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Transcript of Broadway Dairy Project Muhammad Jahanzaib 11022720-028
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Business Plan
On
[Broadway Dairy]
Business Plan Projects Submitted to Faculty of Management and Administrative
Sciences in Partial Fulfillment of Requirements for the Subject of
Entrepreneurship
Submitted By:
Ms Scholar: Muhammad.Jahanzaib (11022720-028)
Ms Scholar: Muhammad. Shahid (11022720-008)
Ms Scholar: Luqman Ahmed (11022720-019)
Ms Scholar: Abu Sufyan (11022720-035)
MBA 3rd(3.5Year)
Session (2011-2015)
UNIVERSITY OF GUJRAT
Date of Submission 04/02/2013
Name of Program Coordinator: Mr. Waqas Manzoor Dar
Signature of Program Coordinator: ____________________
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DedicationI dedicate to our dear Parents whose prayers are always with us
Friends, University Of Gujrat and my respectable
Mr. Waqas Manzoor Dar whose guidance
Is always with us
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Acknowledgement
All praise to Allah, the most merciful, kind and beneficent, and the source of all
knowledge, wisdom within and beyond our comprehension. He is the only God, who can
help us in every field of life. All respect and possible tributes goes to our Holy Prophet
Mohammad (SAW), who is forever guidance and knowledge for all human beings on
this earth.We are very thankful to the most merciful and Almighty Allah who gives us the
strength that we fulfill our task. We are very thankful to our parents who give us a
chance to learn better for bright future. We are very thankful to ourteacher who is
polished our personality and gives personal and professional skill. We are really very
thankful toMr. waqas Manzoor Dar for her cooperative attitude during the completion
of our project work. He helped and supported us during completing project.
We are really very thankful to one of our friend Mr. Furqan Hameedfor his cooperative
attitude during the completion of our project work. He helped and supported us during
gathering and analyzing information.
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Executive summary
Opportunity and problem analysis
Today it is a major problem for the people that they want to consume quality dairy
products but they dont get these products with purity. Secondly several sweets, bakes
and restaurant operators are using milk as raw material and then convert it into cream,
ghee and condensed milk, we will provide them these products in better quality and low
cost.
Business plan: We will collect milk from producers at low cost and then refine it in
different products like cream, butter, ghee and condensed milk. We will provide these
products to industrial consumers for further production of products.
Business form: We are four partners in this business everyone will take active part in
the management and will bring equal capital. Profits and losses of the organization will
be distributed equally.
Marketing: We have selected Gujranwala as target market, we have adopted several
marketing strategy to capture the customers from this market. We have made
competitors and industrial analysis of this market.
Financial plan
Total investment 3000000/-
Mr. Jahanzaib750000/-
Mr. Luqman750000/-
Mr. Shahid750000/-
Mr. Abu Sufyan 750000/-
We have divided this investment in different initial requirements like purchase of fixed
assets, legal charges, cash in hand etc.
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Table of Contents
Contents
Dedication .................................................................................................................................................... 2
Acknowledgement ...................................................................................................................................... 3
Executive summary .................................................................................................................................... 4
Table of Contents ....................................................................................................................................... 5
Business plan ................................................................................................................................................. 9
Vision .............................................................................................................................................. 10
Mission ........................................................................................................................................... 10
Objectives ...................................................................................................................................... 10
SWOT ANALYSIS ............................................................................................................................ 10
PEST ANALYSIS ............................................................................................................................. 11
Porter 5 force modal ........................................................................................................................ 12
Business modal ................................................................................................................................ 13
Business location ......................................................................................................................... 13
Form of organization .................................................................................................................... 13
Intellectual Property ..................................................................................................................... 14
Organizational structure .................................................................................................................. 15
Organizational hierarchy chart ................................................................................................... 15
Office boy....................................................................................................................................... 16
Two cream refiner ........................................................................................................................ 16
Butter refiner ................................................................................................................................. 16
Powder milk refiner ...................................................................................................................... 17
Condensed milk refiner ............................................................................................................... 17
Products Packer ........................................................................................................................... 17
Working hours of labor: ............................................................................................................... 17
Production unit .............................................................................................................................. 17
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Salaries .......................................................................................................................................... 17
Compensation: .............................................................................................................................. 18
Salary payment: ............................................................................................................................ 18
Leaves:........................................................................................................................................... 18
Marketing plan ............................................................................................................................................ 19
Industry analysis ............................................................................................................................... 19
Competitors analysis ....................................................................................................................... 19
Market research ................................................................................................................................ 20
Potential customers ..................................................................................................................... 20
Questionnaires Results ................................................................................................................... 21
Individual customer results ......................................................................................................... 21
Industrial customer results .......................................................................................................... 30
Market objectives ............................................................................................................................. 39
Positioning strategies ....................................................................................................................... 39
Segmentation ................................................................................................................................ 39
Geographical segmentation .................................................................................................... 40
Demographical segmentation................................................................................................. 40
Behavioral segmentation......................................................................................................... 40
Competitors edge ........................................................................................................................ 41
Marketing mix ................................................................................................................................ 41
Product ....................................................................................................................................... 42
Price ........................................................................................................................................... 42
Place........................................................................................................................................... 42
Promotion .................................................................................................................................. 43
