Entrepreneur final (1)

ENTREPRENEUR

PROJECT REPORT

SUBMITTED BY:

Haroon Ali L1F11MBAM2078

Maheenrizvi L1F11MBAM2058

Bushra Takmil L1F11MBAM2071

Younas Hameed L1F11MBAM2073

Submitted to:

Sir AmjadHussain

Sec “D”

Making life easy

Table of Contents

EXECUTIVE SUMMARY ............................................................................................................ 4

Introduction:...................................................................................................................................5

MACRO ENVIRONMENTAL ANALYSIS.....................................................................................6

PEST Analysis:...............................................................................................................................6

Political: .....................................................................................................................................6

Economic: ..................................................................................................................................6

Social: ........................................................................................................................................6

Technological: ................................................................................................................................6

FEASIBILITY ANALYSIS: .......................................................................................................... 8

Product feasibility: ..........................................................................................................................8

Industryfeasibility: ..........................................................................................................................9

Organization feasibility:............................................................................................................. 10

: Financial feasibility ................................................................................................................... 11

Porter five forces: ...................................................................................................................... 12

KEY SUCCESS FACTORS:...................................................................................................... 15

Competitor Analysis: .................................................................................................................... 16

POSITIONING:............................................................................................................................ 16

MARKETING ANALYSIS: .......................................................................................................... 17

Product: .................................................................................................................................... 17

Price: ........................................................................................................................................ 17

Place: ........................................................................................................................................... 17

Promotion: ................................................................................. 1Error! Bookmark not defined.

TARGET MARKET:........................................................................................................................ 18

SEGMENTATION: ........................................................................... 1Error! Bookmark not defined.

Business Model: ................................................................................ 1Error! Bookmark not defined.

Forecasted business Financials: .................................................................................................... 20

Executive Summary

60.3% of the population of Pakistan consists of youth, satisfying their needs can be a great

opportunity. To capture this opportunity we have decided to come up with those ideasthat makes life easierwith updated technology.

We have decided to come up with ourfirst idea thatmakes bike riders life easy with updated technology.

The major flaw in motor bikes industry that they are producing new bike models for people but they are not giving them any feature that can facilitatethem in checking fuel. This is the necessity

of every motorbike rider; every person who rides motorbike wants this facility. Even the market leader in motorbike industry in Pakistan is not giving this facility in their bikes to complete this gap in the bikes and as per the necessity of the people we have launched a new innovative

product which is an External Digital Fuel Meter which can be fitted in any bike no matter what CC the bike is. It tells about the fuel in the fuel tank. One more feature which makes it

innovative that it is not an ordinary analogue fuel meter it is a digital fuel meter. First digital fuel meter for motorbikes in the history of Pakistan. As a manufacturing company Our strong management team will look for ways to increase efficiency, lower operational cost

and ensure sustainable growth.

INTRODUCTION

Company Description

We are starting a new venture that will attract the youth of Pakistan. Our company is introducing a digital fuel meter that will tell percentageof remainingpetrol in bike.

The name of Our Company is “Avitron” we are providing Digital fuel meter and targeting every

bike rider specially youth because they are fond of technology and show interest in latest gadgets or products. “Avitron” is in its start-up stage we are going to mix fashion with technology and bring up the external digital meter that is going to provide self-expression and style in the life of

our customers

We are going to start our business online where customers can order products easily and we can

deliver them at their doorstep and will distribute our products atMcloadroad, we will not stick to this one product only we will also research and provide more products that will make everyday

life easier

Company History: The idea to start it as a business came from a problem which we were observing from many

years like when we wake up late in the morning and getting late for University/Office and start our Bike and it won’t started ,we open the cap of tank to check the petrol but find difficulty to

measure it, and when we found that there is not enough petrol in the bike we have to go on rickshaw or have to use some other transport due to which our expenses will increase and will also get late.

Our friends and family were complaining about how to check petrol in their bikes. We feelthis

problemand discussed with friendsand decided to start it as a business

By visualizing the whole scenario given above makes you think that this wastage of time would

never occur if there would be some kind of meter which can tell us that there is less petrol in the tank.

We have decided to start it as a business because more than half of the population of Pakistan is youth, catering the needs of these people would be a profitable venture.

Vision: "To grow as a dynamic, innovative and market driven domestic manufacturer in the world,

wewill bring more range of products by researching problems of consumers which they suffer in their daily life”.

