ShoeKraft

BUSINESS PLAN PRESENTATION

By: 03 Pooja Aggrawal 08 Biswarup Basu 20 Disha Goel 25 Kushal Gupta 35 Ankit Mehta 44 Pratik Sahu

Elevator Pitch

We make custom-made formal shoes Target Segment: Working Men There is a need to de-commoditize formal shoes We also make comfortable jootis Differentiation from competitors:

Handcrafted for superior quality Choice of fit and design Door to door delivery

Vision

To be the most favored and the most valued footwear brand in next ten years.

Mission

To expand the customers expectations of value in the Indian footwear industry by taking choice of design and color to the customer, while providing superior quality and comfort.

Market Environment
Market 1. Mens footwear market - 55% of the total Indian footwear retail market.

2. Footwear industry estimated between Rs. 17,500-20,000 crores

Segment Working men who want to buy comfortable, well-fitting and good quality leather shoes and jootis at an affordable prices Growth Rate1. Growing at 10-15% a year 2. Between 2006-2011 aggregate worth increased by 200%

Key market trend 1.Increasing working population, purchasing power and image consciousness 2.Rising commoditization; loss of touch and feel

Critical success factor 1. Comfort and quality

2. Low internal cost

3. Timely Delivery

Industry Analysis
Buyer Power MODERATE High bargaining power but similar value proposition unavailable

Threat of New Entrants - HIGH

Low to Moderate investment; Value proposition and business model imitable

Rivalry in Industry HIGH Many shoe-producers, but nobody with the same value proposition

Threat of Substitutes - HIGH

High number of alternatives in organized and unorganized sector

Supplier Power LOW Many supplier alternatives available

Visible Illustration of Market Place

Value Proposition, Key Product/Services & Differentiation

Value Proposition
Customization Comfort Convenience

Key Products & Services

Mens Formal Shoes Mens Jootis

Differentiation

Order taken from and product delivered to customer premises Customer-specific design and made-to-fit

Competitive Scenario and Entry Barriers

Competitive scenario Entry Barriers

Organized retail outlets like Bata, Red Tape, Aldo, etc E-Commerce sites like jabong.com, bestylish.com, etc Unorganized sellers like street vendors and cobblers Low competition in custom-made shoe business

Low to moderate investment High risk of product imitation High risk of business model and value proposition imitation

Operational Model
Customer visits website, submits query

Revenue Drivers:Manager calls customer, schedules appointment

Billing

1. Need for comfort, design

2. Marketing Activities

3. Repeat Customers

Finished product delivered to customer

Cost Drivers:Salesman sent to customer for order

1. Raw materials 2. Labor 3. Premise Rent

Order conveyed to cobbler

Sales and Marketing Strategy

Positioning : Providing added value to customers at competitive prices to fill the existing gap between shoes sold by cobblers and those sold by retail brands. Sales & distribution strategy:

High cost

Low quality

High quality

Direct Sales Force Leveraging customer service to build loyalty Online selling of popular designs by 3rd year , retail store by 4th year Word-of-mouth marketing, pamphlets, online ads by 2nd year Advertising expenses: Rs 5000-10000 for the 1st year
Low cost

Key alliances or partnership: None for the first year. Later we may sell popular designs online and partner with popular e-commerce sites like: Myntra.com Jabong.com Bestylish. com
Pricing approach: Mark-up Pricing Reference Pricing Will not vary with demand Metrics to measure market traction: Number of unique users Average revenue per user Number of websites used

The Team

Ankit Mehta Partner & Manager Background : I.T & Family Business

Biswarup Basu Partner & Business Development

Pratik Sahu Partner & Business Development 2 years in I.T (Requirement analysis and application development)

Disha Goel Partner & Design Head

Pooja Agrawal Partner & Business Development

Kushal Gupta Partner & Operations

I.T . (Expertise: Good people skills)

Experience in shoe design

Family Business

Mechanical Engineering

Organization Structure:

Number of full-time Employees: 5

Manager: 1 Cobblers: 2 Salesmen: 2 Design Interns: 2

Manager Salesmen (2) Design Interns (2)

Number of part-time Employees: 2

Cobbler (2)

Financials

Break-even Sales: 1140 units of formal shoes Key Assumptions:

Formal shoes primary source of revenue

Jooti sales seasonal Leather not bought at wholesale rate for 1st year Collection period same as delivery period (COD) Cobblers not working full-time till sales pick up With existing model: Alberto Torresi, Pantaloons, Beckett Simonon

Potential Acquirers:

With a retail store-based model: Regal Shoes, Baluja Shoes, Metro Shoes, Mochi

Capital

Initial Investment: Rs. 6,50,000

Rs. 3,02,000 for initial set-up Rs. 12,500 annual charges (Brochure, Site, Samples) Rs. 2,85,500 working capital

Rs. 50,000 contingency

Break-even in second year Investment/person for 1st year: Rs. 108333.34 Equity Sharing:

25% for full-time manager 15% for other team members

Scenario Break-down

Operational + Initial investment break-even = 1170 formal shoes Conservative: Break-even and marginal profit in second year; healthy profits in third Best Case: Marginal profit in first year Worst Case: Sales do not respond to marketing activities; monthly break-even targets not met

Risks and Gaps

Company specific risk Company is highly dependent on the skill sets of the cobblers Dependent on the word of mouth advertisement Need to sell about 100 pairs of shoes in a month to achieve break-even Market specific risk Customer loyalty towards the established brands Less frequency of purchase Sustainability of the business model

Appendix