Operational plan ......................................................................................................................................... 46
Collection and storage of milk ........................................................................................................ 46
Cream refining .................................................................................................................................. 46
Cream packing .............................................................................................................................. 47
Butter .................................................................................................................................................. 47
Butter packing ............................................................................................................................... 47
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Ghee ................................................................................................................................................... 47
Condensed department ................................................................................................................... 47
PRODUCTION LAYOUT ................................................................................................................. 48
Financial Plan .............................................................................................................................................. 49
Objectives: ......................................................................................................................................... 49
Capital Arrangement ........................................................................................................................ 50
Use of funds: ..................................................................................................................................... 50
Startup cost: .......................................................................................................................................... 50
Projected Financial statements .............................................................................................................. 51
Projected Income Statement ...................................................................................................... 51
Projected Cash flow Statement.................................................................................................. 52
Projected Balance Sheet ............................................................................................................. 53
Working Notes .............................................................................................................................. 54
1. Sale Prediction .......................................................................................................................... 54
2. Sale Forecasting ....................................................................................................................... 54
3. Quantity of raw material .......................................................................................................... 54
4. Cost of Good Manufactured.................................................................................................... 55
5. Manufacturing overhead ......................................................................................................... 55
6. Fuel charges ............................................................................................................................. 55
7. Factory Depreciation ................................................................................................................ 56
8. Administrative Expenses ......................................................................................................... 56
9. Plant and machinery ................................................................................................................ 57
10. Equipments ........................................................................................................................... 57
11. Furniture and Fixture............................................................................................................ 57
12. Rent cost ................................................................................................................................ 58
13. Preliminary expenses .......................................................................................................... 58
14. Marketing Cost ...................................................................................................................... 58
15. Legal Expenses .................................................................................................................... 59
16. Overall depreciation ............................................................................................................. 59
Financial Analysis of Business ............................................................................................................... 60
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Internal rate of return ................................................................................................................... 60
Payback Period ............................................................................................................................. 60
Net present value ......................................................................................................................... 61
Profitability Index .......................................................................................................................... 61
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Business plan
This business idea is come up after assessing the environment of different cities
of Pakistan by four people who were friends in a university and they decided to start a
profitable business with the name of Broadway Dairy in Gujranwala region. We will
provide the products cream, condensed milk, powder milk, butter and ghee after refining
the milk.
For this purpose they decided to go for a partnership in which all will contribute equal
amount of capital to start up the business and will also provide some services to run the
business successfully.
Problem
From consumer point of viewit is major problem today people wants to
consume milk and different types of dairy products in pure quality but often they find
such things of low quality and at high price. Suppliers are providing such consumer
products at their own rates.
From producer point of viewin winter production of milk increases but its
consumption decreases, in such situation mostly milk is converted in powder milk andutilize in summer for consumption and adulteration.
Opportunity
We can collect milk from different villages directly and supply it to consumers at
low price with purity. In winter extra production of milk can be used to refine it in
different dairy products like cream, butter, ghee, condensed milk and powder milk.
These types of products can be utilized for production of different sweets and bakes
products.
There are many businesses that operating to produce different types of consumerproducts in which dairy products are used as raw material, usually they purchase milk
and refine it into cream, condensed milk and ghee for further use in production. We
shall provide them these products in ultimate form as they require cream, condensed
milk and ghee. We will collect milk directly from producer (milkmen) at low cost and
convert it into cream, condensed milk, powder milk and ghee and deliver it to these
businesses.
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Vision
To become the first priority of the consumers while selecting purity in Pakistan
and abroad.
Mission
Our aim is to provide pure quality dairy consumer products at low cost so that the
people can enjoy good health and taste.
Objectives To provide quality dairy products
To minimize the cost
To utilize extra production of milk in winter season
To build and maintain a strong relationship with customers
To increase the sales 10 to 20 % quarterly
To expand the business portfolio
SWOT ANALYSIS
Strength
Milk and milk product being a necessity, they would always be demand.
Direct link with the farmer ( supplier).
Low cost due to production in bulk.
Trusted for its quality and hygiene.
Weaknesses
Milk and milk product being perishable have lower shelf life.
We cant store the extra milk product due to shortage of finance .
Opportunities
We can expand our business in other cities.
Competitors are providing dairy products at higher price because they are not
consumed milk properly.
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Threats
Lower entry barriers for competitors.
Advance payment (pashgi) in rural area.
Climate change.
PEST ANALYSIS
Political
No legal restrictions to start business
Dairy products exempt from tax
Govt. makes policy to enhance milk production
Unstable political environment
Economical
More suitable as low wages rate limit
High disposable income of selected area
Social
Wellness is a core focus
Consumer are increasingly becoming more and more diet conscious
Enhance people living standard
People are well educated so they are more serious about quality of goods
Technology
High costly machinery are used to refine milk
Available the modern communication technology in a country
Transportation system is well organized
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Porter 5 force modal
Threat of new entry
Low barrier to entry
Not too expensive to enter the market
Absolute cost advantage
Bargaining power of customer
Low switching cost
Pure quality
Homogeneous product
Very large order
Bargaining power of supplier
Too much number of supplier
Similar product
No substitute
Threat of substitute
High relative price
Substitute of product not available
Industry rivalry
Low customer loyalty
Low switching cost
Many competitors
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Business modal
First of all we have analyzed the need of consumers that they have a problem of quality
for consumption of dairy products. Secondly the opportunity analysis of industrial consumers of
dairy products, these consumers purchase the milk from suppliers at high cost and then convert
this milk into different products and these products are used for further production of sweets,
bakes and restaurant products. After analyzing the need and opportunity in the market
resources are gathered, supplies are used and finished products are supplied to our consumers
and at the end feed from them is required in terms of quality and price of the products.
