value added (annual %
growth) in Bangladesh was reported at 6.49 in 2008, according to
the World Bank. Annual growth rate for value added in services
based on constant local currency. Aggregates are based on constant
2000 U.S. dollars. Services correspond to ISIC divisions 50-99.
They include value added in wholesale and retail trade in hotels
and restaurants, transport, and government, financial,
professional, and personal services such as education, health care,
and real estate services. Also included are imputed bank service
charges, import duties, and any statistical discrepancies noted by
national compilers as well as discrepancies arising from rescaling.
But the IT sector is still pretty much relaxed.
Peoples purchasing power is increasing. The number of upper
& upper-middle class families is also increasing. The Household
final consumption expenditure; etc. (annual % growth) in Bangladesh
was reported at 5.21 in 2008, according to the World Bank. Annual
percentage growth of household final consumption expenditure is
based on constant local currency. Aggregates are based on constant
2000 U.S. dollars. We are observing a steady increasing rate in the
household and office expenditure over the past 7-8 years even with
presence of inflation. This indicates the purchasing power of the
customers is increasing.
7.3 Social Analysis
lifestyle trends:Bangladesh is a country where the social
principles are strictly followed and the entire social structure is
driven by norms. But, the Bangladeshi people are not stubborn in
terms of social culture; rather they humbly accept things which are
new and socially accepted. The Bangladeshi people are also very
much social and they have the urge to know what is happening
around. Therefore, there is a potential demand for any business
related to social cause
Demographics:Bangladesh is ethnically homogeneous. Indeed, its
name derives from the Bengali ethno-linguistic group, which
comprises 98% of the population. In
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2009 the population was estimated at 156 million. Religiously,
about 90% of Bangladeshis are Muslims and the remainder is mostly
Hindus.
Consumer attitudes and opinions:Bangladeshi people are always up
for anything new. They humbly accept things which are unique and
socially accepted. Day by day people in here are becoming more
conscious about IT and modern technology. Their standard of living
has increased and buying power as well which eventually enables
them for more luxury and comfort. So, we have a very good
opportunity to all our business.
Consumer views:In Bangladesh poor people look for cheap product
with highest quality they can get. Whenever there is product, with
their expectation is welcomed by people.
consumer buying patterns:Purchasing power of Bangladeshi people
is increasing day by day. Now a days the purchase of modern tools
like
Advertising and publicity:Advertising & publicity is now
becoming a major part of the corporate world of Bangladesh. So, in
this area we have a very good chance for our new venture, as the
cost of promotional activities are also decreasing everyday because
almost every company is doing some sort of promotions all the
time.
7.4 Technological Analysis
Today in the world of business especially media &
communications technological change is very drastic. It is both
good and bad for us. Good in a sense that in some times by
acquiring new technologies we are able to give better quality &
service. In this sector of social business, different technological
solutions are not available in a very short time. So sometimes it
increases the cost of investing.
7.5 Environmental Analysis
Environmental factors include ecological and environmental
aspects such as weather, climate, and climate change, which may
especially affect industries like
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social business. Bangladesh is a humid country. So the life of
the electronics and other tech devices are quite short here. For
networking we have to put the best quality materials to make it
more sustainable. For the environmental issue, our cost might go a
little higher.
7.6 Legal Analysis In home market, currently, its a bit tougher
to get the trade license of a new
venture. Sometimes, the law demands previous connection with
this trade. That is a disadvantage for the fresh entrepreneurs.
The consumer laws are not that strict in Bangladesh. Health and
safety laws must be followed as we are planning to serve big
companies.
Chapter 8Porter's Five Forces Analysis
Porter's five forces is a framework for the industry analysis
and business strategy development developed by Michael E. Porter of
Harvard Business School in 1979. It draws upon Industrial
Organization (IO) economics to derive five forces that determine
the competitive intensity and therefore attractiveness of a
market.
The five Forces are described here:
8.1 Threat of New Entrants
There are high possibilities of new entrants to enter this
service sector as it is an attractive area for investment for
corporate people. If any other new social business idea come to the
market and do their positioning successfully, then our company may
loss its attractiveness. Besides, it is a social service type
business, so new competitors have the chance to enter the market
quite easily without debt financing. And there are many venture
capitalists who are interested in investing in new business. As the
establishment and marketing cost are very high, it will take time
for the new competitors to break-even.
So we can say that threat of new entrants is moderately
high.
Table 3
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8.2 Bargaining power of Customers (Buyers)
If Buyers get the quality product in less than market price,
they always look for that product. In that case bargaining power is
not there for customers.
Bargaining power of the buyer is moderately low in the
industry.
8.3 Bargaining power of suppliers
Suppliers play a vital role in our project. In Bangladesh the
market is dominated by a few large suppliers rather than a
fragmented source of supply but competition is increasing in this
industry as a result suppliers bargaining power is decreasing day
by day. Sometimes there are some other problems among suppliers
such unfair practices of supplies. But still it is a very good
market for suppliers as the demand is increasing day by day,
because they have plenty of orders of supplies.
8.4 Threat of substitutes
As the industry is new, the threat of substitute is considerably
low. If there is a substitute, they have to compete with us maximum
lower price. Other than social business people are not interested
in investing money in social cause. But if in future other
companies come up with new ideas for social business and if their
product becomes our substitute it will create problem in future.
But in present time substitute threats are low. Our main focus is
on providing provide which gives better quality service. As the
switching cost is very high, customers are less likely to go for
substitutes. There are no established companies right now. If we
can make ourselves able to attract customers and differentiate our
product and service from the competitors, then it will create a
huge advantage in our project.
It is fairly easy to establish in the market as there is no
strong existence of substitutes.
8.5 Competitive rivalry between existing players
This force describes the intensity of competition between
existing players (companies) in an industry. There are merely any
existing competitors to challenge our business. So the intensity of
competitive rivalry is very low presently
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Chapter 9Marketing Plan
Marketing is an organizational function and 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. It generates the strategy that
underlies sales techniques, business communication, and business
developments.
For effective marketing and sales strategy we have used
marketing mix strategy or the 7P. Which are:
Product Price Promotion Place Physical condition Process
People
We tried our best to implement 7p strategy in our whole
marketing plan.
9.1 Mission Statement:
Provide best quality products to change the lifestyle
9.2 Vision:
Within next five years we want to become one of the biggest
contributors in social business market
9.3 Message:
We have developed a message for our customers. Our message to
our customers will be:
Go Green, Go Sweet
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9.4 Products:
1. Compostable Tableware Made from 100% sugarcane 100%
biodegradable 120 degree oil and 100 degree water proof Microwave
safe
2. Biodegradable Tableware Made from 100% sugarcane 100%
biodegradable 120 degree oil and 100 degree water resistant Can be
used in microwave and refrigerator Variety of sizes, shapes and
uses available Healthy, Nontoxic, Harmless and Sanitary Can be
recycled and protect the resource From nature and back to
nature
3. Paper Cup with Handle Heat resistant Different sizes and
paper weight are available Can be printed according to customers'
requests Good paper quality Mainly exported to Japan, Europe and
USA Suitable for hot drinking, such as coffee
4. Disposable Tableware 100% natural fiber pulp, non-toxic,
healthy and sanitary to use. No toxic substance or odor is released
even in high temperate or in
acid/alkali condition; 100% food contact safety. Safe to be used
in microware, oven and refrigerator. 100% biodegradable within two
months; wastes will decompose into
CO2 and water; waste can be burned, buried, or composted.
