Assignment on A new business plan
Daffodil International University
Submitted To: Mr. Sheak Abdul Rahim Senior Lecturer Daffodil International University
Submitted By: Forhad Hossain- 081-11-184 Sakib Alam – 081-11-230 Riyasad Alam -081-11-233 MD. Mahmudul Hasan -081-11-232 Rowshan Ara -082-11-262
Introduction: Company profile: Texas easy-bike ltd. Is a private partnership business with the single product line which is e bike. The primary goal of texas easy cycle ltd is to help modernize the bicycle industry, by introducing modern modes of e bike with different new idea generation which are unknown to Bangladesh. It want to be one of the leading private company with having a effective network across Bangladesh and plans to open more distribution channel to cover the important commercial areas.
Address of company: 12 Kaliakoir, Konabari, Gajipur
Details of owner(s):
Name: Forhad Hossain
Position/main responsibilities: managing director Academic/professional qualifications: MBA of management Address: 62/64 SCC Road mohottoli,Dhaka 1100 Contract: 01675552044
Name: Sakib Alam
Position/main responsibilities: Head of marketing Academic/professional qualifications: MBA of marketing Address: Contract:
Name: Riyasad Alam
Position/main responsibilities: Academic/professional qualifications: CA Address: Contract:
Name: Hasan
Position/main responsibilities: Head of HR Academic/professional qualifications: MBA of HRM Address: Contract:
Name:
Position/main responsibilities: Financial manager Academic/professional qualifications: FCA Address: Contract:
Vision of Texas easy-cycle ltd. ●To establish Texas easy-cycle ltd. as a role Model in the bicycle industry of Bangladesh. ●To meet the needs of our Customers, provide fulfillment for our People and create Shareholder Value.
Mission Texas easy-cycle ltd. ●To constantly seek to better serve our customers with best quality product. ●Be pro-active in fulfilling our Social Responsibilities. ● To review and develop the best practices in the industry. ●Working enviroment to be supportive of Teamwork, enabling the employees to perform to the very best of their abilities.
Executive summary
Industry analysis In Bangladesh e bike industry is not so big. The e bike industry is generally a three layered system (manufacturer, distributor, and retailer). Some manufacturers sell directly to the consumer, but most do not. Within the last four years the industry has seen more direct marketing manufacturers, to a large degree a function of the operating efficiencies of the Internet. There is little number of supplier, importer or distributor but the manufacturing company hardly found. As there is little number of manufacture so the market of E bike is not so recognized. Those who import and supply e bike they fail to reach to the market in proper way. Most of the entrepreneur assumes that E bike business is a risky business in any developing country like Bangladesh. Manufacturer also don’t show any kind of interest in producing e bike because it’s quite impossible to produce engine of e bike in Bangladesh and to produce a engine manufacturer need to invest huge. In Bangladesh only one company is producing e bike which is Tazim and sons. But their distribution channel is so poor. They fail to reach to the whole market and their sell is very low in this year. The owner of the company said that they are thinking to switch their business. There are some distributors who import these e bikes from abroad and sell here. Although they have strong business, they fail to reach the entire customer over the country. In Bangladesh e bike industry is not so big but there are potential markets and the market could be huge though it’s not properly recognized yet.
Description of venture In a community where there are too many people that uses the road, there is one practical mode of transportation. An e bike is just the exact transportation because it is not only safe but it is environmentally friendly. With less pollution, you know that healthy wise this is agreeable. It is very common to see things unimaginable now functioning electrically. Texas e bike is indeed run via electric means. The idea of E- Bike eliminates the problem of rising fuel cost which runs most vehicles. This is just a perfect combination of human and motor power on the road. Because it is light and easier to handle, you are assured of your safety on the road, but still retain that fast pace you need.
Texas bikes will specifically design with and for the Bangladeshi communities and road conditions in mind. The speed conforms to the typical road safety speed limit. The bike design and style caters to both soft and rugged type of drivers who enjoys the freedom and comfort the bike offers. Unlike other motor bikes, this is very quiet and runs up to the legal speed limit given in certain areas. Since it has a minimal speed and power, driving one does not require an RTO registration or a drivers’ license for that matter.
Texas is going to start their journey with three dimension or style of e bike. We are customer driven so we chose 3 colors from all the customer choice for these three bikes.
