Strategic Management Report
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Exotica Melamine Ware
1. Executive Summary The melamine product manufacturing sector is still in its growth stage. However, the concept of manufacturing melamine products aims to reach current target group as well as higher middle class people, corporate sector and exporting internationally. That is why the crucial task of creating the appropriate culture and educating the customers about the quality and design of our products will be the top priority of our business. We will differentiate our product by ensuring improved quality than the market is serving now but at a lower cost because of our new technology at the price that market is charging. Again, we will come with unique and attractive design and some sort of customization to grab the higher middle class people, corporate sector and exporting. The land for establishing the factory is owned by the partners will be leased. All the other requirements like machine and others will be purchased by the business. However, political instability, local intruders, inexperienced employees and customers, unawareness about the manufacturing firm of melamine products would play a crucial role to defy the whole venture. Nevertheless, with rigorous direct selling
and advertisement, a culture towards using melamine products and awareness building will be done. As a manufacturing firm, Exotica Melamine needs to create a strong, pro-active and effective human resource base. As the long term strategy, Exotica Melamine Ware visualizes to be a global brand. As the initial setup cost is not huge in amount, so we forecasted to reach to break even within less than five years. It will be easier for the firm to reach the customer easily as we will provide distinctive products at market price. Along with this, the eventual employee experience, brand name and uniqueness of the product will help the company in gain economies of scale through experience curve. Eventually, we hope that Exotica Melamine Ware will be a distinctive manufacturing firm to provide people products with quality, unique design, affordability and reliability.
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Exotica Melamine Ware
Team Profile
Sayba Kamal Athoi 061-479-030
Managing Director
Nibras Yaman 053-159-530
Chief Executive officer
Rehan Muhammad 053-368-030
General Manager
Mosharraf Hossain Saikat 053-141-030
Chief FinancialOfficer
Afsana Jahan 061-478-030
Head of Human Resource
M. Aminul Islam 053-413-030
Head of Marketing
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Exotica Melamine Ware
3. Company Overview Exotica Melamine Ware is going to produce different kinds of melamine products to add divergence to the customers’ dining table. It will be a partnership based company, formed by six individuals having equal share each. Each of the partners of the company will be addressing a managerial role in the organization and will be working as a team to take any sorts of decision regarding the execution and development of the company. We as entrepreneurs see immense opportunity in this sector. Because Melamine Industry is a growing industry and it has a lot of export opportunities so we entrepreneurs are hopeful about the success of EXOTICA MELAMINE WARE. Initially Exotica Melamine Ware will start with 5 machineries and about 50 human resources in Keraniganj near Dhaka. The company will start its operation with 25 crockery models. Our product will be the best in melamine industry in Bangladesh. Our company will achieve a tremendous success in respect of sales amount and market share within a very short time due to its product quality and competitive price.
3.1 Mission Statement We, the new generation of melamine producers, will focus on premium quality melamine products with innovative style and design.
3.2 Vision Statement Establishing a world wide brand Image by reintroducing Bangladeshi Melamine products in the Global Market.
3.3 Key products Different types of melamine cookeries.
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Exotica Melamine Ware
3.4 Strategic goals and objectives 1. We are targeting to capture 10% market share within the first five years of our operation. 2. Our target is to increase our turnover by 15% in the second year, 20% in the third year and 25% in the fourth and fifth year. 3. We want to export our products from the second year of our operation. 4. We want to provide high quality products with a competitive price.
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Exotica Melamine Ware
4. Industry Overview and Analysis Melamine Industry is one of the many topics that did not get enough attention for research in Bangladesh. Over and over again many big news papers and analyst has pointed out the melamine in industry has huge potential in export sector. The industry overview analysis will clarify the overall environment for this business so that an informed strategy can be put into action. As our vision statement is to create a Global Brand the Bangladeshi Melamine Industries competitiveness should be critically analyzed. Bangladesh's melamine industry has carved a niche in the international market, having started its journey only 15 years ago, alongside feeding domestic tableware market. The country went into melamine production in 1989 when Nasir Group's Bangladesh Melamine ventured into the business. The industry got major boost in the following year with Sharif Melamine coming in a big way. Inspired by rising domestic and international demand, 13 other companies joined the melamine bandwagon, creating a Tk 120 crore domestic market. Industry insiders say use of high-tech machine and quality melamine resin and adoption of latest design have given Bangladeshi melamine tableware a competitive edge on regional and international markets. (http://www.bangladesh-web.com/view.php?hidRecord=26516)
Melamine Industry
Total Market
Fig: Standing of the melamine industry in Bangladesh
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Exotica Melamine Ware The Industry Over will be done in the following four components Existing Melamine Companies: •
Sharif Melamine Industries
•
Diamond Melamine Industries (PVT) Ltd.
•
United Melamine Industry
•
Classic Melamine Industries Ltd.
•
Crown Melamine Industries Ltd.
•
Bangladesh Melamine Industry Ltd.
•
G.Q. Marketing Ltd.
•
Gold Star Melamine Industries (PVT) Ltd.
•
Nasir Group of Melamine Industry
•
Sunrise Agencies
(http://www.bdyellowbook.com/catalog/Mills___Industries/Melamine_Industries/)
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Exotica Melamine Ware
4.1 Five Forces Model: Michael Porter's famous Five Forces of Competitive Position model provides a simple perspective for assessing and analyzing the competitive strength and position of a corporation or business organization. The following figure gives an overview of the Model.
Porter’s Five Forces of Competitive Position New Market Entrants, eg: • • • • •
Supplier Power, eg: • • • • •
brand reputation geographical coverage product/service level quality relationships with customers bidding
entry ease/barriers geographical factors incumbents resistance new entrant strategy routes to market
Competitive Rivalry, eg: • • • • •
number and size of firms industry size and trends fixed v variable cost bases product/service ranges differentiation, strategy
Buyer Power, eg: • • • • •
buyer choice buyers size/number change cost/frequency product/service importance volumes, JIT
Product and Technology Development, eg: • •
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alternatives price/quality market distribution changes fashion and trends legislative effects
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Exotica Melamine Ware
www.businessballs.com.
•
New Market Entrants: As already outlined the industry has something around 13 companies that are functioning in the melamine sector. However, among them Diamond Melamine, Bangladesh Melamine, Crown Melamine, Sharif Melamine are the major players. The industry is mainly saturated with these players. The industry does not have any complicated legal restrictions of entering as a result barrier to entry is not limited. A company wishing to open up in this industry can just following legal rules of the registration as a Limited Company and start its operation. As the company does not produce any significant amount of water or air pollution so treatment plant is also not necessary. So entry to this industry will be easy. In the front line of the industry are mainly the Sharif Melamine and Diamond Melamine who differentiates their price compared to the other players by positioning superior quality. As a New entrant to this industry Exotica Melamine Ware should position themselves as high quality with unique tasteful design. This is the route we wish to take.
•
Supplier Power: Supplies for the industry comes mainly from Taiwan, Thailand, China and locally made raw materials. However, only Sharif and Diamond Melamine produces products with better quality than others thus they use Taiwan raw materials which obviously increases their product cost. There are also some small melamine companies that uses locally produced raw materials which make the product quality poor also durability of the product also decreases. The companies in the industry can easily switch from one supplier to the other therefore switching cost is low. Though supplier can threaten to entre the market however most of the suppliers are from outside Bangladesh so initially it won’t be a threat to us as we hope to capture local market then the
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Exotica Melamine Ware international market. Overall the suppliers bargaining power is lot as companies can switch to different supplier
•
Buyer Power: The industry’s supply is divided into two segments one the corporate clients that is there are many restaurants and organization that order the Melamine company to supply their products with the name of those restaurants printed on the product. These orders are usually quite large thus the corporate buyers have bargaining power. That is since they buy in bulk so they can easily bargain for price. The segment of the industry consists of mass customer who buy the product from the retail outlet thus the buyer does not have enough bargaining power because buyers are not few. The switching cost is though low but there is certain mark up of the product below no company will sale and the price of the product is usually fixed and kept at that level. So two different segments have different level of buyer bargaining power. However, both the segment cannot threaten to enter the market because setting up cost is high enough.
•
Product and Technology Development: The market has significant scope for product development as the market in Bangladesh has been there for the last 13 years the population of Bangladesh is experiencing a change in taste and design so it is high time that the design and quality of the existing melamine products can be changed and thus this can be used to capture the urban middle class. The technology used in the production can also be developed so make the products more durable, better looking, and superior to the ceramic products that is the substitute of melamine products. The designs can be significantly changed to incorporate high class look and also cookeries for children can be added. There is huge scope in this sector for product development.
4.2 Core Competencies
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Exotica Melamine Ware Core competencies are those capabilities that are critical to a business achieving competitive advantage. The starting point for analyzing core competencies is recognizing that competition between businesses is as much a race for competence mastery as it is for market position and market power. Senior management cannot focus on all activities of a business and the competencies required undertaking them. So the goal is for management to focus attention on competencies
that
really
affect
competitive
advantage.
