Professional Documents
Culture Documents
GUJARAT UNIVERSITY
(MBA PROGRAMME 2003-05) (N.R. INSTITUTE OF BUSINESS MANAGEMENT)
CERTIFICATE
This is to certify that Mr. Sunil N. Patel Roll No. 03067 of M.B.A-Ist year has satisfactory completed the summer project on BUSINESS PLAN
INTERNATIONAL INNOVATORS OF
under guidance of Mr. Samkit Shah & Mr. Tejas shah of International Innovators.
ACKNOWLEDGEMENT
It is a great pleasure that I express my sincere and heartly gratitude to Mr. Samkit Shah & Mr. Tejas Shah for his valuable guidance and constant encouragement during the completion of whole Summer project on BUSINESS PLAN OF INTERNATIONAL INNOVATORS B In my summer training at International Innovators, I got a very pleasant experience of working in an organization. First and foremost, I would like to thank my project guide, Mr. Samkit Shah . He gave me an in-depth knowledge of the export business methodology and enhanced my understanding on its various aspects. His invaluable and significant guidance improved my outlook and contributed in making my project a real learning experience. He also encouraged me to put in my best efforts and bring out the best of my abilities.
I am also thankful to faculty members of NRIBM and director of NRIBM Mr. Khandelwal for their suggestion for time to time which make my summer training an excellent one.
SUNIL N. PATEL
Table of Contents
International Innovators Business Plan
1.0 Non-disclosure Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 2.0 Scope of the project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 3.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 4.0 The company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
4.1 Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4.2 Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 4.3 Need of the company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 4.4 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 4.5 Business operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.6 Location and facility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4.7 Marketing and sales strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
8.5 Human Resources Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 8.6 Overall Growth Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Bibliography: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Annexure
International Business Awareness Survey form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SOURCES OF INFORMATION In my project I gained some important knowledge about the fundamentals of the field by referring to certain material provided by International Innovators as well as got a lot of information from the GLS library. A large amount of information on the related topics was retrieved from the Internet without which my knowledge would have remained shallow and incomplete.
METHODOLOGY OF DATA COLLECTION I used the questionnaire method of data collection to get the required information from the industries of various sectors. I had also made phone calls to the various companies and than approach to the CEOs or Export directors for their feedback in export experience.
ANALYSIS OF DATA After collecting the required information from all the above-mentioned sources, what I got was raw data. Such raw data would not be of much help to anyone. As taught in my Business Research Methodology course, I tried to organize this data into a systematic report, which would enable the reader to understand it better.
approaches to markets that are dynamic and challenging. This is especially true when one wants to enter markets in other countries. International Innovators use its extensive network and local expertise to provide methodology, strategy and resources needed to help its clients to overcome the hurdles of global expansion effectively, rapidly and at an affordable cost. It provides a range of services for Indian companies as well as for International clients. It also has the ability to customize beyond its stated range of services. 4.4 SERVICES The company is not a trading company, merchandise broker, or middleman. Rather, company is a pure service organization, a partner and ally, managing the global supply chain on behalf of its clients. International Market Research and market analysis 1) Demand for products/services in foreign markets. 2) Impediments to products/services in foreign markets (i.e. Government regulations, product specifications, certifications) 3) Identification of the best potential customers, sales channels and sales leads. 4) Market Research interviews with potential foreign buyers and agents, which often generate immediate sales opportunities. 5) Determining approximate potential sales volume in the foreign market. 6) Analysis of current and projected political and economic climate. 7) Identifying principal cost and risk factors in the Target Markets. 8) Analysis of logistical and operational needs. 9) A preliminary Market test to establish the validity and profitability of the foreign market. Organizing Buyer Seller Meetings (BSMs) 1) Set up meetings between potential buyers and seller after finding sufficient database for particular product in a specific region or country. Trade Fair Participation 1) Recommend Strategic Trade Shows World-wide to Exhibit. 2) Arrange for a local associate to attend and gather information from international trade fairs. Providing Importers or Exporters databases 1) Provide sufficient database to Indian as well as Overseas Company for their International business Brochure, other Marketing Material Design and Content Development 1) Research on a preferred look and presentation of marketing material in a particular part of the world, or on worldwide basis, as the case may be.
