LOGO

1. Executive Summary

Cuts & Fits, a start-up company, is a boutique style retailer of maternity clothing. Cuts &
Fits will offer its customers a wide range of upscale products to choose from. By offering a
nice selection of upper-end merchandise with benchmarked customer service, Cuts & Fits
will quickly gain market share.

The Market

Cuts & Fits has identified two distinct market segments to target. The first segment is the
actual males, those that are buying the products for themselves or for their spouses. This
segment is growing at an impressive 9% annual rate and contains 400,000 potential
customers. The second groups are friends and other people buying gifts. This market
segment has a 8% annual growth rate with 600,000 potential customers.

The Concept

Imagine this. You walk into a new retail space and it is an upscale boutique, as if you were
on Fifth Avenue. But wait, the clothes are not for upscale models, but for expecting Males &
Female. While this may seem a bit unusual, it is truly needed. Fashion conscious women
have been looking for an upscale boutique where they can get good looking, chic clothing.
While there is one other store in Lahore. That sells clothes at a similar price point; the store
itself does not communicate the feeling of an exclusive boutique. Cuts & Fits will thrive by
offering upscale products to upscale clients.

Management
Mr. Irtaza Nasir Bhatti President, Chief Executive Officer, As the C.E.O Mr. Bhatti will
report to the Board of Directors and/or be assisted by a Board of Advisors. He will have
overall responsibility for all aspects of the company, including operations, marketing,
strategy, financing, company culture, human resources, compliance regulations, sales, and
public relations.

Mr. Abdul Rehman Butt Vice President of Finance, As the CFO, he will be responsible
for day-to-day operations, including development of guidelines, distribution of resources
authority consistent with planning, continuous review, and evaluation of performance, as
well company overview of commitments against available financial resources and
established schedules.
Mr. Sahir Malik Vice President of Marketing As the VP of Marketing, this individual will be
responsible for developing and implementing marketing programs to drive sales and raise
community awareness.

Cuts & Fits will achieve strong sales for years two and three while earning moderate net
profit for those years.

1.1 Objectives
To create a maternity clothes and accessory boutique for both Male & Female
Quickly gain market share by addressing the upper-end price point of maternity.
To become profitable within two years.

1.2 Mission
Cuts & Fits mission is to become the premier maternity boutique for the upscale expectant
Male & Female. This will be accomplished by offering the newest fashions and the highest
level of customer attention.

1.3 Vision Statement
Our Vision is to be a progressive business with strong brand equity, enhancing value for all
the stakeholders through excellence in performance and good governess.

1.4 Keys to Success
Offer the finest maternity clothing for Male & Female.
Pamper the customers.
Develop a strict financial control regime for the business.

2. Market Summary:

The recent economic slowdown combined with the tragic events of September 11, 2001,
reduced consumer confidence, which led to declining sales in the apparel industry as a
whole. The impact of the economic slowdown is felt differently by various sub-sectors of
the fashion industry, with some being more greatly affected than others, such as the men's
wear industry, in which the demand is more elastic than in the women's wear industry.

In general, the apparel market is positive due to the immensity and strength of the
industry. However, manufacturers who want to enter the market will have to be extra-
prudent and prepared to make greater investments in promotions and resources to do
observation visits, conduct preliminary market tests, and increase their visibility by taking
part in trade shows and other activities. Industry specialists strongly advise using
specialized brokers to increase one's chances of success.


2.1 Segmentation
Geographical Area of Target Market in Lahore:
Segmentation & Identification Area of Target Market:



2.1.1 Geographic
For the availability of our product we have strong distribution channels that make our
product available in Lahore. But we want to increase our business in Punjab and then
Pakistan. Punjab is divided into 5 zones includes modern retails of Lahore, Faisalabad,
Islamabad, Multan and Gujranwala-Gujarat. Then we target other provinces of Pakistan.
Here are some specific areas of Lahore, which we want to target;

Identification of Target Area:
Defence:
H block, Lahore
Y block, Lahore

Lahore 100,00,000
Women 55%
Men 45%
Women 55,00,000
3 % Target
Women 165000
Potentially
Interested
10%
Potentially Interested 10%
Target 40,000
Women
3% Men
Stores:
Hyper star, Lahore
Metro, Lahore
Mall of Lahore
Shopping Malls

Gulburg:
Liberty market, Lahore
M.M Alam road, Lahore
Xinema Mall, Lahore
Pace shopping mall, Lahore


Others Areas:
Annar Kali, Lahore
Panorama Center Mall road Lahore
Cream block market, Allama iqbal Town
G 1 market Joher Town, Lahore

2.1.2 Demographics
Age: People of all ages but young girls and boys will mostly our customer.
Gender: Male and Female.
Family size: No limit of members. It may be single or all family members.
Family life cycle: young or old, married or single.
Income: Rs. 40,000 and above
Occupation: students, working people and house wives
Social Class: Upper class, Upper middle class and middle class

2.1.3 Psychographics
Lifestyle: Achievers, Well settled and Ambitious people.
Personality: Fashion conscious persons may be male or female.
Value:
Attitude:
In the case of Cuts and fits or any other appersal the final consumer is the
person, who is earner of his family because he or she is the one who manage the
financial expenses and has knowledge about quality and price of the product.
2.2 Behavioral Factors
Creating a feel among consumers that higher the rate, better the quality.Cuts
and fits is not only the product for customer. But it is the brand that targeting the peoples
through believes and values. We define our brand according to the consumer needs.
Therefore, our tag line is The cuts thats fit you. Targeting quality driven customer who
are ready to pay a premium price. Customers believe the product to be expensive, but
consider it to be of superior quality and thus are willing to pay more.
2.3 Market Needs
We are proud to have a differentiation edge over our competitors through our effective
segmentation.

