Transcript Slide 1
Project of Business, Entrepreneurship and Management on developing an innovative business idea Presented by students of B.A. Economics(H) I year section- 1 Hans Raj College Faculty - Mrs. Meghna Malhotra
The Smokeless Stove
COMPANY
Market Strategy Management Financial Analysis Eco-friendly, Multipurpose Smokeless stove Capital of Rs 1,45,000 TO be Founded in 2014 Profitable from 1st year
COMPANY
Market Strategy Management Financial Analysis
Mission
• ‘Apnibhatti’ strives to be the best choice of its customers. Through consistent professionalism, efficient handling of consumer grievances Apnibhatti will ensure a sustainable and hassle-free product at an affordable price.
Vision
• In a period of five years, to become India's most respected smokeless stove provider - internationally credible, trusted by villagers nationwide
COMPANY
Market Strategy
Start-up
Management Financial Analysis Start-up Expenses Legal Research & Development Rent Other(Contingency) Total Start-up Expenses Rs. 25,000 Rs. 30,000 Rs. 40,000 Rs. 50,000 Rs. 1,45,000
COMPANY
What it is and how it works
Market Strategy Management Financial Analysis • Apnibhatti uses paddy husk, which is cheaply available, as fuel and gives a smokeless flame.
• The walls of this stove have been insulated using brick made from special clay, which reduce heat loss and hence increase efficiency
Advantages to Producer
• Easy availability and procurement of raw material. • Low cost of production per unit.
• Energy efficient stove that consumes 400 gms of paddy husk which provides bright and consistent flame for 45 minutes whereas the competitor’s product being weighed 4 kg. It needs about one kg husk per hour
Advantages to Consumer
• Efficient, light weight and portable • Adapt itself to versatile cooking needs • Could be used as a heater as well.
GAP analysis
COMPANY
Market Strategy Management Financial Analysis
FUTURE STATE CURRENT STATE PROPOSALS
Aiming to have presence in at least two states, i.e. Bihar and Jharkhand with 100 villages and production of over 15000 units per year • • • Ready to do consumer testing in 10 villages nearby Nalanda district, Jharkhand with production of 1000 units per year 1) Develop proper transportation channel to penetrate both the states.
2) Develop a manufacturing plant with modern equipments to speed up the manufacturing process.
3) Place an ad campaign in place for awareness Oorja, a similar product being sold in Madurai Has a cost price of Rs 675 as opposed to Apnibhatti’s Rs 550 Oorja uses a battery and a fan which is an added cost
COMPANY
Market Strategy Management Financial Analysis
Target Audience
• Rural areas preferably with high paddy cultivation will be scouted and product marketed • Slum areas in cities with severe power cuts
Customer’s View of Product
• Would want to see people buying the product as doing an investment as this reduces the cost of kerosene used in conventional stoves • Uses paddy therefore eco-friendly and produces less smoke • Reducing the use of non-renewable sources of energy like kerosene, etc. • Emotional attachment with people who were earlier not able to use stoves because of prices of kerosene
COMPANY
Market Strategy Management
PLACE, PROMOTION AND PRICING
Financial Analysis A pilot project will be launched across 10 villages in Nalanda district of Bihar. Under the pilot project we will roll out 1 stove per village at the initial cost of production Rs. 400 to check on customer response / preference and for product testing As part of the official launch, we intent to sell 50 units in one month & will be sold across Nalanda district at a price per unit of of Rs. 550 After assessing general sentiments on viability and satisfaction, we plan to expand it across 45,073 small towns and villages across Bihar at the same selling price per unit where we target the average income household relative to the per capita income of Rs. 16,119 as per the 2009-10 data by the finance ministry of Bihar state government The promotional strategy involves biweekly classifieds in a leading Hindi newspaper Dainik Jagran, fliers and word of mouth publicity. Van operations and wall painting. Total budget allocation for promotion and advertising would be Rs. 2,00,000
COMPANY
Market Strategy Management
Exit Strategy (Possible Options)
Financial Analysis
IPO or investment by PE funds
Out of Reach in initial years
Business Acquisition
Interest buyers through CSR options
Business Merger
Complement another related company
Business Buyout
Build up the business by integrating with another similar company
COMPANY
Product Market Strategy Management Initial management by self employed entrepreneurs Explore options with Govt for subsidizing consumer cost to promote ‘go green’ objective and to save fuel. Financial Analysis Privately held company with board for corporate governance Tie-up with micro financing companies for financing, and with IFFCO for distribution tie-ups. Independent directors – experts from rural field Flat organization, with playing captains Promoters from rural areas, who understand customers needs
COMPANY
Market Strategy Management Financial Analysis
Projected Sales
Sales Total Sales
@ Rs 550 per stove Year 1 4195 units
Rs. 25,17,000
Direct Cost of Sales
@ Rs 400, Rs 350 above 5000 pieces, Rs 375 for year 3 Rs. 16,78,000 Year 2 5500
Rs. 33,00,000
Rs. 19,25,000 Year 3 7500
Rs. 45,00,000
Rs. 28,12,500
COMPANY
Projected Profit & Loss Statement
Market Sales Direct Cost of Sales Total Cost of Sales Gross Margin Gross Margin % Expenses Payroll Marketing/Promotion Rent of warehouse Telephone @ Rs 2000 p.m.
Electricity @ Rs 5,000 p.m.
Total Operating Expenses Net Profit Before Interest and Taxes Net Profit/Sales Strategy Year 1 Rs. 25,17,000 Rs. 16,78,000 ----------- Rs. 16,78,000 Rs. 8,39,000 33.33% Rs. 3,36,000 Rs. 2,00,000 Rs. 1,20,000 Rs 24,000 Rs. 60,000 ----------- Rs. 7,16,000 Rs. 1,23,000 4.89% Management Year 2 Rs. 33,00,000 Rs. 19,25,000 ----------- Rs. 19,25,000 Rs. 13,75,000 41.67% Rs. 4,00,000 Rs. 3,00,000 Rs. 2,40,000 Rs 24,000 Rs. 60,000 ----------- Rs. 10,00,000 Rs. 3,75,000 11.36% Financial Analysis Year 3 Rs. 45,00,000 Rs. 28,12,500 ----------- Rs. 28,12,500 Rs. 16,87,500 37.50% Rs. 5,00,000 Rs. 4,00,000 Rs. 2,40,000 Rs 24,000 Rs. 60,000 ----------- Rs. 12,00,000 Rs. 4,87,500 10.83%