bcom final report- formatted 2
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This Report Contains
Core Idea of the Businessand Product
Operational andFinancial Feasibility
Marketing Plan
Growth and ExpansionStrategy
Date:May24201
0
GroupNo.
10
Reeds Footwear
Business Plan
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Reeds FootwearA Business Plan
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Reeds Footwear
A Business Plan
Prepared For
Ms. Nyla Ansari
Lecturer, Business Communication
Institute of Business Administration
Prepared By
Nadia Naeem
Sarah Hussain
Mudassir Ali Soomro
Areeb Ekhlaque
Mohammad Salman Ghani
May 24, 2010
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Reeds FootwearPage 4
Contents
Executive Summary 5
Core Idea of the Business 6
Purpose 7
Tagline 7
Positioning 7
USP 7
Outlet Locations 8
Demographic Analysis 8
Product Categories 9
Methodology and Resources 9
Customer and Supplier Profile 10
Major Competitors 10
Operations 12
Marketing Plan 15
Financial Feasibility 16
Growth and Expansion Strategy 20
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Business Plan Page 5
Executive Summary
This project for Business Communication is aimed to serve as a
tool for relaying to potential investors and stakeholders the worth,
feasibility and viability of a business venture that has been care-
fully devised in order to convince and persuade these stakeholdersinto developing an interest in this plan.
The business venture, in a nutshell, is a service that sells custom-
ized formal shoes for men. It is aimed at creating a different,
unique market offering and targets a niche market that appreciates
choice, freedom of expression and convenience.
The business report has been structured into segments, each of
which focuses on a particular aspect of the service. These aspects
are basically the functional departments of the service: Marketing,
Operations, HR and Finance. Each department has been managed
by a particular representative of the company, such that we havebeen able to capitalize on each of the management and communi-
cation strengths of our members.
The major tools and focus used for communication were by em-
ploying a clear definition and purpose for this report, by maintain-
ing the emphasis on the salient features consistently and by using
our tools of persuasion, which have been specifically focused upon
in our marketing section.
This report is in essence, strong in terms of communication for it
goes into just the necessary amount of detail and uses precise tools
and methodology in order to make its point and create effective
communication.
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Reeds FootwearPage 6
Core Idea of the Business
There is a shift in consumer markets towards
distinctiveness and greater customization. Even
though the apparel industry has captured thistrend, no such change is seen in the footwear in-
dustry. Our business is aimed at delivering the
superior fit and comfort that only customized
shoes can provide to customers. We provide
high quality, premier leather shoes to cater to
the needs of the high-end middle-aged male
customer.
We bring total shoe design and customization to
everyone whos serious about expressing their
individuality and achieving peak performance.
Visit our store where an expert will guide you to
the three step customization experience. It
starts with an individual computerized fit for
each foot, so no matter what design you havechosen, your finished shoe will be unique to
you. Now nothing can stand in your way.
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Business Plan Page 7
Purpose
There has always been a disparity between the
product available in the market and the image
of that product that the customer has in his/her
mind. A buyer is never satisfied with his pur-
chase when his needs arent satisfied. And here
we come not just to satisfy our customers but to
delight them. This is our basic purpose of com-
ing up with the idea of commencing this type of
business.
Tagline
Restart your artdesign your own.
Positioning
A customized footwear line for the corporate
male and youngsters
USP
Customization of colour, fabric, design and fit
A 30 day money back guarantee
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Reeds Footwear
Zamzama, Defence
Pak-Tower
Dolmen
Mall, Tariq
Road
Page 8
Locality of our Exclusive Outlets
Pakistani Demographics (2009-2010)
Roughly 36% of the total population of Pakistan
is between the ages 20 and 35.
Approximately 22% of the population falls be-
tween 25 and 40, which we classified as corpo-
rate males.
49% of our population are youngsters who have
keen interest in sports.
Source: Federal Statistics Board of Pakistan
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Page 9
Methodology and Resources
The business will operate from a flagship retail
outlet in Zamzama, Karachi which is one of the
biggest markets of consumer items in the city.
Space for the outlet has been identified and pre-
liminary negotiations have begun.
The craftsmen and machinery can be acquiredfrom the ShoeStore which has announced its
closing. This saves training cost for the human
resource and high initial cost for new machinery
and equipment.
Product Categories
Casual and formal shoes for men.
Sneakers and sports shoes for youngsters
Business Plan
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Reeds FootwearPage 10
Key suppliers have been identified and contrac-
tual discussions are underway.
Customer Profile
LocalityClifton, DHA, K.D.A, Gulshan.
Male, belonging to Elite class who are conscious
about their dressing and lifestyle.
Young boys and sportsmen of ages 20-30.
Corporate males of ages 25-40.
Supplier Profile
Leather is supplied from the Pakistan Leather
Manufacturer, situated in Punjab.Other raw materials for the trim department are
bought from factories in Kasuri, Punjab.