Accessible: Our product cuts and fits are available to for our customer. Through using
print and electronic media we provide all awareness of our product our customer feel no
difficulty in assigning the product during purchase. The customers who have been focused
are potential &real customer of our product.

Actionable: We are going to have a strong add campaigns for attracting segment effectively
and efficiently. So, that we can capture the market share as soon as possible.

2.4 Market Trends
The trend is directed towards consumer preferences for appraisal. However, there
was a research that influences consumer preferences for appraisal goods. Current
consumers attitudes regarding the brand image, consumer preferences for global as well
as domestic brands, and its country-of-origin.
Appraisal industry has seen considerable change in its customers purchasing patterns.
Consumers are depending on their psychological satisfaction. They are also searching for
more convenience in retail shopping. As a result, they are willing to pay more for products
that are quick and easy to use and have huge stock in the local market of Pakistan. Faced
with a highly competitive market and an ever decreasing direct marketing channel,
branding has become very important for producers to gain a competitive advantage in the
market place. Brand image provides consumers with a familiarity that increases
convenience in shopping. Therefore, we focus on our brand image.
2.5 Market Growth
We shall not consider training as a burden, but as a sustainable investment for growth.
Need is for promoting culture of learning in this ever changing and ever improving
technological era, for improvement at all levels. We can survive and compete in the
international market, amid challenges, through an efficient work force and integrated
systems. Trained work force is critical for improving productivity and efficiency in the
garment industry, for survival and growth in the competitive international market.
2.6 SWOT Analysis
The SWOT analysis on the Pakistans textile industry is given here for the interest of readers. In
this way we would identify the weaknesses in the textile industry and find the alternative
solutions and remedies so as to make the textile industry competitive and efficient against our
biggest challengers, India and China and against the emerging markets such as Bangladesh and
Vietnam
2.6.1 Strength
1. Raw material base
Pakistan has high self sufficiency in raw material and is the fourth largest producer of
cotton. Abundant use of cotton resources has made the Textile industry of Pakistan move
towards the area of industrialization.
2. Labor
Cheap labor has always been the backbone of the economy of Pakistan. Cheap and ample
supply of labor strengthens the industrial and agriculture sector of the country. Around
39% of the labor force works in the textile sector. As Karl Marx said, that we have to use the
army of labor present in the country for productive means. Thus cheap and abundant
labor means low cost of production.
3. Rich heritage
Due to cultural diversity and rich heritage, designers come up with new different and
attractive designs which are appreciated worldwide. Our culture comprises of Sindhi,
Punjabi, Balochi and Pushtoo values. Also we are also influenced by the Indian culture
through the media exposure, which of course gives the Pakistani designers an inspiration
and taste of Karnataka, Rajhastani styles, etc. This varied culture and fusion among these
two neighbours gives inspiration to the designers to give their best in terms of styles,
creativity and fashion.
4. Domestic market
He recent shift of the population from the agrarian society to the urban areas, increased
income levels and growth of the population raised the domestic demand. This means more
factories more manufacturing units, more supply and more labor.