Business location
We are going to start our business in such area where the raw material will be
available easily and at the cheap rates. Here we can collect raw material from
producers directly and suppliers also. This is the rural area of Gujranwala, village
KotSheraQilamiansingh Road, Gujranwala. In this region there is abundance of milk
production.
Form of organization
We are four partners in this business. Everyone will contribute equal amount of
capital and actively participate in the business activities. Profits and losses of the
organization will be divided equally among the members.
Need and
opportunity
analysis
Resources
and
supplies
Production
process
Outlet/
Supplies
Feedback
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Intellectual Property
Trademark (Applied For):
The application for the registration of the below shownTrademark will be
submitted to preserve the intellectual property rights of Broadway Dairy.This trade
mark after the registration will become the exclusive identity mark of allBroadway Dairy
products. The application will be filed to the Registrar of Trademarks (Trademark
Registry Karachi) under the Trademark Ordinance, 2001 and the TrademarkRules:
2004
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Organizational structure
Organizational hierarchy chart
Abu sufyan, Muhammad Shahid, Luqman Ahmad and Muhammad Jahanzaib are
good friends and they are studying in the university. We have not noticed that the
people want to consume dairy products and due to low quality and high price they are
not consuming the dairy products. Dairy products which they are consuming affect the
health and for that purpose they have to go to doctor. With the questionnaire and
personal observation we observe that people want to consume dairy product, due to low
quality and not suitable for health do not prefer to consume dairy products. So to
provide the quality and healthy dairy products we decided to operate a business which
will provide the quality dairy products which have no effect on the health of people.
CEO & OPERATIONAL MANAGER
ABU SUFYAN
MARKETING MANAGER
M.SHAHID
FINANACE MANAGER
LUQMAN AHMAD
QUALITY INSPECTOR
M.JAHANZAIB
Office boy
Butter
refiner
Cream
refiner
Powder
refiner
Condensed
refiner
Packing Storing
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Human resource planLabor is necessary to work done of any type so we will hire the labor for this
purpose. We are the four partners who are doing the major task of the business. But
these four partners are not enough to complete the task so we hired more 11
employees for this purpose. These employees are hired on the basis of their skills and
knowledge which are checked in the interview. The interview of those employees is
taken by Abu Sufyan who is the operational manager of the business. Interview is the
best way to select the right person on the right job.
Following 11 employees are hired by interview:
Office boy
A person is requiring in outlet which we are organized in Gujranwala city. All
order is placed in outlet by customer that is fulfilled in the production department. He
must be punctual and having an attractive personality. He must have good
communication skills, effective and convincing personality and ability to greet customer
with a smiling face.
Two cream refiner
Two labors are require for the process of converting milk into cream. This is the
regular work and hiring person must be having the quality of hardworking. He will have
some experience of doing such type of work.
Butter refiner
One labor will hire for the conversion of cream into butter. This is not to hardtask. This task will complete on the machine and for the running of machine one person
will require for handling the machine. Only experience person will be hire for this job.
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Powder milk refiner
Two labors will be require for the conversion of remaining 90% milk after getting
10% cream into powder milk. This process will complete by hand as there is no special
machine for that purpose. These persons only require some years experience for that
job.
Condensed milk refiner
Three labors will be hire for the conversion of 90% milk into condensed milk by
adding some ingredients into the milk. This job requires physical efforts as it is hard task
to convert milk into condensed milk, this process in very slowly.
Products Packer
Two labors will be requiring for the packaging the butter, cream and condensed
milk. This process requires only the packaging material.
Working hours of labor:
Production unit
Working hours for different labor will be different, according to their working
conditions. The labors which will work on the production unit the time for their working
will be from 9 AM to 6 PM.
Salaries
Employee salary No of employee salary/Month salary/Annum
office boy 1 8,000 96,000
Cream refiner 2 9,000 216,000Butter refiner 1 8,000 96,000
Powder milk refiner 2 9,000 216,000
Condensed milk converter 3 8,000 288,000
Packaging staff 2 7,000 168,000
Total 1080000
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Compensation:
Workers and employees would be benefited in cash and would be given yearly
increments on theBasis of growth rate that is 10% according to financial plan.
Salary payment:
Salaries are paid to employee in the form of cash. Amount of salary are paid to
the employee at the end of month. Advance salaries are not paid to employee due to
getting high performance from employee.
Leaves:
Labor is allowed to have a leave in a month during their working month.
Employee must announce or informed to the operational manager about their leave
because manager arrange the work of that person.
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Marketing plan
Industry analysis
People are using dairy products as necessities of life. There is so much potential
in this industry, there are many local and international, branded and non-branded
producers in this industry. Branded producers those are providing quality products to
some extent but they are focusing only elite class, non-branded and local producer are
providing these products but they are not delivering purity. In that region where we are
going to start our business there many producers and suppliers of milk normally
producer(milkman) produce the milk and suppliers purchase it from them at low cost
and supply it to ultimate consumers at high cost after mixing water in it. People want to
purchase purity not the milk we will deliver them
Competitors analysis
Dairy products are become the needs of people know a days. Many suppliers are
providing these products most of them are local and without brand name. Branded
suppliers are also exist in the market but people dont want to consume their productsdue to high prices, not according to taste and use of chemicals to save the dairy
products for long period of time.