Recyclable; renewable; reuse to make paper; reduce the need for
petroleum-based material. 120C hot oil and 100C hot water
resistant.
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Stackable; easy to separate; smooth and strong; leak proof; edge
tri9.mming can be omitted for auto lines.
More than 200 items are for your selection; customized moulds
are available per marketing requirements
5. Bagasse Plate Sizes are available from 6 inch to 10 inch 100%
natural fiber pulp, non-toxic, healthy and sanitary to use. No
toxic substance or odor is released even in high temperate or
in
acid/alkali condition; 100% food contact safety Safe to be used
in microware, oven and refrigerator 100% biodegradable within two
months; wastes will decompose into
CO2 and water; waste can be burned, buried, or composted
Recyclable; renewable; reuse to make paper; reduce the need for
petroleum-based material 120C hot oil and 100C hot water
resistant Stackable ; easy to separate; smooth and strong; leak
proof; edge
trimming can be omitted for auto lines More than 200 items are
for your selection; customized moulds are
available per marketing requirements
6. Boards It can also be used for making boards resembles like
Plywood or
Particle board It has wide usage for making partitions,
furniture etc. It is eco friendly method as it does not involve any
harm to the
timbers in the world, like plywood. It is known as Bagasse Board
It is a good substitute for plywood.
7. Sugarcane Denim FabricSugar Cane Jeans are constructed of
fibers derived from the plant Sugar Cane. Sugar is made from sugar
cane, which seems simple enough, but not everyone knows that sugar
cane and its byproducts contain essential amino acids and enzymes
necessary to fuel and rejuvenate our bodies. Likewise, byproducts
from sugar cane are used to fuel automobiles in Brazil in order to
have a less harmful impact on the environment rather than found in
burned fuels of a purely fossil origin. Following these facts in a
rather philosophical approach, the textile specialists at Sugar
Cane were the first in the world to
-
Page | 21
produce a selvage denim fabric made from woven cotton yarns and
sugar cane fibers.
9.5 Pricing method:
9.6 Cost plus Pricing
When an ad is placed in a media and the cost incurred, the
company usually adds certain markup (usually 15%, although it may
vary according to circumstances) to the cost. Then the resultant
figure is presented to the client as Bill. This is a recognized
practice in the industry.As a part of cost plus pricing, the
company will need to use markup mainly for two reasons:
1. More profit2. Safety net markup (in advertising, extra costs
are always incurred, so
markup acts as a guard for the uncertainties and extra
costs)
Sometimes it will be feasible to include an added margin to the
cost in addition to the usual 15% company commission because many
of the clients want a bargain. Sometimes, the clients ask for
deduction from the total bill. The managed service provider will
need to identify these clients and include "the added margin" in
the cost amount of the bill drawn upon them. When they will ask for
more reduction, the company will be able to bring their price down
to the actual level. This strategy will ensure the profit growth of
the company. As mentioned earlier, this is applicable for bills
drawn upon some of the clients who have a tendency to bargain.
However, some clients will never bargain on pricing so the company
will not feel the need to offer an inflated bill to them.
9.7Value-based PricingIn most cases, the company will not
compromise on its 15% company commission rate because it knows that
do that will not be able to provide the quality of IT service.
3) Relationship Pricing
Although the company norm is to charge 15% as the company
commission, the proposed company, in rare cases, will charge less
for the bigger clients based on the considerations of future
potential profit streams over lifetime of clients.
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9.8 Promotion:
As we introduced new social business concept, we are having a
small number of potential competitors. The target market of our
company is medium and lower class people. The promotional plan of
our company will let the customers know about its existence,
features, quality, service, location, offers and other necessary
information which the customers would like to know. Besides, the
promotional activities would also help them decide why they would
choose our products among the others and it might create a latent
demand. The pof:
9.10 Advertising:
Advertising is a non personal medium of promotional plan. It
will involve mass media like television, radio, communicating with
large audiences, advertising in different media vehicles can be
used to create a brand image and symbolic appeal for our company.
Most people regard advertising as the ads and commerday. It is the
buying, selling and planning of the advertising media that account
for the major portion of the typical advertising budget. With most
of the money in an advertising budget going to media advertising
insertions, continue paying attention to media
Advertising
Internet marketing
Public Relation
As we introduced new social business concept, we are having a
small number of potential competitors. The target market of our
company is medium and lower class people. The promotional plan of
our company will let the customers know about its existence,
features, quality, service, location, offers and other necessary
information which the customers would like to know. Besides, the
promotional activities would also help them decide why they would
choose our products among
d it might create a latent demand. The promotional mix would
consist
Table 4
Advertising is a non personal medium of promotional plan. It
will involve mass media like television, radio, news paper etc.
Being a very cost-effective method for communicating with large
audiences, advertising in different media vehicles can be used to
create a brand image and symbolic appeal for our company. Most
people regard advertising as the ads and commercials they read and
see every day. It is the buying, selling and planning of the
advertising media that account for the major portion of the typical
advertising budget. With most of the money in an advertising budget
going to media advertising insertions, the agency will need to
continue paying attention to media-planning function.
Advertising
Internet marketing
Public Relation
Direct marketing
sales promotion
Personal Selling
Page | 22
As we introduced new social business concept, we are having a
small number of potential competitors. The target market of our
company is medium and lower class people. The promotional plan of
our company will let the customers know about its existence,
features, quality, service, location, offers and other necessary
information which the customers would like to know. Besides, the
promotional activities would also help them decide why they would
choose our products among
romotional mix would consist
Advertising is a non personal medium of promotional plan. It
will involve mass effective method for
communicating with large audiences, advertising in different
media vehicles can be used to create a brand image and symbolic
appeal for our company. Most
cials they read and see every day. It is the buying, selling and
planning of the advertising media that account for the major
portion of the typical advertising budget. With most of the money
in an
the agency will need to
Direct marketing
sales promotion
Personal Selling
-
To prepare itself as a consolidated media planner for its
clients, the agency will need a clear understanding of media tools
and the most of efficient way of utilizing them.We promote our
company by giving advertise on newspaper, magazine and radio.
The media mix for Manage service provider would be
To prepare itself as a consolidated media planner for its
clients, the agency will need a clear understanding of media tools
and the most of efficient way of utilizing
romote our company by giving advertise on newspaper, magazine
and radio.
