APEX TIMEPIECE

ABOUT US

The Journey of our company began with a small but confident step in the world of timekeeping.
We at Apex time have started this company to create a watch for everybody to wear and Apex
timepiece is one of those Timepieces which suits every Wrist .

OUR PHILOSOPHY
The name Apex evokes superior craftsmanship, innovate technology and trust worthy product quality.

Our Vision
We create elevating experience for the people we touch and significantly impact the world we work in.

Our Mission
We will do this through a pioneering sprit and caring, value-driven culture that fosters innovation, drives
performance and ensure the highest standards in everything we do

Our Values

Customer first: customers take precedence over all else, always.

People make the brand: ApexPPl are the heart of our success and that is why their dreams and
aspirations are the forefront of our brand policy

Culture and teamwork: High performance in a way of life

Creativity and innovation : Driven by innovation and creativity we focus on smarter approaches and
newer technology

Passion for excellence : In all our products, we ceaselessly strive for excellence

Corporate Citizenship : We ensure that a part of our resources is invested in environment and community
betterment

Our Promise
Pioneering Innovation, international design ethos, customer oriented values and top- notch service have
formed the cornerstone for our brand Apex Timepiece

International styling

Apex strives to promote styles that are at par with the international standards. We bring together high
quality materials and innovate technologies tp give you products that are unique and exceptional

Mark of quality

Passion for highest standards in quality and watches with latest technology

About Apex Timepiece Business plan

Situation Analysis

General's core business is industrial timing devices and consumer clocks, based on skills in
manufacturing high quality timing movements and plastic casings. This market plan is based on
providing consumers with a high quality, innovative watch. It will be offered in a variety of styles for
both men and women. The casing and movement has other potential applications not discussed in this
plan.

Our 2016 profits of 30 million dollars represent 7.5 percent of total sales. Sales growth has slowed to a
current level of 5 percent annually. Growth in current markets is expected to be limited. The Apex watch
is one of several projects with the potential to improve General's growth rate.

Market Analysis

The Apex watch will compete directly with several other branded fashion watches.
The market size for branded fashion watches is forecast to be $524 million retail dollars in2017, growing
to $721 million by 2002. Annual market growth is expected to exceed six percent through 2019,
exceeding our current annual sales growth.

Market Segments

Those under 35 years of age purchase slightly over 50 percent of all branded fashion watches as shown
in the Table 1.
Table 1: Market Segments by Age

AGE PERCENT OF WATCH PERCENT OF POPULATION RELATIVE PURCHASE

BUYERS OVER 17 INDEX

18-24 19% 13% 1.46

25-34 33 19 1.74

35-54 35 40 0.88

55+ 13 29 0.45

The highest purchase prevalence is those from 25 to 34 who purchase 74 percent more watches per
capita than those the average consumer. Purchase behavior is expected to differ among age segments
and by gender. Young females [18-24 years of age] are expected to be intense purchasers. This group is
likely to be very styling conscious. Women in the 25 to 34 age group will be our second significant
segment, expected to buy more watches than any other age-sex segment.

Consumer purchases of branded fashion watches also vary by region as shown in Table 2.
REGION WATCH SALES POPULATION INDEX OF
WATCH
SALES
%
New Delhi 20% 15% 1.33
Mumbai 16 17 0.94
Banglore 15 13 1.15
WEST 15 21 0.71
Bengal
Western 10 10 1.00
india
Central 8 7 1.14
India
Northern 6 5 1.20
India
Union 5 6 0.83
Territories
An index of relative watch sales by regions shows that sales are above average in the east north central,
west north central, north central, Indian states. Product introduction is likely to be more successful in
the states in these regions. 

Competitive Analysis

Although there are fourteen competitors in this market, there is substantial concentration. 
Swatch, Fossil, Guess?, and Anne Kline are strong competitors, holding 70 percent of the market.
Swatch and Fossil have strong manufacturing and distribution skills, while Guess? and Anne Kline have
less extensive distribution networks but strong name recognition in fashion. Titan, Fossil and Swatch are
strong at the lower price lines. Branded fashion watches are a relatively new product category. Although
pioneered by Titan, there is considerable opportunity for new entrants as demonstrated by Fossil and
Guess?.