(http://tutor2u.net/business/strategy/core_competencies.htm) Prahalad and Hamel suggest three factors to help identify core competencies in any business:
What does the Core Comments / Examples Competence Achieve? Provides
potential The key core competencies here are those that enable the creation of new
access to a wide products and services. variety of markets Since our product design is unique and we have a higher quality we hope to target the local urban middle class and then the international. As given in our Vision we want to create a brand that is known globally. The durability, better quality and unique design is our positioning and thus this gives us our first core competencies to capture the market. We will use our domestic plant as a production base for exporting goods to foreign markets. Initially we will export to India and Bhutan from the second year of our production. It will minimize both risk and capital requirements. We will enter the foreign market by contracting with experienced foreign wholesalers to handle the distribution. Makes a significant The fundamental customer benefit that we would provide is - Reliable contribution to the and efficient delivery infrastructure (product picking, distribution, perceived customer customer satisfaction handling). We will introduce products which are benefits of the end very unique in design, appearance and features. Our pattern designs are product
combined beauty, elegance, usability and durability .Our products will have the appearance of the ceramics products but with much better
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Exotica Melamine Ware features: bright color, non-toxic material, no smell, endurable of acid, not get fragile easily, can be applied for the dishwashers. We will bring in many different types of models with unique shape that are widely used by families, restaurants and hotels all over Bangladesh and abroad. Therefore we will follow a differentiation strategy. We will try to improve our supply chain efficiency on a continuous basis. We will collaborate with our suppliers to design new products and to reduce the time it takes to get new products into the production. We will make tight collaboration with our distribution channel partners to wring out distribution cost savings. We will set up complaint box and suggestion box in each show rooms. A red box will be placing for taking complains and white box will be placing for taking suggestions.. All complain will go to the Six Sigma team of EMW. The problems will be sorted out as early as possible.
Difficult competitors imitate
for A core competence should be "competitively unique": In many to industries, most skills can be considered a prerequisite for participation and do not provide any significant competitor differentiation. To qualify as "core", a competence should be something that other competitors wish they had within their own business. Core competencies that are difficult for the competition to imitate: - Minimization of working capital in the production process - High manufacturing and distribution quality - reliable products at competitive prices
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Exotica Melamine Ware - Strong human resource base -Strong ethical code of conducts
4.3 Industries SWOT Strengths: The company’s strength lies in authority product, better cost control, stiff control of management over its all activities. To ensure better quality product the company uses best quality raw materials, highly skilled work force and to motivate workers. Diamond melamine industry use performance evaluation system. There is a reward system for the out standing performer, in term of promotion and increased pay which motivates worker to be work efficient and productive. Where as the company has lowest wastage rate in the industry and high production rate per employee. Weakness: The weakness faced by the company is consecutive effects from its budget constraints. Due to unavailability of funds, the company is not able to expand its current production facilities, excess to proper distribution channel, advanced technology and finally promotion to its products, which is holding the company back to achieve economies of scale and greater market share. Opportunities: Better activity products, efficient management creates goodwill for the company in the market, as we mentioned earlier. The demographic and general economic of the country gives the company the opportunity to expand. Moreover the liberalization trade policy gives the company an opportunity to expand internationally. Company’s goodwill helps it to get loan facilities from the financial institution. Threats: It mainly comes from new entrants, pressure from political parties, weak and corrupted legal and law enforcement structure in Bangladesh, inefficient port management, rising price of oil, MGT 489.8
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Exotica Melamine Ware inflation, exchange rate fluctuation and lack of policy continuity from government part. The new entrains are posing serious trouble for the company both internally and externally. Most of the new entrants are using low quality raw materials from China, selling them at a much lower price and they are taking out the experienced workers by offering high wages and salaries. Hartal, strike, bribe, container jamming in port, inflation and other raise the cost of production by 20% more. TOWS Matrix:
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Exotica Melamine Ware Internal factors
Internal
strength:
quality Internal
product, cost control& efficient constraints, management control.
weakness: lack
technology&
budget
of
lack
advanced of
proper
distribution channel.
External factors
External
opportunities: SO strategy: maxi-maxi
domestic
expansion,
international
expansion,
goodwill,
access
borrowings.
to
Take
borrowing
to
WO strategy : mini-maxi expand To
limit
the
budget
constraints
production facility to capture the company should use borrowing as well larger
market
domestically&
share as sources of financing, convenient to it
internationally to mature the opportunity it has.
with strict internal control for interval strength. External threats : Competition,
ST strategy: maxi-mini
WT strategy: mini-mini
political By strengthening the internal If the company can increase its budget then
instability, macro economic strength through by continuous it almost can reduce its internal weakness. instability, law& order and improvement. corruption.
The
company The threats from external environment are
should minimize the threats poses from
external
environment.
Overtime production, distribution at night at hartal period reducing
mostly uncontrollable by the company; to be competitive it should be more efficient in its production, distribution activities. On the other hand to minimize the risk arises from economic, political, law& order etc.
the effect of flying cost by proper company should be aware of them & has to cost control. find out the way how it can best manage the situation.
4.4 Competitive Advantage
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Exotica Melamine Ware A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. (http://tutor2u.net/business/strategy/competitive_advantage.htm)
In order to achieve a superior profitability we wish position our product Exotica Melamine Ware, as a symbol of quality and unique design. This can only be achieved by pursuing a Differentiation strategy. By definition Differentiation Strategy is: This strategy involves selecting one or more criteria used by buyers in a market - and then positioning the business uniquely to meet those criteria. This strategy is usually associated with charging a premium price for the product - often to reflect the higher production costs and extra value-added features provided for the consumer. Differentiation is about charging a premium price that more than covers the additional
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Exotica Melamine Ware production costs, and about giving customers clear reasons to prefer the product over other, less differentiated products.
(http://tutor2u.net/business/strategy/competitive_advantage.htm) Here our selection of criteria is unique design and high quality which will justify our premium price. No one company in the industry targets the higher income earners. Most companies like Sharif, Crown targets the middle income group which rightfully reflects the product design, quality even the marketing strategies. However we beg to differ in our product by following the BEST COST STRUCTURE. The best cost structure is the combination of low cost strategy with differentiation. We will produce competitively priced products that charge the same price as the premium quality producers existing in the market however the look of the product will be refreshing, attractive and tasteful. The core competences described above will help us to achieve this Strategy. Since we are group of new generation melamine producers we know the total quality management effectiveness in the production system. The efficiency level will rise. Greater international correspondence will help us to attract the foreign market. http://www.12manage.com/methods_porter_competitive_advantage.html
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Exotica Melamine Ware
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Exotica Melamine Ware
5. Market Overview 5.1
Potential Customers
The nature of the industry, level of buyers, general economic conditions of Bangladesh and the nature of the product don’t give the scope to any melamine company to adopt differentiated marketing strategies. So the company will offer an undifferentiated product, but the target customer group will be the middle income group to upper income group, those who can afford it. Our geographical target area in terms of the domestic market will be the urban and sub-urban cities. Though the company is a consumer goods producer, sometimes it will supplies products to business for their specific order such as SMC (social marketing company), Hotel Radisson, and over hundreds of decorators including defense mess. Talking about the foreign markets, we think our neighboring country India has a very strong customer base for our products. So, we have planes to export our products to India through Bhutan. Exported items will be produced according to the specification of importer country. The company will also produce customized products for special orders comprising or more units. Customized product’s features will include demanded logo, design, size and other such attributes.
5.2
Size and growth of the market
Melamine is not that huge in size yet in Bangladesh, but the growth rate is quite high as the number of companies and scale of operation is increasing day by day. It replaces the traditional concept of crockery ceramics, tin, glass etc. by offering affordable, quantity, durable & nice designed products. It got popularity due to its affordable price and durable quantity. It is durable in a sense that it lasts for 10-12 years without any major damage. It gets popularity with in very short time; the growth of the industry was so high that was completely unbelievable. It is partly because it positioned itself against high priced crockery and partly against low priced crockery. As it is for middle class income people its market share increased rapidly due to socioeconomic structure of our country. Today the total number of firms in this industry is about 15 to 20; the number is not sure as no published data regarding the industry is available. Melamine industry is a new concept for the cookeries in Bangladesh since 1987. Before that cookeries means ceramics, tin made cookeries etc. The ceramic was costly in that sense. It is fragile. On the other hand tin made cookeries are not standard in good outlook. As melamine combines the feature of durability & good out look .It can captures the cookeries market rapidly. The demand of melamine product is increasing day by day. Which creates an opportunities to expand the industry further .The industry is now its growth stage. Melamine product is mainly for the middle class people. The
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Exotica Melamine Ware demographic condition of Bangladesh comprises mainly middle class people and the GDP growth rate over the year is increasing in a positive way, which gives the industry a greater prospective market. The cheap labor cost of Bangladeshi labor gives the industry a competitive position over its international competitors. In global market more over the liberalization of trade gives the industry an opportunity to expand its market internationally.
5.3
Strategic Group Analysis
Strategic group Analysis is used to determine: Different competitive positions of companies in the industry Intensity of rivalry within and between groups Profit potential of various groups Implications of competitive position
Positioning Map
Exotica Melamine
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Exotica Melamine Ware Data presented in the figure has been taken from the results of a survey conducted by Diamond Melamine Industry and our company is positioned based on our assumptions. As it can be seen from the above included graph, among the five major competitors in the market, United Melamine offers the product at the cheapest possible price, but the quality of their product is also lower compared to others. Crown Melamine offers their products in a better quality, but charges a bit higher price. The current industry leader, Sharif Melamine is able to charge the highest price for their products due to their established brand name. Sharif Melamine’s closest competitor Diamond Melamine offers a little better product, but charges a little lower price and they are gaining market share quickly. Now our company is expected to offer products which are of the same quality as of Diamond Melamine’s, but we will be offering our products at a little cheaper than them in order to have a competitive edge. Moreover, our unique designs should give us an upper hand over all the established melamine companies.
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Exotica Melamine Ware
6. Overall Strategy Exotica Melamine ware aimed at producing high quality product at a moderate price by using high quality raw materials and efficient production technique. We will pursue a strategy of progress and innovation to produce good quality, value for money melamine products.
6.1 Long term and short term strategy Short term strategy Minimizing cost
We will try to reduce our cost by building efficient scale facilities, establishing tight control of production and overhead cost, minimizing the cost of sales, products and investing in the state of the art manufacturing technologies. (Open learning world 2007).