The media mix for Manage service provider would be-
Table 5
Radio
News Paper
Magazines
Out of the Home: Billboards
Sponsorship
Managing Events
Page | 23
To prepare itself as a consolidated media planner for its
clients, the agency will need a clear understanding of media tools
and the most of efficient way of utilizing
romote our company by giving advertise on newspaper, magazine
and radio.
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Page | 24
Television:
Television is an important medium to reach a huge amount of
customers. Television ads would attract viewers attention. As our
target market is lower middle class and lower class people. Still
we are not using television because of:
Budget constrain The target market is not focused with TVC The
goal is not attainable with this media.
Pros:1. Television is an extremely creative and flexible medium.
Virtually any product
message can be adapted to TV.2. Network television is the
primary vehicle for reaching mass audiences.3. Television offers
advertisers prestige lacking in most other media.
Cons:1. The television message is perishable and easily
forgotten without expensive
repetition.2. Advertising costs continue to increase. This had
led to more and shorter
messages, which contribute to commercial clutter.
Newspapers:
Printed ads in daily news papers would also enhance customers
awareness about our product. Colorful yet classy ads simply
describing our products and its features, occasionally mentioning
the lucrative offers and announcements would create much awareness.
Besides, reviews and features about our product in newspaper would
be a very good idea about customer awareness.
Media Vehicle Sections
Prothom Alo
For ads: First Page bottom-right section, Last Page Top section,
Cholti-bisso, Projonmo dot com second last page, etc.For Reviews:
Naksha (including 2 whole pages).
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Page | 25
Bangladesh Protidin
Editorial page, Life style section, first page bottom section,
last page etc.
For Review: Binodon Page, Sports page etc.
Table 6
Pros:1. Newspapers have wide exposure to a general population.2.
Newspaper advertising is extremely flexible, with opportunities for
color, large
and small space ads, timely insertion schedules, and some
selectivity through special sections and targeted editions.
3. Newspapers reach their audiences at the convenience of the
reader.
Cons:1. The average person spends less than 30 minutes reading a
newspaper.
Consequently, most ads go unread.2. Teenagers and young adults
do not demonstrate high newspaper readership.3. Advertising costs
have risen much more sharply than circulation in recent
years.
Radio:
Now a days radio is one of the most popular medium of
entertainment. When people are on their way to work or other
destinations, they listen to radio. So we should follow the timings
like 8.30-10.30am and 5.00-7.00 pm. It will also follow the TVC
timing
Media Vehicle Program
Radio FoortiHello Dhaka, Tea Stall,
Dhaka Calling etc.
Radio TodayMorning and evening
programs.
Bangladesh BetarChayachoder Gaan, Afternoon program,
Night program
Table 7
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Pros:1. Radio can more selectively target an audience segment
than virtually any other
medium, especially teens.2. Radio goes with listeners into the
marketplace, giving advertisers proximity to
the sale. 3. Radio, with its relatively low cost for production
and immediacy, can react
quickly to changing market conditions.
Cons:1. Without a visual component, listeners often use radio as
background rather
than paying full attention.2. The low average audience of most
radio stations requires high frequency to
achieve acceptable reach and frequency.3. Adequate audience
research is not always available, especially in medium and
smaller radio markets.
Magazines:A lot of people are regular magazine readers. So
placing ads on magazines would make them exposed to our service.
Such popular magazines are
Binodon Canvas Charbela Charidik Mirror etc.
Pros:1. The number and range of specialized magazines provide
advertisers with an
opportunity for narrowly targeting audiences. Both demographic
and geographic selectivity can be achieved.
2. They provide a prestige, quality environment for
advertisers.3. Magazines advertising has a long life, especially
since issues are often passed
along to several readers.
Cons:1. Magazines are more expensive on an audience-reach basis
than any other
major medium, with the possible exception of direct mail.2. Most
magazines have relatively long advertising deadlines, which
reduce
flexibility and the ability of advertisers to react to
fast-changing market conditions.
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3. A single magazine rarely reaches the majority of a market
segment. Therefore, several magazines must be used or alternative
media must supplement magazine advertising.
Billboards:
We are planning to set up a very few billboards at prime areas
of Dhaka. It would attract the business people.
Sponsorship:
We will not go for any sponsorship program because we are not
higher profit Maximization Company. Our main purpose is to help
people.
Managing Events:
We would arrange various short events in particular occasions
like New Years Eve, Eid, Valentines Day, Halloween in under
privileged areas.
Direct Marketing:
Direct marketing involves communicating directly with the target
market. It includes variety of activities like telemarketing,
direct selling, direct response through direct mail etc. Manage
service provider will have a well managed direct marketing
division.
Telemarketing division would take care of all the enquiries of
the customers and encourage them to purchase our service. They will
also let them know about the latest offers and facilities of our
company so that the customer gets interested. Besides, they would
also directly call target customers like corporate companies, big
industries etc. Then they will elaborate about the corporate
facilities and offers and so on.
Direct response advertising will also let the customers
communicate directly from internet.
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Public Relations:Public relations also include advertising,
participating in community services, sponsorship etc which our
company would do a few of them in the long run. Because as a new
company, we would have to first make our existence clear in the
market then we will have to build a strong reputation.
Personal Selling:In case of personal selling, our company would
do these activities- Send sales persons from door to door at our
target people door and tell
about our product and our social cause. Telephone sales are also
a part of personal selling.
9.11Schedule of Campaigning:
For proper advertising & other expense we need a schedule or
a chart which are given below:
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Newspaper Yes Yes Yes Yes Yes
Magazines Yes Yes Yes Yes
Radio Yes Yes Yes Yes
Bill board Yes Yes Yes Yes Yes Yes Yes Yes
On line Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Table 8
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9.12 Promotion Budget:
Type Year 1 Year 2 Year 3 Year 4 Year 5
Newspaper 150,000 175,000 150,000 120,000 100,000
Magazine 50,000 100,000 150,000 100,000 75,000
Radio 30,000 60,000 50,000 40,000 30,000
Billboard 100,000 100,000 150,000 100,000 100,000
Online 15,000 20,000 15,000 20,000 15,000TOTAL 345,000 455,000
515,000 380,000 320,000
Table 9
9.13 Product forecasts
Our expected product & production forecast for the first ear
is given below:
MonthCompostable
TablewareBiodegradable
Tableware
Paper Cup with
Handle
Disposable Tableware
BoardsBagasse
Plate
Sugarcane Denim Fabric
(sft)
Sep, (2012)
1500 1500 5000 1300 800 5000 10000
Oct 1600 1700 5500 1500 900 5500 15000
Nov 1700 1900 5700 1600 1000 6000 18000
Dec 2000 2100 5900 1800 1200 6500 22000
Jan, (2013)
2100 2300 6000 2000 1300 6700 25000
Feb 2200 2500 6200 2100 1400 7000 28000
Mar 2500 2700 7000 2200 1500 7500 32000
Apr 2600 2800 8000 2400 1600 8000 35000
May 2700 3000 9000 2600 1700 9000 38000
Jun 3000 3200 12000 2800 1800 10000 42000
Jul 3300 3300 12500 3300 1900 11000 45000
Aug 3500 3400 13000 3500 2000 12000 50000
9.14People:An essential ingredient to any service provision is
the use of appropriate staff and people. Recruiting the right staff
and training them appropriately in the delivery of their service is
essential if the organization wants to obtain a form of competitive
advantage. Client makes judgments and delivers perceptions of the
service based
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Page | 30
on the employees they interact with. Staff should have the
appropriate interpersonal skills, attitude, and service knowledge
to provide the service that clients are paying for. In our Company
we will appoint people based on their product knowledge and those
who have good interaction capabilities. We need people to stay with
us for a long time and we have to make a good reputation among all
the social business firms. While selecting people for the company
we will maintain a minimum skill requirement and after selecting
the employees we will train them at least 2 months for a better
quality output. We will provide a personality development training
which will help them to build good attitude and give them an
overall service knowledge by which they will be able to convince
the Customer. After doing all these things we can hope to get a
good feedback from our customer as our whole business depends on
them.