2) Conceptualizing and designing both electronic and print marketing material to suit the taste of target market. 3) Translating the marketing material into one or more foreign languages. Certifications and Product Modifications 1) Strategic Research on the certifications required or standards to be adhered to in the target market. 2) Alliances with certification agencies worldwide and support towards getting the clients products certified as required. International Finance Export Incentives and Documentations Translation Services 1) Provide facility to convert English documents in to European languages (German. French, Spanish etc.) or vice a versa as business in European region has been done in their native languages.
4.5 BUSINESS OPERATION International Innovators represent companies from various sectors. Company plays a crucial role by developing systems and solutions to assist our clients in achieving high standards for quality, delivery, and pricing. It has the capability to expand our network at any given time to meet specific requirements. International Innovators working with the manufacturer of Brass products, industrial fasteners, Teflon products, personal protection equipments, industrial and laboratory glasses ,Tools for Jewelers, Diamond Steel doors, windows and Aluminum adjustable louvers Cutters, Watch makers and Clock makers, industrial gears, leather products, wrought iron products ,high technology valves and automotives, handmade papers and paper products, stainless steel and aluminum kitchenware and cookware and electrical products. 4.6 LOCATION AND FACILITIES Company is located in well locality area of Ahmedabad. Company has good infrastructure with 24 hours internet access, and have local area network for successfully working of its operation and wide collection of books related to international business. Company associates are also working with company when ever company has a need to provide translation service to its clients or require any other service.
International Innovators do its business by web and industry directory based international marketing and market research and by its personal contact in overseas country. After searching potential buyers and producers they will set meeting between them and follow necessary procedures, rule and regulations for the business.
Mr.Tejas shah is primarily responsible for setting meetings with potential buyers and manufactures in India and over the world and generating a business. Mr. Samkit Shah had been experience in business development. He brings extensive knowledge and experience in the field of business generation, Export finance and preparation of documents. Specifically, he has a thorough understanding of the business research methodology and business information needs of the companys clients. Mr. Samkit shah is also responsible for coordinating various business activities like monitoring the task accomplishments of various employees. A team of four employees work with the partners out of them one employee work for developing website with specific technical contents and developing e-brochure addition to that, others employees working with find out specific information from various sources with help of online directory named as Kompass. Company has also direct associates in the Europe and the United States.
area. For example, most corporate clients are not aware that there are search services available that can help them with collection problems and provide judgment, lien and collateral information. A well designed and implemented direct mail and industrial meeting would target the best potential clients and create the most selling opportunities. International Innovators also join certain industry associations such as the AIESEC (the largest student organization). International Innovators is also connected with different regional business agencies, consultancy companies and chamber of commerce across the world. Direct associates in the United Kingdom and United States. These associations provide a good way to develop industry contacts and create marketing and selling opportunities for the company as well as build good community relations. Additionally, these associations are often times willing to sell mailing lists of members and subscribers. International Innovators will also seek referrals from industry contracts and consistently network to develop new referral sources. International Innovators will utilize a competitor based pricing strategy that prices its services in line with the leading competitors. The companys strategy will be to position itself among the leading price. This strategy will allow the company to be on the high-end of the pricing scale which will help to maintain targeted margins and profitability levels. The price of services is dependent on the type of service package ordered also depend on the targeted region, period of contract and success of the generating buyers order. International Innovators provide services and information as requested and forward the results via mail, fax or through PC-to-PC transmission. 8.5 HUMAN RESOURCES STRATEGY International Innovators will require an excellent support staff of well trained, knowledgeable, motivated and dedicated employees who can interact well with clients. Therefore, the company will hire a management/administrative/computer operations background. Additionally, three part-time computer operator/customer service/administrative employees will be hired. These employees will have good computer operations, administrative, technical skills and English proficiency. International Innovators is also in touch with foreign associate persons who are particularly useful to gather any information from overseas chamber of commerce regarding to potential buyers of overseas. International innovators also take help of overseas persons for translating the documents and share its profit with them for this service. International Innovators will look for experienced employees who are professional, self-starters, motivated and aggressive. The company will pay the prevailing rate to its existing employees and maintain friendly relationship with the employees. 8.6 OVERALL GROWTH STRATEGY International Innovators expects to realize strong consistent sales and earnings growth over the next five years. This growth will be principally attributable to the development of new and existing which will come at the expense of competitors. International Innovators expects to develop ten to fifteen new clients by the end of the base year. New clients will be developed through a consistent and effective personal contacts, and advertising program like internet and E-brochure and from the use of industry contacts and effective networking to develop good referral sources. International Innovators Business Plan