Flawless quality
For ensuring continuous success and patronage of our clients, we, Exotica Melamine Wares, have etched the philosophy of maintaining top-notch quality in our working methodology. Keen attention is paid to major and down to the minutest of the details in every process, thereby making it possible for us to manufacture customized melamine crockery, unbreakable melamine crockery, dinner sets, serving trays, bowls, gift sets, tableware, etc. Only the best grades of raw materials are employed in the processes which are sourced from authentic vendors of the market. With its superior quality products and competitive prices, the company aims in maintaining a longlasting relationship with its clients.
Unique products
We will introduce products which are very unique in design, appearance and features. Our pattern designs are combined beauty, elegance, usability and durability .Our products will have the appearance of the ceramics products but with much better features: bright color, non-toxic material, no smell, endurable of acid, not get fragile easily, can be applied for the dishwashers. We will bring in many different types of models with unique shape that are widely used by families, restaurants and hotels all over Bangladesh and abroad. Therefore we will follow a differentiation strategy.
Competing
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Initially we will compete internationally. This will help us to gain new Page 21
Exotica Melamine Ware Internationally
customers and to achieve lower cost and enhance the firm’s competitiveness. By entering the markets of foreign customers we will able to strengthen our revenue base and long term growth.(Thomson and Strickland 2003)
Export strategies
We will use our domestic plant as a production base for exporting goods to foreign markets. Initially we will export to five countries. It will minimize both risk and capital requirements. We will enter the foreign market by contracting with experienced foreign wholesalers to handle the distribution.
Improving
We will try to improve our supply chain efficiency on a continuous basis. We
supply chain
will collaborate with our suppliers to design new products and to reduce the
efficiency
time it takes to get new products into the production (Thomson and Strickland 2003).
Improving
We will make tight collaboration with our distribution channel partners to
distribution
wring out distribution cost savings.
channel strategy
Increasing
We will set up complaint box and suggestion box in each show room. A red box will
customer
be placing for taking complains and white box will be placing for taking suggestions..
responsiveness
All complain will go to the Six Sigma team of EMW. The problems will be sorted out as early as possible.
Implementation
We will strictly follow the codes of ethics and will try to incorporate ourselves with
of codes of ethics
corporate philanthropies.
Long term strategy
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Exotica Melamine Ware
Best cost provider strategy: we will provide our customers more value for the money by integrating good-to-excellent product attributes at a lower cost than our competitors (Thomson and Strickland 2003). Our target is to achieve the lowest (best) cost and best prices compared to rivals offering products with comparable upscale attributes.
TYPE OF COMPETITIVE ADVANTAGE ADVANTAGE BEING PURSUED Lower Cost M a r k e t T a r g e t
A Broad CrossSection of Buyers
A Narrow buyer segme nt
Overall Low Cost Leadership Strategy
Focused Low Cost Strategy
Differentiation Broad Differentiation Strategy Best – Cost Provider Strategy
Focused Differentiation Strategy
Source: Adapted Michael E. Porter Competitive Strategy (New York Free Press, 1980), pp 35-40
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Exotica Melamine Ware By following Best Cost Provider Strategy we will able to incorporate following features for the company:
Value - conscious Buyers
More value for the money
Develop unique expertise in simultaneously managing costs down
Good-to- excellent attributes severalto-many upscale features depending on product type
Match the price of rival and provide better features
Build a reputation for delivering the best value
Incorporation of upscale features and attributes at low cost
Robust Infrastructure: A strong infrastructural setup aids in meeting the rigors of production and marketing with perfect ease. Exotica Melamine Ware will have a superlative infrastructural backup by way of hi-tech manufacturing facilities, a large warehouse and well built marketing as well as research & development unit. Employing cutting edge strategies, we will successfully manufactured premium quality crockery and other items, thus, fulfilling all of our business objectives in the most comprehensive manner. Competing Globally: We will try to become a global competitor. Although global competition does not exist to a grater extent for melamine industry but we want to capture the market opportunities wherever possible to become pioneer in delivering high quality melamine products. The reason behind competing globally is to capitalize on the core competencies and to spread the business risk across a wider market base.
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Exotica Melamine Ware Incorporating internet technology in the supply chain and distribution channel: We will incorporate internet technology to our supple and distribution channel. It will help us to procuring raw materials from suppliers, reducing inventory requirements, expediting the design and production of new components, and engaging in mutual beneficial collaboration with suppliers. Internet technology will help the distribution proportion in two ways; (1) it will allows us to bypass retailer/wholesale dealers and sell directly to end users and (2) to build a strong collaboration with distribution channel members.
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Exotica Melamine Ware
7. Company value chain analysis and operational plan: 7.1 Existing core competencies: • • •
Flawless quality Unique products Strong customer responsiveness
7.2 Future competencies: Even if there are possible emergences of some new melamine businesses in future, we will able to hold larger market shares because of some of our future competencies. In Future, our company will be able to achieve superior efficiency through functional level strategies like
Economies of Scale: Scale: According to our expansion plan, we will posses the ability to serve a large number of variety customers to achieve greater division of labor and specialization. Specialization among employees will lead us to provide superior quality services to our customers.
Learning Effects: Effects: Learning by doing will help us to attain a lower cost structure; and, over time, as we learn the most efficient ways to operate our business, there will be further cost saving. Also, we will be able to develop a more trained and efficient labor force in future. Thus, operating cost would decline because of increasing labor productivity.
Experience Curve: Curve: If our company can pass some good years at the beginning in terms of revenue, customer number, customer satisfaction etc, we will be the holder of large market share. By expanding our business, we will be able to serve a large number of customers and to hold a larger market share, which will lead to systematic lowering of our cost structure compared to rivals.
Strategic Alliances and Expansion: opportunities
with various techniques and future
expansion plans of our camping business to different places like United States of America, Norway, Sweden, Russia, Finland, Kazakhstan, Kingdom of Saudi Arabia MGT 489.8
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Exotica Melamine Ware Qatar, Oman, Abu Dhabi,, Dubai, India, Bhutan and Australia and Some other places will give us the opportunity to differentiate our services and to charge a premium price.
7.3 Product and service overview: Exotica melamine will produce export quality high class household crockery (dinnerware and tableware) from melamine. Products made from melamine are extra durable (practically unbreakable) and long lasting. Our products are shatterproof, dishwasher safe and also microwave safe. There is no other plastic crockery in the market that has the highest scratchresistant than the melamine crockery. Exotica Tableware’s products combine strength and beauty with marvelous design and are the very best choice for plastic tableware that stands up to everyday use. Exotica melamine product line: There are 48 melamine items that make up Exotica Tableware’s product line. The following shows the different types of items will produce at Exotica Tableware’s factory: Soup Plate Coup Plate Dinner Plate Rice Bowl Serving Bowl Soup Bowl Firni Bowl Serving Tray with Handle Serving Tray Oval Tray Cover Bowl Tea Cup & Saucer Glass/Cup
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Exotica Melamine Ware Mug Big Rice Spoon Curry Rice Spoon Coup Spoon Service Spoon Salt Pot
7.4 Facilities: Process Layout Since the Exotica Melamine is following the Batch process, so that their facility layout will also fall under the process layout. They have eight departments. The layout of the plant has been designed in such a way so that all the manufacturing activity is under one roof such that the flow of material processed at one stage automatically flows to a next stage of processing thereby reducing manpower to handle the material from one place to another and avoid waiting time for the next process. The advantages of process layout: • The system can handle a variety of processing requirements • System are not particularly vulnerable to equipment failure • Equipment maintaining cost is lower • Possible to use individual systems The departments for Exotica Melamine process layout are: •
Stock Warehouse
•
Glue & Heating Department
•
Cutting Department
•
Production Department
•
Grinding & Polishing
•
Sreening Department
•
Washing Department
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Exotica Melamine Ware •
Packing Department
Some physical layout of the departments is provided in the appendix section.
Stock Warehouse: The raw materials the Exotica Melamine use are 1. melamine compound, 2. melamine shiner, 3. printed tracing paper. Since the first two mateials are not readily available in the markaet so Exotica Melamine has give the purchasing order in advance. it takes at least 3-4 weeks to recived the goods after Exotica melamine made the purchaing order. Therefore Exoticamelamine keeps ample amount of raw materials on hand so that if there is any sudden increse in demand they donot run out of stock. Glue & Heating depatment: In this department glue is added to the tracing paper and the is dried using industrial elecric oven. Cutting: In this department the designed paper is cut into desired shaped and arranged together in such a way so that it will be easier for next department. The Cutting department and the Glue & Heating department is situated next to each other to achive efficiency. Production Derparment: In the production department all the compiling, compressing & heating are done to give the product its shape & size. This is largest department and takes up most of the plant space. In this department there 22 compressing machine so that multiple items can be made at a time. The raw materials are inserted from one end and the finished product comes out from the other end. The machines used in the production department are semi-automatic.
Grinding & polishing department:
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Exotica Melamine Ware Situated next to the Production department is the Grinding & Polishing department. In this department rough edges of the finished products are smoothed out and polished. This department has two doors, one door is used to rough edges product and the other is used to sent finished product out of the department to the next department.
Screening: In this department products will be tested so that it would meet Exotica Melamine standards. The producted will be tested using electronic weighing machine and skilled person to identify discoloration. The job in this department is time consuming, so its takes a lot of time for the product to pass through this department. Washing: Situated near the screening department is washing department. In this finished products are washed with soap water and left to dry. This department is also large as it needs a lot space to dry the products. Packing: This department has two doors, one of them is connected to the plant and the other is connected to finished goods storage. In this department, the products are packed and sent to the storage.
