BUSINESS PLAN ON

NEW MOTORBIKE COMPANY

 BUSINESS PLAN ON
MOTORBIKE-“Zx AUTO LTD.”

Submitted to
Mr. Reaz Ameen Choudhury
Faculty, Department of Master of Business Administration
American International university-Bangladesh (AIUB)

Submitted by

NAME OF GROUP MEMBER ID

Sunandan Das 08-92571

Course: Strategic Management

Semester: Fall, 2010
Program: MBA
Section: B

Submission Date: 14th December, 2010.

American International university-Bangladesh
(AIUB)

2
 Letter of Transmittal

December 14th , 2010

Mr. Reaz Ameen Choudhury

Faculty, Department of Master of Business Administration
American International university-Bangladesh (AIUB)

Subject: Application for submission the report “Business Plan on motorbike-“Zx”

Dear Sir,

In accordance to your advice to our group for preparing a Business Plan on Zx motorbike,
we prepare to serve our purpose.

In preparing this report, we have followed your guidelines to spread up our focus on all
the steps of Business plan. As per your direction, we have added a lot of information
regarding the market strategies of the company. From this report we have achieved a lot
of basic knowledge of Strategic Management and we think our selves that it will help us a
lot in our future career.

We sincerely hope this report will fulfill the requirements suggested by you under the
course Strategic Management we truly appreciated this report. We hope it will be
accepted to you.

If you have any question after reading this report, let us know.

Sincerely yours,

SUNANDAN DAS 08-92571-3

Acknowledgement

3
This Business plan is prepared on the basis of the assignment given by Mr.Reaz Ameen
Choudhury, lecturer of American International university-Bangladesh (AIUB). It was a
wonderful experience while working on the product plan Zx motorbike. At first our
thanks go to the almighty Allah and than to our lecturer. A great number of people have
made significant contributions in preparing this paper. I am heavily indebted to all of
them. I am expressing my immense gratitude to all of them who have extended enormous
support, guidance and speared their valuable time in preparing this paper.

This paper perhaps couldn’t have been completed without the continues help and generous
assistance that has been rendered by Mr.Reaz Ameen Choudhury a special debt goes to him
for being so generous. It would unjust if we do not make a mention of and all those students
of American International university-Bangladesh (AIUB) who despite of their busy schedule
speared sometime to answer our quarries. My heartiest gratitude and sincere thanks for all of
them.
Most importantly we are thankful to all those members of our group who after assigning the
subject constantly worked together for preparing this paper.

Table of Contents

4
 Contents Page No
INTRODUCTION 7-12
ORGANIZATIONAL STRATEGY 14-17

RESEARCH AND 19-21

METHODOLOGY

SUPPLY CHAIN 23-34

MANAGEMENT

MARKETING STRATEGY 36-39

FINANCIAL STRATEGY 41-42

CONCLUSION 44

5
 Chapter-1

INTRODUCTION

6
Back ground of the project

In order to fulfill our course “Strategic Management” we are suggested by Mr.Reaz

Ameen Choudhury to create a Business plan for a new product on the basis of
Bangladesh market situation. For this reason we were starting to think for a new product
and new concept of market. After survey we found that there is great opportunity of
setting a new motorbike company thus we prepare this plan. Our company name will be
“Zx Auto Ltd.”.

Prospect of motorbike:

The auto industry of which the motorcycle industry is a part has got deep backward
(Metals such as steel, aluminum. Copper, rubber, chrome, nickel, plastic, paint, glass,
textiles, electrical, capital equipment, trucking, warehousing) and forward (dealerships,
retailers, banking, credit and financing, insurance, logistics, advertising, repair and
maintenance, petroleum products, services, parts) linkages as such any major shifts in
demand are felt in a variety of other industries.

Motorbike industry Worldwide has seen a tremendous growth in the past two years.
Production in 2005 has been estimated at 40.0 million units with China producing 17.0
million units. This global surge in demand has also been felt in Bangladesh industry.

A total of 185,000 pieces of motorcycles were sold in Bangladesh in 2009, sales growing
at a pace of nearly 25 percent. India, where top Japanese auto-bike makers set up plants
of joint ventures, is meeting nearly 85 percent of the country's total demand of the two-
wheelers. 15 percent demand is being met by imports from China. Currently our market
is fully dominated by Indian motorcycles. So we have a great opportunity to capture this
existing setup in this growing bike market.