2.6.2 Weaknesses
1. Research & Development (R&D)
Developed countries are using the technology of biotechnology and genetic engineering to
increase the quality and quantity of their cotton production. They are able to grow colored
cotton, organic cotton and several different varieties cotton to added value to the textile
chain. In Pakistan, there is very some research done on small scale by private companies to
invent modified cotton fibers. Practically no efforts are being made by the APTMA in the
R&D of the textile industry to enhance the quality of its products, upgrade the technology
used, and encourage effective methods of production in order to compete internationally.
Instead the industry suffers lack of latest means of production and falling cotton crop
output every year. Due to low quality of cotton crop, profitability decreases and the farmer
switch to the other crop such as sugar cane, maize and thus the cotton production
decreases.
2. More dependence on cotton
As the textile sector is heavily dependent on cotton production, low cultivation of cotton
will deteriorate the textile industry. On the other hand, Pakistan lacks expertise in the
development, production and marketing of synthetic products and fabrics required for
items like swimwear, skiwear and industrial apparel. So far Pakistan has been unable to
diversify in the export of textiles and is heavily dependent on single fibre, that is cotton and
its blends. This dependence on single crop economy is restricting the diversification of
exports from Pakistan.
3. Labor productivity
Despite of the abundant supply of the labor, productivity of the labor is very low. According
to a study by Federal Adviser on textiles, the regional competitors of Pakistan take 75
minutes to complete and produce one piece of cloth whereas we take 133 minutes for the
same work. We also waste 30% in finishing and 12% in washing. European buyers
recommended that we should cut our costs up to 45% in sewing by getting more efficient.
Labor productivity can be improved by giving the labor appropriate training with the
advancement of technology so as to make them more efficient and with lower wastage of
resources. In China an average 70 hours of training are given to labor to enhance their
expertise.
4. Poor infrastructure
The important resources and infrastructure, such as adequate of supply of water,
continuous supply of electricity and gas, efficient logistics and transportation, tax structure,
raw material supply are all basic requirements for the development of an industrial base.
However, on the other hand, the industry is faced with rising charges of the energy sector,
which increases the cost of production, making it difficult to compete with the other
regional rivals.
5. Poor quality standards
With the exception of big and leading units who comply with global quality standards in
textiles, most of the medium and small sized units can not ensure the reliable and
consistent quality standards. Some of these textile units import second hand machinery
from China, India, Korea, and Taiwan with no checks and balances on the quality of the
machinery parts and tools. Preference is only given to the cheap and workable machinery
with no concern of the quality of the machine, therefore, resulting in poor quality of the end
product.
The industry can generate more profit by adding more value to the product, as value can be
measured in terms of quality, increased per unit price, etc. Pakistans textile industry
should focus on latest material handling techniques and should train workers. The inability
to timely modernize the equipment, machinery and labor has led to the decline of Pakistani
textile competitiveness.
6. Unstable political situation
Political unrest, strikes and terrorism have critically affected the economy of Pakistan.
Frequent changing of the government has adversely maligned the policies of the textile
sector. According to the World Trade Review Pakistan has failed to take necessary steps
needed to meet post Multi-Fiber Agreement (MFA) challenges for its textile industry owing
to lack of political will by the successive governments.
In 1978 World Bank surveyed the Pakistan textile industry and reported many deficiencies
in this sector. It also gave certain measures to resolve these issues, but unfortunately all
these problems still persist and the industry is still unable to keep its pace with the
international market. Successive governments lacked the will to reform human resources
and adapt the marketing techniques that resulted present scenario in this industry.
7. System orientation and supply chain
Nowadays, customers are very systematic in their work and they expect the same
professionalism from their vendors. Unfortunately, we lack this capability and are not
competent to struggle in the international business, thus losing many opportunities.
On the other hand supply chain management is rarely implemented. We are disorganized,
disconnected and distorted. Time management is very much important aspect in the
business and buyers expect on time delivery to match the retail launch of the Spring/
Summer or Autumn/Winter seasonal collections on time . Delayed delivery of export
orders result increase in cost due to fines by the buyers and at times losing business
altogether due to the breach the order contract.
2.6.3 Opportunities
1. Pakistan Textile City
Pakistan Textile City in Port Qasim, Karachi with an area of 1250 acres, will be completed
in 2011 as a private public sector joint venture. The main purpose of the textile city is to
provide the textile industry with the world class infrastructure to meet the global
competitiveness and challenges and as to provide value added textile industrial zone. Its
main features include one way window operation, constant supplies of gas and water, and
uninterrupted power supply.
2. Marketing
Targeting the unexplored export markets with the help of aggressive sales and marketing
will pave the way for the textile growth. Its all about hunting your opportunities with the
handful of colorful lollipops. If we make investment in our sales force and train them in the
fine art of marketing textile products, we can capture an much bigger market share from
other smaller competitors.
3. Collaboration with foreign companies
By making partners with the foreign companies, we will be able to learn a lot from them in
terms system orientation, supply chain and it would be feasible to import latest technology.
We can also reduce our costs, comply with the international standards, add value to our
products, easiness in marketing our products in different foreign regions, improved labor
and thus catching up with our regional competitors.
4. Re-engineering of production system
Information technology has a crucial role in manufacturing sector. Acquiring state of the art
machinery is though very much expensive, but a very fruitful and necessary measure to
stay competitive in the long run. It is the level of trust, the exporter builds with its
customers by giving them flawless products, made on state of the art machinery. Once this
trust is developed, there is no other way than any unforeseen exception, that you may lose
a customer to another competitor. Therefore, its highly recommended to produce with
great efficiency, minimizing the wastage of the raw material, energy resources and thus
reducing the cost of production.
5. Producing high value products
Its better to export yarn than raw cotton. Similarly its better to export finished fabric than
to export grey fabric (raw fabric). Furthermore its very much feasible to export readymade
garments than to only fabrics. What makes the latter better is the value added and
subsequent increase in per unit price.
Therefore, the textile industry should focus on the finished products so as to create more
value in their products and reap larger margin of profits. The industry should also diversify
into other areas such as technical textiles and nonwovens in order decrease its dependence
on conventional and commodity textiles, which is highly sensitive to per unit price and
volume for the profit margin.
6. Image building of Pakistan to attract FDI
Security measures should be taken to facilitate the buyers and investors to visit Pakistan
for investments. Secure business environment must be needed to attract golden sparrows
to facilitate business dealings and building positive image of Pakistan that they can rely
upon.
7. Reducing the cost of business.
China and India are much cheaper in labor, raw material and utilities as compared with
Pakistan. Rising inflation also increase the cost of production. We have to control these
unnecessary costs if we have to survive in the middle of the two giants of the textile sector
in the world.
2.6.4 Threats
1. New competitors
Pakistan is facing new competitors in textile sector such as Bangladesh, Vietnam and
Turkey. Though we cannot avoid competition but we can always stay ahead of them by
reforming our strategies and educating our entrepreneurs so as to move one step forward
in every aspect.
2. Phasing out of quota system
As the quota system is ruled out by WTO, there is a threat by the Chinese and Indian
manufacturers to gain most of the market share. We have high costs, low labor productivity
and inefficient production processes.
3. Fashion life cycle
Fashion changes day by day these days. Media has so much penetrated in our daily lives
that we easily adapt ourselves as it wants us to. This has resulted in shortening the fashion
lifecycle thus increasing the fashion risk.
Now the buyer does not want to wait long for his consignment because he is insecure that
by the time it will reach to him he will lost its demand due to change in fashion. Therefore,
they prefer to buy from neighboring countries even at higher cost to get their products
instantly rather than to wait weeks or months for their consignments to reach them.
2.7 Products & service offerings

