Documente Academic
Documente Profesional
Documente Cultură
for
of
section -B
For:
MBA Entrepreneurship Assignment
Faculty of Management
Lecturer:
SARATH
Contents
1. EXECUTIVE SUMMARY
2. SUMMARY OF PLAN
2.1 Background
3. BUSINESS BACKGROUND
3.2 Location
3.3 Demographics
3.4 Infrastructur
5. SWOT ANALYSIS
5.1 Strengths
5.2 Weaknesses
5.3 Opportunities
5.4 Threats
7. RISKS
8.1 Overview
8.8 Products
9.1 Production
GMWP is an exclusive small business enterprise, ventured by a dynamic entrepreneur, whose core
competency has been in the field of fmcg sect
The Marketplace concept, developed by my friend, has become well known nationally for its population
transportatio.This strategic location of the plant, is an ideal catchment area, and assures the free flow of
customers for its exposure and use
Wide range of products “water to soda”, and a pleasant atmosphere and very comfortable taste
arrangemet to consume, especially after the busy and exhaustive routine.
Products are customs-designed to buyers taste, firms goals initially are set to satisfy the customers.
Owners philosophy and culture, to fulfil the customers demand at reasonable price, is a competitive edge
to command a good reputation.
The plant management has developed its strategic planning to achieve, quality of product and services ,
to focus on marketing segments and to utilise the working capital in its right direction.
The Plant assets build on its customers, plant capacity, reputation image and equipment involve in the
shopping.The plant has the negative cash flow in its first month operation, due to the initial stage of the
business, but the management is hoping the positive cash flow in its future operation
Ganga water plant is fully financed by a bank loan at a competitive variable loan of 8.95%. The loan
was utilised for financing : furniture and fixtures, high tech machines, and for day to day working capital
requirements. The entrepreneurs did not utilise any of his/her personal finances in the business. It is the
intention of the entrepreneurs to pay off the bank loan within eight years if not earlier if actual and
projections match.
There are a number of prevailing issues that should be considered in the formative period of the water
plant operations. These should be closely monitored and acted upon to allow the business to consolidate
and become successful. These include;
Careful attention to Human Resource Management, especially as employees are a significant cost and
the business relies on providing quality service.
Continuous environmental scanning of the macro and micro environmental factor
Continual monitoring of the adjacent competitor in the shopping centre
Focus on methods of improving cash flow into the business
2. SUMMARY OF PLAN
2.1 Background
This plan provides an assessment of the strategy and operations for. The plan will help shape the future
of the business and contribute to long term viability and growth, it ensures effective coordinated use of
resources, minimises costly mistakes and failures, enables managers to anticipate and identify potential
pitfalls and also identifies company strengths and weaknesses in relation to competitors.
The GMWP is a new enterprise that has recently opened within a express highway at jewar noida Uttar
pradesh India.
Efficiencies
Labour, Rent etc
Equity Premises
Fair Lease, Personel Ganga mineral ROI
Mgmt, Staff Relations, wate How will it make the
Supplier Relations, r
plant business
Customer Service, etc prosper?
Unique
Competitive
Advantages
The business vision is to focus on our future goals and objectives, and to achieve them we will
concentrate on strategic planning to achieve them in short term and in long term period.
The business vision is also to become a leader in mineral water industry around the Noida area through
our affinity with customers in the chosen market. The market strategy is to provide wide range of quality
products on daily basis to satisfy our customers needs, and promises to demonstrate consistently the
superior service and quality to each customer.
The plant will strive to develop competitive advantage to the value of our product and services, and to
charge current market prices to our products and services. The objectives are to achieve a high standard
of performance and quality of product, and to provide a hygienic, safe and clean environment to our
customers. The plant will build a good team, working through mutual understanding, and respecting the
aspirations of each employee, to empower them in decision making, in regard to provide excellent
services. The plant will encourage and reward a high standard of performance from employees.
The business is 100% on debt financing, and will focus more on increasing the sales volume and to
reduce the burden of debt-financing, In doing this the cafe will establish market position, through
publicity measures and good reputation.
The plant will support environmental and community objectives, and participate in community services,
through musical entertainment once a month in the premises. The long term goal is to thrive in the
business, being able to pass the venture to the next generation.