7
Environment Scanning: All over the Industry

Competitive Analysis:
The market is very competitive. There are six (6) competitors brand in the market of bike
industry. The market leader is Bajaj (Market share-35%), then Hero (market share-30%),
Honda (market share-25%), Suzuki (market share-2%), Walton (market share-2%) and
other Chinese brand (market share-6%) in the market. All are strong brand image in the
market so we enter the market as competitive price, quality and services.
Technological Analysis:
We provide the latest and best technology support in the bike industry. We provide the
digital meter, steel ring wheel, HD & neon light, hydraulic break, plastic & silver body
combined, 4 stock engine, 125cc, 150cc, and comfortable for driver to handling.
Governmental Policy:
Government always supports to build a new industry plant like bike, auto, ship etc. The
Govt. rules & regulation shows flexibility about this industry. According to terms &
condition we approved our project plan in their selected area. The Govt. ensured us to
give the facility of gas, electricity, legal protection of the industry. It brings a new
opportunity to grow our economic climate.
Political Environment:
The political situation is unstable in our country. Hortal, strike is regular phenomena in
the Bangladesh. That’s why we are choosing Gazipur & Chittagong area to establish our
project plant. We recruit 55% female worker due to availability in Hortal day.
Environmental Effect:
We provide green technology of our bike. It has less pollution in the air. Less sound of
engine, and less air polluted. It communicate faster and safety. According to DAB
instruction, we would maintain the industry set up location.
Legal Aspect:
According to Govt. policies we accept all terms and condition for forming the business.
We follow the Govt. rules & regulation and provide employees labor law and wages
structure.

8
Demographic Feature:
In Bangladesh, there are 49% people are male. Per capita income is approx $580. 18 to
25 ages people are use the bike for fashion, 25 to 32 ages people usage for
communication purpose. 33 to 40 years ages people use economic consumption.
Environmental Scanning: Business Concerned

To formulate the Corporate Strategy, environmental scanning is must. Without

environmental scanning Business and Functional level strategies cannot be designed. The
six major Business Concern factors that influence the motorbike product manufacturing
business most are shown in the following fig:

9
And the other External factors (PESTEL) are:

• Political
• Environmental
• Social
• Technological
• Economical
• Legal

Market Research:

We survey the market of Bangladesh through primary data and secondary data. The third
party named AC Nelson also survey in favor of our request in Bangladeshi Market.
Bangladesh has 49% of male population. Per capita income is approximately $ 580. We
are select random basis 50 samples in each district. Most of them are young boy,
teenager; men are show interest to purchase the bike. Their profession is businessman,
student, service holder, professional; doctors, engineer etc. Due to avoid the Jam the bike
is preferred for communication and it is comfortable and easy movable. The bike has
huge demand for urban to rural area. This industry has a positive growth in Bangladesh.
There is a good demand for economic fuel consumption bike miles 55-60 per/hour.
Stylish, Digital Meter, Hydraulic break, self-starter is basic feature of new generation’s
demand. Yamaha brands are showing poor growth in the country now although it grew
well in the 1990s. The prices of Yamaha products have also remained higher averaging
more than 200,000 a piece. Heights and styles of Indian's motorbikes have propelled the
local customers, mostly rural people, to purchase the two-wheelers. Apart from this, their
prices remain competitive.

10
Findings of Market Research: The Market Demand of Bike Industry

 Miles 55 to 60 km per litter

 Hydraulic break, Digital meter, Self-starter
 4 stock engines
 5 gears- high speeds
 Stylish Body Shape
 Wheel- Black & Silver Aluminum Alloy Ring
 125cc & 150cc
 Color black & red-wine
 Easy Movable and handling
 Weight: 125cc - 115 kg, 150cc – 135 kg

SWOT Analysis:

The following SWOT analysis will provide insights into Zx Auto’s internal strengths and
weaknesses at the end of the turnaround as well as the opportunities and threats posed by
the external environment in which the company operates.