Cuts & Fits is a new boutique that offers a wide range of fancy maternity clothes
and accessories. The concept is to offer high-end products for Male & Female in one store.
This level of convenience is not offered by anyone else. While there is one other store that
offers upscale maternity clothing, no one offers products for both mother and child in the
same store. Our products are highly effective disinfectants with high quality and
convenience in pricing. In apparel market the competition are on the peak these days. But,
we over products according to our customers need. Our product will have a broad
spectrum and will have a rapid growth market share.
Some of Cuts & Fits product offerings include:

Maternity clothes.
Shoes.
Wallets.
Belts.
Clutch Bags.
Undergarments.
Wallets
Party dresses
To create a maternity clothes and accessory boutique for both Male & Female
Quickly gain market share by addressing the upper-end price point of maternity.
Our services are our customers satisfaction. Because we are launching garments outlets,
therefore our brand and our valuable products are our service. Due to this it is compulsory
to focusing o quality and customer satisfaction. Regarding the product and servicing we
have clear motives and our goals.

2.8 Key success factors
Success in the Apparel industry depends in large part of knowledge of retail
operations, and the suitability of your brand skills and personality to the business.
The apparel business just like our cuts & fits requires that we must:
Enjoy meeting people.
Be skilled in the art of maintaining customers.
Have a knack for choosing the clothes that people will actually buy,
Possess a huge dose of fashion sense.
According to a report, the industry is very competitive, and studies show that 80
percent of retail clothing businesses fail within the first five years. Most brands,
particularly small businesses, perish because of poor management, tough competition from
department and discount stores and poor evaluation of fashion trends.
Below are nine ways of our business can succeed in the clothing retail market:
1. Start small
One of the most common downfalls of retailers is that they tie up so much cash in
inventory and overheads in the beginning. But we are short in cash; concentrate on getting
select quality merchandise. As your business grows and our customers increase, we can
then afford to increase your inventory.
2. Location

Selecting a location with significant sources of demand is the most important
decision when deciding to open a garments brand outlet. Opening a brand store in Lahore,
one cannot find a better place than mall of Lahore, panorama center, liberty market
because there is high frequency of habitual shopping class is seen.

3. Quality Product and Service

You are only successful when you over a high rated product. Similarly, you're only
as good as your last customer interaction. Successful brands ensure their service offer
quality and product after sometime by gathering data to the customer. We must do this
technique, because then we make a trend in market.

4. Effective Capitalization

The life cycle of a brand is naturally five years. In year one, the business is built. In
years two and three, the business is fine tuned. In years four and five, earnings are
maximized. Same the condition will happen with us. We have a crystal clear thinking about
our plan or accomplishing our goals. Cuts and fits invest effective capitalization in its
business process, so we can earn maximum profit.

5. Environment
A successful brand outlet has an environment that matches the product it is serving
and the customers it attracts. A retail chain store that focuses on selling high quality and
prestigious apparels to families should have an environment in there outlets that are
peaceful and exciting. Its maters a lot in your sale.




6. Staff and customer service

Successful employ managers and employees who perform at a high level and work
to accomplish the company goals. We hire that employees which have a clear mind about
our brand and they know about our customer needs. For this purpose, we need a strong
and hardworking marketing team. Employees selection is also our success factor. Also we
hire a strongest sales staff, which convince our customers for buying.

7. Go on heavy service
We are offering products for every age persons like young, kids, aged
persons. So, its commonly seen that there is a rush of people in retails brand store. It will
be our success factor to handle a large number of people at a time. Because a statement is
that every customer is superior in business.

8. Strong supplier network
Supplier affects a lot on a company reputation. Therefore,
management of Cuts and fits will prefer to hire those suppliers, which know the market
trends and they are initiatives in doing activities. So, we will have a high edge in the market.
9. Strong distribution network or channel
Cuts & fits have a strong distribution in all over the city.
It is our key success factor. Because distribution of the products on the time have a lot of
affects your sales and promotion of your product.
10. Successful product positioning & promotion
Our successful product positioning will also become a key
success factor for us. It helps us create a brand image in the customer mind. And then we
will be able to accomplish our goals. In these days successful product promotion also give
you a edge in the market. If you offer a high quality product then effective promotion takes
you on the top of profit edge.




3. Marketing Strategy
Cuts & Fits marketing strategy is based on the following:
Product differentiation based upon "The Cuts that fits you"
Building a relationship-oriented business.
Fostering corporate social responsibility.
Focusing on the diversified "communities" as the company's target markets.
Cuts & Fits brand and marketing message are not directly attached to any particular group
of customers, but rather to a diversified community of consumers who believe in
humanitarianism and equal opportunities and choices for everyone. The company does not
simply offer products that clothe the body, but rather products that clothe the soul -
clothing that supports people, either directly or indirectly, through difficult situations.
The company's primary marketing strategy is to establish itself as the "Apparel Company of
the Future." With management's deep roots in humanitarianism coupled with a firm belief
in harmony and honesty in business and advertising, Cuts & Fits will greatly increase the
marketability of its apparel line.

3.1 Pricing Strategy

Cuts & Fits pricing strategy remains competitive with all other high quality apparel
companies, but offers much more in terms of meeting the company's mission and purpose
for existing. As a general rule of thumb, 50% of each garment's cost is consumed in actual
manufacturing, divided among labor and materials. The other 50% is allocated overhead
and shipping expenses.* Average mark-up is 40% of cost.
Currently, all of the company's products are on target in price, as compared to other similar
branded apparel. Cuts & Fits with regularly monitor its operating expenses, delivery costs,
cost of sales, trade discounts offered, damage allowance, hazards, and other variables to
ensure that the company's pricing strategy remains competitive with industry standards
and expectations.

