Submitted by:
SHYAMSUNDER N MULE
USN: 4JY10MBA41
Under the guidance of:
Prof. Mr.GIRISH BAGHA
Professor,
JSSCMS, Mysore.
Submitted to:
Vishweshwarayya technological university, Belgaum
in partial fulfilment of the requirements
for the award of
MASTER OF BUSINESS ADMINISTRATION
Table of Contents
Executive summary ....................................................................................................................................... 4
Objectives ..................................................................................................................................................... 5
Company Overview ....................................................................................................................................... 5
Vision......................................................................................................................................................... 6
Mission ...................................................................................................................................................... 6
Strengths and Core Competencies ........................................................................................................... 6
Challenges ................................................................................................................................................. 6
Company Ownership................................................................................................................................. 6
Company Location and Facilities............................................................................................................... 6
Product and Services..................................................................................................................................... 7
Benefits and Features: .............................................................................................................................. 7
Why people need this service? ................................................................................................................. 7
Competitive Advantages ........................................................................................................................... 8
Start-up Summary ......................................................................................................................................... 8
Marketing Analysis ........................................................................................................................................ 8
Target customers ...................................................................................................................................... 8
Trends ....................................................................................................................................................... 8
Market Demand ........................................................................................................................................ 9
Industry Life Cycle ..................................................................................................................................... 9
Cyclical trends in business ........................................................................................................................ 9
Market Potentials ................................................................................................................................... 10
Market Opportunities ............................................................................................................................. 10
Barriers to Entry ...................................................................................................................................... 10
Market is highly competitive, so no such barriers exist in the industry. ............................................. 10
Strategy and Implementation ..................................................................................................................... 10
1 Philosophy ............................................................................................................................................ 10
2 Marketing strategy ............................................................................................................................... 11
a) Value Proposition ............................................................................................................................ 11
b) Branding .......................................................................................................................................... 11
Executive summary
The clothing Store will be a start-up retail men's, women's, and children's clothing
store specializing in unique clothing from other parts of the Belgaum. This
business will be a casual urban wear traditional clothing store which will be run by
the owner, it will be located at maruti galli Belgaum. This store will also have a
local market and will serve both youth and adults. Our intent is to provide the
community with unique clothing they would normally purchase outside of the city.
The fashion and retail business tends to be overly youth focused. However, by
closely following generational fashion trends as well as our own customers'
purchasing preferences, we will tailor our inventory to meet the specific needs of
our clientele. We will solely focus on the our styles, colors and fits will be our
specialty.
we plan to promote our retail business with an ambitious, targeted marketing
campaign, which will include a grand opening event, local media coverage, print
advertising.
1. For establishment of Fabric Retail Business in Belgaum This feasibility has been
conducted.
2. The initial cost of the project is Rs 22230000/- including the initial capital of
Rs12230000/- and initial working capital of Rs10000000/3. Projected Revenue for the project for first 5 years are Rs 33000000, 36300000,
43560000, 52272000, 62726400
4. Payback period of the project is approximately 1 year 5 month.
5. Gross profit for first 5 years are Rs14649000, 17706100, 23341870, 29836185,
37413446.
6. The IRR of the project is 75%
Objectives
Company Overview
It is a retail store for men and women wear with good quality clothing. We present
an extensive variety that are manufactured using different fabrics such as Cotton,
Silk, Wool and others. Available in a wide range of gorgeous colors, designs and
prints, these apparels are designed keeping in mind the most up-to-date fashion
trends. The Clothing Store's primary goal is to find customers and keep them
coming back.
Store will set the pace for both rural and urban fashion for all seasons. Last year's
outfit will be accessorized to be this year's outfit. People like to buy clothing pieces
and accessories to continue wearing clothing that would be out-of-date otherwise.
Store also cater to all types of customers and for all occasions other than routine
shopping. Examples: Wifes buying gifts for their husbands, friends buying gifts
for their friends, etc.
Retail profits can be as high more then 50 percent on clothing. The sales and profit
margins in a specialty clothing store are higher than the average retail store. We
have the opportunity to profit successfully.
The urban clothing market is the most exciting, fastest growing market for
consumers. They will always look for unique clothing pieces and they will not
hesitate to buy them.
Vision
The foundation parameters on which we ensure the excellence of our garments are:
Material
Cut
Design conformation
Embroidery
Stitching
Stability
Finish
Color fastness
Challenges
The store will be retail sales of urban clothing and associated products.58% owned
by the proprietor and 48% owned by bank loan.
Highlighted features:
- Lovely designs and prints
- Eye-catching colors
- Long-lasting Apparels
- Comfortable to wear
- Available in various sizes
Why people need this service?
A number of the factors that have made us the ideal choice of our customers are:
Various variety under a single roof
Quality guaranteed goods
Customization
Capacity to accept mass orders
Well-timed delivery
Easy payment modes of Cash
Competitive Advantages
While there is no guarantee a competitor will locate within our area, we have no
doubt in our fashion sense, outstanding customer service and quality products.