Here we have made a survey about the prices of the dairy products and we will
compare it with consumer expectations and our prices that would be charged by us.
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Brand
name
Liquid milk
Rs. / 1kg
Powder
milkRs. / 500g
Cream
Rs. / 1kg
Condensed
milkRs. / 1kg
Butter
Rs. / 1kg
Ghee
Rs. / 1kg
Haleeb 85 320
Nestle 90 250/290 340
Blueband
600
Withoutbrand
80 200 260 360 600 800
Market research
No doubt, availability of quality milk and its related products is a problem that is
being faced by every city of the Pakistan but the Gujranwala and Lahore are also facing
this problem in spite of that these cities are the biggest milk producer in the Pakistan
and also consuming it in larger quantity. I know the Gujranwala market, its consumers,
its suppliers and its producers as well. I share this thing with my partners and search a
very high potential for our business in the Gujranwala market. We will operate our
business in Gujranwala and InshaAllahwe will expand it in other cities in coming fewyears.
Potential customersThere are many suppliers in this era, but people still want to consume quality products.
For knowing the feedback of the consumers about existing products and their quality
and what kind of change they want regarding the consumption of existing products. For
this purpose we have developed two type of questionnaires; individuals questionnaire
for household consumers and industrial questionnaire for industrial consumers. Theresults of these questionnaires and its analysis are given below:
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Questionnaires Results
Individual customer results
What is economic status of you?
Frequency Percent Valid Percent Cumulative
Percent
Valid Upper 19 25.3 25.3 25.3
Middle 34 45.3 45.3 70.7
Lower 16 21.3 21.3 92.0
Poor 6 8.0 8.0 100.0
Total 75 100.0 100.0
Interpretation
The result of this question show that 45.33% middle and 25.33% upper economic
status people prefer to use our products. That is favorable for our business.
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For which purpose you use dairy product?
Interpretation
Almost 40% people are use dairy products for necessities and 24% use for need
that is showing regular customer of our business that is more positive point for
business.
Frequency Percent Valid Percent CumulativePercent
Valid Health 17 22.7 22.7 22.7
Necessity 30 40.0 40.0 62.7
Need 18 24.0 24.0 86.7
Want 10 13.3 13.3 100.0
Total 75 100.0 100.0
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Do you satisfy with the quality of those existing products?
Frequency Percent Valid
Percent
Cumulative
Percent
Valid extremely satisfy 3 4.0 4.0 4.0
Satisfy 14 18.7 18.7 22.7
Dissatisfy 45 60.0 60.0 82.7
extremely
dissatisfy
13 17.3 17.3 100.0
Total 75 100.0 100.0
Interpretation
The result of this question show that 60% people are dissatisfies the quality of
existing products. That is opportunity for our business to capture the market.
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What change would you like in the existing products?
Interpretation
The result of this question show the 62.67% people want to change the quality of
dairy products that is positive point for business give a best quality to people and charge
healthy prices.
Frequency Percent Valid
Percent
Cumulative
Percent
Valid quality change 47 62.7 62.7 62.7
price change 22 29.3 29.3 92.0
performance
change
4 5.3 5.3 97.3
Packing 2 2.7 2.7 100.0
Total 75 100.0 100.0
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Do the price relate with existing products quality?
Frequency Percent Valid
Percent
Cumulative
Percent
Valid Agree 14 18.7 18.7 18.7
strongly agree 6 8.0 8.0 26.7
Disagree 38 50.7 50.7 77.3
strongly disagree 17 22.7 22.7 100.0
Total 75 100.0 100.0
Interpretation
The result this question showing 50.67% customer are disagree the existing price
to relate the quality of products.
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Are these easily available in market?
Frequency Percent Valid
Percent
Cumulative
Percent
Valid Agree 10 13.3 13.3 13.3
strongly agree 2 2.7 2.7 16.0
Disagree 47 62.7 62.7 78.7
strongly
disagree
16 21.3 21.3 100.0
Total 75 100.0 100.0
Interpretation
The result show this question the 62.67% people disagree dairy products are not
easily available in a market. That is opportunity for business to provide easily in market.
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Are those goods are available to you in proper packing?
Interpretation
The result showing 60% people are disagreed those goods is not available in
proper form.
Frequency Percent Valid
Percent
Cumulative
Percent
Valid Agree 8 10.7 10.7 10.7
strongly agree 5 6.7 6.7 17.3
Disagree 45 60.0 60.0 77.3
strongly
disagree
17 22.7 22.7 100.0
Total 75 100.0 100.0
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What price you will be willing to pay in order to get desire quality?
Frequency Percent Valid Percent Cumulative
Percent
Valid Low 9 12.0 12.0 12.0
Equal 45 60.0 60.0 72.0
High 21 28.0 28.0 100.0
Total 75 100.0 100.0
Interpretation
The result shows 60% people willing to pay equal price to get desire quality.
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Would you like that these products are delivering to you at home?
Frequency Percent Valid
Percent
Cumulative
Percent
Valid Agree 20 26.7 26.7 26.7
strongly agree 34 45.3 45.3 72.0
Disagree 14 18.7 18.7 90.7
strongly disagree 7 9.3 9.3 100.0
Total 75 100.0 100.0
Interpretation
The result showing that 45.33% people are agreeing to like that these products are
delivered to at home,
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Industrial customer results
Which business you are operating?