3.2 Promotion Strategy

Cuts & Fits brand is a competitive advantage in itself, as it is not directly attached to any
particular group of customers and allows entry into different segments of the apparel
industry. In addition, the company has an established marketing strategy that relies upon
celebrities, market specific advertising, product promotion, and "giveaways" that have
established Cuts & Fits presence in the apparel industry.
Cuts & Fits will depend upon several promotion strategies to reach new customers. These
strategies include:
3.2.1 Advertising: Cuts & Fits will utilize industry-wide apparel magazines and
newsletters as primary sources of advertising.
3.2.2 Magazines/Newsletters: Industry magazines and newsletters are considered
to be effective advertising media because they consistently reach the company's target
markets. Because magazines and newsletters are tangible media, they help advertisers
relate intangibles, such as believability, quality, and prestige. These types of media are
non-intrusive, quiet, personal vehicles that usually have a long life. Their primary
audiences pass them along to secondary readers, so that their reach builds over long
periods of time, making them a long-term investment.
3.2.3 Direct Mail: Cuts & Fits will explore the benefits of incremental, coordinated,
direct mail campaigns which ensure that the company's advertising is:
Targetable
Efficient
Flexible
Measurable
Accountable

3.2.4 Media: Cuts & Fits will initially develop a local media campaign, including radio
and television, built around service innovation. This campaign will begin with a "Who We
Are" statement and be supported by other advertisements that reinforce the company's
marketing message to consumers of casual, active, and sports apparel.

1. Radio: One of radio's greatest strengths is its ability to deliver a marketing message to a
selective audience. The media is portable, free, and very accessible - at least one radio
exists in most American homes. Cuts & Fits radio campaigns include advertising with
WMCA 570 and WWDJ 970, which are two of the largest radio stations.
2. Television: Nearly 31% of total TV households watch prime-time television
(ABC/NBC/CBS affiliates), a share change of 38.8% since 1985-1986. People spend more
time with TV than with any other medium, which due to its sight and sound uniqueness,
creates awareness, interest, and desire. Executed properly, Cuts & Fits TV campaign will
lend prestige and glamour to the company's marketing message.
3. Cable Television: Cable television service is available to 95% of all television
households in the Pakistan, and about two-thirds of all television households subscribe to
it. Most of those systems offer at least 30 channels (57% have between 30-53 channels and
13% have 54 of more channels).

3.3 Financial Objectives of CUTS & FITS
3.3.1 Revenue Growth
Increasing revenue is the most basic and fundamental financial objective of Cuts & Fits. The
growth in revenue of our company comes from an emphasis on sales and marketing
activities, and is solely concerned with increasing top-line earnings earnings before
expenses. Our Cuts & Fits company revenue goals are in terms of percentage increases
rather than aiming for specific Rupees amounts. We are setting our objective of increasing
revenue by 20 percent each year for the first five years of our company's operations.
3.3.2 Profit Margins
Profit objectives are a bit more sophisticated than revenue growth goals. Any money left
over from sales revenue after all expenses have been paid is considered profit. Our
company is a startup company so we use our Profit or bottom-line earnings in number of
ways that includes investing it back into the business for expansion and distributing it
among employees in a profit-sharing arrangement.
Profit goals are concerned first with revenue, then with costs. Keeping costs low by finding
and building relationships with reliable suppliers, designing operations with an eye toward
lean efficiency and taking advantage of economies of scale, to name a few methods, can
leave our Cuts and Fits Company with more money after paying all of our bills.
3.3.3 Sustainability
At certain times, companies or brands may be primarily concerned with basic economic
survival. Retrenching is a marketing technique based on a financial objective that
attempts to keep a brand alive and keep current revenue and profit levels from falling any
further during the decline stage of the product/brand life cycle.
Companies may be concerned with financial sustainability during periods of economic
turmoil, as well. Cuts and fits financial objectives for survival include collecting on all
outstanding debts on time and in full, de-leveraging by paying off debt and keeping income
levels consistent.
3.3.4 Return on Investment
Return on Investment is a financial ratio applied to capital expenditures. ROI can be applied
to two basic scenarios. ROI is concerned with the return generated by investments in real
property and productive equipment. Our Cuts & Fits will make it sure that the outlets,
material, products and other equipment they buy generates sufficient revenue and profit to
justify its purchase cost.

25%
Niche Market
Segmentation (
Middle Class &
Others)
Target Market
(Elite Class &
Upper Middle
Class)
3.4 The Target market
The process of evaluating each market segments attractiveness and selecting two
or more segments As the outlets of cuts and fits are in posh area and prices are high, so
cuts and fits is targeting upper class and upper middle class.
Target market depends upon size and growth rate of population, Company
resources and structural attractiveness of market segment. Cuts and fits are not so much
expensive but is unique. We are targeting household women, students and all aged men.
The segmentation of our target market on the basis of income is Elite and upper middle
class. The majority market of cuts and fits is household women as they are more in to
buying the wearing products because they are more curious about fashion.
As we know that we are selling appraisal products so our main target market is girls
of elite class, and upper middle class and especially those who are using different kinds of
brands without keeping in mind that from what class of society they are.
We conducted a survey using the most appropriate tool i.e. the questionnaires in
which we asked customers if we launched cuts and fits in the market, would they like to
buy that innovative product or not. For this purpose we used a sample size of 100 and
response we got is shown bellow graphically.