Trained employees hired to supply the finished
shoes to our specific outlets.
Major Competitors
ENGLISH BOOT HOUSEPark Towers
Shop #120, Shahrah-e-Firdousi
Seaside, Clifton
Tel: (92-21) 3-583-0294, 3-583-0217
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FOOT PRINT (CUSTOM-MADE SHOES)
Shop #1, 10-C, 5th Commercial Lane, Zamzama
Phase 5, D.H.A.
Karachi, Pakistan.
Tel: (92-21) 3-537-1717
ZAPATERIA
Shop #1, Plot 40-C, Street 10, Badar Commercial Area
Phase 5, D.H.A.
Karachi, Pakistan.
Tel: (92-21) 3-534-1206
URBAN SOLE
Dawood Center 124-R, Shop #3Block 2, Main Tariq Road
Karachi, Pakistan.
Tel: (92-21) 3-454-8281
Atrium Mall, GF 54-33, Atrium Mall, Saddar
Karachi, Pakistan
Tel: (92-21) 3-564-1013
Page 11Business Plan
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Reeds FootwearPage 12
Operations
People who want to buy customize shoes canvisit our exclusive outlet and can order of theirown choice or from our catalogue. Footwear can
be defined as garments that are worn on thefeet. Footwear has become an important com-ponent offashion accessories.The leather is bought from the Pakistan LeatherManufacturer situated in Kasuri, Punjab. Thenthe leather is used to fulfil the need of the cus-tomers through different departments.
Clicking or Cutting DepartmentIn this department, the top part of the shoe orthe "upper" is made. The clicking operative isgiven skins of leather, mostly cow leather butnot restricted to this type of leather. Using metalstrip knives, the worker cuts out pieces of vari-ous shapes that will take the form of "uppers".This operation needs a high level of skill as theexpensive leather has to be wasted at the mini-mum level possible. Leather may also have vari-ous defects on the surface such as barbed wire
scratches which needs to be avoided, so thatthey are not used for the uppers.
Closing or Machining DepartmentHere the component pieces are sewn together byhighly skilled machinists so as to produce the
http://www.teonline.com/textile-accessories/fashion-accessories/footwear.htmlhttp://www.teonline.com/textile-accessories/fashion-accessories/http://www.teonline.com/textile-accessories/fashion-accessories/http://www.teonline.com/textile-accessories/fashion-accessories/footwear.html -
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Reeds FootwearPage 13
completed upper. The work is divided instages. Various edge treatments are also doneonto the leather for giving an attractive look tothe finished upper. At this stage only, the eyelets
are also inserted in order to accommodate thelaces in the finished shoes.
Lasting & Making DepartmentThe completed uppers are molded into a shapeof foot with the help of a "Last". Last is a plasticshape that simulates the foot shape. It is laterremoved from the finished shoe to be used fur-ther in making other shoes. Firstly, an insole tothe bottom of the last is attached. It is only a
temporary attachment. Sometimes, mostlywhen welted shoes are manufactured, the insolehas a rib attached to its under edge. The upperis stretched and molded over the last and at-tached to the insole rib. After the procedurecompletes, a "lasted shoe" is obtained. Now, thewelt- a strip of leather or plastic- is sewn ontothe shoe through the rib. The upper and all thesurplus material is trimmed off the seam. The
sole is then attached to the welt and both arestitched together. The heel is then attachedwhich completes the "making" of the shoe.That was the process for heeled shoes. When aflat shoe is in the making, there are considerably
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Business Plan Page 14
fewer operations. The insoles in this case is flatand when the uppers are 'lasted', they are glueddown to the surface of the inner side of the in-sole. The part of the upper, that is glued down,is then roughed with a wire brush to take off the
smooth finish of the leather. This is done be-cause rough surface absorbs glue to give astronger bond. The soles are usually cut, fin-ished and prepared as a separate component sothat when they are glued to the lasted upper, theresult is a complete and finished shoe. Soles canalso be pre-molded as a separate component outof various synthetic materials and again glued tothe lasted upper to complete the shoe.
Finishing Department and the Shoe RoomThe finishing of a shoe depends on the materialused for making it. If made of leather, the soleedge and heel are trimmed and buffed to give asmooth finish. To give them an attractive finishand to ensure that the edge is waterproof, theyare stained, polished and waxed. The bottom ofthe sole is often lightly buffed, stained and pol-ished and different types of patterns are markedon the surface to give it a craft finished look. A"finished shoe" has now been made.For shoe room operation, an internal sock is fit-ted into shoe which can be of any length- full,half or quarter. They usually have the manufac-
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Reeds FootwearPage 15
Marketing Plan
We will be advertising in popular magazines
and local publications that are aimed at the
target market we plan on selling our productto.
