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Udaya Jayasinghe MHCE Task 1
Udaya Jayasinghe MHCE Task 1
BUSINESS PLAN
( LIAISON OFFICE FOR LEVIES’ INDIA )
G.K.J.M.U. J AYASINGHE
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TABLE OF CONTENTS
CONTENTS 2
NATURE OF BUSINESS 3 -4
FINANCE 20 -21
REFERENCE 22
BIBLIOGRAPHY 23
APPENDIX 24
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Author is the vast experience person in the garment industry having a hands
on 15 years’ experience in locally & overseas and engaging in production, Industrial
engineering, Planning, Cutting, and Merchandising jn a factory & Liaison Office. Due
to this sound knowledge of the apparel industry author has decided to start the new
liaison office for India levies’ brand to supply jeans produced from Bangladesh.
Author has decided to start the own office due to higher demand for the green &
ethical manufacturing garment having higher demand from the Indian famous buyers
that creates higher profit margin which allow the author to achieve the below vision &
mission.
According to the Hirsch below are the main steps going to use for starting the
business Opportunities (Hisrich et al 2009, p.67)
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1. Marketing - will use the networking & personal contact to find the
orders from the world recognize brand as author currently working in
liaison office of a famous brand ( LIDL )
2. Sourcing – Author has good network of supply chain as currently using
the strong suppliers for the running product. Factory names are
New line Clothing
Nassa Apparels
Sharmeen apparels
3. Product development – Author has planned set up the state of the art
sample room with expatriate to cater high quality product
4. Production – Author has planned to start LEAN manufacturing
production process consult anting to supplier to upgrade their
production standard & minimize the wastage to reduce the production
cost increase their profit margin.
5. HR, Admin, compliance, CSR – Author has planned to more concern
to work with compliance based factory which is focusing on cooperate
responsibility to community.
According to the model of McCarthy 4 Ps Author is going used to do the marketing analysis.
Product Price
Denim pant
7$
Promotion
Networking Place
Interview India Levie's
presentation market
Exhibition
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PRODUCT
The product that author is going to sell the denim pant as denim pants
requirement in the world is increasing. Especially developing country like India,
according to the statistics of India denim wear demand increasing. In 2013 the denim
market of India was worth INR 13,500 Cr. which accounts for 5% of the total apparel
market of the country. The market is projected to grow at a Compound Annual
Growth Rate (CAGR) of 15% to become an INR 27,200 Cr. market in 2018.
Agreement: The author & Tech city company has the main agreement as below.
1. Capital investment is ( 50 : 50 )
2. Profit will be shared after covering the capital investment & it
will be based on 50 : 50
3. Extension or termination of the project is after covering the
capital investment.
PRICE
In case of the price author is going to give the competitive prices which comes
through the strategic lean manufacturing process & product development strategies.
Below mention the price markup for the denim.
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PROMOTION
PLACE
In case of the place author is going to marketing in the India market through
the denim product as India denim product requirement is increased. As shown in
below
In case of the ownership author has decided to go with the partnership with
Tech City Company to make liaison office for Levies brans for the India market.
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MANAGEMENT STRUCTURE
In case of management structure that Author believes on functional structure that
gives clear responsibility to the person & easily expertise in the work that task
carrying out. Also commonly called a bureaucratic organizational structure, the
functional structure divides the company based on specialty. This is your traditional
business with a Marketing & Merchandising department, Operational Department,
HR, Admin & compliance department, Finance department, the advantage of a
functional structure is that individuals are dedicated to a single function. These clearly
defined roles and expectations limit confusion. The downside is that it’s challenging
to facilitate strong communication between different departments.