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Exotica Melamine Ware
Diamond Melamine Process Layout: (Functional)
Raw Materials
Department 1
(Stock) Department 2
(Glue & Heating) Department 3
(Cutting)
Department 4
(Production Department)
Department 5
(Grinding & Polishing)
Department 6
(Screening)
Department 7
(Washing) MGT 489.8
Department 8 (Packing)
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Exotica Melamine Ware
Value Chain Analysis: The value chain a systematic approach to examining the development of competitive advantage. In order to find out the source of competitive advantage we must do value chain analysis. The organization is split into 'primary activities' and 'support activities.
Primary Activities:
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Exotica Melamine Ware Inbound logistics: Our main Inbound logistic is raw materials and the Exotica Melamine use raw materials are Melamine compound, Melamine shiner, Printed tracing paper. Since the first two mateials are not readily available in the markaet so Exotica Melamine has give the purchasing order in advance. it takes at least 3-4 weeks to recived the goods after Exotica melamine made the purchaing order. Therefore Exoticamelamine keeps ample amount of raw materials on hand so that if there is any sudden increse in demand they donot run out of stock.
7.5 Production The Process Type at Exotica Melamine Exotica Melamine uses Batch Processing for production. The main reason for using this particular process is that, Exotica being a melamine company need some moderate variety in its production process. Example- the production of different kinds of melamine products is more or less similar (raw material remains same). Their only difference is in their design and processing time. Therefore, we may say that the key factor in process selection of Exotica Melamine is moderate variety in production. Another factor is that, a batch manufacturing facility produces intermediate volume of each good. The advantages of batch processing are as follows:
•
Production flexibility is there.
•
Per unit cost will be less than job shop.
•
Planning and scheduling of production process will be moderate than the job shop.
•
Output variety can be increased but at a less cost.
•
Equipment utilization will lead to high usage of total capacity.
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Exotica Melamine Ware •
Batch processing can be performed with semi skilled workers that will reduce the labor cost.
Theoretically, moderate volume can be a disadvantage of batch processing. But, as Exotica melamine needs a few more varieties to be added, batch processing helps it to do that. For example, as Exotica melamine has to produce different varieties of similar products (exp-Dinner plates) to meet what the customer really expects from them, batch processing is an effective process with which this company can satisfy the hidden demands of its customers. Besides this, the company is able to maximize the utilization of its total capacity, which will help to compete within the industry as it did before.
The Production Process of Dinner Plates: Exotica Melamine produces more than 48 brands of melamine products. It must be said that most of those follow a similar production process. For example-the production process of Dinner Plate is quite the same as Soup Bowl. The basic difference is in the design\shape and time required to process those inputs. Also different products require different sets of conditions for production. This means things like- temperature, amount of materials varies for different product while they are produced.
Exotica melamine first receives the raw materials from supplies and stores them at the warehouse. A sample of the raw materials is sent to the Exotica’s Quality Control Department. There intensive testing is done on the samples (of raw materials) and then they are compared to the standard required to produce the melamine. If the raw materials meet the standards then they are approved by the Exotica’s Quality Control Department and sent for processing (production). If they fail to meet the standard then they are rejected and sent back to the supplier. Our product under study “Dinner Plate” has 12 sub-processing units in its production line. The manufacturing process of Dinner Plates can be described in the following manner: Adding Glue to Paper: The printed tracing paper that Exotica melamine outsourcers from other companies, those are basic print design on the melamine product. Then synthetic glue (cyanoacrylate) is added on the opposite side of the printed-paper. Labor skill: low Heating: After adding the glue, the paper is then dried in a large electric oven. Labor skill: low
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Exotica Melamine Ware Cutting: After the paper is dried it cut into desired shape according to the design. Labor skill: high Weighing: The ingredients (melamine molding compound- 0.1 to 10 percent of N-methyl-2-pyrrolidone and a resin selected from the group consisting of epoxy, phenolic and silicone resins) are first weighted. For dinner plate 125g. Labor skill: low
Heating the Compound: After weighing, the compound is heated in the furnace for 40 to 60 seconds at 120˚ Celsius. Labor skill: low Compressing: This process is machine intensive. The preheated compound is placed into the machine. The machine compresses the compound at 180 psi and apply heat at 150-160˚ Celsius for 30-50 seconds to form the basic shape of the plate. Labor skill: moderate Adding the designed paper: After forming the basic shape the worker add the designed paper on the plate, then the machine compresses again at 120 psi and apply heat at 140˚ Celsius. This process attaches the print design on the plate. Labor skill: moderate Adding Melamine Shiner: After adding the print design the worker add melamine shiner (Methyl Ethyl Ketoxime) on to plate. Then the machine compresses again at 80 psi and at 100˚ Celsius. This process makes the melamine to shine which would otherwise look dull and gloomy. Labor skill: moderate Grinding:
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Exotica Melamine Ware After the plate has been made, the edges of the plate are grinded using a grinding machine to smooth the edges. Labor skill: moderate Polishing: After grinding, the plates are polished to shine even more and look nice. Labor skill: moderate Plastic Wrapping: To prevent from dust and other harmful particles the plate are wrapped in plastic; usually three plate together. Labor skill: low
Packing: After plastic wrapping the plate are packed into boxes; usually six plate in a single box. The boxes are made from recycle paper which the Exotica melamine outsources from other companies. Labor skill: low At last the finished products go to inventories. The production process ends here. They fulfill the order slips provided by the marketing department. Thus they meet production schedule. Exotica’s Quality Control Department plays a crucial role in the whole process. Their task begins from checking the raw materials (as mentioned earlier) to packing. They can check quality at any stage of production to assure the best quality. At Exotica Melamine if the raw materials are rejected before production only then it is sent back to the suppliers. But if at any other stage of the process a fault is found the rejected items will be considered just as scrap. The production process is stopped immediately. Analysis of the process of Exotica Melamine: Activity
Batch
At Exotica Melamine
Work in process
Moderate
Moderate-High
Cost per unit
Moderate
Moderate-High
Equipment Flexibility
Moderate
Moderate
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Exotica Melamine Ware Fixed costs
Low-Moderate
Moderate
Variable Cost
Moderate
Moderate
Labor skills
Moderate
Moderate-low
Volume output
Low
Low-Moderate
Scheduling
Moderate Complex
Low Complex
Job Variety
Moderate
Moderate to High
Exotuca Melamine (dinner plate) Production process: (Batch)
Weighing melamine mounding compound
Heating the compound Putting the preheated
SHAPE \* MERGEFORMAT compound in the
compressing machine & apply heat to form the basic shape
Adding glue to the printedpaper
Heating the paper to dry
Cutting the paper into desired shaped according to design
Adding the designed paper & compressing again with heat Adding melamine shiner & again compressing with heat
Grinding the edges
Polishing Outbound logistics: Our outbound logistics will be Warehousing
Plastic wrapping
Order fulfillment Transportation MGT 489.8
Packaging Discharge
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Exotica Melamine Ware Distribution management 4. Marketing & Sales: Marketing and sales activities will be included following Channel Selection Advertising Promotion Selling Pricing Retail management Supporting activities: 1. Firm Infrastructure: Organizational Structure ( we will follow horizontal organizational structure) Quality management ( We have product quality control department) Company culture Public affairs
2. HRM: (Employee recruiting, hiring, training, development, and compensation) The company follows on the job training for its production workers. To motivate employee the company pays a performance bonus, promotion. On the other hand company uses a non pay motivation technique by high lighting the best performer of the month in various sectors.
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Exotica Melamine Ware 3. Technological development: (Process automation, design, redesign) It uses world-class technology from the Long Chung Company of Taiwan. The sources of raw materials are mainly from Taiwan, Indonesia, Thailand and China. The best raw material comes from Taiwan. 4. Procurement: (Purchasing inputs such as raw materials, supplies, and equipment) Some office equipments: (Computers, Printers, Fax machines, Power Generator, Copier,
etc.) Technical and Manufacturing equipments: (Semi- automated machine, High-frequency
preheating machinery, etc.)
7.6 Equipment & Machineries: Since our business will produce melamine products, there will be maximum usage and need for equipment and machineries in producing the products. However, in running the overall business we will be using different equipments. We will basically be needing equipments and machineries for two purposes. One purpose will be to carry out our day to day work in the office and other purpose will be for manufacturing the products Some office equipments are listed below: 1. Computers 2. Printers 3. Fax machines 4. Power Generator 5. Copier
Technical and Manufacturing equipments - High-frequency preheating machinery (for melamine industry):
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Exotica Melamine Ware Function: It is mainly used to the preheating process before moulding of thermo set materials, such as melamine. It enhances the liquidity of materials, and decreases harmful ingredient and increases the glossiness of the product surface. Features: 1) Introduce advanced technology from Japan. World famous brands are adopted for the overall unit. Thus the performance is guaranteed. 2) Full automatic hood structure requires no air supply. Accurate switching is ensured. 3) Modification is convenient; only one press is required for the operation. 4) Safety protection -- Multi-protection measures are taken to ensure the man/machine safety
Exotica Melamine Ware Equipment Commutator Machinery
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Exotica Melamine Ware The device is mainly applied for the pre-heating processing for thermo-set resin material such as melamine, epoxy, bakelite and urea plastic, etc., including preformed project such as compressed molding,
transfer
molding
and
extrusion
molding,
etc.
The H. F. Preheating process is widely applied for Thermo-set plastic molding such as for electric components, mechanical parts, bakelite products, urea products, melamine table wares, and packaging of IC, commutator, transistors and other micro-electronic components. The device can be used to improve the surface glossiness of (imitating ceramic) products, prevent water-like wrinkle and strengthen the fluidness of powder resin. It can pre-heat and soften the powder resin (caking) prior to the plastic packaging for the electronic components and semi-conductor IC, so as to improve the grade and performance for the products.