Mission Statement: “We deliver customerswith best possible reliable products with latest technology to make their

life comfortable along with our efficient employees and will reward our self through customer’s feedback”

In order to judge the attractiveness of the industry environmental trends must be considered. For the evaluation of the environmental factors we are going to conduct a PEST Analysis:

PEST Analysis

Following is the PEST Analysis for “Digital fuel meter”

Political:

We are doing our business in Punjab and the Punjab government is supportive with the industrial

sector so we have no pressure from the political sector, but there is a threat that if there is political instability in country it might affect our business.

Government gave permission to firms to set up plants for assembly/manufacture of motorcycles in Pakistan if the Government cancel the license for any reason the company will suffer

Economical:

World is facing recession problem & it is difficult for people of Pakistan to choose most expensive products until and unless they find value added services in it which attract them to buy it or if someone is offering more benefits than its cost. If we will give an innovative digital

product at lowcost the consumer will definitely going to buy it .If trade is promoted in Pakistan and the products which are produced in Pakistan would be exported then it will help our

economy to grow.

Social:

In accordance with the data shown on the website of Pakistan Automotive Manufacturer’s Association (pama), there were a total of 819,556 motorcycles in the fiscal year 2012-13

Industries are producing new bikes at low rates for people but they are not giving them any feature that would facilitate them in sense of ease in fuel checking. This is the necessity of every

motorbike rider; every person who rides on a motorbike wants the facility of fuel meter.

There is no social pressure on us because we are producing an electronic item not a food item on

which the society will be curious and the pressure groups will force us not to produce it. It is a product, which will be remembered by every motorbike rider.

Technological:

We are introducing a new technology in the market, everything is digital now a days , so people will accept this new innovative product which is an External Digital Fuel Meter& it can be

fitted in any bike no matter what CC bike it is.

FEASIBILITY ANALYSIS

Product/service feasibility

There is a positive trend towards the digital products now a days everyone wants to have the

latest technology and digital technology brought a new level of convenience to customers. Peoplewill getexcited about this product because it is solving the problem of bike riders of

checking fuel in digital way which can be easily fixed in every bike and demand for motor bike is increasing so, there is huge chance for the acceptability of our product in the market.

Digital fuel meter is attached in heavy bikes only, mostly used in foreign countries and heavy bikes are not affordable for everyone in Pakistan, very few people can afford it, but meter which

we are providing is affordable.

We will launch our product next month because for this product we don’t have to wait for some

specific event or time. Thereare many buyers but we are the only one seller for this product no one is selling external fuel meter in the market until now and we are first to bring this innovation in the market.

We also conduct survey from different motor bike user about that will you buy this type of

product andmostly bike users yes without taking too much time, after that we also asked that how much you will spend on that kind of product. Some user’s say that it’s a onetime investment so theywill surely going to pay for that, and students were the most excitedconsumers toward this

product, they asked details about the product that how it will be fixed in their bikes and how much price they have to pay. Through survey we also identify that consumers will happily pay

up toRs3000 for our product.

Industry feasibility:

The automobile industry of motor bikes in Pakistan is at its maturity stage already but the innovation that we are bringing-up in the form of digital technology will help us prosper and

flourish and gain a significant market share.

We are targeting Pakistan’s nation as a whole. The youth comprises of 60.3% of the total population so it will provide us the opportunity to attract a large number of consumers that could buy our product because usage of motorcycles is high among the students.

The minimum price of lowest quality bike is R.s 40000 in Pakistan. The person who can spend

40000 can also spend a little amount for making their life easy which will solve their daily problem of fuel checking in digital way and the consumers who can afford luxurious bikes like Honda, Yamaha etc. will definitely feel to pay for it.We are targeting the whole community of

motorbike riders, of any age from 15-65. Mostly those people who cannot afford bike like deluxe and prider but can have the features of fuel meter in their bikes and for those also who have old

bikes and want to know the fuel consumption of their bikes.

Organizational feasibility:

Maheen Rizvi

(Marketing Manager)

We are 4 equal partners:

Haroon Ali farrukh Product designer& CEO

MaheenRizvi Marketing Manager

YounasHameed Operations Manager

BushraTakmil Finance Manager

Mr.Haroonalifarrukh is always found of mechanical /electrical worksandtry to solve electronic/mechanical problems of his home by himself ,the problem of fuel checking make

him realize that the bike has an important missing feature, and thought of designing a product which will solve his and every bike rider problem digitally .He will design product with the

collaboration of his father Mr.farrukh

MaheenRizvi is an MBA student and have experience of marketing, as she is vice president of a

University’s most prominent Club and market their club well for almost 3 years

Being a marketing manager she will try to promote product through online advertising, Facebook, and pamphlets. She will also approach those consumers who are not aware of such an innovative product through her Public relations (PR)

YounasHameed is also an MBA student and will be responsible for operations i.e. how we can minimize cost, which locations will best suits us ,and how to manufacture more outputs in

less time, and how to design our layout for shop

Bushra is also an MBA student and have experience of 3 years in managing resources and team as Head of managing backstage and will be responsible for all the financials of product and also find investors who can finance us so we can expand our business and will try to bringinvestors

We will done it with the help of Mr.Farrukh who has been working in PTV as Electrical engineer and have 25years of experience .He will guide us and share his experience with uson

how to make our product better.