Frequency Percent Valid Percent Cumulative
Percent
Valid Sweets 10 40.0 40.0 40.0
Bakes 5 20.0 20.0 60.0
ice cream 4 16.0 16.0 76.0
Restaurant 6 24.0 24.0 100.0
Total 25 100.0 100.0
Interpretation
The result showing this question 40% customer are operating sweet related
business and 24% customer operate restaurants. That are benefit for business, we are
produce these products that are mostly use in sweet and restaurant business.
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How do you manage the material related the dairy products.
Frequency Percent Valid Percent Cumulative
Percent
Valid self-production 4 16.0 16.0 16.0
from suppliers 21 84.0 84.0 100.0
Total 25 100.0 100.0
Interpretation
The result shows this question 84% customer arrangement of raw material from supplier
they are benefit for our business.
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Which products you frequently utilize as raw material?
Frequency Percent Valid
Percent
Cumulative
Percent
Valid Milk 4 16.0 16.0 16.0
Cream 1 4.0 4.0 20.0
butter and ghee 6 24.0 24.0 44.0
condensed milk 1 4.0 4.0 48.0
more than one 13 52.0 52.0 100.0
Total 25 100.0 100.0
Interpretation
The result show this question 52% customer are use more than one products
(milk, butte, ghee and milk) as raw material that is opportunity we produce many
products at a time
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In which routine you order for the raw material?
Frequency Percent Valid
Percent
Cumulative
Percent
Valid daily basis 10 40.0 40.0 40.0
two time in a
week
6 24.0 24.0 64.0
four time in a
week
9 36.0 36.0 100.0
Total 25 100.0 100.0
Interpretation
The result showing this question 40% customer purchase on daily basis, these
customers are most important for our business. Because our production of products on
daily basis.
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Do you satisfy with thee exiting quality of raw material?
Frequency Percent Valid
Percent
Cumulative
Percent
Valid strongly satisfy 4 16.0 16.0 16.0
Satisfy 6 24.0 24.0 40.0
strongly
dissatisfy
8 32.0 32.0 72.0
Dissatisfy 7 28.0 28.0 100.0
Total 25 100.0 100.0
Interpretation
The result shows this question 32% customer is strongly dissatisfy the quality of
exiting quality of the raw material. This is our opportunity to provide the best quality
products and capture the whole market.
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Do the raw material is providing you in proper packing?
Frequency Percent Valid
Percent
Cumulative
Percent
Valid strongly satisfy 1 4.0 4.0 4.0
Satisfy 10 40.0 40.0 44.0
strongly
dissatisfy
9 36.0 36.0 80.0
Dissatisfy 5 20.0 20.0 100.0
Total 25 100.0 100.0
Interpretation
The result shows this question 40% customer is satisfy the packing of existing
products. On the other hand 36% customers are dissatisfying the packing of existing
products.
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Do you satisfy with existing price of raw material?
Frequency Percent Valid
Percent
Cumulative
Percent
Valid strongly satisfy 1 4.0 4.0 4.0
Satisfy 6 24.0 24.0 28.0
strongly
dissatisfy
6 24.0 24.0 52.0
Dissatisfy 12 48.0 48.0 100.0
Total 25 100.0 100.0
Interpretation
The result shows this question 48% customer is dissatisfy with existing price of
raw material, our opportunity to provide fewer prices against market and capture whole
market.
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Which kind of change you want from the raw material?
Frequency Percent Valid
Percent
Cumulative
Percent
Valid Price 4 16.0 16.0 16.0
Quality 11 44.0 44.0 60.0
both same as
existing
10 40.0 40.0 100.0
Total 25 100.0 100.0
Interpretation
The result shows this question 44% customer are change the quality of raw
material.
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How much you are willing to pay for desired quality?
Frequency Percent Valid Percent Cumulative
Percent
Valid Low 5 20.0 20.0 20.0
High 11 44.0 44.0 64.0
same as existing 9 36.0 36.0 100.0
Total 25 100.0 100.0
Interpretation
The result shows this question 44% customer is willing to pay high price against
best quality of raw material. That is benefit for our business to earn healthy profit.After
knowing the feedback of the consumers about existing products, we have adopted the
following marketing strategies to capture the market.
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Market objectives
While targeting the Gujranwala market we have defined the following objectives:
Delivering purity to our consumers
Making direct relations with the customers
Retain the customers loyalty
Market strategies
To attain our market objectives we have to set out the following market strategies:
To delivering purity to our consumers
To making direct relations with the customers
To retain the customers loyalty
Positioning strategies
For survival among the competitors, gaining the customers priority and creating
values for customers we have to adopt the following strategies:
Segmentation
Before going to any market we have to make segmentation of our market because
no one have the same taste, consumption pattern and every market have different
potential related to a product. Our purpose is not only to focus the ultimate consumers
but we will provide raw material to industrial customers those are operating the business
of sweets, bakes, ice cream or hoteling. For this purpose Broadway Dairy have
segmented our market into different segments, that are:
Geographical segmentation:
Country Pakistan
City Gujranwala
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Demographical segmentation:
Upper class
Middle class
Lower class
Behavioral segmentation:
Household consumers
Industrial consumers
Geographical segmentation
No doubt, availability of quality milk and its related products is a problem that is
being faced by every city of the Pakistan but the Gujranwala and Lahore are also facing
this problem in spite of that these cities are the biggest milk producer in the Pakistan
and also consuming it in larger quantity. I know the Gujranwala market, its consumers,
its suppliers and its producers as well. I share this thing with my partners and
geographically selected a very high potential market for our business.