Our supplier relationships and exclusive product offerings will prevent future
competitors from entering the market as a competitor. Also, it takes time to build a
retail store, and by the time a competitor attempts to compete with us directly, we
will have already established a strong customer base.
Start-up Summary
Total start-up expense (including fixtures, equipment, and grand opening) is
22230000. Startup assets required 4230000 in inventory. With the owners'
investment of 8000000, the amount of additional start-up funds needed are
14230000.
Marketing Analysis
Target customers
Clothing fabric is a business-to-consumer retail shop. Male and Female are our
clear target customers. However, we do realize that we will likely attract young
Male and Female customer. Moreover, we expect a portion of our products to catch
on with the younger generations. It's important that we do not offer products that
are exclusive to the older audience.
Trends
The retail fashion industry is a solid business with ever-changing styles and everpresent consumer demand. While supercenters and megastores ruled the past two
decades, more and more consumers are looking for change. They're searching for a
more serene and customer-friendly shopping experience. This is true especially for
those nearing retirement age. In reality, as the Baby Boomers numbers decrease,
there will be fewer older Generation X-ers to sell to. However, this market
decrease will not occur for at least twenty years. Even then, clothing will always be
in high demand. The fashion industry in Belgaum has been thriving since the
advent of moving pictures.
Market Demand
Shifting demographics made the male and female clothing business look attractive
to new entrants and, therefore, the market became tremendously competitive. Big
retail chains began to penetrate the market. Sales continued to grow. Fueling this
growth was a climb in birth rates in the late 1980s and early 1990s.
Industry sales normally peak between late August and December. Throughout this
phase, stores compete for valuable back-to-school sales and holiday gift purchases.
Stores normally generate between 50 percent of their annual sales in these
months.
Industry Life Cycle
Clothing market is at maturity stage although its generating good demand and
sales and has good scope for businesses for next few years. The higher birth rate
was observed in late 90s and early 2000s which boomed the market and now
demand is still growing but with slow birth rates as compared to past years. This
makes industry stand at maturity level in its life cycle.
Although this sector of the industry is season-driven, this cycle will not affect it
much.
This business has conventionally been highly seasonal, as with other clothing
businesses, so spring is on the way, this is also the season for weddings, and has
some gorgeous dresses and suits for wedding parties.
New sessions of schools will be starting in month or so (march to august) which
also boost the sales of cloths for kids.
Month of December also a high sales month due to Christmas celebrations
people love to shop and buy presents
Market Potentials
Shifting demographics made the male and female cloth business attractive to new
entrants and, therefore, tremendously competitive. Sales will continue to grow in
the next 5 years:
Market Opportunities
Market is growing with a rapid rate so its a great opportunity to enter in the
market where demand is increasing drastically
Birth rate has remained high in the past 5 years meaning more potential for kids
cloth purchasing.
Country is going through recessionary period so parents are on tight budget,
which is a great opportunity for our business to offer discounts and low pricing
packages to attract our consumers
This business has conventionally been highly seasonal, as with other clothing
businesses, so spring is on the way, this is also the season for weddings and
gorgeous dresses and suits for wedding parties.
New sessions of schools will be starting in month or so.
Barriers to Entry
Basic strategy of our business is to launch kids wear by the next some months.
Initially we launch normal kids wear which will cater the needs of masses.
By the end of the year, we will launch customized products to cater to the need of
every individual customer.
Later on, school accessories and school wear are also in the pipe line
a) Value Proposition
Our core value proposition is that we will add value to our product by providing
matchless male female and kids wear with extensive range of color and different
sizes in comfortable and durable fabric with easy mode of cash transactions at
comparatively low prices.
b) Branding
We position our selves as a brand, which gives quality products at fairly low prices
with extensive range of vibrant colors and continuous value addition to our
products with innovative ideas in design in printing.
c) Marketing Objectives
d) Strategy
Meet the demands of market and supply demanded goods on time without any
barrier or hurdle
Offer excellent products at low price
Make products according to the needs of the customer
Give good hassle-free ambiance for shopping, which will help the business and
give edge over rivals
Develop a friendly store environment and decoration, which will attract
customers to bring their family in the store and shop with comfort.
3 Sales strategy
Clothing store generate sales via strategic marketing efforts. These concentrated
efforts will be targeting new and returning customers as well as single-visit tourist
consumers. We will also implement a referral program rewarding customers who
refer new customers with discount coupons. Following our grand opening we will
offer promotional discounts and seasonal and clearance sales throughout the year.
Clothing store will accept cash and payment via major credit and debit cards. Cash
layaway plans will also be permitted. Returns and exchanges must take place
within 30 days of purchase and receipts are mandatory.
Our sales staff will include both co-owners and 2-3 part-times sales associates.
Comprehensive training will be provided to each sales associate - to include selling
merchandise as well as how to provide fashion advice to customers. Our sales team
will earn an hourly rate, plus a generous percentage of commission from each sale.