As we are at initial stage we will hire only one or two mechanic which will fix the meter in

consumer’s bike

Financial feasibility:

The startup cash of business is invested by all the partners’ .Each partner is investing R.s 35000 and will start the business with total R.s140000

Per unit cost

Digital voltmeter

350

Variable gauge(cork) 300

Batter 50

Wires 50

Total cost R.s.750

INDUSTRY ANALYSIS:

As mentioned earlier, we would be targeting the youth of Pakistan. The youth comprises of

60.3% of the total population so it will provide us the opportunity to attract a large number of consumers that could buy our product. It would be up to us to create an image in the minds of the consumer to influence them to buy our product.

Industry Attractiveness:

The industry of automobile industry is in its maturity stage already but the innovation that we are

bringing-up in the form of technology is providing an opportunity for us to customize existing productwill help us toprosper, flourish and gain a significant market share.

Industry structure: The industry structure helps in determining the profit potential of a particular industry. The average rate of return can be affected by the structure of the industry. The profit potential in the

automobile industry is quite high as this sector is quite active in Pakistan contributing 9.5% to the

GDP annually that ensures the availability of our required product in good quality at quite a reasonable rate. Secondly, the manufacturing costs are not too high; these low costs can help us

secure a reasonable profit by offering the Digital fuel meter to our consumers at affordable prices this will help us attain a good position in the market with a significant profit.

Porter’s Five Forces Model: A complete analysis of the profit potential of a particular industry can be determined by

conducting a “Competitive Forces Model” analysis:

Industry Rivalry:

We do not have any rivals, we just want to make people life easy and fill the gap, which is left over by the motorbikes manufacturing companies. There is no existing competitors of our

company because we are the first one to introduce external digital fuel meter

New Entrants:

This is a threat that new companies can enter in this business, to keep our self-save from this

threat we will work on economies of scale so that the cost can be reduced and product differentiation can be maintained.

Bargaining power of Buyers:

Bargaining power of product buyers is low because there are many buyers in the market and we are the only seller of this product. We can charge any price any consumer have to pay it

Bargaining power of Suppliers:

We are only buyers and our suppliers are many, we are making the product with things like meter, battery etc. raw material is easily available that’s why supplier power is less because there are number of suppliers available in the market

Substitute:

Substitute products are available in the market but they are not focusing on latest technology Threat is always there with the business, there is no such substitutes available in the market

which can perform better than us right now.

Key success factors:

The key success factors in the automobile spare parts industry are the:

Latest technology Price

Product differentiation

We will be focusing on each one of them to sustain in the market.

Latest Technology

Youth is always fond of latest technology even if they have to paymore. When people will get latesttechnology at affordable prices which is solving their daily life problem they will surely feel to pay for it

Price

When people will feel that they are getting more than what they are paying they will feel satisfied.

Product differentiation

We are providing a unique product which isnot present in the market, providing a differentiated product will be an important factor for achieving success

Competitor Analysis: We fortunately have no competitor in the market yet since we are the first company to introduce

this product in the market. When the competitors may come in the market, we will have the

service strength. Only we know how to fit the meter in the bike no one else knows about it. Honda and Yamaha know internal fuel meter process but no one is aware about external fuel

meter.

We don’t have any direct competitors because we are entering in the market with new product which was not available before in the market, every player in the automobile industry specifically firms using the same idea of manufacturing spare parts of motor bikes will be our

indirect competitors. Moreover, all the other manufacturers working in the industry would be providing a product that would act as a substitute for our digital fuel meter. It depends on our

marketing strategy that how well we will be able to capture our consumer’s mind and relate them

toour product. If we would not be able to position rightly in the minds of the customers than

other products will be our substitutes.