9.1 PROFIT AND LOSS A/C OF INTERNATIONAL INNOVATORS FOR THE YEAR ENDED ON 31ST MARCH 2004 Dr. Particular Administration Expenses: 54,118 Office manger 2,40,000 Manager 1,20,000 Staff 80,000 Total salary Exp. 4,40,000 Telephone Exp. 25,125 Internet Exp. 36,000 Electricity Exp. 29,975 Interest Exp. 35,900 Selling & Distribution Exp. Advertisement Exp. 5,690 Legal Exp. 11,600 Office Exp. 9,840 Traveling Exp. 4,49,870 Depreciation 85,000 -------11,29,000 -------Net Income Other Income loss 9,53,302 31,698 1,44,000 Amount Rs. Particular Sales Less: Discount Cr. Amount Rs. 10,07,420
-------11,29,000 --------
International Innovators
Business Plan
9.2 BALANCE SHEET OF A INTERNATIONAL INNOVATORS AS ON 31ST MARCH 2004 Liabilities Capital Reserve & Surplus Bank loan Rs. 80,000 3,29,335 6,20,000 Assets Fix Assets Building & Equipments Furniture & Fixture Investments Other Investment Current Assets Cash on Hand Balance with Bank Loss Carried forward Rs. 6,50,000 50,000 1,00,000 50,000 35,335 1,44,000 -------10,29,335 --------
------10,29,335 -------
International Innovators
Business Plan
9.3 FIVE-YEAR FINANCIAL STATEMENT PROJECTIONS Sales are expected to increase by 5% in Year 1 as additional clients are developed. Year 2 sales increase 10% and Year 3 sales by 15%. The addition of a new salesperson in each year will result in development of new and existing clients are expanded market coverage. Years 4 and 5 sales increase by 20% due to an increase among existing clients, additional new clients and from cross-selling of new services. Operating expenses will be high in Year 1 at 114% of sales. However, operating expenses will decline each year thereafter around 76% as a percentage of sales by Year 5. Operating expenses are comprised largely of fixed costs such as salaries, rent traveling expenses. Equipment will consist of computer hardware and software, a telephone system, fax machine, modem and printer. Equipments will be depreciated over five years. Furniture and fixtures will be depreciated over eight years and leaseholds over the expected life of the lease which is projected to be three years. All items are depreciated assuming weighted average value depreciation.
The mission of the project is to conduct leading edge research in international business, create awareness for international business.
10.2 FINDING AND ANALYSIS Method of Doing Export Business in Various Countries From research data it has been found that the surveyed company has mix preference for the export method that is by means of direct method (31%), by means of indirect method (27%) and by means of combined is (29%) and around 13% companies are not going for international business. Small scale Industries prefer export by means of indirect method because of not so awareness of complicated procedure in export business. Moreover mode for export is also depends on the product line, number of competitors and number of customers or end users.
Target Region for Exports In future From the research data it is shown that most of small scale and few of large scale industries do their export in world wide. Some companies do their exports in particular region because of the product features and demand itself and government policy for the particular product. It is seen that language, culture and lack of international marketing knowledge and representative of small company also leads to restrict a company in a particular region.
Middle East South East Europe Africa Northern and Southern U.S. No Specific Region Not Doing Export
Incentives Used By The companies: From the research it is clear that the large scale industries/companies are very much aware of export incentive and have thorough knowledge of export methodologies. But for small scale industry due to the lower volume of export order, lack of knowledge and complicated procedure and due to the lack of image in government they are not capable to use export incentive as effectively as large scale industries so gradually small scale industries are not in favor of using incentive provide by the government so the result obtained is almost equally for this research.
YES
NO
NOT APPLICABLE
Need of Specialization Service for Export Business From the research data it is reflected that the positive and negative reply for the specialization service remain almost same. The positive reply is due to small scale industry as they pursue more growth than existing and due the optimistic nature and product features. While the negative replies due to large organization as well as the limited production capacity, getting sufficient customers and margin from domestic markets as well as the pessimistic nature of the entrepreneurship in case of small scale industries.
Target Customers: From the Research project it has been found that small companies (manufacturing as well as export companies) are not so aware of end user of the products. Their only intention is to make an export business and that companies think little bit of growth at their current level. Information collected from potential buyers: Most of the surveyed companies wanted to collect information regarding to product quantity and technical specification and credit worthy of the buyers. Companies Experience for export business: It is found that big companies have good export experience and had face less problems in documentation and other complex procedures compare to small companies so big company has good chances to growth in the export business. Mode of Advertise: Most of the companies use Internet as advertisement tool now a but around ten percentage of the companies use the search engine optimization option which may quite helpful for boosting the inquiry of the companies product via internet. But it is found that
most of small companies and some big companies havent this type of knowledge so they cant get better success via internet. So companies also rely on print media or yellow pages.