9.15 Process:This area of marketing depends on how the company
is able to handle the customers demands and needs properly. Any
customer query, confusions and so on must be met through proper
communication by those responsible for the work. It can be done
while presenting the work or before the contract is made. There
maybe times where customers may ask to scale back the efforts since
they cannot handle the volume and have to expand the resources,
therefore the agencies job will be to adjust the campaigns
accordingly.
9.16 Physical condition:Our customers may have a vague idea
about the effectiveness of our work being done according to their
needs. So it will be necessary to communicate in a way that the
customers will feel confident in using our product.
9.17 Controls:Marketing plan of this firm will be connected with
the production and operational plans. Because all the agreements
and deadlines have to be maintained by theproduction and operation
department otherwise it will largely affect the fame of the firm.
From production to delivery each and every step needs to be
supervised with the discipline, quality and other important
concerns. Any error at any step may fail the firm to satisfy the
customers as per demand.
A plan always needs to be flexible so that changes can be made
at crucial or emergency situations. There will be alternative plan
for every department along with the core planning, so that if one
plan fails than alternative plan can substitute that.
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Cost control is a vital issue for increasing profitability. If
the production cost is low than it aids to generate more profit.
Cost is dependent on different variables like less production , too
much waste, more bargaining power of suppliers, inefficient
employees etc. These independent variables must focused more to cut
the cost respectively.
Supply chain is always important in terms of efficiency. Proper
supply of raw materials and other effective needed materials can
play a big role in business efficiency. If the production and
operation process is too long than it will simply incur more labor
cost and time will be wasted as well.
Communication is the crucial point for business success for an
ad company. Company needs to maintain good relationship with the
media. A very good channel in the media is like a prerequisite for
a company to attract more and more customers. A good communication
also helps the company to increase the business fame in the
industry.
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Chapter 10Operational plan
10.1 Description of companys operation:
Our aim is to achieve very fast growth and gain very good
customer response on our venture because we are first in Bangladesh
for this kind of unique production process. As our business is
manufacture based final product from sugar cane fiber that provides
different type of tangible product to customers, we will emphasize
on our operational plan to make it efficient. An effective plan
will help us to implement the strategies in our day to day
operations. We will focus on building up customer reliability by
assuring a better quality product.
We have developed our total operation system in three parts.
That is given below:
Front Office Operations Service Operations(Back Office)
Supporting Wings
Each and every wing will be working independently. The purpose
of dividing the whole operations into three parts is to come up
with better efficiency and better manufacturing process. We hope
will be able to deliver the best product made from sugar cane fiber
and satisfy them at our level best.
10.2 Supporting Wings
Support Wings helps to assist ongoing operations. Which are
described below:
1Finance:
Our finance department for operations will be responsible for
keeping track of all the businesses transactions that will occur.
We will have one main finance department with two divisions. But at
the end of every day all the information will be accumulated in the
finance department.
Cash Management:
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Page | 33
This is the main purpose of this department. As we are going to
have many products, this will help us to keep track of cash inflows
and outflows effectively. Using the daily, weekly, monthly and
annual data, our financial analyst will forecast and manage the
cash resources, including the investment of cash balances. This
information will guide us to take decisions effectively.
Accounts Payables:
The Finance department will keep the record of daily purchase of
raw materials for production and for necessary equipments on
credit. It will process, verify and make payment to the vendors
within the time. It will be carefully handled so that we can
maintain a long-term relationship with the suppliers.
Management Information:
Another important responsibility is to communicate the findings
with the management team. After getting all the necessary data,
finance department will present statistical information to
operating executives and owners to facilitate identification of
areas for improvement. It will recommend such kinds of things like
to cut one of the operating costs, which is adding less value to
the business, or to control costs of foods services etc.
Financial Reporting:
On the basis of daily reporting, monthly operating statement,
balance sheet, cash flow projections will be made. Experts will
calculate the full year forecasts and other various analytical
reports.
Detailed Budget Preparation:
For an effective operational plan, preparation of the annual
operating budget is important with the capital expenditure budget
and cash flow projection. This will guide top-level management to
make decision regarding businesses expand or adding value to the
business.
Payroll Processing:
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Page | 34
All the aspects of the payroll functions are going to be taken
into account including cost segmentation and daily labor
productivity tracking, overtime of the employees will be recorded
so that the salary and wages can be managed effectively.
Customized Reporting:
Our team will be able to provide customized financial reports to
meet owner's needs or requirements for the profitability.
Human resource:
The Manager on Duty is a particularly important and critical
role for the success of our venture. In a manufacturing related
business, HR department acts the crucial activities of recruiting
capable persons who will directly serve the customers. .
Information Technology:
Operational plan
Supporting Wings Primary activates
Manufacturing operationFinance
Human ResourceMKT and sales
Administration
Production and delivery
Information Technology Customer feedback
Superior Profitability
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Page | 35
There are many businesses, which need different software
packages for satisfying their operational as well as functional
needs. To fulfill this requirement, these companies sign deals with
the software manufacturing companies. Information technology is
useful in ensuring the smooth functioning of all the departments in
a company such as the human resource department, finance
department, manufacturing department and also in security related
purposes. This kind of technology in this service sector allows us
to work effectively and get rid of errors that can be made while
working manually.
Administration:
The main purpose of this Administration is to plan, direct, or
coordinate supportive services of an organization. Basically, the
administrative activities include all the crucial sections of the
business.
Property management:
This administration department such as coordination of
marketing, finance will manage the total plant and HR department
will be done. Adding new service or adding new technology will be
fully supported by this sector.
Primary activity:
Our primary activity is divided in to production, sales,
marketing, and customers feedback. These primary activities are
very important for executing any order.