7.7 Research and development R&D department will have a research team comprising engineers, psychologist technicians to find new information on consumer behavior and competitors. Exotica’s R & D department can use other researches as a secondary source of data. However, there is very limited amount of research & development in this sector. Almost all the manufacturers in the country still depend on research & development done in the other countries.
7.8 Quality Assurance: Exotica’s Quality Control Department plays a crucial role in the whole process to maintain the product quality. Exotica melamine first receives the raw materials from supplies and stores them at the warehouse. A sample of the raw materials is sent to the Exotica’s Quality Control Department. There intensive testing is done on the samples (of raw materials) and then they are compared to the standard required to produce the melamine. If the raw materials meet the standards then they are approved by the Exotica’s Quality Control Department and sent for processing (production). If they fail to meet the standard then they are rejected and sent back to the supplier. Moreover, we are careful to assure the best quality of each factors related to the product manufacturing.
8. Marketing Plan
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Exotica Melamine Ware
8.1 Brand Elements Company Name: Exotica Melamine Ware Mission: We, the new generation of melamine producers, will focus on premium quality melamine products with innovative style and design. Vision: Establishing a worldwide brand Image by reintroducing Bangladeshi Melamine products in the Global Market. Brand Slogan: Creating a divergence in your tableware
8.2 Product, Place, Pricing & Promotion strategies of the company (4P’s): Products: Our Melamine Industry produces crockery at the cheaper possible price with high quality and unique design. Our main differentiation from the competitors will be achieved through this unique design of product, which will serve as the unique selling proposition of our products. In its product assortment it will include various sizes and designs of Mug, glass, Plates, Bowl, Tray, Spoon, Salt pot & Tea cup. As crockery melamine endures longer than that of ceramics, glass, and tin made products, we expect to capture market share of our product quickly. Where as it will use best quality food graded raw materials, which is hygienic and approved by BSTI (Bangladesh standard and testing institute). Quality product, attractive designs and standard packaging and distribution system will gain the confidence of customers, distributors and retailers. This ultimately turns the product as a highly accepted brand among its customers.
Place (distribution):-
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Exotica Melamine Ware The company follows dual distribution system to distribute its products. It uses 3 distribution vehicles to transport its product straight to the door of retailers and distributors. More over the company has two authorized agents through which it tries to cover its distribution needs. The company’s markets sphere extends beyond the domestic market. After functioning fully in the domestic market, the company will also start to export its products into India through Bhutan. Our marketing research indicates that we have a huge sales potential in India. Since exporting any product from Bangladesh to India is restricted, we have decided to open an agency in Bhutan. This will not be like a foreign direct investment, but we will give dealership to a local company in Bhutan to act as our buying house to import our products. Then we will export our products from Bhutan to India. This how our overall cost will be lower and we will be able to capture the Indian market. The domestic Market- (initially)
Pricing:-
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Exotica Melamine Ware To be competitive in the market, the company will adopt target-pricing strategies. Actually success in target pricing completely depends on how well a company can control its cost. To provide better quality products at an affordable price normally less than other branded products of same quality. To reduce cost, by keeping the quality intact, the company reduces its wastage of raw materials, other resources, and better-trained human resources management. The wastage level of the company is 50% lower than its competitors. More over the Management of the company will ensure to reduce wastage level further more. By being effective & efficient in using raw materials, human resource and machineries, the company will achieve lowest possible cost for its products than its competitors. Through standard setting for workers the company increases its production to the highest level at the industry, which reduces cost in turns. Promotion (Advertising):The company will maintain the best quality for its products and use selected advertisement medias like radio, television and print media. For radio commercial- the company shall use attractive music tune and voice of a housewife to grab listeners attention. Advertisement in T.V will be given between prime Dramas and different cooking shows. The company will specially advertise on ATN Bangla. In terms of advertising, the company will use attractive models as housewives using the products. As mentioned earlier, the company will also use print media. Colorful ads will be given in different newspapers and different cooking/ household related magazines. Moreover, the company will distribute free calendar, T-shirts for its distributors, sellers & buyers. It will also participate in DITF (Dhaka International Trade Fair) as a form of advertisement to enhance its brand image, at the same time generate sales.
This is how we have allocated our budget-
1. TV commercial- The advertisement will be shown only on ATN Bangla, every weekend at once a day for the whole month. Emphasize will be during the night soap opera and cooking shows. Moreover, special emphasize will be given in showing the ad on Friday evening during Bengali movie (this is the most important ad to reach the rural people. Cost of Commercial: 8*1*Tk.1,000*10s= Tk. 80,000
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Exotica Melamine Ware
2. Radio commercial- The radio commercial will be broadcasted only at ‘Radio Today’
every
alternate weekend at once a day for a month. Cost of Commercial: 4*1*Tk.1000*10s=Tk.40, 000
3. Print Media- The print advertisements will be put only at ‘Prothom Alo’ on friday (5 col.inchs) Cost of Commercial: 4*5*Tk.2, 500=Tk.50,000
Total Cost= Tk. 170,000 (per month)
Total cost= Tk. 2,040,000 (1st year)
SummeryPromotion Type
Media
Frequency
Est. Cost-yr1
TV Commercial
ATN Bangla
Every weekend, once a 960000 day
Radio Commercial
Radio Today
Every alternate weekend, 480000 once a day
Print Media
Prothom Alo
Every Friday, 5 column 600000 inch
Total Yearly Expense
2,040,000
8.3 Segmentation, Targeting and positioning strategies of the company:o
Segmentation: -
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Exotica Melamine Ware The company will mainly use mass marketing strategy through out the country. Due to the limitation of resources the company will first operate in some selected districts. In future the company has its vision to expand its market area all over the country. Though the company is a consumer goods producer, sometimes it will supplies products to business for their specific order such as SMC (social marketing company), Hotel Radisson, and over hundreds of decorators including defense mess. Exported items will be produced according to the specification of importer country. The company will also produce customized products for special orders comprising or more units. Customized product’s features will include demanded logo, design, size and other such attributes. The company will follows a micro marketing practice with inclination to build a strong bond of customer relationship with its customers. o Targeting: Market targeting refers to the selection of one or more market segments to which a company can serve with its resources after considering the alternatives and the potentials of the market. The nature of the industry, level of buyers, general economic conditions of Bangladesh and the nature of the product don’t give the scope to any melamine company to adopt differentiated marketing strategies. So the company will offer an undifferentiated product, but the target customer group will be the middle income group to upper income group, those who can afford it. Our geographical target area in terms of the domestic market will be the urban and sub-urban cities. Through out its production, distribution, pricing and promotional activities there is no differentiation, either for customers or for any geographical segment in the country. To capture the export market for melamine products, the company will provides better quality of products, packaging at a lower price in comparison to the domestic market. Company will reduce its price from the exported products to the extent it gets tax rebate from tax authority. This gives the company a competitive advantage in the export market compared to the domestic market and also over the foreign competitors.
o Positioning: The primary target of our company is to re-introduce melamine to both domestic and foreign markets. Positioning is the combination of marketing strategies which aims at occupying a certain position in the
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Exotica Melamine Ware buyers’ minds. A company might obtain the position in the buyers’ mind through better product attributes, price or quality, offering the product in a different way than the competitors and so on. Our company will offer improved quality of products in the industry at a lower price even than the market leader, which ultimately helps to position the product in the buyers’ minds as the best quality product. The market share of the company is expected to grow at a steady pace. The brand 1 melamine, Sharif melamine is an old and reputed company in the market. It has an establish brand loyalty, good customer base for which it is less emphasizing less on quality and charging more price comparative to its quality. Where as our company will be a new company and still trying to make a strong customer base and brand loyalty in the market, for this reason it is more emphasizing on quality and charging more reasonable price to its quality.
Positioning Map
Exotica Melamine Ware
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Exotica Melamine Ware Data presented in the figure has been taken from the results of a survey conducted by Diamond Melamine Industry and our company is positioned based on our assumptions.
As it can be seen from the above included graph, among the five major competitors in the market, United Melamine offers the product at the cheapest possible price, but the quality of their product is also lower compared to others. Crown Melamine offers their products in a better quality, but charges a bit higher price. The current industry leader, Sharif Melamine is able to charge the highest price for their products due to their established brand name. Sharif Melamine’s closest competitor Diamond Melamine offers a little better product, but charges a little lower price and they are gaining market share quickly. Now our company is expected to offer products which are of the same quality as of Diamond Melamine’s, but we will be offering our products at a little cheaper than them in order to have a competitive edge. Moreover, our unique designs should give us an upper hand over all the established melamine companies.
9. Human recourse strategy and planning
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Exotica Melamine Ware It is very important for any company to have a well-defined and apparent HR policy to run the firm smoothly. It starts from recruitment and continues to turn off. All aspects are included here. In one word, a company is nothing without an excellent HR. The EXOTICA MELAMINE WARE
also has an HR Policy; but, before that there the some basic principles and
commitments which the company has to maintain; they are-
Basic Principles of the HR Policy Prohibition of Child Labor Prohibition of any form of Discriminations (Gender, Age, Sex, Race, Religion, Status) Equality Freedom of Association and the Right to Collective Bargaining No Harassment Maintaining all Possible Legality Compliance of Occupational Safety & Health Provisions Prohibition of Forced Labor Compliance of Environmental & Safety Provisions Affirmative Action Ensuring Social Compliances
And the commitments towards the workforce are as follows-
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Exotica Melamine Ware
Lowest Wage & Salary
Overtime Payments
Discipline & Rules
Proper Environme nt
No Child Labor
Training Programs
Compensa tions & Benefits
Social Complianc es
Legality& No Discrimina tion
Factory Culture
The HR Policy of the EXOTICA MELAMINE WARE starts followingRecruitment Process Recruitment is an important job for any organization. To recruit there are some steps that the EXOTICA MELAMINE WARE will go through.