Managing
Directotor
W
S Higher competitor
Poor supply chain
Author vast experience & poor marketing
knowladge
Financial stability
Good network
O T
Indian denim market value Many Competitors
incresing Poor supply chain
Inflation is incresing Bangladesh
2018 - 27,200 Crore indian rupee market
political unstability in bangladesh
value
ISIS terrorist threats
2023 - 54,600 Crore indian rupee market
value
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FIGURE 5: SWOT ANLYSIS FOR LIASION OFFICE
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After analysing the macarty 4 Ps which helps to identify the product which is
going to produse & where that product is going sell then how this product going to
sell in the indian market at what price.after that author decided to use the SWOT
anlysis to understand the feasbility of the project.According to the above analysis
below is the details explanation of SWOT analysis
STRENGTH
In case of strength author has plus value due to he is having vast experience in
readymade garment industry which use to success the new manufacturing plant. Also
author is having good financial stability invest the entire project. Author currently
working in liaison office that will helps to get the orders from levies brand through
the networking.
WEAKNESS
In case of the weakness this new office is going to start needs more focused on
the skilled man power for example: quality inspectors, production supervisors etc.
Secondly the marketing plan for entering the India market will be the tough challenge
as the current competitor are strong in their market. Current market share as below
Third weakness that poor supply chain based in Bangladesh which is facing
higher political instability impacted the smooth supply chin.
THREATS
First threat is higher no of competitors engaging in the market to avoid that
need to offer the competitive price. Due to political instability difficult to maintain the
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smooth supply chain & due to the recent global ISIS terrorist attack causes required
the extra vigilant supply chain Several that effected the supplier normal working
routine like worker unrest , Hartal &. It is planning to run the business based on the
rented building as Bangladesh land prices are very high. Shown in below the rental of
the building in Bangladesh export processing zone.
OPPORTUNITY
High demand from the Indian denim market.
O BSERVATION
Based on the statistics in RMG sector reviled that Bangladeshi apparel
industry has shown a constant growth and will continue to grow in next few years due
to cheap labor & availability of labor & cotton availability form the India (second
largest cotton producer). Hence we have no much of risk to introduce the new product
in to the industry and let it grow steadily.
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MARKET S URVEY
According to the data sourced from internet that revels key factors to growth
the denim industry and countries fitness based on this factors.
As well when we consider about the target market denim consumption as shown in
the figure 3 consistent growth in denim demand.
SUPPLIER INFORMATION
Author is going to source the denim pant for the Levis brand from the Bangladesh RMG factories.
Here are some of potential supplier’s names
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Nassa Apparels
Sharmeen apparels
According to the kottler & Keller that I going to discussed about the market
segmentation model to understand the how I am going to approach the Indian denim
market.
Markets Segmantation
PSYCHOGRAPHIC SEGMENTATION
Which means this mainly gives the idea of activities, buying choices, buying pattern are based
thinking pattern & attitude of the society. This is mainly engaged with age, Income, buying choice.
When you analyses the Indian denim market that you see the denim pant distribution in between the
ages. According to the below Levies is the leading brand in India capturing 50% of the market.
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BEHAVIORAL SEGMENTATION-
This will explain the customer’s behavior towards the product, loyalty
occasion, benefits and readiness to buying any product, like Deepawali festival /
Christmas / Durga Pooja / Holy festival purchases are for the specific occasion and
the same customer continuously buying the same product or brand is the customer
loyalty. Therefore above mentioned period of time we can introduce the new product
to market.
DEMOGRAPHIC SEGMENTATION
In this segments normally discussed about the Age , size of the family ,
religious, ethnicity , educational level , social elements are the main features of this
segmentation .the fore in the case of India Hyderabad & Mumbai is the most
developed province in India . That area is used to live high income level people &
educated people therefore that area better for the fashionable denim pants to introduce
to capture the market .mention below the affordability of the denim in Indian market.
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GEOGRAPHIC SEGMENTATION –
This is based on the how geographical changes impacting purchasing or
choosing product. Example is country’s location, climate conditions, population,
religion are few variable factors of geographical segmentation that need to be
considered.