POSITIONING

Tagline of Company

“Making life easy”

The tagline of our company is making life easy which depicts that we will solveconsumer’s

problems which they face in their daily life by making such products which will decrease or solve their problems

Tagline for Digital fuel meter

“Spirit of every bike rider"

First product of our company is a digital fuel meter which will solve the problem of bike users of

checking how much fuel is left in their bikes withthe latest technology of digital meter S

Marketing Analysis

Product

Our product would be digital fuel meter that depicts the remaining fuel percentage on the screen. Our fuel meter would be available in different colors. Our customers can choose their desired

color from a wide range that will be available to them online. We will not be only selling fuel meter; we will be selling a way of life. The quality of the digital fuel meter provided by us would

be a competitive advantage for our firm

Price

The price for each meter would be R.S. 2500, which is affordable. We are going to charge a

reasonable price so that everyone would be tempted to buy our fuel meter. It is one time investment that will solve problem of fuel checking

Placement:

We will start it by distributing our product toretailers atMcloadroad and give 12% commission to them. We decide to place our product here because it is a location where spare parts of bike is available and consumer of every class visit Mcload road .It is the biggest market where every

spare part of bike is available.

Consumers can also place an online order to our page on Facebook or they can call us for an order.

Promotion:

We will promote our product through e-marketing and will make our page on Facebook, and will also promote our product by pasting information about product in different universities. We will also place desk and display our product in different universities so more and more youth

can be aware of this product and can get information about this product because youth is technology lover. We will also ask for their feedbacks that what other problems they face in their daily life so we can design more products to make their life easier

TARGET MARKET

Target market is the most important thing in launching a new product. We are basically targeting young generation as they are comprised of 60.3% of the population and youth are mostly the technology lovers, that’s why our main focus is on solving youth problems

SEGMENTATION

Geographic:

Right now we are making this product available in Lahore, if it proves to be successful we will

also move to other cities

Demographic:

For bike riders, mostly for youth because they are fond of latest technology

They can be either Muslim or living in Pakistan and of no specific ethnic or religious

background.

For Higher income group and for middle class

Psychographic:

For those who are interested in innovation, and must be the first on the block to own

latesttechnology and embrace it.

Behavioral:

For those people who are concerned about having latest technology For those who gives priority to their problems solution over price

BUSINESS MODEL

Buying material

Mechanics

Distribution/Online order

End User

Payment

Installing

Business

Avitron Company

FORECASTED INCOME STATEMENTS

Particulars Year 1 Year 2 Year 3

Revenues 200000 $250,000 $450,000

Cost of Sales 60000 75,000 135,000

Gross Profit 140000 $175,000 $315,000

Advertising & Promotion 16000 20,000 23,000

Bank Charges 2800 2,500 2,500

fuel expenses 10000 15,000 25,000

Maintenance 1500 2000 2200

Licenses & Fees 500 530 430

telephone 2000 3,500 4,000

website 400 400 400

(One

labor) (two labor) (three labor)

Labor charges(700 per month) 84000 16800 252000

Total Operating Exp. 117200 60,730 309,530

EBIT 22800 $114,270 $5,470

Depreciation 250 250 250

Operating Profit 22550 $114,020 $5,220

Interest Expense 2000 1,800 1,500

Earnings Before Taxes 20550 112,220 3,720

Income Taxes (25%) 5137.5 28,055 930

Net Income 15412.5 $84,165 $2,790

Avitron Company

Balance Sheet

Particulars Beginning Year 1 Year 2 Year 3

Cash 100000 146192 266211 318640

Inventory 75000 82500 75000 75000

Total Current Assets 175000 228692 341211 393640

Fixed Assets:

Tools 4000 4000 4000 4000

Less: Depreciation 0 250 500 750

Net Fixed Assets 4000 3750 3500 3250

Total Assets 179000 232442 344711 396890

Accounts Payable 0 36529 75046 147100

Long Term Debt 129000 128500 133500 195000

Total Liabilities 129000 165029 208546 342100

Owner's Equity:

Paid-in Capital 50000 52000 52000 52000

Retained Earnings 0 15413 84165 2790

Total Liabilities &

Equity 179000 232442 344711 396890

Cash Flow

Cash Reconciliation Year 1 Year 2 Year 3

Beginning Cash 100000 $146,192 $266,211

Add: Change in Cash 46191.5 120,019 52,429

Ending Cash 146191.5 $266,211 $318,640

Year 1 Year 2 Year 3

Operating Profit 22550 $114,020 $5,220

Add: Depreciation 250 250 250

22800 114,270 5,470

Add:Working Capital Investment 60000 68,000 85,000

Cash From Operations 82800 182,270 90,470

less:Interest Expense 2000 1,800 1,500

less:Income Taxes 5137.5 28,055 930

Net Cash Before Debt Pmt 75662.5 152,415 88,040

less:Debt Payment 29471 32,396 35,611

Change in Cash 46191.5 $120,019 $52,429