2.4.1 Sales
The RCC has planned sales of 10000ltrs per day
3. BUSINESS BACKGROUND
3.1 Location
The Plant is located in jewar, which is a north eastern suburb of Uttar pradesh located 60 kilometres from
the NOIDA , 30 Kilometres from PALWAL and 39 Kilometres from ALIGARH. Currently the business
has plan of employs 2 full-time and 4 part-time personnel.
The area is the excellent populated and demanding, servicing the needs of a growing population. The
area include250 shopsand will include a approximately 48 specialty retailers,10,000 houses.
3.2 Demographics
The total population in a 10 kilometres primary catchment area IS 2,22,000 people. 67% of these people
are habitual of drinking mineral water. Most area is undiscovered by such type of business there.
3.3 Infrastructure
The road infrastructure throughout the Region, although extensive, is congested and needs considerable
upgrading, especially in the khair region. The pressures are typified by traffic congestion, poor bus
networks, high dependency on private cars, and poor access to interstate rail . The lack of adequate water
and sewerage to support the growth needs in some sub-regions will cap the rate of growth in the region.
The tourist dollar is important to the Region and, as a consumer of tourism products and services, the
modern tourist is becoming very discerning. Not only do average tourists travel more and further to reach
quality and authentic experiences, but they have more disposable income and 'free' time to enjoy their
travelling. To ensure that the Region continues to cater for such discerning customers, it must ensure that
the soft infrastructure so essential for support of tourism products is well structured to meet customer
expectations and that the tourism processes are meeting best practice and world-class standards. The
philosophy of the restaurant will be welcomed by the anticipated increase in tourism as identified by
NWSRDO, (1997).
3.5 Retail provision
The traditional retail provision in Richmond was based on the strip retail along the main road. The
Richmond marketplace will provide a much needed modern retail facility, as well as a real community
focus, for the expanding population of this well-established but under-serviced area. Refer Appendix 1.
Richmond Income Distribution.
In the case of hotel and catering industry, uniqueness is lot more conspicuous. With all those uniforms,
strange sounding job titles, tipping, and unsocial hours, not to mention the high levels of
entrepreneurship and labour mobility. The unsocial hours factors alone suggests that at least as mineral
water management is out of the ordinary.
Mineral water industry like any other business, have to make profits and maintain cash flow and,
therefore, can be run on business principles. Unlike usual and routine manufacturing industry, managers
in these types of service industry requires to anticipate, adjust or react in a time span for the following
features:
constant fluctuations in short-term customer demand
Business fluctuates by the week, the day, the hour. For the worker, this means is that his or her job has an
irregular work flow. For the business, this means a problem of adjusting labour supply to demand and
hence the use of part time and casual labour and a pay system which alters earnings by customer demand,
ie. tipping or some appropriate surrogate.
The demand for labour is direct
In the mineral water industry labour is demanded for what it can produce, people are not machine
minders. This means that productivity is based on personal ability and effort. Consequently, there are
great individual differences between worker’s output. Concepts of productivity are therefore, about
judgements of human capacity.
The subjective nature of standards
Concepts like ‘hospitality’, ‘service’, ‘cleanliness’ are all matters of subjective judgement. This means
that every worker’s output is judged subjectively. This has the effect of making the actual relationships
between managers and workers crucial to standards.
Transferability of skills
The kind of skills that workers in the mineral water industry possess are generally confined to that
industry. This makes for an efficient labour market between the various sectors of the industry. This,
together with the relatively unskilled nature of some of the work, encourages the high labour mobility
pattern which is often such a conspicuous feature of the industry. 1
4.1.3 Organisational commitment
Commitment is a conscious affirmation of loyalty to something or somebody. Organisational
commitment is to draw a picture of the behaviour that is likely to be found in an employee who is
specifically committed to an organisation. Besides the obvious likelihood of punctuality, reliability and
cooperativeness, three deeper aspects of commitment may be present and visible. These are:
1. An emotional attachment to the aims and values of the organisation. This attachment is often
expressed through pride in the name of the company.
2. A willingness that goes beyond normative expectations.
3. Being prepared to push instrumentality into the background
In a sense, commitment has one advantage for management over motivation, in that while motivation has
to be demonstrated to be acknowledged, commitment actually has to be openly declared in some way by
both parties. Commitment implies going public.
4.1.4 Empowerment
It is a new form of organisational behaviour and structure which has come about because of a perceived
need for organisational responsiveness and which is itself the mechanism that enables organisations to be
responsive.
