Investment Proposal

in Pune, India
Priyanka Bhanvadiya- 4274000
Saeka Noda- 4265333
Isabel Padron- 4259254
Jeane Salonga- 4274532

Statement of the Problem

To determine if the investment of Manuel
Pena of $100,000.00 will be worthwhile
considering the market in Pune, India

SWOT Analysis

Strengths

Good customer feedback

Competent owners
Competent manager (NGO)
Background/ idea on researching the market first
Personal experience
First movers in Pune India
Hired skilled staff (registered nurse)

Weaknesses

6 months in the business

Not yet well-established
4 customers
No government certification yet
Lack of funds
High cost for manufacturing (researching) DME
Sunk cost of $135,000 due to the failure in the U.S.

Opportunities

Strategic location
9.6 million people with highest per capita income (Pune)
Increasing mobility of Indian Society
Parents are more self-reliant
More investors
Utilize volunteers from universities/colleges
Growth in healthcare expenditure
Cheap service ($200) compared to per capita income of ($2,400)

Source: World Bank

Source: OECD

Threats

Government services move slowly in India

Little awareness of DME
Low Ranking-Ease of Doing Business
High Political and Financial Risk
The gap between the affluent and the
impoverished (80% are poor)
Possibility of class action lawsuit (medical
treatment)
Other emerging economies

Source: A.M. Best

Alternative Solutions:
Option 1:
Further Market Research

Option 2:
Focus on home healthcare
and delay selling of DME

Option 3:
Do not invest

Alternative Solutions:
Option 1:
Further Market Research

4 focus groups

Children of Parents who

need Home Heath care
and Care Recipients

200 households
Personal door-to-door
Survey
Next

Focus Group Interview

Sample Questions:
Are you familiar with a nursing home and/or home health care service (sending a registered
nurse)
Do you want the elderly (parents) to be placed at a nursing house, if theres any?
Would you prefer a home health care service, then?
What are the differences on home health care from nursing house? What are the
advantages or disadvantages of the two?
What are the difficulties faced by the families without any professional home healthcare
support?
Would you consider a home health care service? Why or why not?
How often do you want the nurse to visit the house?
What are your general concerns regarding the caring services available for you or your
parents?
What kind of service and expertise the nurses should have do you want?
What are your expectations from the home healthcare providers?
Previous

Alternative Solutions:
Option 2:
Focus on home healthcare
and delay selling of DME

Furniture and Fixtures

Website
Advertisement
Hiring and Training Costs

Alternative Solutions
1st month

2nd month

3rd month

4th month

Revenue

$ 4,000.00

$ 5,000.00

$ 6,000.00

$ 7,000.00

Less: Operating Expenses

$ 2,850.00

$ 2,850.00

$ 2,850.00

$ 2,850.00

Manager Salary

450.00

450.00

450.00

450.00

Secretary

300.00

300.00

300.00

300.00

Utilities

150.00

150.00

150.00

150.00

Rent

750.00

750.00

750.00

750.00

Nurses

$ 1,200.00

$ 1,200.00

$ 1,200.00

$ 1,200.00

$ 1,150.00

$ 2,150.00

$ 3,150.00

$ 4,150.00

Tax

230.00

Net Income

920.00

$ 1,720.00

Earnings before Interest and

Taxes

430.00

630.00

$ 2,520.00

830.00

$ 3,320.00

Alternative Solutions:
Option 3:
Do not Invest
Political Risk

Source: A.M. Best Country Risk

Criteria for Decision Making

Returns: 35%
Risks: 20%
Cost:
15%
Benefits: 15%
Time:
15%

Comparative Analysis
Option 1:

$ 10, 417.00

Cost:

Time
Frame:
Benefits:

Option 2:

$22, 400.00

Option 3:
0

Weight
15%

15%

11%
4 months

8%
2 months

15%
N/A

5%
- Knowledge about the market
(Ex. Customer preference,
customer requirements, product
familiarity)
- Prevent business failure
- Determine strategic location
- Make services better for
certain group of people
- Competition in market would
be define
- What promotions will be the
best to reach the market

12%
- Start the business early
- Inflow from sales
- The focus on one business
would be beneficial because
they would be building their
name in that industry and
gain knowledge from the
market before venturing into
another business
- The customers from home
healthcare would be the
potential buyers of DME

15%
- No losses
when the
business
failed

14%

13%

7.50%

15%

Next

Survey Costs
Population of Pune
Assumption of number of people in each household
Total number of households
Percentage of old people (people over 65 years of age)

Number of old people (people over 65 years of age)

Price of survey per hour
Per survey will be 15 minutes

9,600,000.00
6.00
1,600,000.00
16.67%

1,600,000.00
$

25.00

4 persons per hour

We will ask 200 people to take the survey

200

Number of hours spent on the survey

50

Quantitative Research

$ 1,250.00

Analysis

Total

623.50

$ 1,873.50
Next

Focus Group Costs

Per Focus Group Costs

US

Cost in India

Screener Development

250.00

75.00

Recruiting Fees

100.00

30.00

Respondent Incentives

100.00

30.00

Room Rental

450.00

135.00

Respondent Food & Refreshments

100.00

30.00

DVD Recording

250.00

75.00

Transcription of Audio

120.00

36.00

Discussion Moderator

750.00

225.00

Analysis, Report Preparation and Delivery

$ 5,000.00

$ 1,500.00

Total Cost per Focus Group

$ 7,120.00

$ 2,136.00

Number of focus group

number of hours for each focus group

Total number of hours for all focus groups

Cost per Focus Group

$2,136.00

Total Costs

$8,544.00

Total Cost for Market Research: $10, 417.50

Previous

Initial Investment

Initial Investment Costs

Furniture and Fixtures

$ 10,000.00

Website

Advertisements

$ 10,000.00

Hiring & Training Costs

Total

$ 2,000.00
$ 22,400.00

400.00

Previous

Comparative Analysis (Contd)

Option 1:
Risks:

Return:

Total:

- No customers mean no
income
- Sunk costs
- Language barrier
- Cultural differences
- Lack of government data

Option 2:
- Possibility of business
failure
- Unanticipated
competition
- Sales are less than the
forecasted value

Option 3:

Weight

No risks.

20%

10%

15%

0%

$920/ month
(Refer to Appendix F)

0%

35%

0%

40%

83%

37.50%

35%

100%