3.5 Specific Environmental Factors










The specific environment includes those external forces that have a direct impact on
manager s decisions and actions, and are directly relevant to the achievement of the
organizational goals.
3.5.1 Customers:
Customers are very important for the organization because customers are the main
source of organizations profit. Organization exists to meet the need of customers. Customer
obviously represents potential uncertainty to an organization. If customers become
dissatisfied with the organization products it will really affect the organization. Customers
are regarded as the king of the market. Success of every business depends upon the level of
their customers satisfaction
3.5.2 Suppliers:
Suppliers are very important for any organization. A supplier relationship is one
way of ensuring competitive and quality products for an organization. They are the persons
who supply raw material and required components to the company. They must be reliable
and business must have multiple suppliers i.e. they should not depend upon only one
supplier.
3,5,3 Competitors:
Every organization has one or more competitors. Competitors analysis and
monitoring is crucial if an organization is to maintain its position within the market. Every
move of the competitors affects the business. Business has to adjust itself according to the
strategies of the Competitors.

THE ORGANIZATION
SUPPIERS
CUSTOMERS COMPITETORS
3.6 PEST Analysis
















3.6.1 Political Factors
If we analyze the political situation of our country, we come to know that it is not in very
good condition. Currently, these problems are main and most important problem which
our country is facing.
The continuous change in power affects the policy making of the industry thus affecting our
business in a negative way.
Government seems failing in solving the problem of shortage of most important resource
required to operate any industry and business that is electricity.
The legislation is in hands of few people and they keep on changing it in ways that would
benefit their sole interests.
Government does not take interest in new establishing industries.
Nowadays we are also facing an internal war situation in our Frontier Province which is
also affecting us a lot and adding to already worsening political situation.
International pressure groups are also there which are indirectly ruling our country
For past many years like USA and others are used to interfere in our internal matters and
they dictate our government according to their sole interests.
In short, the political condition of Pakistan is not good or unstable.

THE ORGANIZATION
ECONOMIC
POLITICAL/LEGAL
SOCIALCULTURAL
TECHNOLOGICAL
3.6.2 Economical Factors
Economic condition affects both capital availability cost and demand. Timing and
relative success of particular strategies can be influences by economic conditions.
As we look at the economical trends of Pakistan there is a high inflation rate which
decreases the purchasing power of customers so economical factors might affect on cuts
and fits.
We can categories our economy into different segments, although the general economy of
Pakistan is not in very good condition but still we can see development in some industries
and sectors.
There are some industries which are not affected by the current economic situation and we
are seeing growth in these industries. Although the cost of goods manufacturing has
increased and profit margins have decreased.
Not only in Pakistan, but overall world economy is unstable.
Our Pakistani industry is in introduction and growth stage in the trade cycle and we can
hope for good in future, provided the political situation and overall world economy also
stabilizes.
Pakistan have got loan from IMF and World Bank on certain conditions. These conditions
are also affecting our economy.
3.6.3 Social Factors
Social factors include the demographic and cultural aspects. These factors affect
customer needs and the size of potential markets.
According to the current lifestyle people are getting busier in their work in some place
husbands and wives both are the earners in case of this trend it create a demand of
domestic help services so that people could get reliable services in their absence.
Consumer attitudes and opinions are favorable towards trustworthy services which would
bring comfort and ease to them.
Now, people are more aware of quality of services and are ready to pay a slightly higher
price for durable and reliable services.
Advertising and publicity has a major role in forming consumer attitudes and changing
consumer buying behavior.
3.6.4 Technological Factors
The frequent change in technology is a challenge these days. Pakistan is still far
behind rest of the world in technology development, innovations, and research and
development.
Our product would be based on latest technology being used all over the world.
Our R&D activities will continuous in our factory.
We have latest automated machines that would surely create big difference in the market.


3.7 Marketing Research
Marketing research consists of all the activities that enable the organization to
obtain information it needs to make decisions about its environment, marketing mix, and
present or potential customers. Marketing research is the development, interpretation, and
communication of decision oriented information to be used in all the phases of the
marketing process.
Coming to what processes cuts and fits uses to research the current status or even to
determine the future prospects of brand is firstly the use of syndicated services because
they are developed without a particular client in mind but are sold to anyone interested.
The source is the marketing information system that employs these are basically
internally coordinated activity that provide continuous, scheduled or on demand standard
reports that help evaluate the products performance. It collects the data it requires by the
data bases and data ware houses it keeps both of the customers it sells to as well as the
retailers and how much sales at a specific time is the sales were. Therefore keeps a whole
record of what is happening when.
Moreover, cuts and fits also use the conventional method of obtaining primary data
either from the people or from the shop keepers it sells its products to. Therefore, engages
in an independent marketing project. Sometimes they even collect the data they need by
distributing or providing free samples of different products in all major places around
Pakistan. So, we can conclude that, we are uses the Simulated Test Marketing.
An example of marketing research for our brand can be put forth.
First, we defined the objective, the object was does it have to come up with a new and
innovative product. It wanted to research that would to the launch of our brand bring new
innovation in the product itself and do the people want innovation?
Now, we had to conduct a situation analysis which dealt with concentrating on what people
wanted and what new flavor can be brought forth different from the existing ones.
The third step was conducting an informal investigation by going to the retailers and the
shop keepers and the consumers themselves by just asking verbal questions.
The next step was to conduct a formal investigation; in this case, we are giving samples of
our products in all big places. Finally, we will be analyzed the data and launched our brand
cuts and fits.