1. TARGETING
In case of the Targeting is the second process of the market segmentation once the
marketer has identified the segments it must be decided how many and which
customer groups/segments to target. With respect to the decision to which customer
groups or segments to target the company may choose one or a combination of the
following. Marketing strategies; mass marketing strategy (undifferentiated
marketing), single segment strategy (differentiated marketing) or multi-segment
strategy. Based on above theory this company is follows the multi segment strategy.
2. POSITIONING
The third and final step in the market segmentation process deals with positioning.
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Once the company has identified the segments and chosen which segment or
segments to target the final step is to decide on, what position it wants to occupy in
those segments. Positioning is concerned with how the customers perceive the
products and how it is defined by the customers in order to maximize the potential
benefit to the company. The result is a persuasive reason why the target market
Should buy the product or products (Kotler and Keller, 2009, P308).Customers are
not capable of remembering information about each product and thus the consumers
organize the products, services and companies in their minds in order to simplify the
Buying process. This process happens with or without the help from the companies.
However, the companies are not interested in jeopardizing their products’ position and
therefore it is necessary for the companies to plan positions to gain advantage
to their products in selected target markets (Armstrong and Kotler, 2005: 208).
In order for the company to achieve a particular product or service positioning there
are steps the company must follow. These steps include: Understand what the target
customers expect and believe to be most important when deciding on a purchase.
Develop a product or brand which caters specifically for the customers’ needs and
Expectations. Evaluate the positioning and images, as perceived by the target
customers of competing products in the selected market segment or segments.
Statement of the landline telephone is based on the results from the questionnaire.
Image that differentiates from competing brands and products on the basis of the
characteristics of the brand or product, the needs and expectation of the target
customers and their perception of competing brands’ positioning .Communicate with
the targeted customers about the product via promotion and make the product
available at the right price. (Dibb and Simkin, 1996: 18) A successful positioning.
After identifying product now I have plan to analyses the threats of the
product that I am going to enter selected market. For that analysis I am going to use
the porter 5 pcs frame work to identify the close view of the strength, threats
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Rivals
Low
Threat of Consumer
substitute bargain
products power
Low Denim Moderate
pant
Threat of Suppliers
new bargaing
entrants power
Moderate Low
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5. RIVALS – LOW
in case of rivals in India market denim market for the levies brand is low due to Levis already
capture 50 % of the market
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MARKETING STRATEGY
PRICING
Pricing is mention below the reference.
Selling
$8.5
price
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SALES PROJECTION
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total
Year 1
100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 100000 1200000
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total
Year 2
150000 150000 150000 150000 150000 150000 150000 150000 150000 150000 150000 150000 1800000
Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total
Year 3
200000 200000 200000 200000 200000 200000 200000 200000 200000 200000 200000 200000 2400000
In case of the marketing plan authors has decided to set up the clear objectives as below so
as to achieve the company goals.
1. Market share
To gain 10% market supply from the Levis India denim market by August
2019.
2. Operational Objectives
To decrease production cost by 5 % by applying lean manufacturing
system to increases supplies profit & workers welfare, Compliance within
the factory.
3. To achieve a 5 %increase of return on capital within august 2019.
4. Objective for Branding.
To participate Levies brand promotional campaign to increase the sales
which indirectly increase the selling units of the authors.
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MANPOWER NEEDED
20 staff
HR PLANNING
HR is planning with 2 person as a supporting staff for the main teams.
MOTIVATION
In case of the motivation factors company is having several activities through the year.