Flow of orders of goods and services:
Our maximum capacity of production in per months in glass and
plate section is 20000 units per month. In our tissue paper section
10000 units per month. And in bad sheet section production capacity
is 50000 square feet per month. We are expecting to reach our
breakeven by sales within first six months. Since its a new concept
in Bangladesh we have to for some months for getting order at a
large scale. We are expecting to get order from hotels and
restaurants where one time usable glasses and plates demand are
very high. We also are expecting order from different corporate and
family program where one time usable glasses and plates are also
used. Our tissue paper is for all section of people of the society.
So we are expecting a large quantity of order from households,
offices, hospitals.
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Our expected flow of order for one year (unit):
MonthCompostable
TablewareBiodegradable
Tableware
Paper Cup with
Handle
Disposable Tableware
BoardsBagasse
Plate
Sugarcane Denim Fabric
(sft)
Sep, (2012)
1500 1500 5000 1300 800 5000 10000
Oct 1600 1700 5500 1500 900 5500 15000
Nov 1700 1900 5700 1600 1000 6000 18000
Dec 2000 2100 5900 1800 1200 6500 22000
Jan, (2013)
2100 2300 6000 2000 1300 6700 25000
Feb 2200 2500 6200 2100 1400 7000 28000
Mar 2500 2700 7000 2200 1500 7500 32000
Apr 2600 2800 8000 2400 1600 8000 35000
May 2700 3000 9000 2600 1700 9000 38000
Jun 3000 3200 12000 2800 1800 10000 42000
Jul 3300 3300 12500 3300 1900 11000 45000
Aug 3500 3400 13000 3500 2000 12000 50000
Table 10
Technology utilization:
We will use different types of technology for maintaining our
production process, maintaining proper inventory, manage order from
buyers and for selling our products. Our most of the machines are
automatic that are controlled by centre controlling unit that
maintain maximum productivity. If any fault occurs in any parts of
the production system then manufacturing process will be ceased for
moment until machines are properly repaired. That will prevent us
from occurring any major accident. Our inventory system is
maintained by (CBIT) computer based inventory system. So we reduce
inventory holding period that will help us minimizing cost and
speeding the production process. We will use website for receiving
orders. So our investors will not face any hustle for giving orders
and we can supply them products in priority based with great
efficiency.
Machinery and equipment:
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Page | 37
We need machinery that is both efficient and cheap. So china is
the best option. We need different types of machinery for producing
of final output because our product range is diverse. For producing
Biodegradable and Disposable tablewarewe need almost dame types of
machinery with different shaped dice. But for producing Boards and
Sugarcane Denim Fabric from sugar cane fiber we need more expensive
and unique type of machine. For manufacturing fabrics we have to
set up different types of textile machineries. We have to buy
chair, fan, trolley, computer, light, table besides machinery.
The list of those machineries is given below:
Biodegradable tableware machine. BA-12 Type sugar cane Cup
Handle Making Machine. Plate Bending Machine. Battery Plate Pasting
Machines. Plate Rolling Machine. Oblique Type Bagasse Corrugation
Machine. Automatic Bagasse Corrugated Board Making Plant. Briquette
Machine. Straw Fuel Machine. Coal Briquette Press. Briquette
Crusher. Briquette Dryer. Mixing equipment Carbonization Furnace
Pellet Mill Asbestos Tile Machine Pellet Machine
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Page | 38
Chapter 11SWOT Analysis
The SWOT analysis is an extremely useful tool for understanding
and decision-making for all sorts of situations in business and
organizations. SWOT is an acronym for:
A. StrengthsB. WeaknessesC. OpportunitiesD. Threats
The analysis is given in the next page:
-
STRENGTHS1. We are going to provide unique compact packages. 2.
Right service, quality and reliability.
3. Low price.4. Smart and proficient management.
5. Competitive price with maximum quality.
6. Management is committed and confident.
OPPORTUNITIES1. Bangladesh has a large potential market for
social business.
2. More and more investors are being becoming interested in
investing in this particular sector.3. People respond to new
ideas.4. Future prospect to expand.
1. We are going to provide unique
2. Right service, quality and reliability.
4. Smart and proficient management.
5. Competitive price with maximum
6. Management is committed and
WEAKNESSES1. No direct marketing experience.
2. Less experience in legal procedures.
3. Limited initial budget.4. Customer service staffs need
training.
OPPORTUNITIES1. Bangladesh has a large potential market for
social business.
2. More and more investors are being becoming interested in
investing in
3. People respond to new ideas.4. Future prospect to expand.
THREATS
1. It is going to be difficult to establish the venture when
idea is new.
3. Political instability.3. Environmental degradation.
4. National economy and price level.5. Possible negative
publicity because of less marketing experience.
SWOT
Page | 39
1. No direct marketing experience.
2. Less experience in legal procedures.
4. Customer service staffs need
1. It is going to be difficult to establish
4. National economy and price level.5. Possible negative
publicity because
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Page | 40
Chapter 12Human resources plan
12.1 Form of Ownership:
Type of ownership (Type 1 Social Business):
This kind of social business is a non-loss, non-dividend devoted
to solving social problem and owned by investors who reinvest all
profits in expanding and improving the business. The investors can
take back their original investment over a period of time, but
cannot take any profit. According to Nobel Peace Prize laureate
Prof. Muhammad Yunus,A Type 1 is when the social business produces
a product or service that is specifically targeting a social
objective.
We will have equal shares in our venture, therefore risk is
equal. In case of bankruptcy and liquidation, the loss will be
divided equally among us. No partner can transfer h share to any
other person without the prior consent or willingness of all other
partners. We all will be Active partners which mean the partners
who actively participate in the day-to-day operations of the
business are known as active or working partners.
12.2 Authority of Principals:
Principal of Authority actually defines who will be assigned
what ones responsibility is which are given below:
Post Responsibility Assigned to
Director of Planning & Operation-Production
Taking Care of Daily Operations
Md. Golam Ahasan
Director of Marketing & Sales
Communication & SalesFarzana Islam & Md. Atiqur
Rahman
Director - Finance Taking Care of Daily Cash Shamiul Haque
Director - HRM & IT Total Control over People Saiful Islam
Sourav
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Table 11
These are the responsibility we are assigning. These key people
will work as directors of different department. They will work
individually with the help of other employees those will be hired.
But at a specific period of time, there will be board meetings and
evaluations of each and every department's performance. Any kinds
of changes in decisions will be evaluated first, and then will be
implemented. Each and every of these members will cooperate,
because without cooperative actions we cannot make sure high
quality service to the customers. From financing to the operations
will work as it is one individual department.
12.3 Management Team Background & Roles and
Responsibilities:
Shamiul Haque and Farzana IslamDirector of Planning and
Operation-Production
When it comes to social business it includes all the activities
necessary to continue its daily operations. The key responsibility
of any social businessoperation is to execute each and every
activity in an efficient way that it can reduce overall cost of
running the business. Operations managers are responsible for
managing activities that are part of the production of goods and
services and daily operations. The main responsibilities include
managing the operation process, planning, controlling, and
designing, improving performance andoperation strategy. They also
play a vital role in other functions like marketing sales, finance
accounts and other stuffs.Operations managers have to deal
with:
Asset Management:Proper use of buildings, facilities, goods and
services, balancing effectiveness and efficiency. Overall, managing
day to day operations.