Company Analysis

General currently distributes products through channels accounting for 75 percent of watch sales.
Branded fashion watch sales are growing faster than our current product lines. Our innovative product,
product design skills, strong manufacturing skills, and experience in distributing consumer clocks provide
an opportunity for entry and growth in this market.

Strengths
Weaknesses
· Innovative production methods provides the
potential for new designs · No experience in distribution to jewelry stores
·  Experience in distribution channels for ·  No experience in marketing fashion products
timepieces

SWOT
Opportunities Threats
· Large market ·  Strong competition with concentrated market
· Market growing faster than our current sales shares
· Consumer demand for fashion goods creates a ·  Possibility of new market entries
demand for innovative products
OBJECTIVES

 Market share of three percent of the branded fashion watch market in the first year [sales
of over 8 million dollars].
 Project break-even in 2018.

MARKETING STRATEGIES

General will introduce a new product, the innovative Spree watch, using penetration pricing, extensive
advertising, and expanded distribution in order to increase our revenues and growth rate.

ACTION PLAN

Product

We will introduce between 30 to 40 different designs in the first year. One quarter of
these will have a "metal" case, copying many of the traditional and modern metal
designs. These are targeted at consumers 25 and over. We will design a series
including licensed characters and unusual shapes for the market segment under 24
years of age. Swatch does not have exclusive licensing for Disney and Warner
Brothers characters or Coke. By using these and others we will have a variety of
product and character designs in our line. The most unusual aspect of our line will be
some very unusual shapes. Several of these will be geometric; hexagon, trapezoid,
oval, and diamond. For younger ages our technology allows the design of watches in
the shapes of cartoon character faces.

Price
The APEX watch will start form a suggested retail price of $50. We believe that we
have product quality and feature advantages, encouraging the use of a price slightly
exceeding Swatch. This pricing strategy, coupled with our efficient production
methods, aids in achieving our relatively high market share for a new product entry.

Distribution

We will introduce Apex in the Northern India but within the first year sell to the
national market. With our current strong distribution channels nationwide covering 75
percent of watch sales, we will limit our potential if we restrict our distribution to
specific regional markets. Although we do not currently have jewelry stores, our
distribution will place watches in at least 75 percent of locations in the India .We will
use current normal distributor markups.

Promotion

Five new sales representatives will be added to assist in the development of new
distribution outlets. A sales trainer will be hired to train the sales force in the new
product. This will be within our $500,000 sales support budget based on an average
salary and benefits cost of $100,000 for each position.

The advertising level for the four leading firms can be compared by determining the ratio of voice share
(% of total advertising dollars of  $20 million) divided by the market share as shown in Table 3.
Consumers will not know our brand; therefore, we will have to advertise more aggressively to achieve
brand awareness. Although our market share goal in 2018 is three percent, we will set advertising at one
million dollars. This will achieve an advertising voice/market index considerably higher than our
competition.

Table 3:  Fashion Watch Advertising and Voice

COMPANY MARKET VOICE VOICE/ ADVERTISING

SHARE SHARE
MARKET MILLION $

SWATCH 20% 28% 1.4 5.5

FOSSIL 20% 24% 1.2 4.8

GUESS? 20% 21% 1.05 4.2

ANNE 13% 13% 1.9 2.5

KLINE

APEX PLAN 3% 5% [assumes 5.0 1.0

 same level of
total
advertising
as last year]

Media will be targeted to our major market segments; women between 18 and 24 and between 25 and
34. Smaller amounts will be directed to other segments.