Demographical segmentation
Individuals have different taste, requirements, consumption patterns and monthly
incomes. According to these characteristics we have divided our market into three
classes and Broadway will target its consumers according to their status.
Behavioral segmentation
Broadways main customers are industrial consumers; according to the purpose
of consumption we have segmented our consumers in to following to classes:
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Household consumers
Ultimate consumers are our household customers who utilize the dairy products
for ultimate consumption.
Industrial consumers
Industrial consumers are our main customers; they utilize the dairy products for
production different consumer products. Sweets, bakes, ice cream and hoteling are the
business that has been selected as customers. In the Gujranwala region many
businesses are operating that are providing different consumer products in which dairy
products are used as raw material, these business operators feel that they should be
provided condensed milk, cream and ghee with low cost, they usually purchase milk
and convert it into cream and condensed milk but they do this in small quantity so their
cost is high they require that they should be provided with these products in ultimate
form at low cost and with high quality. It is the basic opportunity for us .
Competitors edge
No doubt several suppliers are providing these products but mostly in this area
are providing at small scale and with interference of middle man that collect the milkfrom supplier and then supply it after mixing water in it. Whereas we will produce these
products at large scale and eliminate those middle men, we will provide these products
at low cost and extreme quality.
Marketing mix
After selecting the target market we have to applied some tactical and controllable tools
to produce the response in the selected market, these are called marketing mix. There are four
P, s of marketing mix that would be focused for attracting the potential costumers.
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Product
Products that we are going to deliver our customers are cream, condensed milk,
powder milk, butter and ghee. We will provide these products in absolute quality, proper
packing and at low cost.
Branding
Products will be provided to our customers with separate brand names like
crepito for cream, Desi for ghee and butter, and puritatum for condensed milk.
Packing
All products will be available in proper packing, small packs of 1 kg and 500g for
households and big packs for industrial consumers will be provided to our customers.
Price
Prices of the products are set out after inspecting the behavior of the consumers
about existing products with relation to their quality.
Penetration pricing
Penetration pricing strategy will be adopted for capturing the market, because
customers are willing to pay same or low price for quality consumption.
Place
Production process is conducted in rural area where raw material is easily
available. Whereas the outlet for contact with customers will be open in urban areas
where we will supply to housed hold consumers and industrial consumers.
Factory sight:
Village KotShera
QilaMian Singh road
Gujranwala
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Marketing outlet:
Tanveer center
Nowshehra road
Gujranwala
Promotion
For promotion of our business and for the awareness of people about our
organization and making the strong relations with the customers we have taken the
following steps:
Promotional objectives
o To aware the customers about the our products
o To making strong and loyal relation with customers
o To attracting the more customers for increasing sales
Opening ceremony
We will arrange an opening ceremony in which we will invite our potential industrial
consumers and introduce them with our business and suggest them to try this strategy,
purchase raw material from us, and reduce the cost of their products.
Print advertising
Through print media advertising we have attempted the following steps to
promote our business:
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Visiting card
The customers that will visit our organization we will provide them our visiting
card for direct marketing we have printed out the visiting cards for the customers.
Newspaper
For door to door advertisement through print media we will advertise weekly on
every Sunday in daily express newspaper Gujranwala.
Pamphlets
For promotion of business and introducing of a business we have printed out
pamphlets through which customer will get acknowledgement about our products and
key purposes.
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Broad costing
For advertising through electronic media we have taken the following steps:
o Cable ads
Cable ads will be broadcast on Gujranwala TV that will promote our business
around the city.
o Facebook ID:
We have created a page with name of Broadway dairy at Facebook for gaining
the peoplesperception and suggestions about our organization.
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Operational plan
Operations of the organization are divided in to different departments because
we have to refine the milk into different products like cream, condensed milk, powder
milk, butter and ghee. We shall purchase milk from different producers at different
locations and store it in one tank. The whole operations of the organization are divided
into following departments.
Collection and storage of milk
First step of business operations is collection of milk from different producersfrom different villages of the region. For this purpose a vehicle will be used, that will go
at the doors of the producers and collect milk, a person will be appointed with the driver
that will check the quality and quantity of milk. After collecting the milk tanker will be
bring to factory. Here for the storage of milk at cold place, chiller of 1000 liters is
purchased the whole milk will be stored in this chiller and supply to other departments
as they required.
Cream refining
After collection of milk the next step is to refine it in to cream for this two refining
cream machines will be used. After refining the milk into cream, milk will be divided into
two i.e. cream and refined milk. Both these products will be used into further four
dimensions. Cream into butter or will be packed as final product. Refined milk will be
used four production of condensed milk or powder milk.
Lets discuss these four dimensions in to detail:
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Cream packing
After refining the milk in to two parts, cream will be sent to packing department,
after packing it will be stored as final product in cooling system, from where it will be
dispatched to consumers.
Butter
Total cream will not be packed but some part of the cream will be converted in to
butter. For this purpose cream will be sent to butter department a laborer will convert it
in to butter. After completion of butter process, butter will also be sent into two
dimensions. Either it will be sent to packing department or further convert into ghee.
Here I would like to explain these two dimensions:
Butter packing
After completion of butter process, butter will be sent to packing department.
Where it will pack and after that it will be sent to store.
Ghee
Here the further operation will be applied on butter and it will convert it into ghee,
mostly people like to consume ghee rather than butter so we will convert it into ghee.