Empowerment is incorporating into an employee’s role the authority and means to be responsive to
customer requirements. It enables the employees to be responsive by ensuring that the necessary rules of
order within the organisation do not interfere with the performance of a task which the customer requires.
5. SWOT ANALYSIS
5.1 Strengths
1
Quality is emphasised and delivered in the plant products and services.
Quality of water - fresh and refreshing to order, quality water
5.1.6 Macro Locational Factors
There are a number of strengths in the physical location including;
The only mineral water plant in jewar
Close to university - population of 8,000
Close to palwal and faridabad3000 employees
Located in identified strategic growth area
5.1.7 Micro Locational Factors
Location in community based area
Ergonomic environment for successful retailing
Friendly atmosphere and bright building design
Well serviced by public transport
5.1.8 Product/Delivery
The water is fresh and passed by iso9001
Casual and relaxed atmospher
Competitive pricing
5.1.9 Infrastructure
The GMWP is a new premise in a modern recently opened .
New equipment installed, which is well laid out
5.1.10 Advertising
Promotional activity by shopping centre including on-going marketing programme
5.2 Weaknesses
5.2.1 Facilities
Initial start up problems due to centre not being open . Short term hitch that does not appear to have
influenced business.
Limited in its location within the area, in terms of supply.
5.2.2 Undercapitalised
The plant is undercapitalised
5.2.3 Workforce
Staffing structure - new to everyone
Poor work culture, especially from drinking mineral water in area.
Little motivation/initiative in work force - have to be told minute details/hand holding
The employees have not looked after the assets
5.2.4 Customer relations
Customer relations sometime suffer due to mispromotion .
5.2.5 Production methods
Filtered by reverse osmossis process.
Production fluctuation
Not industrialised procedures/processes
5.2.6 Location
Away from populated area.
5.2.7 Variability
Limited months of business - ie peaks at summers
simultaneous production and consumption.
5.2.8 Restricted Hours
Being in a mineral water the plant is faced restricted in winters
5.3 Opportunities
5.3.7 Capacity:
5000 ltrs per day
5.3.8 Longer Hours
Extending hours - could open till late evening in line with the trading hours of area
5.3.9 Location
Unique selling proposition.
5.3.10 Product Standardisation
Standardise product and service by restricted by modes. To adopt “Ours-is-better-than-theirs”
strategy, by using a combination of focus-differentiation strategy keyed to product quality. Sales and
marketing efforts are focused on the individual customer basis, to suit their requirements and taste, to
develop the superiority perception in customer’s view.
5.3.11 Takeaway Prospects
Opportunity of sell on basic areas
5.3.12 Catering opportunities
Offices within the areas
University
5.3.13 Indoor functions
eg. birthdays, Office luncheon, marriages
5.3.14 BYO - opportunity.
Possible future BYO opportunity attracting evening customers
5.3.15 Discounting prospects
Market penetration through offer discounts eg
10% discount to UWS students
Discount to pensioners
5.3.16 Regional Demographics
Neighbouring community, university and area besides - an assessment of the our potential customers -
find their needs.
5.3.17 New communications infrastructure
Proposed M2 freeway will attract travellers, change in gravity model
5.4 Threats
5.4.1 Competitors
Adjacent Takeaway plantsetc
water cheaper and easier.
Loyalty of community .
Future tenants - Could be new tenants that come in.
5.4.2 Pricing
Prices will be cheap.
5.4.3 Special Offers
5.4.4 Discounting
Not applicable
5.4.5 Promotions
The management strength is also depend on its employees to facilitate the process of achieve business
goals and objectives in future. The plant has developed a good culture within the organisation that the
management and employees work side by side to understand the needs of the customers, and developed a
good communication system among the management, employees and customers.
The incentives scheme on good performance would be helpful, to give motivation to drive and sense of
achieving business goals and objectives.
The whole team would be responsible to problem solving, and to maintain plant image, also decision
making in certain areas and speciality. Increasingly competitive environment the team would seek the
winning strategies and review them.
Strong leader associated with numerous other qualities, to achieve change and sense and desires of others
for the firms effectiveness. Persuasion is a word which conceals an enormous amount of effort, which not
only clarifies the risks, but also ensure to create credibility.