Strengths Weaknesses
• Excellence GREEN TECHNOLOGY • Per capita income is low of
• Effective Value Chain Bangladeshi people

• Competitive Price • Low economies of scale

• Next Generation bike

• Fuel Efficient Consumption
• Less Weight
• HD & Neon Light
• Safely Balancing Systems for Rider

11
Opportunities Threats
• Fast growing market in Bangladesh • New competitors may enter the
• Female customers are the new market market with brand image
segment
• People prefer bike for easy
communication
• Recently Hero and Honda company
dissolve the partnership

12
 Chapter-2

ORGANIZATIONAL
STRATEGY

13
Vision:

We aim to bring greater happiness to our customers, through our products and services
while continuously enhancing stakeholder value.
Mission:

Our mission is to satisfy our customers through our products quality, services by using
high technology support and usages our best resources and continuous value added
services for customers in Bangladesh.

Our expectation is within three (3) years we are going to be profit in the industry,
delivered 20% sales growth, enhance continuous value added to the share holders and
employees’ benefit and to become a resources of our company.

Corporate Strategy:

In each road we can see our bike at least 1 within a one hour. So our focus would be
listed below:

Customers, customers and customers demand

 Continuous value added of product quality & services,
 Continuous Sales growth 20% per year
 Ensure services to the post purchase customers
 Building brand image in the corporate world

Objectives:

Broad objective is the main issue of a report. All the information of a report will be on
the basis of broad objective. The broad objective of our services that to providing the best

14
fresh and quality product in an effort able price which is branded products and services.
This consistently offers value in terms of price and quality and which are safe for their
intended use. Products and services will be accurately and properly labeled, advertised
and communicated.

Specific objective is to reach the broad objective. A specific objective is the classification
of a broad objective. The specific objective of this report is to fulfill the requirements of
the course “Strategic Management”.

There are two basic objectives are primary & secondary objectives.

A. Primary objective: The primary objective of the report is to make a Business plan to
launch ‘Zx motorbike” in the market.

B. Secondary objective: Secondary objective means how to achieve our primary

objective as described below:

► To know about the potentiality of the product?

► To know how to develop the product?

► To know what should be the cost?

► To know what should be the price?

► To find out what should be the Marketing technique?

► To know what will be the distribution channel?

► To find out what will be the process?

At a Glance of our Product Features:

 4 stock engine made by Japan

 125cc & 150 cc

15
  Oil consumption Miles: 55-60 per litter
 13-15 Litters Capacity of Tank
 Color: Black, Red-wine, Blue
 Aluminum Ring Wheel Black & Silver
 Normal & Digital Meter
 Self-Starter
 Hydraulic & Manual Gear System - 5 gears (1 in Fast & 4 in Back side)
 Black Sit cover
 Neon & HD Light
 Stylish Plastic & Silver Body Combined
 Attractive Looking Glasses
 Hal mate & Rain Coat (Extra)
 Weight: 125cc – 117 kg, 150 cc- 137 kg

Methodology:

This report is a qualitative and quantitative report because for our research, we have
collected required information through both secondary and primary data collection
methods. We have collected secondary data from different books, newspapers, journals,
internets, websites, and primary data through survey, interviewing or questioning the
potential customers, telephoning and observations. Among all, we have mainly followed
face to face interview or questing to potential customers to collect our data which are
used for our report. Information collected from secondary method is the supportive
information for the report.

Scope of the report:

We have conducted our survey at Dhaka city.

Limitation:
To prepare this report we have faced a lot of problems such as:

16
 • Time limitation
• Unavailability of information etc.

Organizational Chart:

This is the proposed organizational structure of “Zx”. Initially the Entrepreneur of the
firm is going to play a dual role of CEO and the SBU Head. But when “Zx” will go for
expansion or open another operation in foreign market, then will recruit separate
individual as Head of Strategic Business Unit.

Employee hierarchy chart

CEO

Production Operation Financial Marketing

Manager Manager Manager Manager

Supervisor Supervisor Supervisor Supervisor

Supporting Supporting Supporting Supporting

Stuff Stuff Stuff Stuff

17
 Chapter-3

Research and Methodology

18
Research and Methodology:
This report is a qualitative and quantitative report because for our research, we have
collected required information through both secondary and primary data collection
methods. We have collected secondary data from different books, newspapers, journals,
internets, websites, and primary data through survey, interviewing or questioning the
potential customers, telephoning and observations. Among all, we have mainly followed
face to face interview or questing to potential customers to collect our data which are
used for our report. Information collected from secondary method is the supportive
information for the report.