Online advertising on social networking sites
such as Orkut, Twitter and Facebook, which
are used by a wide number of corporate males
and youngsters who are of school and univer-
sity going age.
Marketing partnerships and alliances will be
formed with schools, universities, corporate
turers details or a brand name wherever appli-cable. Depending on the materials used for theuppers, they are then cleaned, polished andsprayed. Laces and any tags that might have tobe attached to the shoes, such as shoe care in-
structions, are also attached. The shoes, at last,get packaged in boxes. These operations can bechanged to meet the needs of the customer.
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firms, government organizations, mens ap-
parel stores and sporting goods stores.
Word of mouth.
Target MarketLocalityClifton, DHA, K.D.A, Gulshan.
Male, belonging to Elite class who are conscious
about their dressing and lifestyle.
Young boys and sportsmen of ages 20-30.
Corporate males of ages 25-40.
Market Research
We have conducted telephonic and survey-
based interviews with sample audiences in ourtarget market.
Localized and extensive secondary and primary
market research has been undertaken.
Ethnographic and observational study has also
been carried out.
Business Plan Page 16
Financial FeasibilityStart-up Capital needed is estimated to bePKR 13.8 Million out of which 8.8 million will
be financed internally and 5 million exter-
nally.
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PKR 2 million will be kept as a reserve in a
bank at a rate of 12% interest annually in or-
der to meet the requirements of negative cash
flow for initial four years or to finance any un-
expected problem in the business.External funding is divided into 20 equal por-
tions and each portion is work PKR 250,000.
These portions have been created for inves-
tors looking to make 14% ROI per year, for a
initial period of 5 years. Each investor will re-
ceive PKR 35,000 yearly as a return on his/
her initial investments.
It is estimated that the firm will reach Break-even by the 51st month of its operation, when
operations will yield positive returns for the
business. After 51 months, Profit Margin is ex-
pected to remain 17%-19% each year.
Initial inventory to be bought in the start of
the 1st month of operations is estimated to be
PKR 260,000, after which Sales are expected
to start.Cost of Goods Sold will represent 40% of the
sales.
Advertising, utilities, labour and transport
will be our biggest expenditures with Adver-
Business Plan Page 17
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tising being the highest in the first few months
so that the target market is made aware of the
existence of this business. After that the ad-
vertising expense is decreased as innovative,yet cost-effective techniques will be employed
to promote the business to the target market,
which cannot be used initially as awareness
will not be present for the business.
Depreciation is done under the straight line
method for a period of 10 years.
Estimated financial results for the first five
years of operation follow.
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Year1
Year2
Year3
Year4
Year5
Revenues
PKR650,0
00
PKR1,1
50,0
00
PKR1,4
50,0
00
PKR1,7
00,0
00
PKR2,3
00,0
00
CostofSales
260,0
00
460,0
00
580,0
00
680,0
00
920,0
00
GrossProfit
390,0
00
690,0
00
870,0
00
1,0
20,0
00
1,3
80,0
00
InterestEarned
240,0
00
180,93
7
147122
129184
123,4
78
OperatingExpenses
400,0
00
415,0
00
425,0
00
440,0
00
455,0
00
DepreciationExpense
7800
7800
7800
7800
7800
ROIExpense
700,0
00
700,0
00
700,0
00
700,0
00
700,0
00
Taxes
14390
29,9
34
33,8
09
35,0
46
38,1
56
NetProfit/Loss
-492,1
90
-281,79
7
-149,4
87
-33,6
62
302,5
22
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Business Plan Page 20
Growth and Expansion Strategy
The business idea that has been presented has
much opportunity and potential to grow in the
long term. To start, the business will establishitself in the high-end male niche market, build-
ing a reputation for quality and comfort.
Our short -term expansion strategy is two-
pronged:
1. We are currently in the negotiation phase of
a partnership contract with NIKE and expect
within the year to expand into a line of cus-tomised sportswear to capture younger cus-
tomers.
2. Take the business virtual by allowing cus-
tomers to participate in the design and cus-
tomisation process and consequently provid-
ing shipping option to customers residing
outside of Karachi
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Business Plan Page 21
The long-term strategy for growth includes
1. Acquiring the latest German three dimen-
sional digital technology which enables many
manufacturing processes from foot mappingand cutting to stitching to be digitally exe-
cuted through robotics cutting costs, turn-
over time per shoe and enabling greater flexi-
bility.
2. Opening retail outlets in major cities of Paki-
stan including Lahore, Islamabad and Mul-
tan.
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Reeds FootwearPage
Conclusion
On the basis of the exhaustive financial and op-
erational feasibility analysis and our sound mar-
keting plan, you can see that our business ideahas great potential to cater to an untapped mar-
ket and provide impressive returns on your in-
vestment. Project
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Phone: 111-1-REEDSE-mail:info@reedsfootwear.com
www.reeds footwear.com
115AJason Trade TowersSharae FaisalKarachi
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