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Exotica Melamine Ware
Job Analysis
Manpower Analysis of Number
Recruitment
Selecting Internal or External
Job Analysis The main analysis should be conducted by the supervisors. There are certain reasons to assign them to analyze•
They can understand the posts needs as they observe closely
•
They can easily figure out the problems with the existing systems
•
They would have direct communications with the workers
They needs to figure out or define the following things•
Job Content- what are the responsibilities and the duties the workers need to perform. How to work or perform the tasks.
•
Requirements- they should figure out what types of skills and capabilities are needed in the people. What qualifications are required? It is to be done based on the qualitative approach.
•
Relationship & Environment- they should figure out how the worker should behave, to whom and how they will be liable, what conditions they would work what type of work environments are there and so on.
After they do the analysis they would hand over their findings to the upper level management. After their analysis the management would again give the supervisors for the manpower analysis.
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Exotica Melamine Ware Manpower Analysis Manpower planning at the EXOTICA MELAMINE WARE
would be divided into two parts;
which are Manpower Plan for workers Manpower Plan for management Manpower Plan for workers As it is a manufacturing company its success mostly depends upon the productivity of the workers. Therefore, to make a good manpower plan for the workers is very important for them. To plan accordingly the supervisor & the HR department goes through the following three steps Calculation of Manpower Required Permission from Higher Authority Manpower Plan for management Calculation of Positions Required Approval from Higher Authority
Selecting Internal or External External Recruitment Whenever there would be any empty entry-level post, or lack of internal supply, or new employees needed then the company should look for the external recruitments. By many sources and by many methods it can be done. Besides, the market of the labor should be considered; whether it is tight or loose labor market or not. Normally most of the time there is good supply of workers; therefore recruiting right person would be difficult due to large number of supply; whereas, in the management level yet now people do not prefer the Garment industry as a lucrative place to join. Thus, EXOTICA MELAMINE WARE should do something to make it lucrative place to join. EXOTICA MELAMINE WARE can brand as an attractive recruiter. Based on these the management should decide whether to go for internal or external recruitment.
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Exotica Melamine Ware Recruitment There are some principles which the EXOTICA MELAMINE WARE would follow while recruiting. These are-
Principles While Recruiting
Prohibition of Child Labor Prohibition of Forced Labor Equality (EEO) No Discrimination Employment Contract
At first recruitment notice would be given or published. Then recruitment would be done. For this following recruitment channels or the methods can be usedDirect Applications•
Advertise through Newspapers
•
Electronics Media
•
Posting
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Exotica Melamine Ware Selection Process: To select from the recruited people the management can go through the following proceduresSteps
When to do
1. Pre-
after getting all Immediate
Screening
the
Who to do
application supervisor;
forms & applies
Description It is mainly the screening of the in recruitment after getting all the
some cases HR applicants executives
2. Initial interview
After
selecting HR executives & In the management level it
the
screened Supervisors
would be mostly the written test
applicants
to figure out their knowledge; in the worker level it would be the promises of their ability
3. Reference/ot her checks
After
selecting Supervisors
It is to check the references; it
candidates from
also can be the checking of
the
proper
initial
interviews
birth
certificate
to
eliminate child labor; to check the academic transcripts.
4. Testing
To
check
the Supervisors
& For the worker level it would be
capabilities after Line mangers
checking
initial interview
capacity; for the management it would
the be
production
checking
their
capability to handle the bluecollar 5. Interview
Final
interview For
after testing
the It is the formal procedure to
managementHR
know about the candidates and
Director, rank them to final selection
HR manager For the workerHR
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Exotica Melamine Ware Supervisors 6. Job offer & Formally
offer HR
personnel Based on the ranks the selected
Salary
the position to through
Determinati
the
on
candidates after supervisor
contract to join the company
the interview
where
recruited departmental
the deserving candidates would be given the employment letter & all
the
terms
&
conditions would be written, which would be kept both to the employee & employer; besides, pay grade will be determined in this stage. For the workers & lower levels they will be given specific pay grade, and there would be chance for bargaining for the upper management 7. Other
Formal
By
the Other testing would be done if
testing & ID procedures after responsible
required;
Card
testing with validity; and they
final selection
people
such
as
medical
will be given the ID card (Appendix-02) which they have show in their work area (Selection Steps) (All the history of the candidates would be recorded in the skill inventory and HRIS which is discussed later.) Terminations & Unemployment Compensation To recruit new people to have empty posts is necessary which a resultant of termination is. The EXOTICA MELAMINE WARE would follow mostly the industry practices in this regard. There are certain ways to terminate which the EXOTICA MELAMINE WARE is going to follow.
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Exotica Melamine Ware They are Retrenchment Discharge Dismissal Termination Due to disciplinary action Retirement
Retrenchment- according to the labor law 2006, section 20, the EXOTICA
MELAMINE WARE authority would be able to retrench any worker if there is unnecessary internal labor supply. Discharge- according to the labor law 2006, section 22, the EXOTICA MELAMINE
WARE authority would be able to discharge any worker if he/she has physical or mental disorder approved by any registered doctor. Dismissal- for misbehave and criminal activities the EXOTICA MELAMINE WARE
would be able to dismiss any worker without giving any pre-notice and any unemployment compensation. Besides, if the worker or employee is being dismissed due to doing misbehave then they will not get any recovery. Followings will be regarded as misbehave Termination- there is mainly two ways to terminate people. They area) Termination by employee- any permanent worker can resign from the post by
giving a written notice of resignation before 60 days of leaving. Besides, a temporary worker or employee can resign from the post by giving a written notice of resignation before 30 days of leaving. These are according to the labor law 2006, section 27. But rather giving written notice the worker can leave the origination paying the same amount of the money he/she would get for that time. b) Termination by employer- employer can also terminate the employees or
workers through the proper way. There are certain unemployment programs they need to go through.
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Exotica Melamine Ware Retirement- according to the Bangladeshi labor law after the age of 57 people should
retire from the position.
Retirement Benefits According to the labor law 2006 section 26(4) retired workers should be paid all the deserved and previous dues. Moreover, there should be some retirement benefits for the retired people. There should be Provident Fund for the employees and workers. In the entire job period an amount should be saved for them as for the fund which they would get after the retirement. If any employees get terminated of switched then the saved fund up to that period he or she can take with him or her.
Training & Development Programs To enhance the productivity of the entire organization it is very important to provide training and development programs for the employees and the workers. The EXOTICA MELAMINE WARE would also provide training and development programs to the employees and the workers. All the programs would serve the purpose of Career planning Assessments Competency Modeling Skill-based training Company university
Health & Safety Health and safety issues are vital for any company. The EXOTICA MELAMINE WARE would also provide the health and safety facilities and required training programs to the employees and
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Exotica Melamine Ware the workers. After certain periods, such as 3-4 months these sorts of trainings would be conducted. To conduct the programs specialists from outside would be hired. Based on special needs, like- seasonal diseases, epidemics, these sorts of programs can be organized. These sorts of training programs are for awareness of the employees and the workers about how to prevent from the health damages and how to keep safe own-self and the company’s wealth.
COMPENSATION PLAN Salary and wages will be maintained in following ways to cope up with the legality of the labor laws. Salary & wages pay- this should be paid after determining the regular duration of
workings and the extra work hours. Increment of salary or wages & Promotion- based on ability and experience salary and
wages would be incremented. Increment will be for 2 times by 10% of the basic for the management. After that he/she will be promoted. Payment time- after giving the salary of the first month within next month’s first seven
days it must be paid. Salary/Wage slip- while giving it slip of clear explanation should be provided. Defer of salary/wage- wages of worker should never be deferred. Minimum Wage/Salary- the EXOTICA MELAMINE WARE would pay according to
the following described process or grade ways comparing to the Bangladeshi law. Deduction from wages- according to Bangladesh labor law 2006, section 125 (2) for
following matters or discipline breaks salary or wages can be cut which can be regarded as the punishments or negative compensation of the workforce-
Rewards and Incentives Other than the compensation programs and the benefit programs there will also be some rewards and incentives for the workers which areMGT 489.8
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Exotica Melamine Ware Reward for crossing target (Recognition) If the workers of the production floor can achieve the target of cross the target of the production before the dead line then they will be given incentives. It can be
Recognition to All
Vocal Appraisal
Reward for extra-units produced (Piece Rate If the worker can produce beyond the target within his or her time period then he/she can be rewarded financially with piece rate pay. Worker/Performer of the Month Every month the best performer from every unit and from every floor will be rewarded the recognition of the “Worker of the Month”. In every floor on the notice board their photos will be hanged for the whole next month so that the entire workforce can recognize them, which will also be motivating for all. Evaluation of Production & Performance In each steps evaluation or auditing of the production and the performances will be done. By evaluating the production and the performances the strength and the weaknesses will come out which will helpful for the betterment of the production. To evaluate the production and the performances the evaluation or auditing technique will be as follows Total Quality Management It sustains the competitive advantages by consistently exceeding the current and future expectations of customers, based on continuous improvement in all processes, goods and services through the creative involvement of all employees and workers. All the people have to work on it. Every people will be careful regarding the Quality of the products every time so that the Quality improves continuously. The EXOTICA MELAMINE WARE will firmly follow Total Quality Management to construct own self more spirited in the comprehensive apparel trade market after post MFA era. The quality management objective will be ‘Quality at First
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Exotica Melamine Ware and Forever’ in the business plan and communicated to all level of employees from top level to lowest level for focusing on the buyers’ desires and expectations with regards toBalanced Scorecard Balanced Scorecard will also be maintained so that every time the true picture of the production and performances come out towards the management. The immediate supervisors in every department will liable to record the findings and to report to the immediate ones, in following ways the reports will go to the HR personnel so that they can measure or evaluate the performances. Leadership To run the EXOTICA MELAMINE WARE solely depending on autocratic or democratic leadership style would not be viable. To some extend autocratic is required like as while controlling the workers; to few extend democratic style is required like as while getting feedback or suggestions; where as phantom style is also to be used. Control Power While controlling the wages, salary, compensation there should be a dictation. The main power will be in the hand of the management so that the workforce feels that they are liable to the management. Beside, when supporting them, giving them the compensation there will be the friendly leadership. The management should understand the mentality of the workers. While taking the feedbacks from the workers they should behaved friendly so that they feel part of the company. When suggestions are taken from them then fully autocratic style should be there. Therefore, it can be said that leadership should vary according to the needs. If the power controls of the management and the participation of the workforces comply with each other then the overall mission, vision, or the goal of the company will be achieved.