Porter’s five forces analysis

Porter's five forces is a framework for the industry analysis and business strategy.

The Five Forces

1.1 The threat of substitute products or services

1.2 The threat of the entry of new competitors

1.3 The intensity of competitive rivalry

1.4 The bargaining power of customers (buyers)

1.5 The bargaining power of suppliers

Market research:

19
a) Motor bike sells in Bangladesh:

Year Sells
2005 50000
2006 70000
2007 90000
2008 120000
2009 185000

Analyze: In 2005 motor bike sell is about 50000 and it is increased about 20000 in next
year. This trend is continued in 2007. Motor bike sell is rose to 120000 in 2008 and
highest sell we found in 2009 that is 185000.

b) Market share of competitor:

20
 Brand Share Percentage
Bajaj 35%
Yamaha 25%
Hero Honda 30%
Suzuki 5%
Other Chinese Bike 5%

Analyze: Bajaj and Hero Honda are the most popular brand in Bangladesh. Next comes
Yamaha. Suzuki and other Chinese brand take only 5% market share in Bangladesh.

21
 Chapter-4

Supply Chain Management

Supply Chain Management:

Supply chain management is the operational function of the organization. In bigger sense,
it includes inbound logistics, outbound logistics and procurement.

22
 Sources Distributor Customer
of Supply
Procureme Supply Supply
nt Planning Part
Demand Information Flow

Flow of Products & Materials

F
Distribution
Service &
Manufacturing Customer

Inbound logistics will collect raw materials Imported from Japan and from local
Suppliers. Inbound logistics is the supply chain system responsible for moving materials
from supplier to Manufacturing plant. This includes-

• Purchasing,
• Suppliers,
• Transportation.

Motor Bike Supply Chain

23
Design (High Value Added) - After researching consumer wants and needs, bike
makers begin designing models which are tailored to the public demand. In the past,
this design process has taken long time. Today, however, through the extensive use of
computers, it is possible to develop prototypes, or "concept bike," from sketches in less
time.
Raw Materials (Low Value Added) - These include rubber, glass, steel, plastic, and
aluminum. Over the past few years, the cost of raw materials has increased
significantly, mostly due to the price increase of oil and natural rubber. Also,
companies are now using aluminum and plastic in place of steel whenever possible in
order to lessen the weight of the bike, which in turn improves fuel efficiency.
Assembly (Medium Value Added)- Due to the combination of rising raw materials'
costs and consumers' eternal search for the lowest price, companies are looking for
ways to cut costs out of the manufacturing process. Recent trends to reduce costs
include using fewer parts in each bike component, minimizing industrial waste and
pollution, and having parts delivered to assembly plants on a just-in-time basis.

Marketing (High Value Added) - Marketing is an integral part of the value chain,
since it is the primary basis for consumers' perceived values. Automakers and

24
individual dealers work together to create national, regional, and local marketing
strategies. These may include television and radio advertising or special incentives
offered to customers. In addition, firms have started advertising more online.
Distribution and Sales (High Value Added) - After production is complete, bikes are
shipped to dealerships around the world to be sold. As mentioned previously, dealers
may offer incentives to increase sales.

Zx Auto Ltd. Supply chain

Customer Dealers Central

Warehouse
(Dhaka)

Part
Assembling/
Manufacturi
ng plant

Import Local
5% Zx-125 95% Zx-
15% Zx- 125
150 85% Zx-

Suppliers Procuremen
t

Fig: Supply Chain Activity of Zx Auto Ltd.

25
Product Range

Zx Auto Ltd has two products: i. Zx-125 and ii. Zx-150. The key features of these two
models are as follows:

Zx-125
Key Features
» Comfortable Seat with Rear Grip
» New Beautiful Petrol Tank with Graphics
» Strong 4-Stroke Smoke Less Engine
» Stylish Speedometer with Economy Zone
» Elegant Front Light
» New Shape for Back Light

Zx-150
Key Features
» Attractive Fuel Tank with modern graphics
» Speedometer with trip meter
» Tachometer with Fuel Gauge Indicator
» Black painted silencer with stylish cover
» Front hydraulic disc brakes
» Back light with aerodynamic cowl
» Stronger and adjustable cushion