7. RISKS
Risk, says Rescher (1983), is the chancing of a negative outcome.To measure risk we must accordingly
measure both of its defining components, the chance and the negativity. Lack of perception of risks
contributes to unexpected systemic failures .It is therefore essential for a business plan to clearly make
an assessment of primary and secondary risks ..The major risks in this business are
Primary risks
Financial risk;
-investment risks; mortaging the only financial asset
-owner ‘s labour -return
Secondary Risks
Risk relating to environment
- Health hazards being food industry
- Fire
-complying with legal stipulations
-security risks
Risk Dealing with organizational issues
-handling human resources
-administrative problems
- availability of devoted human resource
Psychological Factors
Uncertainties
The management perceives these risks and is well aware of these risks .They have the capability and
fortitude to tackle various risks facing the plant.
8.1 Overview
In order to maximise the company's present net worth and make satisfactory profit the estimated turnover
looks attractive but in order they provide an orderly and agreed basis on which to conduct its business in
an ever changing competitive market environment any business should have its marketing objectives
stated. For GMWP to have successful life cycle could state its marketing objectives as follows:-
Market research - survey questionnaire .
Create awareness of the firm's service among potential users
Build the firm's image among existing and potential users .
Advertising by various methods;
local papers, community radio
direct mail
discount vouchers and deals
advertising in area.
Cornucopia will seek to identify the needs of the customers who are:
Present Customers?
Potential Customers?
How will it be counteracted? ie how will the cafe protect its market share
Customer Needs
What services do you provide? Wide range from light to heavy meals
8.8 Products
Product advantages
Design
Pricing
Reliability
Versatility
Support/Service
Market testing
Innovation
Time to produce
Pricing:
Major focus on standard price and takeaway price which is cheaper.
Cash system no credit provision
8.9.6 Action and implementation program
After implementing the above action program which covers the different aspects of marketing and which
major concerns this particular type of business a through evaluation should be done in the time period.
On the results attained further action program should be prepared.
Competitor analysis
. Where competition is strong and intense
. Where competition is promoting heavily
. Where competition is launching new services.
List all the competitors and update information for all the competitors.
Promotional strategy: - build awareness and interest in the service product and the service organisation.
Differentiate the service offer and the service organisation from competitors:
Build and maintain the overall image and reputation of the service organisation.
. Promotional tools would be :
- direct mail
- leaflet drops - with a feedback coupon
- Signage in front of the shop
- Local paper advertising
- Allowing the display of young budding artists from local university
Distribution strategy:
Due to the nature of the product a great awareness is to be created locally and nearby suburbs of the
existence of the plant and accessibility.
9. STRATEGIES FOR OTHER KEY AREAS
9.1 Production
ITEM 1997
Furniture 11,000
Equipment 3,00,000
Stock 20,000
Fixtures 1,70,000
Total 50,1000
We have looked at GMWP ability to meet short-term obligations. its financial projections show that it
has enough short-term (or current) resources available to meet obligations. We have looked at the current
ratio (current assets/current liabilities) and the Acid-test (or quick) ratio (current assets-
inventories/current liabilities) and we can safely say that RCC has the ability to meet current liabilities
with its most liquid assets.
This ratio relates profits to investments. It is the rate of return on investment. Net Profit/Total Assets
As per industry standards a return of 7% is acceptable. gmwp return on investment exceeds industry
standards.
The cost capital is the required rate of return that will satisfy all capital providers. The cost of debt
(capital) is the required rate of return on investment of the lenders of a company. In GMWP case the
lender is the bank, which has loaned money @ 8.95%. RCC`s earnings from the income and expenditure
statement clearly shows at the end of the day it makes a profit of over 15%.
The profit incentive is essential part of private enterprise. Adam Smith, the founder of formal economic
study, argued that the right to make a profit is the strongest form of business motivation. In an economic
sense, profit is the reward that an owner receives for assuming the risks of investing capital in an
enterprise.
Since the entrepreneur, the person who initiates and organises a business, risks time, money, and effort,
some argue that he or she should be allowed to make as large a profit as possible. It is generally agreed
that the entrepreneur is entitled to a return on investment, and should enjoy a margin of profit to cover
possible losses in future, and a reward for efficiency and ingenuity in management.
Profit is not an end in itself; it can be just a beginning. Profit can provide seed money for more products,
more plants, more dividends, more tax payments, and more jobs. Profits can advance the well-being of
everyone--businessmen and entrepreneur, consumers and producers, investors and non-investors.