Annual picnic
Iftar party for the all the employee in Ramadan month
T shirt for the all the workers
Lunch provide for all staff in reasonable amount
21 Annual leaves , 14 Casual leaves
Profit share based on the sales & profit
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FINANCES
INCOME STATEMENT
Sales forecast - new liasiason Office Income Statement (1st January to 31st December)
Sell Price US$ 8.50
Product price- US$ 7.00
Operational cost US$ 1.00
Gross profit margin US$ 0.50
Month Jan Feb March April May June July Aug Sept Oct Nov Dec Total
Forecast qty in pcs 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 1,200,000
Sale Revenue - US$ 850,000 850,000 850,000 850,000 850,000 850,000 850,000 850,000 850,000 850,000 850,000 850,000 10,200,000
Cost of product- US$ 700,000 700,000 700,000 700,000 700,000 700,000 700,000 700,000 700,000 700,000 700,000 700,000 8,400,000
operation cost- US$ 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 1,200,000
Gross Profit - US$ 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 600,000
42,500 42,500 42,500 42,500 42,500 42,500 42,500 42,500 42,500 42,500 42,500 42,500 510,000
Net Income US$ 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 90,000
Month Jan Feb March April May June July Aug Sept Oct Nov Dec Total
Forecast qty in pcs 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 1,800,000
Sale Revenue - US$ 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 1,275,000 15,300,000
Cost of product- US$ 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000 12,600,000
operation cost- US$ 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 1,800,000
Gross Profit - US$ 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 900,000
63,750 63,750 63,750 63,750 63,750 63,750 63,750 63,750 63,750 63,750 63,750 63,750 765,000
Net Income US$ 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 11,250 135,000
Month Jan Feb March April May June July Aug Sept Oct Nov Dec Total
Forecast qty in pcs 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 2,400,000
Sale Revenue - US$ 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 20,400,000
Cost of product- US$ 1,400,000 1,400,000 1,400,000 1,400,000 1,400,000 1,400,000 1,400,000 1,400,000 1,400,000 1,400,000 1,400,000 1,400,000 16,800,000
operation cost- US$ 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 2,400,000
Gross Profit - US$ 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 1,200,000
85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 85,000 1,020,000
Net Income US$ 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 180,000
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REFERENCES
1. http://www.technopak.com/Files/denim-market-in-india.pdf
2. "Ninety Cents Buys Factory Safety In Bangladesh On $22 Jeans". Bloomberg.com. N.p., 2016.
Web. 20 Aug. 2016.
3. "Garment Workers Wages - Google অনুসন্ধান". Google.com.bd. N.p., 2016. Web. 21
Aug. 2016.
7.
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BIBLIOGRAPHY
1. http://indiafreestuff.in/top-10-jeans-brand-of-india/
2. https://www.google.com.bd/search?
q=bangladesh+rmg+export+statistics&biw=1366&bih=635&source=lnms&tbm=isch&sa=X&s
qi=2&ved=0ahUKEwj3nJPD0dLOAhWLNY8KHSiTCOUQ_AUIBigB#tbm=isch&q=india+denim+
market&imgrc=RmcN6KwwoppEJM%3A
3. https://www.google.com.bd/search?
q=sample+agreement&biw=1366&bih=635&tbm=isch&imgil=cunQMSLYUkfTRM%253A
%253BExr2nNjYA4U_2M%253Bhttp%25253A%25252F%25252Fwww.legaldeeds.com
%25252Finterface%25252Fservices%25252Fincorporation%25252Fcanada
%25252Fpartnership_agreement
%25252Fpartnership_agreement.html&source=iu&pf=m&fir=cunQMSLYUkfTRM%253A
%252CExr2nNjYA4U_2M%252C_&usg=__NpjruLdmKwBPTIV1QtzVHLf-
sy0%3D&ved=0ahUKEwiSkfj-99LOAhUCTI8KHYflATkQyjcIKw&ei=-
9e5V9KnEYKYvQSHy4fIAw#imgdii=cunQMSLYUkfTRM%3A%3BcunQMSLYUkfTRM%3A
%3BWSwXlnBOF4UocM%3A&imgrc=cunQMSLYUkfTRM%3A
4. http://epzbangladesh.org.bd/details/rent-of-land-and-space
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1. PRICE OF GARMENT
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