Procurement

Like other big manufacturing companies Zx auto Ltd. Also have to procure product
internationally and locally. Procurement Process of Zx Auto Ltd. is stated below:
1. Forecasted Procurement
2. Bill Of Material (B.O.M.)
3. Price Negotiation

26
4. Performa Invoice is called
5. Purchase Order is placed
6. Establish Letter of Credit (L.C.)
7. Revival and Recovery of Original Documents
8. Bill of Lading
9. Invoice
10. Letter of Credit
11. Clearing Agents
12. Delivery and Possession of Material
13. Good Receipt Note

27
Production Planning
Zx Auto Ltd. Manufacturing plant is at Dhaka and Chittagong and central Warehouse is
Gazipur, Dhaka. Daily production capacity is 3000 units comprising 2 models. Dhaka
plant can produce 2000 units per day while Chittagong plant can produce 1000 units. And
it has planned to produce 5000 units per day using both push as well as pull system.

Long range capacity

Planning

Aggregate Planning

Master Production
Scheduling

Production
Planning &
Control system

Push Pull
System System

Fig: Zx Auto Ltd Production Planning Process

28
Manufacturing
Manufacturing process for Zx’s two premium product Zx-125 and Zx-150 are stated below:

Zx-125: Zx-150:

Components
Components

Locally
Locally Imported 5% Procured 95%
Imported 5% Procured 95%

Lead Time:
Lead Time: Lead Time: 1 6 months Lead Time: 1
6 months week week

Zx-125: For manufacturing Zx-125, 5% components are imported from Japan and Lead
Time is 6 months. And Locally Procured 95% component takes only 1 week of Lead
Time.

Zx-150: For manufacturing Zx-150, 15% components are imported from Japan and Lead
Time is 6 months. And Locally Procured 85% component takes only 1 week of Lead
Time.

Manufacturing Process

In Zx Auto Ltd. there are total fourteen processes, as follows:

1. Frame Assembling
2. Paint shop
3. Buffing

29
4. Alternative Current generation
5. Drum Gear Shift
6. Drum Gear Shop
7. Machine Shop
8. Fuel Cope
9. Die casting
10. Engine Assembling
11. Wielding
12. Ignition Coil Shop
13. Switch Assembling
14. Engine Machine Assembling

Bottlenecks

In Zx Auto, supplier is considered as the bottlenecks…

Part
Procurement Assembling
Central Assembling/Man Dealers
Supplier (Karachi) Warehouse ufacturing Plant
(Dhaka)

Warehousing

Stores

Stores dept. at Zx Auto Ltd performs following functions:

a. Manages the receiving, stacking & issuance of parts & materials to the shop.
b. Ensures the provision & dispatches of required parts to DHK & CTG plant, spares part
division & vendors.
c. Handles the rejections & damages from all shops

30
d. Handles the scraps & wastes generated in the factory
Handling Techniques

At Zx Auto Ltd, following handling techniques are used:

1. For handling from shop to shop especially designed trolleys, bins and pallets are used.
2. Imported motorcycle components are received in steel & wooden cases & pallets.
3. Local vendor parts are received from receiving section in standard carton boxes.

VENDORS/DEALERS

Vendors

At present, 82 vendors are working with the company.

Functions of vendors are:

• This department is responsible for all the relations and dealing with different
vendors.
• This department motivates vendors to produce excellent quality and train them to
achieve the highest level of quality.
• This department also deals with the CKD (complete knock down).
• This department performs VIP (vendor improvement programe). Under this
programe, the department representatives go to the vendors and train them for
new methods to produce better quality at reasonable price.

Dealers

Atlas Honda has established countrywide dealers’ network. Zx Auto Ltd. has 200 dealers
nationwide. Zx Auto Ltd. dealers deal in five categories. In the past Zx motorcycles
allowed the dealership even for 1s but now they want to strengthen their dealership
network so they now only form 5s dealerships as:

31
“5S” dealers

5s stands for the following five facilities

1s Sales
2s Service
3s Spare parts
4s Special sales (installments or leasing)
5s Exchange facility

These 5s dealers deal in all the above categories and the reason for that is customer can
get all the facilities regarding Zx motorcycles under one roof.