10. Foreseeable and Unforeseeable Risk
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Exotica Melamine Ware
10.1 Foreseeable Risk Θ Melamine industry is a lucrative industry. Therefore high expected profit will encourage other new entrants to come to the industry. Θ Foreign firms may show their interest in this industry which may decrease our customers. Θ Increasing price of raw materials is a big threat to us. It may decrease our profitability in the long run. Θ Unpredictable political situation of the country is another threat to our business. Political instability has always hampered business of all types in Bangladesh. Sudden hartal, street agitation or highway blockage by political parties will be great barriers for Exotica Melamine Ware.
10.2 Unforeseeable Barriers Θ A sudden change in government policy about melamine sector can hamper the operation. Θ The natural calamities may suddenly take place and that will hinder the operation. Θ Chances of maritime accident. Θ Economic downturn can hamper Exotica Melamine Ware as overall income level would go down. Θ Decrease in purchasing power of the customers.
Market risk Public demand for melamine product may change drastically over the time. In addition to that, different external environmental causes like political and legal issues may results in highly risky market situation. For example, increasing inflation can increase the cost of the company. However, we expect the demand for melamine product will increase day by day because we are producing a product with ceramic look but unique in design and high in quality. This intuition regarding the market indicates that there are lots of prospects for melamine.
Operational risk
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Exotica Melamine Ware The Company has only 50 employees. The absence of the office employees will not hamper the operations that much. However the absence of lower level workers may create problem.
Credit Risk Initially the company will need money to raw materials, equipment and machinery. This money is expected to finance by taking loans from the bank and from our funds. So if we encounter loss it will be tough for the company to pay back its debts.
Liquidity Risk In the first 2 years the company is expected to loss substantial amount of cash due to startup costs. As a result the company may face huge cash crunch due to losses. In that situation the company may have to take additional loan from the banks. However, a substantial portion of asset of the company will be pledged for bank loan. This may force the company into a short-term liquidity crisis.
11. Financial Management Plan
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Exotica Melamine Ware Melamine is not a new line of business in Bangladesh. Already there are many melamine companies that are performing in the industry. However it seems to be very prospective as the market is not yet in its mature stage. As the new entrants in this market we need to be very cautious about the quality of products, different promotions, price and also the advertising expenditure which are needed to boost up sales. As we are going to be market follower, we need to be very much cautious about cost reduction through improved efficiency and good supervision, not at the cost of bad quality. General Background •
Number of machines will be five.
•
Each machine is capable of producing different categories of Melamine product.
•
There is no tax for the first five years for the new company situated in Dhaka and Chittagong, and as we have decided to set our business in Dhaka so we do not need to pay tax for the first five years.
•
We plan to use electricity as the main source of energy, for the initial stage to reduce extra cost.
11.1 Assumptions After conducting all the required research, forecasting and analysis, we have found that the initial investment or project cost of our business would be Tk.21000000. We have studied our market and made some financial assumptions which would help us to invest this total investment effectively and would give us the maximum return. The assumptions we have made during estimating our balance sheet for the first five years of the business are: •
2 bighas of lands is bought at Tk.3000000 per bigha.
•
Office building of 2000 sq. feet will be rented with a monthly rent of Tk.25000.
•
Office furniture, computers, printers will be bought by investing 500000 and will depreciate at the rate of 20% per year.
•
Machinery will depreciate at the rate of 10% per year. ( As per Income Tax Ordinance 1984)
•
3 delivery vans will be bought at 1000000 each and will depreciate at the rate of 10% per year.
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Exotica Melamine Ware Revenue and cost related assumptions It is assumed that: •
Revenue will grow at 15% at the second year, 20% at the third year, and 25% at the 4 th and 5th year initially.
•
Cost of goods sold is 50% of the revenue.
•
Wastage level will reduce by 6% for the learning effect and hence increasing operational efficiency.
•
Salaries and wages is 15% of the revenue.
•
Other expenses are 12% of the revenue.
•
Selling and distribution is 25% of the revenue.
•
Other expenses in year 1 comprise business start up cost of Tk. 850000 and each year it will reduce by Tk.50000 because of efficiency and also because of the reduction in the wastage level.
Other Assumptions •
Firm will run more on equity than debt, because at initial stage it will be really hard to attract debt capital.
•
Market Interest rate is taken to be 14.5% per annum. It is used to calculate the weighted average cost of capital of the company which is then used to discount the Free Cash Flows of first 5 years’ expected values.
•
It is assumed that business will run for the foreseeable future.
•
And as a result we will have to find a terminal value for the company to get an idea about the Net present Value.
•
We will follow Straight-line Depreciation method for our fixed assets.
•
9% interest on the short term investments is considered and the company will get if it invests any excess cash in hand.
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Exotica Melamine Ware Depreciation Fixed Asset Schedule
Cost in Tk.
Dep. Rate
Land
6000000
0%
Building
2500000
20%
Machine (5)
7000000
10%
Office furniture, computers, printers
500000
20%
Delivery Van (3)
3000000
10%
Total Fixed Assets
19000000
11.2 Financial Plan •
Out of total capital requirement of Tk.21000000, Tk.17000000 will be provided by the six share holders and the rest Tk.4000000 will be financed by loan from friends and family.
•
Lease facilities will not be allowed as business is in its infant stage probably no company will be interested to invest in such a new venture.
Total investment required in this project Breakdown of Investment
Tk.
Investment in Fixed Assets
19000000
Investment in Working Capital
2000000
Total
21000000
Fixed Cost at initial stage
Tk.
Owned Land (2 Bighas @Tk 30 lakhs)
6000000
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Exotica Melamine Ware
5 Machines @ Tk. 1400000
7000000
Building / Factory Premises
2500000
Office furniture, computers, printers
500000
3 Delivery Van @ Tk. 1000000
3000000
TOTAL
19000000
Working Capital Requirement •
There will be approximately Tk.2000000 required for working capital for purchase of Raw material, payment of wages and all other day to day expenses for running the business.
11.3 Budgeted Income Statement
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Exotica Melamine Ware Details
Year 1
Year 2
Year 3
Year 4
Year 5
Tk.
Tk.
Tk.
Tk.
Tk.
Revenue
10,000,000
11,500,000
13,800,000
17,250,000
21,562,500
Cost of goods sold
(5,000,000)
(5,750,000)
(6,900,000)
(8,625,000)
(10,781,250)
Gross Profit
5,000,000
5,750,000
6,900,000
8,625,000
10,781,250
(2,000,000)
(2,875,000)
(3,450,000)
(4,312,500)
(5,390,625)
Salaries
(1,500,000)
(1,725,000)
(2,070,000)
(2,587,500)
(3,234,375)
Other expenses
(1,200,000)
(300,000)
(250,000)
(200,000)
(150,000)
Interest Expenses
(580,000)
(580,000)
(580,000)
(580,000)
(580,000)
Operating Profit
(280,000)
270,000
550,000
945,000
1,426,250
Interest income
-
49,875
49,875
125,210
177,802
Net Profit / (Loss)
(280,000)
319,875
599,875
1,070,210
1,604,052
Expenses: Selling
and
distribution
expenses Administrative expenses:
11.4 Budgeted Balance Sheet Details
Year 1
Year 2
Year 3
Year 4
Year 5
Assets:
Tk.
Tk.
Tk.
Tk.
Tk.