Product Specification Person carrying Capacity: 2 people Mileage: 40 Kms Weight with battery and body dimension: 70kgs and 1720mm x 48mm x 1110mm Battery details: charging time is 6-8 hours Power consumption per full charge: 1.5 Units Charger is 200w smps Battery voltage and capacity is 48V/14ah – VRLA Battery Speed and Power: 25 km less and 250 w less Color choices: 3 varieties
Production plan Our plan is not to produce but to assemble e bike. To produce e bike we need to invest huge amount because of the engine. There are no companies who produce engine in Bangladesh. It is tough for any investor to invest huge amount in initial stage. Also in Bangladesh it is hardly found personnel who are efficient in such production. Collection of raw materials Engine: our plan is to import e bike engine from China. China is now in top position in producing e bike. They are no.1 in giving the product in cheapest price. Chinese company can give us good or quality engine at low cost. The main cost will be for the shipment. Battery: In Bangladesh “Rahim Afrooz” is the market leader in producing battery. That’s why TEXAS is planning to take e bike battery from them. E bike battery is not like ordinary battery in shape, volt and in some other cases. We are influencing RAHIM AFROOZ to make e bike battery. Body kit and other parts: Texas will produce the body kit. We already took a galvanizing factory to produce the body of the e bike. Our challenge is to make the body parts according to customer choice. We will also produce the parts like silencer, seat, gear etc. We will take looking glass from a reputed company who will make glass according to our choice. Assembling: our main work is to collect the raw materials make some of parts and assemble it into finish product. As we are customer driven so we make product as they demand.
Marketing plan Market Analysis Summary TEXAS has identified four distinct market segments which are Individual consumers, distributors and also based on age and gender. It will be quite easy to differentiate between the two groups of customers. Individual sales will be derived via the Internet, and sales to distributors will be accomplished through participation at the industry trade shows. Individual’s consumers: products will be sold direct to the consumer via the website. The typical customer is someone who rides a couple of thousands of miles a year, either with a team or a club. This group enjoys cycling and spends a decent amount of their disposable income on their passion. Individuals will be targeted through a sales campaign on the website. The individual customers are important because they are the ones served up until now. Additionally, the profit margin is higher (although quantity is less) since there is no distribution layer. In this case TAXAS will service the existing customer group. Distributor customers will be targeted trough deals and relationships set up through industry trade shows. While the margins are lower for this customer group, distributors are able to purchase far greater quantity of products. They also assist in the selling of the product to the independent bicycle retailers, who then help sell it to the end consumer.
Competition and Buying Patterns E bike market in Bangladesh not so big so its easy to grab market and be the market leader for us. For many consumers, their buying pattern is the purchase of a carbon fiber seatpost based on the material of the post instead of differentiation between the different brands.
Strategy and Implementation Summary TAXAS will be leveraging its competitive edge of customization of its product for different riders. This will offer differentiation between the competitors, something that will be emphasized in the marketing materials. The products will be marketed via the Internet for the individual customers and through trade shows for the distributors. The sales strategy will rely communication of the fact that TAXAS products are lightweight, safe, high end e bike seatposts. The sales campaign will also stress the ability of Concrete Carbon to replenish distributor's stock of the seatposts quickly and as promised.
Competitive Edge TAXAS competitive edge is its product offering that is customized to the weight and aggressiveness of the rider. Every other manufacturer has only one seat post with the only variation on length. No body else offers distinct products for different riders. The competitors have only one product that generally has a weight limit. TAXAS three different posts are made for different weight groups. By increasing the amount of material in key areas TAXAS is able to make a posts for all weight riders with a huge safety margin. Concrete Carbon is keenly aware of the liability risks involved with a product liability suit. Having specific posts for specific riders is a competitive advantage because it provides the rider with the lightest weight
post that they can ride safely. It also provides them with the most comfortable riding post. If a light weight rider is using a stout post it will feel quite stiff and all of the road vibrations will be transferred. Conversely, if a heavy rider is using a post that is too light for him, it will not be stiff enough.
Marketing Strategy TAXAS will use a different marketing strategy based on the two different market segments that it seeks to reach. Marketing for the individual consumers will be done primarily over the Internet. While TAXAS will use some magazine advertisement space, the main effort will focus on promoting the website through good positioning on search engines as well as pay per click advertising. Pay per click advertising is a system of advertising that is done through search engines where payment is made to a search engine such as Google whenever the search engine refers a person to TAXAS site based on the keyword that they entered into the search engine. Participation in the industry trade shows will be the key marketing effort for the distributors. There are two main shows and 80% of industry business is transacted at the shows, for manufacturers, distributors, and retailers. No one who is seriously participating in the industry misses these shows. The shows provide TAXAS with an opportunity to show off its product to the distributor as well as establish as relationship with them. Therefore, the shows will receive a lot of attention by TAXAS based on the recognition that this is where the deals are made and relationships established.