Criteria for Dealer Making:

The criterion is very clear and that is the expansion of business, so before anything else
naming or choosing Dealers is important. To find out the potential dealer we have to find
the answers to these questions:

WHY, WHERE, WHEN, WHO

WHY?

There can be countless reasons to this Why but at most of the time it’s about capturing
the market. Success comes when we keep a track of our competitor so any move from
competitor can also bring an answer to this Why.

WHERE?

32
This will include some research work because we have to inspect and analyze the data of
potential markets we are intended to intrude. A survey of market potential, competitor
analysis and the need of customer will help us in a big way. It will also include the
location of our dealership as demographics play an important part in sales activities.

WHEN?

There is always a specific perfect time of doing something or most commonly we say,”
There is a right time for right thing”. This aspect spreads from our social live business
activities. In the case of dealership our dealer is most concerned about it but at the end of
day we are worried since the dealer carries our name
WHO?

Now the dealer comes into the equation, we have to find what kind of potential dealer
should have to become our part.
His past experience business wise?
What is his personality attributes?
What is his background?
What is his potential in the market?

Dealer Facilities:

Zx Auto Ltd. is always ready to facilitate its Dealers to expand their business. And as a
result Zx have launched a new facility for its dealers in co-operation with some local
Banks.
Bank will provide them the facilities like:
1. Account
2. Limit to Loan
3. Purpose of Loan
4. Security
5. Mark Up Rate

33
6. Payment
7. Basis Qualification
Major Selling Cities

Motorbikes of Zx Auto Ltd. are sold all over the country. Among them some major
selling cities are: Dhaka, Chittagong, Comilla, Rajshahi, Khulna, Bogura, Sylhet,
Rangpur, Mymonshing, Dinajpur.

Transportation

Zx Auto Ltd. has 10 units HINO (capacity 50 units/truck) and 20 units TATA (capacity
40 units/truck) trucks which carry all the finished motorbike all over the country.
Through these trucks Zx auto Ltd. try to deliver motorbikes all over the country wide
dealers.

34
 Chapter-5

Marketing Strategy

35
Marketing Objective:

The marketing objectives of our business are as follow:

• We are desiring to maintain a positive, stable growth each month through the
customer satisfaction by providing cheapest and quality product than competitors.
• We are expecting to sale at least tk 600 crore from the year of operation. and 5%
increase every month.
• By providing customer value on the basis of various customer assessment we
desire our continue customer would be our loyal customers.

Finally we desire to open at least four branch of our sales distribution center from the
second year of operation.

Target market/ Market Segment:

Geographic: The profile for Zx motor bike customer consists of the following
geographic, demographic, and behavior factors:

Our immediate geographic target is the city of Dhaka, Chittagong, Khulna, Sylhet,
Rajshahi, and Rangpur.

The total targeted population is estimated at 3,00,00,000

Demographic:

• Male
• Ages 18-50, this is the segment that makes up 80% of the market.
• Office back Young professionals who work close to the location.

36
Product life cycle:

Pricing strategy:

Price will be fixed up for six months like:

Model Price in TK
Zx-125cc 90,000/=
Zx-150cc 1,10,000/=

37
By using Mark Up method:

Model Zx-125cc Zx-150cc

Raw Material 40,000 55,000
Labor 10,000 10,000
Prime Cost 50,000 65,000
Factory Overhead 2,000 2,000
Production Cost 52,000 67,000
Operating Cost 8,000 8,000
Cost of Good Sold 60,000 75,000
Profit 30,000 35,000
Selling price 90,000 1,10,000

PROMOTION STRATEGY:

For hyper competition in the market, promotion will be one of the important strategies to
make the customer loyal. For the first thirty days we will have gifts for the customers.
Gifts will also be given out on special days like Eid, Valentine’s Day, Pohela Baishakh,
New Years, etc. We will also do some other promotional activities like, arranging for
surprise gifts, if a person buy two mobile together they will get 10% discount. We will
also perform promotional activities outside like placing advertisements in the print media,
electronic media and also billboard.

Advertisement: In present world context advertisement is the best way to reach the
customer. Without advertisement we cannot reach the customer. Through TV
advertisement we get in touch with consumer. We also work with Radio Print media,
Banner, Leaflet, Billboard etc.

Direct sell: After six month we want to open retail outlet chain shop in six division’s
city. People bought their chose able item from there. Company also provide after sales
service in next one year.

