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BLUE DOLPHIN

PROPOSAL
Jorge Peregrino
Paula Vargas
Monika Mital
Zhenyu Zhang
Yu Meng

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INTRODUCTION
Our company is going to provide car wash service in Zollikofen. We are located
near petrol station by which daily turnover of cars is around 25 000. Our visibility is good
then. Our company uses the high pressure car wash system provided by Blue Dolphin
company of total value of 420 000 CHF. We are operating under leasing contract for 10
years with our partner. Our operating place is rented for 30 000 CHF per annum.

a.

What is our service?

We offer complex external car wash service,

Our service takes no more than 15 minutes

Our service is of competitive price of only 6 CHF

We may be granted VDA certification (Verband der Automobilindustrie)

b. Who are our clients?

20% of our clients are street cars

80% of our clients are local cars

Our service is aimed at both individual clients as well as transport companies, taxi
companies which possess fleet of cars and need professional car wash service. We are
happy to offer them discounts as they they are interested in using our services.
Promotion and advertisement plan:

Because of no competitor here, so we do not need to decrease our

price and the key problem is cultivate the residences habit here.

Celebrate the opening and welcome the customer here first time with

40% discount and free coffee. Moreover, the first 10 customers each day is free
during the first 2 weeks.

Opening our Workshop to Customer especially their children, invite

them visit ours and let them know the new high pressure washing machine can
make a totally new way which can save water and time with good quality.

Cooperate with supermarket and petrol station, let them give

their customer our coupon and do some promotion

Build loyalty card system and points system, and different

discount level if you have a card and put in a certain amount of money.

Make an entertainment area for both customer and their kids.

General analysis based on five forces of Michael Porter


1 SUPPLIERS
The bargaining power of suppliers is also described as the market of inputs.
In this case, suppliers of six boxes high pressure car wash system, chemical,
water, energy, maintenance and insurance taxes advertising to the Blue Dolphin
car wash company can be a source of power to bargain because we have already
made a ten years leasing contract, which means the price of boxes is fixed. We
consider diversification of suppliers as a good strategy in order to avoid
dependency of a single supplier, and have better negotiation power.

2 BUYERS
The bargaining power of customers is also described as the market of
outputs. There is 21000 vehicles in Zollikofen, (total population of Zollikofen 42000
people with an average of one vehicle for two inhabitants) which means a
considerable ability of consuming on car wash service. We can take measures to
maintain potential customers by implementing a loyalty program.

3 POTENTIAL NEW ENTRANTS


As we can see from the case, there is no competitor in Zollikofen. So we
can skip the threat of new entrants. Nevertheless, other companies may would like
to enter the city as there is only one company.

4 SUBSTITUTES SERVICES
There is two ways to substitute our high pressure car washing including
washing at home and washing in tunnels with rollers. Just 20% are done at home

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while 50% are done in tunnels with rollers. But we need bigger investment above CHF 1
Million if we built tunnels with rollers.

5 RIVALRY AMONG COMPETING SELLERS


We do not need a large-scale advertising investment, we need is a precision
marketing, and our advertising strategy is the precision marketing, customer market
segregation, through data collection and analysis of data to determine customer
preferences and potential demand and we have to do is other third-party mutual exchange
marketing strategies to reach a consensus, longer-term mutually, more beneficial
cooperation, lower-risk, lower cost and larger effect.

Financial Analysis
In order to make a good financial analysis of the company, we may take into
consideration several aspects in its environment. One of the most important is the country
we are in. This case runs in Switzerland, where there are important points to consider
such as its economy has no drastic changes, this means: no inflation rates, flatness,
constant but low growth; therefore the sales, salaries, leasing, the operation costs,
administrative costs will remain the same.
Note: To see details, please go to the Excel file.

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TOTAL INVESTMENT
Concept
Initial investment
Expenses
Rent
Water
Energy
Maintenance
Insurance taxes advertising
SUM