Here the cream process ended and ghee will be sent to packing department and after
finally it will be stored.
Condensed department
After refining the milk into cream the remaining refined milk will be sent to condensed
Department, The after process that converted into cream.
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PRODUCTION LAYOUT
RAW MATERAIL
STORAGE
MILK REFINING
PROCESS
CREAM REMAINING MILK
CONVERT INTO CONDENSED MILK POWDER MILK
PACKING
STORE
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Financial Plan
Financial Plan ensure that there are adequate funds available to acquire the resources
needed to help the organization achieve its objectives; ensure costs are controlled;
ensure adequate cash flow; establish and control profitability levels. The two core
functions of the Finance Department are to provide strategic financial support for
business and operational planning and to provide day-to-day financial services to the
investor, its departments. Meet external and internal financial reporting requirements.
Objectives:
To maintain an inflation growth in earning per year at a rate of 13.92%.
To obtain a return on equity of at least 25%.
To meet annual projected profit.
To maintain a strong cash flow by meeting projected cash flow balances.
We start the dairy business with Three Million rupees on the basis of partnership and
we divide profit equal proportion. Loss also bears by equal proportion all partners.
sources of funds:
Loan or debt portion does not prevail in it. The detail of the fund and its
contribution are shown in the tables.
Detail Amount Percentage
Equity PKR 3000000.00 100%Total PKR 3000000.00 100%
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Capital Arrangement
The details of the contribution of the equity and ratio of the profit distribution are shown
in the table as follows:
Detail of Equity
Name of Partners Amount Contributed Percentage share
Mr. Abu Sufyan 750,000.00 25%
Mr. Luqman Ahmed 750,000.00 25%
Mr. Muhammad Shahid 750,000.00 25%
Mr. Muhammad Jahanzaib 750,000.00 25%
It has been decided with consensus that there would be 40% retained earning
first year, 30% second year and 20% third year will the part of equity and remaining
profit distribution in partners every year.
Use of funds:
The funds those are contributed will be used in such ways such as the startup cost.
Startup cost:
Description Total Cost Quantity
Vehicle 500000
Motor Bike (2*107000) 214000
Plant & Machinery cost 880000
Furniture & fixture 64000
Equipment 88450Security of Building 84000
Legal Expenses 10000
Marketing Expenses 71600
Gas Installation 145000
Total Capital Cost 2057050
Cash in hand/ required cash 942950
Total project cost 3000000
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Projected Financial statements
Projected Income Statement
Broadway DairyProjected Income Statement
For The Year Ended, 2013, 2014, 2015
Description Notes 2013 2014 2015
Sales 1&2 24876000 28607400 32898510Less: CGS 4 (20955345) (23050879) (25355966)
Gross Profit 3920655 5556521 7542544
Less: OperatingExpenses
AdministrativeExpenses
8 (205300) (225830) (248413)
Selling Expenses(Packing)
(180000) (198000) (217800)
Operating Profit 3535355 5132691 7076`331
Net Profit 3535355 5132691 7076331
Retain Earning 1060607 1539807 2122899
Profit Distribution 2474748 3592884 4953432
Abu Sufyan25%
618687 898221 1238358
Luqman Ahmed25%
618687 898221 1238358
M. Shahid 25% 618687 898221 1238358
M. Jahanzaib25%
618687 898221 1238358
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Projected Cash flow Statement
Broadway DairyProjected Cash flow statement
For the year ended 2013, 2014, 2015
Description Notes 2013 2014 2015
Cash flow from operating activities
Net Profit 3535355 5132691 7076331
Add: Depreciation 16 178645 178645 178645
Cash flow from operating activities 3714000 5311336 7254976
Cash flow from investing Activity
Less: Purchases of Asset (1746450) ----- -----Less: preliminary Expenses 13 (310600) ----- -----
Cash flow from investing Activity 1656950 ---- ----
Cash flow from Financing Activity
Add: Capital 3000000 ---- ------
Less: Dividend (2474748) (3592884) (4953432)
Total cash flow during year 2182202 1718452 2301544
Add: opening Balance --------- 2182202 3900654
Total Cash Balance 2182202 3900654 6202198
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Projected Balance Sheet
Broadway DairyBalance Sheet
As on 31 Dec 2013, 2014,215
Description Notes Opening 2013 2014 2015
Fixed Assets
Plant&Machinery
9 880000 792000 704000 616000
Vehicle 714000 642600 571200 499800furniture 11 64000 57600 51200 44800
Equipment 10 68450 61605 54760 47915
UPS 20000 14000 8000 2000
Deferred cost
Preliminary 13 226600 226600 226600 226600
BuildingSecurity
Office Building 48000 48000 48000 48000
Factory Building 36000 36000 36000 36000
Current Assets
Cash in hand 942950 1182202 900654 1202198
Cash at Bank 1000000 3000000 5000000
Total Asset 4060607 5600414 7723313
LiabilitiesOwner equity 3000000 3000000 3000000 3000000
Retain Earning 1060607 2600414 4723313
Total Liabilities 4060607 5600414 7723313
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Working Notes