Sales Strategy Individual customers The sales focus for this group will be the conversion of qualified leads through the emphasis of the products being customer designed for the specific customer, combining comfort, lightweight, and a wide safety margin. This will help differentiate TAXAS products from the competition. Concerns about durability will be eliminated by the industry's best warranty of five years. Distributors The sales strategy for the distributors will be quite different. It will emphasize a close relationship between the distributor and TAXAS. This is very important because it is of great concern to a distributor for them to carry and feature a manufacturer who has delivery or warranty problems. Distributors are sensitive to the issue of availability of the product from the company. TAXAS will work hard on convincing distributors that it will be able to meet all of the needs of the distributor, that production can be scaled quickly if necessary, and that Concrete Carbon is quick to fill orders, allowing the distributor not to have to keep a large inventory of the product out of fear of not being able to fulfill orders from a e bike retailer. Lastly, TAXAS will work on impressing the distributors at the shows that they are making a high-quality product with a low failure rate and that if any warranty claims are made they will be addressed quickly and happily. This is in recognition that sales are made based on relationships, as much or more so relative to the actual products. Sales Forecast Sales will be fairly slow and steady for the first year. With the e bike Industry Trade show coming up in November, sales are forecasted to increase from the distributors that month or the following month. With more retailers carrying the seat posts, there will be greater visibility of the products and it is reasonable to believe that individual sales will also increase.
Financial plan
Financial plan is the process of source identification, raising of fund, investment of fund, distribution of profit. These all fuction is disscused below ----
Sources of Fund: Capital is the first source of the owners equity. There have borrod amount needed also from bank with minimum interest rate.The more the shares are purchased by the shareholders, the more the capital is collected from the capital markets.
Sources of fund Owners equity Forhad hossain Sakib alam Riasad alam Hasan Borrowing banks Capital market
Raising of fund:
Amount in crore
4.5 2.0 1.0 1.0 1.5 from 5.0 5.0
After the identification of sources of fund the fund needed to raise.So that in this stage we have to gather information from the various sources.Then we can find the several alternatives.Then we have to analysis the alternative to select the best and suitable alternatives for our company. Borrwing from bank tk 5.0 crore we will get from the One bank ltd because after the analysis of different banks we can see that one bank ltd has the lower rate of interest for the long term debt condition.
Investment of fund: In the investment of fund decision we consider the working capital management and the capital budgeting.Working capital management is the trade of between the profitability and liquidity.Working capital is needed to run the business. Capital budgeting is the process of planning expenditure on assets whose cashflows are expected to extend beyond one year.The purchase govt. treasury bills and Treasury bond to cover –up the increased requirement of statutory liquidity requirement (SLR). Out of the total investments, Tk. 1.0 crore is invested in govt. securities and the rest amount i.e. 1.0 crore is invested in ordinary and preference shares of different listed and unlisted companies.
Distribution of profit: Here the amont of that will be distributed to the stackholder and shareholder and what will be the amount of retain-earning is the important factor to calculate.This company after the one year will declare the 10 percent profit will be distributed toward the share as cash dividend and rest of the amount will be kept as a retain earning which portion will be invested in different project to maximise the capital structure.
Assessment of risk Risk is defined as a hazard, a peril, exposure to loss.Risk is the variability of actual return emanating from a project in future over its working life in relation to estimated return.There are mainlytwo types of risk--1. Business Risk 2. Financial Risk
1.Business risk: Business risk is the uncertainty in protection of future return on assets that it purchases.Also business risk is the chance that the firm will not have the ability to compete successfully with the assets that it purchases. Lack of making effective distribution channel for networking is the business risk for Texas easy-bicyle Here Texas easy-bicyle decide to sell 50 thousands easy-bicyle in our country but it has some sources of risk so that it could be sale 40 thousands bicyle that is the business risk of Texas easy-bicyle.
2.Financial Risk: Financial risk is the part of total risk that management introduces through debt capital.Financial risk is the chance that investment will not generate sufficient cashflow to cover interest payment of money borrowed to finance it or principal repayment on the debt to provide profits to the firm. Texas easy-bicyle ltd. Making a huge borrowed amount from the One bank so tha tit has a financial risk to meet up the interest and the debt amount in the given time period.