Fixed Assets:
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Exotica Melamine Ware Land
6,000,000
6,000,000
6,000,000
6,000,000
6,000,000
Building
2,500,000
2,500,000
2,500,000
2,500,000
2,500,000
Machinery
7,000,000
7,000,000
7,000,000
7,000,000
7,000,000
Delivery Van
3,000,000
3,000,000
3,000,000
3,000,000
3,000,000
Office equipment
500,000
500,000
500,000
500,000
500,000
Total Fixed Assets
19,000,000
19,000,000
19,000,000
19,000,000
19,000,000
Accumulated depreciation
(1,600,000)
(3,200,000)
(4,800,000)
(6,400,000)
(8,000,000)
Net Book Value
17,400,000
15,800,000
14,200,000
12,600,000
11,000,000
2,920,000
1,889,875
1,475,000
3,527,585
4,267,500
-
525,000
525,000
1,318,000
1,871,600
Accounts Receivables
1,500,000
3,625,000
5,939,750
6,764,375
9,404,912
Total Current Assets
4,420,000
5,514,875
7,414,750
10,291,960
13,672,412
Total Assets
21,820,000
21,839,875
22,139,750
24,209,960
26,544,012
1,100,000
800,000
500,000
1,500,000
2,230,000
Loan
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
Total liabilities
5,100,000
4,800,000
4,500,000
5,500,000
6,230,000
Share capital
17,000,000
17,000,000
17,000,000
17,000,000
17,000,000
Retained Earnings
(280,000)
39,875
639,750
1,709,960
3,314,012
Net Equity
16,720,000
17,039,875
17,639,750
18,709,960
20,314,012
Current Assets: Cash Investments
Liabilities and equities Short term liabilities: Sundry Creditors
Long term liabilities:
Equity:
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Exotica Melamine Ware
Total of liabilities and equities
21,820,000
21,839,875
22,139,750
24,209,960
26,544,012
11.5 Weighted Average Cost of Capital We know that weighted average cost of capital is the average of the after-tax costs of each of the sources of capital used by a firm to finance a project. The weights reflect the proportion of the total financing raised from each source. Now we look at WACC, and we see that its WACC hovers around some 12.90% in the first 5 years of the business. The interpretation of this value would be that the ‘rate of return’ or IRR (Internal Rate of Return) has to be higher than this WACC value to have the project profitable for investors. So, the decision criteria for whether to run this project or not would be,
IRR > WACC In this case, IRR has to be > 12.90%, on average. WACC CALCULATION Details
Year 1
Year 2
Year 3
Year 4
Year 5
Long-term Liabilities
4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
Equity
17,000,000
17,000,000
17,000,000
17,000,000
17,000,000
Total LT Debt & Equity (4)
21,000,000
21,000,000
21,000,000
21,000,000
21,000,000
Weight of Debt Wd
0.1904
0.1904
0.1904
0.1904
0.1904
Financial Exp (Int)
580,000
580,000
580,000
580,000
580,000
Cost of Debt, Kd**
0.145
0.145
0.145
0.145
0.145
Owners' Equity (3)
17,000,000
17,000,000
17,000,000
17,000,000
17,000,000
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Exotica Melamine Ware Weight of We
0.8096
0.8096
0.8096
0.8096
0.8096
Cost of Equity (Ke) (b)
0.1250
0.1250
0.1250
0.1250
0.1250
WACC
12.90%
12.90%
12.90%
12.90%
12.90%
** cost of debt is taken 14.5% as any loan provided by Standard Chartered Bank over one year is charged @ 14.5%
Further Assumptions for NPV •
A terminal value will be calculated to calculate the net present value.
•
It is assumed that the FCF of the company will become constant after the 5th year.
•
Company does not need to pay tax for the five years, because it will be under tax holiday scheme approved by government of Bangladesh.
Net Present Value The company has a positive NPV. We took 5 years projected cash flow and came up with NPV of positive value which means that the project is a feasible one. Terminal Value = FCF of 5th year / WACC = 3,996,708 / 0.149 = 26,823,545 FREE CASH FLOW CALCULATION Details
Year 1
Year 2
Year 3
Year 4
Year 5
Tk.
Tk.
Tk.
Tk.
Tk.
1,320,000
1,919,875
2,199,875
2,670,210
3,204,052
Terminal Value
-
-
-
-
24,837,612
Total cash flow
1,320,000
1,919,875
2,199,875
2,670,210
28,041,664
1,169,176
1,506,208
1,528,679
1,643,500
15,287,416
FCF=
Rev-
Total
expnses+DepCAPEX
Discounted cash
21,134,979
flows
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Exotica Melamine Ware Initial investment Cumulative NPV
(21,000,000) (19,830,824)
(18,324,615)
(16,795,937)
(15,152,437)
134,979
134,979
PAYBACK PERIOD = 4.99 years or 4 years and 11.88 months
11.6 Break-Even Analysis If we look at our break-even trends over time, we can easily see a satisfactory downward trend in all of the burden values. Since break-even point are the minimum points required to be achieved by business simply to cover its fixed cost, the smaller the values, the less the burden on us. We have done the breakeven point analysis on the yearly basis. We calculated the break even point on the sales value as the range of products of our company is more so it will be very critical to calculate the breakeven point on a unit basis. BREAK EVEN POINT Details
Year 1
Year 2
Year 3
Year 4
Year 5
Tk.
Tk.
Tk.
Tk.
Tk.
Depreciation
1,600,000
1,600,000
1,600,000
1,600,000
1,600,000
Salaries
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
Start up cost
850,000
-
-
-
-
Total fixed cost
3,450,000
2,600,000
2,600,000
2,600,000
2,600,000
5,000,000
5,750,000
6,900,000
8,625,000
10,781,250
2,000,000
2,875,000
3,450,000
4,312,500
5,390,625
850,000
1,025,000
1,320,000
1,787,500
2,384,375
Total variable cost
7,850,000
9,650,000
11,670,000
14,725,000
18,556,250
Revenue
10,000,000
11,500,000
13,800,000
17,250,000
21,562,500
Variable costs: Cost of goods sold Selling and distribution expenses Admin exp. - Fixed salary exp.
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Exotica Melamine Ware VC ratio to sales
0.785
0.839130435
0.845652174
0.853623188
0.86057971
1-VC i.e. CM ratio
0.215
0.160869565
0.154347826
0.146376812
0.13942029
So, Break Even
16,046,512
16,162,162
16,845,070
17,762,376
18,648,649
11.7 Internal Rate of Return Here, we calculate the internal rate of return of our company for the first 5 years of operation, which is a capital-budgeting criterion that represents the rate of return that a project earns. IRR CALCULATION Details
Year 1
Year 2
Year 3
Year 4
Year 5
Total cash flow
1,320,000
1,919,875
2,199,875
2,670,210
28,041,664
Discounted cash flows
1,169,176
1,506,208
1,528,679
1,643,500
15,287,416
Total
NPV @ 12.90%
21,134,979
Initial investment
(21,000,000)
NPV
134,979
NPV @ 13.5% Total cash flow
1,320,000
1,919,875
2,199,875
2,670,210
28,041,664
Discounted cash flows
1,162,996
1,490,326
1,504,563
1,609,022
14,887,593
20,654,499
Initial investment
(21,000,000)
NPV
(345,501)
IRR=13.07%
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Exotica Melamine Ware The IRR = 13.07 so it is greater then the WACC which is 12.9% so this shows that the project is feasible.
11.8 Ratio Analysis LIQUIDITY RATIO Details
Year 1
Year 2
Year 3
Year 4
Year 5
01. NWC to Total Asset Ratio
0.17
0.25
0.36
0.46
0.60
02. Current ratio
4.02
6.89
14.83
6.86
6.13
There is a trend of Net Working Capital to increase over time. The current ratio is also in a very good situation which is always above the required ratio. EFFICIENCY RATIO Details
Year 1
Year 2
Year 3
Year 4
Year 5
01. Total Asset Turnover ratio
0.53
0.61
0.73
0.91
1.13
02. NWC Turnover ratio
0.33
0.41
0.50
0.51
0.53
Overall, the company seems to be getting more efficient over time. Its total asset turn over has increased a lot in first 5 years of operation and the net working capital turnover ratio also represents a good sign. PROFITABILITY RATIO Details
Year 1
Year 2
Year 3
Year 4
Year 5
01. Return on investment
-1.35%
1.52%
2.77%
4.71%
6.60%
02. Operating profit margin
-2.80%
2.78%
4.35%
6.20%
7.44%
0.53
0.61
0.73
0.91
1.13
04. ROA
-1.47%
1.68%
3.16%
5.63%
8.44%
05. ROE
-1.67%
1.88%
3.40%
5.72%
7.90%
03. Fixed asset turn over in times
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Exotica Melamine Ware The company’s return on investment has improved over the time and will stand at 10.49% at the fifth year. The operation seems to be fine as well, since it has a positive operating profit margin of 9.82% after five years. This improvement is mainly due to the efficiency in operating expenses in those later years of business operation. The companies fixed asset turn over is expected to remain very low. However, this ratio is expected to take off and be in a good position over time. Because, any business needs to utilize its fixed assets in a profitable way over time, once they are well experienced into the business. Finally, to measure, the company’s profitability, we look at their ROA (Return on Assets) and ROE (Return on Equity) ratios. Both of them show similar patterns. Starting with negative values in the first year, they are expected to grow at a constant rate in the near future.
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Exotica Melamine Ware
12. Long Term Sustainability Exotica Melamine Ware will able to sustain in the long run because we are offering more value for the money by providing a blend of good quality melamine product at a competitive price. Our existing and future competencies will help our company to survive in the long run. For example our product designs are very unique and high quality. Therefore we will be able to target the both local and international customers. As we have said earlier that we want to become global. So we will give more emphasis on durability, design and better quality. Therefore we will able to create a global brand name. In addition we will build a robust infrastructure within a decade. It will help us to enjoy economics of scale and better placement of products to the customers.
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13. References Open Learning World, Cost reduction strategy, retrieved from www.openlearningworld.com on 25th march,2009. Thompson, A. , Strcikland, A. J. Strategic Management, 13th ed. , New Delhi: Tata McGrahill Publishing Company Limited. Bangladesh Web. 2007. Melamine Industry. Avaiable at (http://www.bangladesh- web.com/view.php?hidRecord=26516) [ accessed on 20th , March2009] www.vaaluebasedmanagement.net [ accessed on 25th March, 2009] (http://www.bdyellowbook.com/catalog/Mills___Industries/Melamine_Industries/) [ accessed on 25th March, 2009] www.businessballs.com. [accessed on 25th March, 2009] (http://tutor2u.net/business/strategy/core_competencies.htm) [accessed on 26th March, 2009] (http://tutor2u.net/business/strategy/competitive_advantage.htm) [accessed on 26th March, 2009] http://www.12manage.com/methods_porter_competitive_advantage.html [accessed on 26th March, 2009] Adapted Michael E. Porter Competitive Strategy (New York Free Press, 1980), pp 35-40 Income Tax Ordinance, 1984. Dhaka. Bangladesh Gadget www.decentplastic.com [accessed on 26th March, 2009]
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