3.8 Positioning
Positioning is referring as Arranging for a product to occupy a clear, distinctive and
desirable place relative to competing products in the minds of target consumer.We
arrange cuts and fits to occupy a clear, distinctive, and desirable place relative to competing
products in the mind of target customers.
This is something very important because as it creates an image about our brand in
the minds of our patrons that how they perceive it. This positioning would be helpful in a
sense as it would tell us that our patrons are willing to buy our product or not the more
effectively we position our product the more will be demand for our product.
In cuts and fits feedback will be taken from the customer in order to know the
customer demands and then improvements will make in products. We are focusing on
quality and pricing in order to create a distinct and clear position in the minds of our
customers .cuts and fits will have a strong brand name and we will leading the market
appraisal industry.






In Pakistan, the markets for producing brand appraisal on its own are very rare. Only a few
names are in the market that produces their own products. But here cuts and fits is
differentiating from all in the way that we are providing quality and new styles other than
traditional in a variety of styles and colors that makes your personality admirable. Our
brand enables you to present yourself as a style setter in the limits of our society. Cuts and
fits collection is specifically designed to suit a variety of occasions and cultures as well.

4. Financial Plans of CUTS & FITS
The growth of Cuts & Fits will be moderate and the cash balance will always be positive.
Being a retail environment we will not be selling on credit. We will accept cash, checks, and
all major credit cards. Tele-Check Services will be used as the check guaranty system to
help reduce the percentage of loss on bad checks. Marketing and advertising will remain at
or below 5% of sales. We will continue to reinvest residual profits into company expansion,
and personnel.
Important Assumptions
Cuts & Fits Company does not sell on credit nor do we offer layaways at this time. We
accept cash and checks, Visa and MasterCard. All sales paid via credit cards will be
deposited in our business checking account within 48 hours.
Key Financial Indicators
The following chart shows the benchmark figures for Cuts and Fits Company:






4.1 Projected Profit& Loss
Projected profit and loss of Cuts & Fits Company is:



Pro Forma Profit and Loss for Outlets of Cuts & Fits
Year 1 Year 2 Year 3
Sales 284,200 369,460 480,290
Direct Cost of Sales 142,100 184,730 240,145
Other Production Expenses 0 0 0
Total Cost of Sales 142,100 184,730 240,145
Gross Margin 142,100 184,730 240,145
Gross Margin % 0.00% 50.00% 50.00%
Expenses
Payroll 44,115 48,527 53,379
Sales and Marketing and Other Expenses 15,448 15,523 15,834
Depreciation 0 0 0
Telephone / Pagers/ Cell 1,800 1,800 1,836
Utilities 4,500 4,800 4,896
Payroll Taxes 4,412 4,853 5,338
Other 0 0 0
Total Operating Expenses 70,275 75,502 81,283
Profit Before Interest and Taxes 71,826 109,228 158,862
EBITDA 71,826 109,228 158,862
Interest Expense 1,491 1,175 845
Taxes Incurred 21,100 32,416 47,405
Net Profit 49,234 75,637 110,612
Net Profit/Sales 17.32% 20.47% 23.03%
100000
150000
175000
200000
300000
4.2 Projected Cash Flow
The following table explains projected cash flow.



PROFORMA CASH FLOW FOR CUTS & FITS OUTLETS
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales 284,200 369,460 480,290
Subtotal Cash from Operations 284,200 369,460 480,290
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0 0 0
New Current Borrowing 0 0 0
New Other Liabilities (interest-free) 0 0 0
New Long-term Liabilities 0 0 0
Sales of Other Current Assets 0 0 0
Sales of Long-term Assets 0 0 0
New Investment Received 0 0 0
Subtotal Cash Received Rs284,200 Rs369,460 Rs480,290
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending 44,115 48,527 53,379
Bill Payments 174,454 244,577 315,576
Subtotal Spent on Operations 218,569 293,103 368,955
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out 0 0 0
Principal Repayment of Current Borrowing 0 0 0
0
0
50000
80000
100000
120000
150000
200000
Other Liabilities Principal Repayment $0 0 0
Long-term Liabilities Principal Repayment 3,300 3,300 3,300
Purchase Other Current Assets 0 0 0
Purchase Long-term Assets 0 0 0
Dividends 0 0 0
Subtotal Cash Spent 221,869 296,403 372,255
Net Cash Flow 62,331 73,057 108,035
Cash Balance Rs62,715 Rs135,771 Rs243,806



4.3 Projected Balance Sheet
The following table explains the projected balance sheet of each outlet of Cuts & Fits.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash 62,715 135,771 243,806
Inventory 13,365 17,375 22,586
Other Current Assets 0 0 0
Total Current Assets 76,080 153,146 266,393
Long-term Assets
Long-term Assets 0 0 0
Accumulated
Depreciation
0 0 0
Total Long-term Assets 0 0 0
Total Assets 76,080 153,146 266,393
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable 15,762 20,491 26,426
Current Borrowing 0 0 0
Other Current Liabilities 2,000 2,000 2,000
Subtotal Current
Liabilities
17,762 22,491 28,426
Long-term Liabilities 13,400 10,100 6,800
Total Liabilities 31,162 32,591 35,226
Paid-in Capital 5,100 5,100 5,100
Retained Earnings (9,416) 39,818 115,455
Earnings 49,234 75,637 110,612
Total Capital 44,918 120,555 231,167
Total Liabilities and
Capital
76,080 153,146 266,393
Net Worth 44,918 120,555 231,167