38
Marketing Research: Marketing research may be used not only for identifying and
selecting opportunities and devising marketing program, but also for monitoring the
achievement of program objectives in the marketplace.

PRODUCT FORECASTS
We will start the producing bike with a few numbers of model, color, design etc. In future
we will increase our model no. color, design, as well as the entertainment facilities.

CONTINGENCY PLAN
If our strategy is not appreciated, then we will have another plan for attracting the
customers. We will change our promotional strategy from niche marketing to mass
marketing depending on the situation.

39
 Chapter-6

Financial Strategy

Financial Objective:
The financial objective of our company can be summed up as under:

a. We will collect at least 60% of our total capital from the five owners. Remaining
40% will be collected from IIDFC with 10% compound interest.

40
 b. We desire to gain at least 20% net profit within the first operating year.

c. we will try heart and soul to minimize our production cost up to 5% by using
effective working labor and importing new technology.

Capital Structure:
Capital = 5 000,0000000(5000 Crores)
Owners Equity = 60%=3000,00000000 (Equally)
Debt = 40%=2000,0000000 (Financial Institution at 10% rate)

Budget:

Sales Budget:
Sales Budget in Unit(for Three Months) Total
125cc 150 cc Sales
per
Quarter
January February March January February March

127,50
Unit 25,000 26,500 28,000 15,000 16,000 17,000 0 units
Price per 90000 90000 90000 1,10,000 1,10,000 1,10,000
Unit
22500000 23850000 25200000 16500000 17600000 18700000 1243.5
Total 00 00 00 00 00 00 crore

Production Budget:
Production Budget in unit(for Three Months)
125 cc 150 cc
January February March January February March

Unit 25000 26500 28000 15,000 16,000 17,000

Opening 6000 6300 4000 4200
Closing 6000 6300 6615 1000 4200 4410

41
 Total 31,0000 26800 28315 16,000 16,200 17,210

Break even analysis:

Break even is the point where the total revenue is just equals to total cost. Our average
products per unit price are Tk 1,00,000, average per unit cost is Tk70,000 and fixed cost
is Tk 2, 00, 00,000000

Fixed cost

Break even unit = -------------------------------------------------

(Per unit price –per unit cost)

2, 00, 00,000000

= --------------------------------------------------

(100,000-70,000)

= 6,66,6,66 Units

42
 Chapter-7

Conclusion

Conclusion:

A total of 185,000 pieces of motorcycles were sold in Bangladesh in 2009. Dhaka,

Bangladesh (BBN)- Motorcycles manufactured by India's Bajaj Group have attained the
top position in recent years in the country's fast growing bike market beating the Hero
Honda brand assembled and marketed by the state-owned Atlas Bangladesh Limited.
Bajaj's popular products are Pulsar, Discover and Avenger. A total of 85,142 motorcycles
were registered with the BRTA (Bangladesh Road Transport Authority) in 2009 against
93,500 pieces in 2008, according the state-run BRTA statistics. Total 40,000 pieces of

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Hero brands in the last fiscal year attaining the second position in the market." Atlas
assembles products of Hero Honda Motors, the world's largest manufacturer of two-
wheelers, based in India. Hero Honda is a joint venture between India's Hero Group and
Honda Motor Company of Japan that began operation in 1984. But, most of the new
buyers refrain from registering their bikes.

At this present situation we would like to take the opportunity to by opening a motorbike
manufacturing industry with advance technology, equipment, machinery, resources for
producing low cost but stylish bike.
“Zx Auto Ltd.” is investing initially Tk.5000 Crore to execute this business plan. At this
moment, these funds are sufficient to allow the Company to achieve its business goals
and they provide a satisfactory cash safety cushion for the Company. The investor will
share in the increased valuation of the Company as revenues grow, the balance sheet
becomes stronger, and the Company attains a market leadership position. The pro forma
projections indicate that the business will have sufficient excess cash to cover operations,
but it should materialize its sales as quickly as planned.

Bibliography:
Book:
Kotler, Philip, and, Keller, Lane, Kevin, “Marketing Management”, 12 Edition, Published
by Ghose, prentice- Hall of India Private LTD, M-97.

Internet:
www.google.com
www.wikipedia.org

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