Cost Management:Most of the cost of producing goods and service
is related to cost of acquiring resources, processing and
delivering them to customers. Cost cutting motive is very important
for an operations and operation manager should be efficient in
this.
Decision Making:Operation manager take decision. Which are:
1. Designing the total operations process
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Page | 42
2. Managing the process3. Improving the system
Roles & Responsibilities: Management of people, equipment,
and supplies Cost control Recordkeeping Leadership Communication
Strategic planning Departmental management
These are the major duties performed by an Operations
Director.
MD. Saiful Islam SouravDirector of Finance
Finance is a major player in the success of a business. The
major responsibilities are given below:
Roles & Responsibilities:As a director of the finance
department my duty would be to monitor the activities of all other
departments with the finance department so that proper and accurate
financing can be done. Marketing, Human Resource, Administration
and Operational activities need financing and that will be highly
evaluated to ensure least amount of unnecessary cash outflows. My
key activities will be:
Cash Management:Financing the whole organization is a crucial
part specially the managing the cash inflows and outflows for
different period. I have to ensure that there is adequate cash for
the operating activities (day to day operations). My concern will
be to confirm the fact that there is enough liquidity. Since
liquidity and return are negatively related, I have to keep an eye
on the potential return of our investment. One of my main duties
will be to find out strategies to keep the operating expenses as
low as possible.
Financial Structural Decision:I have to determine the optimal
mix of short term debt, long term debt and equity that will
maximize the return. Since we are financing our project with
significant amount of equity, initially our tax payment will be
higher. So, once we achieve stable growth in terms of sales and
income, my focus will be to increase the debt amount for leverage
as well as return.
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Fund Management:Financial manager has to deal with managing
funds of cash and other disbursements. He has to pay salaries to
the employees and the stuffs. He has to maintain a minimum amount
of fund in order to hedge any risk. The key role of managing funds
is given below:
Anticipation of funds(capitalization) Raising of fund Allocation
of fund(investment decision) Assessment of fund
Investment Climate Observing:As a financial manager its my duty
to observe the invest climate and make assumptions and decisions
based on my observing. Regular observations might result in
bringing money to the company which is beneficial for the company
in long-term.
Md. Golam AhasanDirector of Marketing Department:
Roles and responsibilities of Marketing and Sales
Director:Service oriented organizations need different kinds of
promotional activities rather than a product oriented service. We
need to assure that our service create anemotional attachment with
the present customers. I will be responsible for the tasks of my
people who will do marketing works and promotional activities. Our
initial promotional activities will be primarily to introduce our
products to the market. It is necessary for our initial revenue. We
will try to do all the research work when we start our operations,
so that any kinds of changes that will be needed can be recognized
and we can immediately take necessary actions.
My key responsibilities will be: Must know and research about
what our competitors are doing and the
trends they are adapting. Spotting recent trends and acting on
them very fast is one of the very
important duties of a Marketing and sales director. As trends
change very fast, capturing them and adapting should be fast to
otherwise we will lag behind.
Staying up to date with the news, researches and other
information that directly affect our services.
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In order to promote sales of our services that will most benefit
the customers and to establish creditability through communication
in a manner that will optimize the companys market share and
savings, improve the companys efficiency, help achieve the companys
mission and goals, and result in outstanding customer service.
Major responsibilities involve supervision, marketing,
profitability and sales, reporting, purchasing, resale pricing,
inventory, service, maintenance, and other duties as requested by
management.
Maintaining a positive attitude that promotes teamwork, keeps
the workers cooperative and happy and increases their productivity
within the firm and thus maintains a favorable image of our
company.
Provide supervision which involves establishing and
communicating division goals and results to employees, staffing the
division and delegating the workload, actively supporting employee
growth, and upholding company policies.
Establish and communicate division goals and results to
employees and establish division goals with assistance from upper
management.
Be instrumental in coordinating and assisting the department
managers in developing annual marketing plans. Will also coordinate
all advertising for the company and negotiate with print and other
media representatives to ensure efficient purchasing of
advertising.
Another important duty is staff division and delegate work load
that is needed to meet market requirements. That person will also
establish and update job descriptions for all positions within the
division and recommend selection of employees based on job
requirements. They will also review general work assignments for
each employee daily. The marketing director will also staff and
adjust work force to fit seasonal needs with a minimum of
unproductive labor costs. The marketing director will also be
responsible to employ seasonal work-sharing arrangements to
minimize layoffs and unemployment compensation costs if so
needed.
Should be able to inform all customers of safe service. In
addition be responsible for developing and updating a regular
maintenance schedule for all division facilities and equipment.
Responsible for internal employee growth and will schedule and
supervise orientation for new division employees and update
employees regularly on new service knowledge and also identify in
writing annually any training which is needed for individual
employees while discussing performance.
Uphold all company policies and insure that division facilities
and equipment meet all federal and state regulations.
Reviewing marketing activities with all applicable management.
These activities can include: sales call recap, market share
report, sales analysis
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and strategy review reports, sales promotional efforts and
upcoming promotional plans.
I will monitor the daily records and trends of the revenues.
Results from the review reports will be discussed with all other
board members. So that before changing any strategies or actions,
all of them get to know and cooperate.
Md. Atiqur RahmanDirector of Human Resource Department
Roles and Responsibilities in Bagasse: I will try to handle and
work as effectively as possible to take out best from myteam
members to achieve more from our objectives of the whole
organization. As our business is production oriented, which needs
people who will provide services to the customers directly, it is
the most important role to manage the Human Resource. As our
business is not very large, we need adequate of people to work and
provide services to customers. My focus will be to hire such
potential people to work with me and with my members. Managers will
be highly monitored so that under their supervision, employee
management goes in an organized way. Under my supervision,
administration will be done by a different department. Last of all,
strategies can be modified and reorganized if needed.
My key responsibilities for the organization: To maintain and
develop HR policies, make necessary changes if there is a
need for a change. Develop the HR management team with
experienced people from the field
to ensure a high quality service. Manage the team of staffs in
the organization according to the need.
To ensure recruitment of required level/quality of Management
staff, other business lines staff. Administer and approve employee
offer letters salary letters and employment contracts.
To meet the needs of the business, I am going to focus on
retention of skilled employees.
Develop and modify effective methods or tools for selecting
people through interviews and tests.
Work with the key people to determine the salary budgets and
ensure compliance to the approved salary budget by giving focus on
incentives for better performance. These will be maintained on the
corporate guideline on salary adjustments and promotions.