$
$
$
$
$
$

30,000.00
20,412.00
20,412.00
40,824.00
18,000.00
129,648.00

Equipment
High pressure car wash system
Chemicals

$
$

420,000.00
23,814.00

SUM

443,814.00

SUM

OTHERS
Excavation done by Markus
Franchise

$
$

200,000.00
136,080.00

SUM

336,080.00

909,542.00

INITIAL TOTAL INVESTMENT

YEAR

TOTAL INVESTMENT
INCOME STATEMENT

Y1

Y2

Y3

Y4

Y5

Y6

Y7

Y8

Y9

Y10

TOTAL

$909,542

Yearly sales

Cost of sales
Gross PROFIT
Total Operation costs

340,200

34,837

34,837

34,837

34,837

34,837

34,837

34,837

34,837

34,837

305,363

305,363

305,363

305,363

305,363

305,363

305,363

305,363

305,363

305,363 $3,053,632

34,837

$348,368

188,948

188,948

188,948

188,948

188,948

188,948

188,948

188,948

188,948

188,948

1,889,480

Rent

30,000

30,000

30,000

30,000

30,000

30,000

30,000

30,000

30,000

30,000

$300,000

Water

20,412

20,412

20,412

20,412

20,412

20,412

20,412

20,412

20,412

20,412

$204,120

Energy

20,412

20,412

20,412

20,412

20,412

20,412

20,412

20,412

20,412

20,412

$204,120

Maintenance

40,824

40,824

40,824

40,824

40,824

40,824

40,824

40,824

40,824

40,824

$408,240

Insurance taxes advertising

18,000

18,000

18,000

18,000

18,000

18,000

18,000

18,000

18,000

18,000

$180,000

Salaries

42,500

42,500

42,500

42,500

42,500

42,500

42,500

42,500

42,500

42,500

$425,000

Leasing

16,800

16,800

16,800

16,800

16,800

16,800

16,800

16,800

16,800

16,800

$168,000

Operative PROFIT

Profit after taxes

$116,415 $116,415 $116,415 $116,415 $116,415 $116,415 $116,415 $116,415 $116,415 $116,415 $1,164,152
Total taxes

38,805

38,805

38,805

38,805

38,805

38,805

38,805

$271,635

Tax

38,805

38,805

38,805

38,805

38,805

38,805

38,805

$271,635

$116,415 $116,415 $116,415

$77,610

$77,610

$77,610

$77,610

$77,610

$77,610

$77,610

$892,517

Balance Sheet
Up to Nov 16th.

ASSET

Liability

Liquid asset

$ 200,000.00

Bank/Cash
Leasing

Leasing
Interest Payable
Loan

Equity
$ 7,908.48
$ 100,000.00

Owners equity
Stock
Profit

$ 100,000.00
$ 116,415.20

Total

$ 216,415.20

7,908.48
Total

$ 107,908.48

Fixed asset
Equipment
$ 86,415.20
Land paid in advanced
$ 30,000.00

Total

$ 324,323.68

Asset=Liability+Equity
Total

$ 324,323.68

How did we calculate our financial income statement?


Turnover:

We know that there are 42000 inhabitants in the city. There is a car

for each two inhabitants. Based on that, 30 % of people would wash their cars in
high-pressure car-wash machines and 60% of them are willing to wash their cars
when it doesnt rain. We made an assumption that 25% of those people wash
their cars at least twice a month. We know that the price of every wash is 6 CHF.

Our yearly turnover would be: 42000 x 50% x 30% x 60% x 125% x

6 CHF x 12 months = 340200.


Cost of sales:

We include the 50% of salaries for social charges. For the

salaries, we made an assumption, we averaged the payroll of the other two


companies (Geneva & Nyon); its 42500. The social charges are 21250
CHF.

We included the loan we borrowed the bank paying its interest

and its annuity. This means that we pay 13586.80 CHF per year.

Cost of sales would be 34836.80 CHF.

For the operation costs and taxes, the details are given in the

main data, these data are based on the annual turnover and operative profit,
so it would depend on its value. No assumptions were needed.

TURNOVER
500,000
450,000

400,000
350,000

Blue Dolphin

CHF

300,000

Laussane

250,000

200,000

Geneva

150,000

Yverdon

100,000

Nyon

50,000

0
Company

If we compare the turnover with the other companies we can conclude that
Blue Dolphin is in the middle with 340.200 CHF. It is a good number for a company
that is new in the market, it demonstrates its potential within the car washing
industry. Likewise, the turnover permits us to pay our administrative and
operational costs, generating profits through its activity.

Conclusion
Finally, during ten years, the sales will remain constant, this means that
wont be a yearly growth, flatness. The operation costs are the same because they

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depend of the annual turnover (its the same every year). Its a feasible proposal to the
bank, we can pay their interests, and this means that the company is solvent, it can pay
its liabilities with no worries.
From the five competitive forces of Porter, we can state that we can get lower
relative costs and make loyalty program to reduce customers' power in term of bargaining
power of supplier and customer. Also, the project is profitable as to intensity of competitive
rivalry. So the five forces are positive to our project.