10.3 CONCLUSION AND RECOMMENDATIONS CEOs from all the sectors give feedback that they have better chances to growth in future. Chemical industries have better position today as well as in future as in western region manufacturing of so many chemicals has been banned because of environmental problems. Fabrication companies ( i.e. companies related to casting, precise welding) and other process companies have also better growth in future in export business so many companies give the export order to Indian companies due to the environmental issues, costly labor in their home country. Small industries cant do much export business as compare to big industries because of their lack of knowledge or not viable to have export department, their conservative nature and lack of capacity to create good image in government department. It is clear that the large scale industries/companies are very much aware of export incentive and have thorough knowledge of export methodologies. But for small scale industries due to the lower volume of export order, lack of knowledge and complicated procedure and due to the lack of image in government they are not capable to use export incentive as effectively as large scale industries so gradually small scale industries are not in favor of using incentive provide by the government. Some companies fail to do Export business because of not having a website or website having lack on technical details or not use search engine optimization concept which may quite helpful to put a website of a that company in first two page of search engine list. Most of the companies are not so much enthusiastic to have participation in foreign trade fair due to lack of knowledge of incentives can be get from government for trade fair participation , due to lack of awareness the culture and buying pattern(negotiation methods), lack or knowledge of foreign language or contact of a local expertise person
BIBLIOGRAPHY Cooper, Donald R.; and Schindler, Pamela S. Business Research Methods. VIIIth edition New Delhi: Tata Mc Graw-Hill Publishing Company Limited, 2004. Cross, Wilbur; and Richey, Alice M. The Prentice Hall Encyclopedia Of Model Business plans : Prentice Hall ,1988. Rao, S. S. Handbook For Writers and Editors. Ahmedabad: Ahmedabad Association, 2002. Internet sources www.i-innovators.com www.fce.unsw.edu Management
ANNEXURE:
7Nature of Organization Manufacturer producer Service provider 8 Legal Status Proprietorship Public Company Partnership Firm Others: Private Company Trader Merchant Exporter Selling Agent Merchant Exporter Buying Agent Others
9 Year of Establishment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Number of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Branch Offices in India, if any . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Parent / Subsidiary Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Products / Services for international business ............................................................. 14 Present exports to / imports from
Indirect
16 Target Countries / Regions Middle East Africa South East Northern and southern America Not Applicable 17 Target Customers Distributors Joint Venture Agents Contract manufacturing OEM Others: Europe No specific Region
Better Profit
Growth
Others
19 From what countries have inquiries already been received? ............................................................. 20 Is the trend of sales and inquiries up or down? ............................................................. 21 What general and specific lessons or experience have been learned from past export attempts or experiences? .............................................................
22 Who are the main three domestic and foreign competitors? .............................................................
23 Do you advertise internationally? If yes, what is your general method of advertising? Print Media Others: (Not specific) 24 How often does the company update/refurbish its website? Less than Six Months Less than one Year More Than One Year Internet Yellow Pages
25 Does the company use features like search engine optimization? Yes No
26 Does the company participate in / visit International Trade Fairs? Which are main ones attended recently? ............................................................. 27 Which quality standards have you adapted for the International Markets? Are you planning to adapt any others in the future? ............................................................. 28 How does the company finance export orders? Internally Internally/Externally
29 Has the company explored options of international finance? If yes, which ones? .............................................................
30 What is the information that the buyer would seek from you for importing product from your company? Product quality Technical Specification Rate Others Quantity
31 Information that you would seek from your prospective buyers for export order? Product quality Technical Rate Others Quantity
32 Which countries does the company have branches or representatives in? In which countries/regions is the company planning to establish branches or appoint representatives? ............................................................. 33 What does the company expect from its overseas branches / representatives? ............................................................. 34 Does the company use export incentives? DEPB Others 35 What are the shipping methods the company uses? Has there been particular type of problems that the company has faced? By Air By Sea By Road Advance License EPCG
36 Does the company think that a specialized agency working towards export market development can make a difference? If no, why not ? Yes No
37 If yes to above question, what type of services do you think you can assign to specialized agency? market research database translation marketing buyers
Others