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Coordinate increments and promotions of all staffs. Ensure
appropriate and effective communication at all staff levels from
top
management to the employees. To maintain and develop effective
management system in order to maintain
competitive advantage. Conduct the staff Induction session with
the HR managers. Performance Management will be considered as an
important tool to
regularly monitor and modify the performance. To recommend and
ensure implementation of Strategic directions for the
people within the organization. Ensure and maintain a
motivational climate in the organization, including
adequate opportunities for career growth and development.
Monitor all employee benefit programs made by the HR manager with
the
Finance and Administration department. Monitor the entire HR
Administration and responsible for corporate HR
functions.
I will be responsible for controlling the HR managers for
management of payroll issues, maintenance of employee records,
safety issues of the employees, records of the insurance and other
programs offered to employees and assist employees in understanding
and evaluating the participation in these programs.
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Chapter 13Social Responsibility Strategy
Corporate social responsibility (CSR, also called corporate
conscience, corporate citizenship, social performance, or
sustainable responsible business/ Responsible Business) is a form
of corporate self-regulation integrated into a business model. CSR
policy functions as a built-in, self-regulating mechanism whereby a
business monitors and ensures its active compliance with the spirit
of the law, ethical standards, and international norms. In some
models, a firm's implementation of CSR goes beyond compliance and
engages in "actions that appear to further some social good, beyond
the interests of the firm and that which is required by law."CSR is
a process with the aim to embrace responsibility for the company's
actions and encourage a positive impact through its activities on
the environment, consumers, employees, communities, stakeholders
and all other members of the public sphere who may also be
considered as stakeholders.
It is defined as the voluntary activities undertaken by a
company to operate in an economic, social and environmentally
sustainable manner. Our company recognizes the value of
incorporating CSR practices into operations. Operating responsibly
also plays an important role in promoting local values
internationally and contributes to the sustainable development of
communities.
In Bangladesh no legal compulsion is there. A few years back,
Bangladesh Bank (BB) issued circular urging CSR activities for
scheduled banks. Now BB publishes a very comprehensive annual
report on CSR activities of the scheduled banks. This has compelled
the banks to be forthcoming about CSR activities because the annual
report has been the instrument of compulsion.
There is no denying that because of the central bank, CSR
activities have been virtually institutionalized in the banking
sector. In this connection it may be mentioned that Bangladesh Bank
has adopted a number of pro-poor measures through the banking
channels which have helped accelerate poverty alleviation
activities. However, it should be remembered that decoration work
in the VIP road, arrangement of golf tournament, display of gala
fireworks in connection with the opening ceremony of state
functions etc., are not acceptable under CSR programs. We try to do
actual CSR activities of programs. We try to ensure human rights,
labor standards, and environment friendly plant.
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Chapter 14E-business Strategy
Interactive or Internet Marketing:
Internet marketing is a dynamic and revolutionary idea which has
become a very important medium of marketing recently. Interactive
flow of information whereby users can participate in and modify the
form and the content of the information they receive in real time.
So, Our Company will definitely engage in internet marketing. In
this way, by putting up an adlot of people will come across the
information about our company. In doing so we would have to
create-
Face book Fan Page:Face book is a famous social networking site
today. So creating a fan page in fabook would help the target
customers to know informations about our company and get updates
about offers and events automatically.
Twitter Page:
Facebook Fanpage
business Strategy
Interactive or Internet Marketing:
Internet marketing is a dynamic and revolutionary idea which has
become a very important medium of marketing recently. Interactive
media allow back and forth flow of information whereby users can
participate in and modify the form and the content of the
information they receive in real time. So, Our Company will
definitely engage in internet marketing. In this way, by putting up
an adlot of people will come across the information about our
company. In doing so we
Table 12
Face book is a famous social networking site today. So creating
a fan page in fabook would help the target customers to know
informations about our company and get updates about offers and
events automatically.
Twitter PagePut up Banner ads
Create own web page
Page | 48
Internet marketing is a dynamic and revolutionary idea which has
become a very media allow back and forth
flow of information whereby users can participate in and modify
the form and the content of the information they receive in real
time. So, Our Company will definitely engage in internet marketing.
In this way, by putting up an ad virtually, a lot of people will
come across the information about our company. In doing so we
Face book is a famous social networking site today. So creating
a fan page in face book would help the target customers to know
informations about our company
Put up Banner ads
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Following Twitter page will also benefit the customers and it
would be easier for us to do marketing in such an inexpensive
way.
Putting up Banner ads:Putting up banner ads in different sites
where our target customers regularly visit, even in face book and
twitter is also an important marketing strategy
Creating own Website:Our company will create its own website
where it would promote itself and there will be all informations
and facilities to.Our website is www.bagasse.com.bd
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Chapter 15Financial forecasts and other information
15.1 Assumptions:
Our all assumption about our business are-
Sl. Description Year 1 Year 2 Year 3 Year 4 Year 5
1 sales growth - 20% 20% 15% 15%
2 Total Quantity supplied 20,000 30,000 35,000 47,000 60,000
3Revenue will be generated from(compostable tableware, Tissue
paper , Paper cup)
3,480,000
4,176,000
5,011,200
5,762,880
6,627,312
4Revenue will be generated from ( Boards, Sugercane Fabrics)
20,000,000
30,000,000
35,000,000
47,000,000
60,000,000
5 Salary growth of permanent staff - 12% 13% 14% 15%
6 Utilities Expense (% of Revenues) 1.0% 1.0% 1.0% 1.0% 1.0%
7 Maintenance Expense (% of Revenues) 1.5% 1.5% 1.5% 1.5%
1.5%
8 Rent Expense (Tk. 40,000 monthly)480,000
480,000
480,000
600,000
600,000
9 Dividend expense11,700,195
17,768,782
20,953,915
28,066,651
35,842,056
10 Project cost will be funded by equity investment
11 Minimum Wage of employees Tk. 7,000
12 Cost has been calculated on constant basis.
13 Details of Marketing expense has been attached
14 Salaries will be paid at the end of the month
15Sales revenue will be collected at sales time and at the
emding of the month.
16 Debt: Equity = 30%:70%
17 Project life 5 years
18At the end of 5 years Net Income will be generated as same as
year 5(considering year 5 profit to calculate PV of Perpetuity)
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19 Details of Salaries expense has been attached
20 37.5% Tax applicable for joint venture or social business
21Rent Contract will expire after year 3. Thus, 25% growth
assumed in Rent Expense
22Straight line depreciation assumed for calculation of
Depreciation expenses
2380% of Net Income will be disbursed as Dividend among S/Hs and
rest 20% wil be kept as R/E for future.
Table 13
15. 2 Financing Mode:
Financing Mode
1 Debt 450,000 30%
2 Equity 1,050,000 70%Table 14
We will take 30 % bank loan. And rest of our investment will be
done by equity investment.