4 Operations
As a retail store will conduct business seven days a week from 9 a.m. to 9 p.m.
Wednesday through Monday, from 9 a.m. to 9 p.m. Tuesday 9 p.m. to 1 p.m.
During the holiday seasons and during special events, store hours will be extended.
In addition to the two full-time co-owners, three part-time employees will be hired
to serve customers.
12
5 Goals
The following is a list of business goals and milestones we wish to accomplish our
first year of operations.
Swot Analysis
Strengths
Marketing expense in the start will be huge, to establish brand name required
lot of advertising
Opportunities
Threats
Competition is high and big chains like Wall-Mart, Gap and Limited
Incorporation
People are more conscious for pricing due to recession and going for discounts
Marketing Mix
a) Product
We present an extensive range of male female and kids wear that are manufactured
using different fabrics such as cotton, silk, wool and others. Available in a wide
range of gorgeous colors, designs and prints, these apparels are designed keeping
in mind the most up-to date fashion trends.
14
b) Price
Penetration Pricing will be the pricing strategy for our business, as our business is
new and at the high street of Belgaum where competition is huge, so we try to give
good quality at low price to penetrate in the market and try to achieve higher sales
volume to set low price and better quality strategy. Once we achieve this objective
then try to charge higher price for our customized products for value addition
c) Place
d) Promotion
Advertising:
1. Above The Line:
- Internet
- Radio
- Magazines ( Parents and kids magazines only)
- Newspapers ( Only Weekends for two or three weeks)
2. Below The Line:
- Flyers ( through hawkers)
- Coupons
15
FINANCIES
initial investment
Perticular
Amount
Cost of materials
10000000
Building
3000000
1000000
Furniture
1000000
Machinerys
Genarator
100000
700000
525000
875000
25000
Computer
5000
Printer
17230000
Land
5000000
Total
22230000
Sources of funds
Means of finance
Particulars
Particulars
Amount
Equity
Amount
8000000 FA
12230000
14230000 NWC
10000000
Total
22230000 Total
22230000
Expected revinue
nor of day
production
tot revinue
330
330
330
330
330
100000
110000
132000
158400
190080
16
INCOME STATEMENT
1
total Revinue
EXPENDITURE
Purchases
Salaries
1812000
1993200
2192520
2411772
2652949
10000
10000
10000
10000
10000
10000
10000
10000
10000
10000
100000
100000
100000
100000
100000
25000
27500
30250
33275
36602.5
Insurance
200000
200000
200000
200000
200000
Fuel
50000
50000
50000
50000
50000
Electricity charges
60000
66000
72600
79860
87846
Total Expenditure
EBDIT
Less. DEP
6084000
EBIT
Less.Int
1588681
EBT
3918096
4919303
EAT
9142224
5137200
1308423
4352760
992621.2
6704775
3700908
636768.1
8759825
3157556
235783.9
11153299
17
0 Year
FA
14230000
NWC
8000000
Revenue
Year 1
33000000
Year 2
Year 3
36300000
43560000
Year 4
52272000
Year 5
62726400
Total Expenditure
12267000
13456700
15865370
18734907
22155398
EBDIT
20733000
22843300
27694630
33537093
40571002
Less. DEP
6084000
EBIT
14649000
Less.Int
1588681
5137200
17706100
4352760
23341870
1308423
992621.23
3700908
29836185
636768.1
3157556
37413446
235783.9
EBT
13060319
16397677
22349249
29199417
37177662
3918096
4919303
6704774.6
8759825
11153299
EAT
9142224
11478374
15644474
20439592
26024363
Add Depn
6084000
5137200
4352760
3700908
3157556
15226224
16615574
19997234
24140500
29181920
PV @ 12%
13594842
13245834
14233636
15341724
16558605
Approx IRR
75%
Cashflow
Cummulative
15226224
15226224
16615574
19997234
51839032
24140500
75979532
29181920
105161451
18
Year 2
Year 3
Year 4
Year 5
8000000
8000000
8000000
8000000
8000000
Reserves Total
Total
Shareholders
Funds
9142224
11478374
15644474
20439592
26024363
Secured Loans
less :
repayment
14230000
12020201
9530143
6724285
3562572.8
2209799
2490057
2805859
3161712
3562696.1
17142224
19478374
23644474
28439592
34024363
Total Debt
12020201
9530143
6724285
3562572.8
-123.276
Total Liabilities
APPLICATION
OF FUNDS :
29162425
29008517
30368759
32002165
34024240
Building
2700000
2430000
2187000
1968300
1771470
land
5000000
5000000
5000000
5000000
5000000
machinery
3384000
2707200
2165760
1732608
1386086
cls stock
5000000
7500000
10000000
10000000
10000000
Bank
13078425
11371317
11015999
13301257
15866683
Total Assets
29162425
29008517
30368759
32002165
34024240
19