4.4 Business Ratios
Business ratios for the years of this plan are shown below.
Ratio Analysis
Year 1 Year 2 Year 3 Industry
Profile
Sales Growth 0.00% 30.00% 30.00% 0.20%
Percent of Total Assets
Inventory 17.57% 11.35% 8.48% 49.00%
Other Current Assets 0.00% 0.00% 0.00% 23.00%
Total Current Assets 100.00% 100.00% 100.00% 81.40%
Long-term Assets 0.00% 0.00% 0.00% 18.60%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 23.35% 14.69% 10.67% 40.70%
Long-term Liabilities 17.61% 6.60% 2.55% 15.20%
Total Liabilities 40.96% 21.28% 13.22% 55.90%
Net Worth 59.04% 78.72% 86.78% 44.10%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.00% 50.00% 50.00% 38.30%
Selling, General & Administrative Expenses 32.72% 29.62% 27.09% 22.10%
Advertising Expenses 0.00% 0.02% 0.02% 2.10%
Profit Before Interest and Taxes 25.27% 29.56% 33.08% 0.70%
Main Ratios
Current 4.28 6.81 9.37 2.22
Quick 3.53 6.04 8.58 0.62
Total Debt to Total Assets 40.96% 21.28% 13.22% 55.90%
Pre-tax Return on Net Worth 156.58% 89.63% 68.36% 1.70%
Pre-tax Return on Assets 92.45% 70.56% 59.32% 3.80%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 17.32% 20.47% 23.03% n.a
Return on Equity 109.61% 62.74% 47.85% n.a
Activity Ratios
Inventory Turnover 10.91 12.02 12.02 n.a
Accounts Payable Turnover 12.07 12.17 12.17 n.a
Payment Days 27 27 27 n.a
Total Asset Turnover 3.74 2.41 1.80 n.a
Debt Ratios
Debt to Net Worth 0.69 0.27 0.15 n.a
Current Liab. to Liab. 0.57 0.69 0.81 n.a
Liquidity Ratios
Net Working Capital $58,318 $130,655 $237,967 n.a
Interest Coverage 48.16 92.96 188.00 n.a
Additional Ratios
Assets to Sales 0.27 0.41 0.55 n.a
Current Debt/Total Assets 23% 15% 11% n.a
Acid Test 3.53 6.04 8.58 n.a
Sales/Net Worth 6.33 3.06 2.08 n.a
Dividend Payout 0.00 0.00 0.00 n.a

4.5 Financial Analysis on CUTS & FITS
Financial analysis (also referred to as financial statement analysis or accounting analysis or
Analysis of finance) refers to an assessment of the viability, stability and profitability of a
business, sub-business or project. Cuts & Fits Company has appointed professionals that
make useful information taken from financial statements and other reports. These reports
are usually presented to top management as one of their bases in making business
decisions. Our major business decisions are based on these reports such as:
Continue or discontinue its main operation or part of its business;
Make or purchase certain materials in the manufacture of its product;
Acquire or rent/lease certain machineries and equipment in the production of its
goods;
Issue stocks or negotiate for a bank loan to increase its working capital;
Make decisions regarding investing or lending capital;
Other decisions that allow management to make an informed selection on various
alternatives in the conduct of its business
Goals

For financial analysis financial analysts often assess the following elements of a
firm:

Profitability - its ability to earn income and sustain growth in both the short- and
long-term. A company's degree of profitability is usually based on the income
statement, which reports on the company's results of operations;

Solvency - its ability to pay its obligation to creditors and other third parties in the
long-term;
Liquidity - its ability to maintain positive cash flow, while satisfying immediate
obligations;
Stability - the firm's ability to remain in business in the long run, without having to
sustain significant losses in the conduct of its business. Assessing a company's
stability requires the use of both the income statement and the balance sheet, as
well as other financial and non-financial indicators. etc.









4.6 INCOME STATEMENT OF Cuts & Fits for the year ended

INCOME STATEMENT Cuts & Fits-
For the year ended DECEMBER 31

Rs Rs
Debit Credit
Revenues
GROSS REVENUES (including INTEREST income) 500,000
--------
Expenses:
ADVERTISING 6,300
BANK & CREDIT CARD FEES 144
BOOKKEEPING 2,350
SUBCONTRACTORS 88,000
ENTERTAINMENT 5,550
INSURANCE 750
LEGAL & PROFESSIONAL SERVICES 1,575
LICENSES 632
PRINTING, POSTAGE & STATIONERY 320
RENT 13,000
MATERIALS 74,400
TELEPHONE 1,000
UTILITIES 1,491
GOODS 95,000
--------
TOTAL EXPENSES (290,512)
--------
NET INCOME 209,488

The net income of cuts and fits shows a statement of comprehensive income. With the help
of this statement we can assess the ability to earn income and sustain growth in both the
short- and long-term. A company's degree of profitability is usually based on the income
statement, which reports on the company's results of operations. Income statement of
cuts& fits clearly shows that the business is earning good income that also shows
companys sustainability in both short and long term.
4. 7 Solvency
Cuts & Fits solvency is high with the help of balance sheet it is clearly shown that it mostly
deals in cash and due to handsome profits the company is able to clear its debts on time
and have ability to pay its obligation to creditors and third parties as well.

4.8 Liquidity
Thorough balance sheet it is clearly shown that Companys liquidity ability maintains
positive cash flow and is also able to satisfy its immediate obligations.
So with the help of above financial statements we clearly got a financial picture of Cuts &
Fits Company that is highly profitable and sustainable as well. With the help of companys
balance sheet and income statement the companys ability to remain in business in the long
run, without having to sustain significant losses in the conduct of its business is clearly
shown.