Projected Cost:
Project Cost
Sl. Item Amount (Tk.) Details
1 Advance Rent 240,000 6 Months rent (Area: 5,000 sft.)
2 Interior Designing 198,000 Appendix-1
3 Crusher machine 600,000 2 machine; Tk. 300,000 each
4 Processing Machineries 300,000 According to market experts
5 Furnitures & Fixtures 150,000 Appendix-1
6 Miscellaneous 12,000 Around 1% of Fixed Cost
Total Fixed Cost 1,500,000
8 Working Cap Req. N/A
Total PC 1,500,000
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Our total projected cost will be 1500000 lakh taka. Breakdown of
interior design cost and furniture cost are attached in the
appendix
15.3 Income Statement:
INCOME STATEMENT
Description Year 1 Year 2 Year 3 Year 4 Year 5
Revenue23,480,
00034,176,
00040,011,
20052,762,
88066,627,
312Revenue from (compostable tableware, Tissue
paper , Paper cup)3,480,0
004,176,0
005,011,2
005,762,8
806,627,3
12
Revenue from ( Boards, Sugercane Fabrics)20,000,
00030,000,
00035,000,
00047,000,
00060,000,
000
Expenses:
Salaries Expense2,572,4
002,881,0
883,255,6
293,711,4
184,268,1
30
Marketing Expense 110,000 126,500 145,475 162,932 182,484
Maintenance Cost 352,200 512,640 600,168 791,443 999,410
Utilities Expense 234,800 341,760 400,112 527,629 666,273
Rent Expense 480,000 480,000 480,000 600,000 600,000
Depreciation Expense 162,000 162,000 162,000 162,000 162,000
Interest Expenses 68,275 57,375 44,624 29,706 12,255
Total Expenses3,979,6
754,561,3
635,088,0
085,985,1
286,890,5
52
Net Income Before Tax19,500,
32529,614,
63734,923,
19246,777,
75259,736,
760
Tax @ 37.50%7,312,6
2211,105,
48913,096,
19717,541,
65722,401,
285
Net Income After Tax12,187,
70318,509,
14821,826,
99529,236,
09537,335,
475
Dividend expenses9,750,1
6214,807,
31817,461,
59623,388,
87629,868,
380
Retained Earnings2,437,5
413,701,8
304,365,3
995,847,2
197,467,0
95
ROE(%) 6.99% 34.40% 67.04% 79.61%101.64
%
Dividend Payout Ratio 80% 80% 80% 80% 80%
Sustainable Growth Rate(%) 20.33%
Table 15
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From the income statement we can see that all revenues and
expenses are calculated according to our assumptions. And our
sustainable growth rate at the end of year 5 is 20.33%.
15.4 Balance sheet:
BALANCE SHEET
Description Year 1 Year 2 Year 3 Year 4 Year 5
ASSETS
Current Assets
Cash in hand 2,769,302 6,592,697 11,068,347 17,023,434
24,590,283
Advance Rent & Miscellaneous 252,000 252,000 252,000 252,000
252,000
Total Current Asset 3,021,302 6,844,697 11,320,347 17,275,434
24,842,283
Fixed Assets
Interior Designing 198,000 198,000 198,000 198,000 198,000
Crusher machine 600,000 600,000 600,000 600,000 600,000
Processing Machineries 300,000 300,000 300,000 300,000
300,000
Furnitures & Fixtures 150,000 150,000 150,000 150,000
150,000
Less: Accumulated Depr. 162,000 324,000 486,000 648,000
810,000
Total Fixed Assets 1,086,000 924,000 762,000 600,000 438,000
Total Assets 4,107,302 7,768,697 12,082,347 17,875,434
25,280,283
LIABILITIES & S-Hs' EQUITY
LIABILITIES
Current Liabilities
Salaries Payable 214,367 240,091 271,302 309,285 355,678
Utilities Payable 19,567 28,480 33,343 43,969 55,523
Total Current Liabilities 233,933 268,571 304,645 353,254
411,200
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Long-Term Liabilities
Long term Debt 385,828 310,757 222,933 120,192 0
Total Liabilities 619,762 579,327 527,578 473,446 411,200
OWNERS EQUITY
Owners Capital 1,050,000 1,050,000 1,050,000 1,050,000
1,050,000
Retained Earnings 2,437,541 6,139,370 10,504,769 16,351,988
23,819,083
Total Equity 3,487,541 7,189,370 11,554,769 17,401,988
24,869,083
Total Liabilities & Equity 4,107,302 7,768,697 12,082,347
17,875,434 25,280,283
Table 16
From our balance sheet we can see that our total liability and
assets are increasing every year. Our retained earnings are also
increasing in every year. Our salaries payable and utilities
payable has been crated because at the date when we create our
balance sheet then some of our current month expense remain
payable.
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15.5 Cash flow statement:
CASH FLOW STATEMENT
Description Year 1 Year 2 Year 3 Year 4 Year 5
Net Income After Tax12,187,70
318,509,14
821,826,99
529,236,09
537,335,47
5
Adjustment for:
Depreciation 162,000 162,000 162,000 162,000 162,000
Increase/Decrease in Salaries Payable
214,367 25,724 31,212 37,982 46,393
Increase/Decrease in Utilities Payable
19,567 8,913 4,863 10,626 11,554
Net Cash from Operating activities12,583,63
618,705,78
522,025,06
929,446,70
437,555,42
2
Purchase of Fixed Assets - - - - -
Sales of Fixed Assets - - - - -
Cash flow from Investing Activities - - - - -
Debt Repayment (64,172) (75,072) (87,823) (102,741)
(120,192)
Dividend Payment(9,750,16
2)(14,807,31
8)(17,461,59
6)(23,388,87
6)(29,868,38
0)Cash Flow from Financing
Activities(9,814,33
4)(14,882,39
0)(17,549,41
9)(23,491,61
7)(29,988,57
2)
Net Increase/(Decrease) in Cash 2,769,302 3,823,395 4,475,650
5,955,087 7,566,849
Add: Opening Cash and Cash Equivalent
- 2,769,302 6,592,69711,068,34
717,023,43
4
Closing Cash and Cash Equivalent 2,769,302
6,592,69711,068,34
717,023,43
424,590,28
3Table 17
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15.6 Capital budgeting:
Capital Budgeting
Sl.
Description Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Cash Inflow/(Outflow)(1,500,000
)452,71
8549,548 897,872
1,036,579
1,276,373
Cummulative Cash Flow452,71
81,002,26
71,900,13
82,936,71
74,213,09
0
Payback - 1 1 0.45
Discounting Factor 17.40%
1 0.85 0.73 0.62 0.53 0.45
Discounted Cash Flow(1,500,000
)385,62
0398,721 554,894 545,670 572,318
Discounted Payback - 1.00 1.00 1.00 0.29
1 Payback Period 2.45 years
2Discounted Payback
Period3.29 years
3 NPV at 17.40% 957,223 BDT.
4 IRR (%) 37.97%
Table 18
From the capital budgeting analysis we can see that our payback
period is 2.27 years. Our discounted payback period is 2.45 years.
Our NPV at 17.40 % is 957,223 TK. Our internal rate of return is
37.97%.
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15.7 Loan Amorti