1. Sale Prediction
Description Per unitprice/Kg
Per daysale(kg)
Per monthsale(kg)
Annualsale(kg)
Cream 260 60 1800 21600
Ghee 500 13 390 4680
Condensedmilk
260 150 4500 54000
Powder Milk 400 20 600 7200
2. Sale Forecasting
Description Per unit price(Kg) Unit sale in a year Total sale (Annual)
Cream 260 21600 5616000
Ghee 500 4680 2340000
condensed 260 54000 14040000
Powder Milk 400 7200 2880000
Total sale 24876000
3. Quantity of raw material
Description Per Liter Price Dailypurchases
Monthly Annually
Milk 62 800 24000 288000
Ghee dalda 170 15 450 5400
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4. Cost of Good Manufactured
Description Notes Total CostMilk 3 17856000
Labour Cost 984000
MOH cost 5 2115345
Total cost of goodmanufactured
20955345
Cost of goods sold 20955345
5. Manufacturing overhead
Description Notes Total Cost
Electricity bills 60000
Gas bills 144000
Dalda Ghee 918000
Fuel charges (Generator ) 6 108000
Fuel charges (vehicle) 6 540000
Fuel charges (bikes) 6 108000
Depreciation 7 165345
Factory Rent 12 72000Total Cost MOH 2115345
6. Fuel charges
Description Daily fuel cost Monthly fuel cost Annually fuel cost
Vehicle 1500 45000 540000
Bikes 300 9000 108000
Generator 300 9000 108000
Total fuel cost 756000
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7. Factory Depreciation
Description Percent Total DepreciationVehicle 10% 71400
Chiller 10% 25000
Cream refiner 10% 7000
Butter refiner 10% 6500
Condensed milk plan 10% 7500
Powder milk plant 10% 120000
Cooling store 10% 20000
Generator 10% 10000
Furniture 10% 4000
Equipment 10% 1945Total Depreciation cost 165345
8. Administrative Expenses
Description Total cost
Office rent (8000*12) 96000
Depreciation:Office equipment (49000*10%)
UPS (20000*30%)Office furniture (24000*10%)
4900
60002400
Office boy salary (8000*12) 96000
Total Administrative Cost 205300
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9. Plant and machinery
Description Per unit cost NO.ofunits
Tot TotalCost
Chiller 250000 1 250000
Cream refiner 35000 2 70000
Butter refiner 65000 1 65000
Powder refiner 120000 1 120000
Condensed milk plant 25000 3 75000
Cooling store 200000 1 200000
Generator 100000 1 100000
Total Cost 880000
10. Equipments
description Per unit cost NO. of units Tot Total Cost
Air conditioner 25000 1 25000
computer 12000 1 12000
Celling( office) 10000 ------ 10000
Celling Fan office 2000 1 2000
Pedestal Fan
Factory
2600 6 15600
lighting 550 7 3850
UPS( office) 20000 1 20000
Total Cost 88450
11. Furniture and Fixture
Description Total cost
Sufa set 15000Moving chair 3500
Table and chairs 5500
Furniture (Factory) 40000
Total cost 64000
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12. Rent cost
Description Per month Months Total cost
Security ( officePlace)
8000 6 48000
Security ( factoryPlace)
6000 6 36000
Total Cost 84000
13. Preliminary expenses
Description Notes Total Cost
Legal Expenses 15 10000
Marketing Expenses 14 71600
Gas installation 145000
Total Cost 226600
Building Security 84000
Total cost 310600
14. Marketing Cost
Description Per unit cost NO. of units Tot Total Cost
Pamphlets 3 2000 6000
Visiting card 2 500 1000
Newspaper Ad 6400 4 25600
Cable Ad( Local Channel)
18000 ------- 18000
OpeningCeremony
140 150 Guest 21000
Total Cost 71600
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15. Legal Expenses
Description Total CostPartnership Registration 4000
Legal Advisor 6000
Total Cost 10000
16. Overall depreciation
Description Percent Total Depreciation
Vehicle 10% 71400Chiller 10% 25000
Cream refiner 10% 7000
Butter refiner 10% 6500
Condensed milk plan 10% 7500
Powder milk plant 10% 120000
Cooling store 10% 20000
generator 10% 10000
Furniture 10% 6400
Equipment 10% 6845
UPS 30% 6000
Total Depreciation cost 178645
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Financial Analysis of Business
Internal rate of return
IRR = lower rate + diff b/v 2 rate (NPV at lower rate/sum of both NPV)
IRR = 45 + 5 (3077247/5977742)
IRR = 47.57
Working
PV = FV/ (1+i)n
Years Discounted @
45%
Present value of
cash flows
Discounted
@ 50%
Present
value ofcash flows
2013 1.45 1504966 1.50 1454801
2014 2.1025 817337 2.25 763756
2015 3.048 754944 3.375 681938
Total 3077247 2900495
Payback Period
Year Cash flow Cumulative cash flow
2013 2182202 2182202 (c)
2014 1718452 (d) 3900654
2015 2301544 6202198
a= A is number of year in which last cumulative cash flow is less than our cash outflow.
b= Initial investment = 3000000
c= Cumulative cash flow against a = 2182202
d= next cash flow of c1718452
Payback Period = a +b - c/ d
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=1+3000000+2182202/1718452
=1+0.4758
Payback Period = 1.4758
Net present value
NPV = Present value of future cash flow-Initial Investment
NPV = 4789981-3000000
NPV = 1789981
Working
Present value of future cash flow
PVFC= present cash flow/ (1+ I )n
2013 = 2182202/ (1.14) =1914212
2014 = 1718452/ (1.14)2 = 1322293
2015 = 2301544/ (1.14)3 =1553476
Total present value of future cash flow = 4789981
Profitability Index
PV = P.V of Future Cash Flow/ Initial Investment
PV= 4789981/3000000