FINANCIAL ANALYSIS AND EXPECTED RESULTS

As shown in Tables 1 and 2 of the financial appendix, we expect to achieve a market

share of three percent and sales of $8.5 million in the first year. The Apex watch
project will break-even in the first year. We do not expect any watch technology
breakthroughs during this period. Competition is expected to be based on design,
price, and achieving widespread distribution, areas in which we expect to be very
competitive.

In conclusion, we will invest one million dollars in the Spree watch project. We can achieve sufficient
market share to achieve our financial and marketing objectives. During the next five years the market is
expected to grow and our costs are expected to decline with experience increasing unit contribution.
Our greatest challenge will be tracking the market's tastes in watch design and meeting and leading
these with creative and innovative designs.

CONTINGENCY PLANS  

Table 4:  Impact of Advertising Levels on Financial Results

TOTAL AD BUDGET BREAK EVEN YEAR NET PRESENT VALUE IN MIL. $

$2,500,000 2016 $35.8

3,000,000 2017 34.0

3,500,000 2018 30.4

4,000,000 2019 28.6

It is not expected that there will be increased price competition due to the entry of the Apex watch.
Increased advertising, however, might lead to an increase in industry advertising. A sensitivity analysis of
the effect of increased advertising on our break-even year and cumulative profits appears in Table 4.
Increases in advertising in steps of an additional $500,000 dollars up to $4 million, assuming no
additional gains in market share, have fairly limited effect on our performance. Therefore, in the event
that there is increased industry advertising, we are prepared to increase our advertising by as much as
$1,500,000 annually. Our increase advertising also will allow us to react to lower-than-expected
consumer awareness, fewer distribution outlets than planned, or less than expected

FINANCIAL APPENDIX
TABLE 1: PRO-FORMA INCOME STATEMENT AT $50 PRICE

CURRENT YEAR 2016          

  BEFORE          
RESEARCH & DEVELOPMENT RELEASE $50.00 SUGGESTED RETAIL PRICE    
INVESTIGATION COSTS $250,000 $12.50 LESS RETAIL DISCOUNT (25%)  
DEVELOPMENT COSTS $750,000 $37.50 PRICE TO RETAIL    
DISCOUNT RATE PER YEAR 12.00% $7.50 LESS WHOLESALE DISCOUNT (20%)  
    $30.00 MFG SELLING PRICE    
             
ANNUAL COSTS AND SALES   2016 2017 2018 2019 2020
PRODUCER'S PRICE PER UNIT   $30.00 $30.00 $30.00 $30.00 $30.00
VAR COSTS PER UNIT   $15.00 $14.00 $13.50 $13.25 $12.00
FIXED COSTS PER YEAR   $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000
RETAIL SALES FORECAST [MIL $]   $524 $574 $616 $672 $721
INDUSTRY SALES PER YEAR [UNITS]   10,480,000 11,480,000 12,320,000 13,440,000 14,420,000
COMPANY MARKET SHARE [UNITS]   2.00% 4.00% 6.00% 8.00% 10.00%
COMPANY  SALES PER YEAR [UNITS]   209,600 459,200 739,200 1,075,200 1,442,000
             
  BEFORE          
INCOME STATEMENT RELEASE 2016 2017 2018 2019 2020
SALES REVENUES   $6,288,000 $13,776,000 $22,176,000 $32,256,000 $43,260,000
VARIABLE COSTS   $3,144,000 $6,428,800 $9,979,200 $14,246,400 $17,304,000
FIXED COSTS $1,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000
PROFITS ($1,000,000) $1,144,000 $5,347,200 $10,196,800 $16,009,600 $23,956,000
CUMULATIVE PROFITS   $144,000 $5,491,200 $15,688,000 $31,697,600 $55,653,600
NET PRESENT VALUE $35,309,732          

TABLE 2: PRO-FORMA INCOME STATEMENT AT $45 PRICE

 

CURRENT YEAR 2016          

  BEFORE          
RESEARCH & DEVELOPMENT RELEASE $45.00 SUGGESTED RETAIL PRICE    
INVESTIGATION COSTS $250,000 $11.25 LESS RETAIL DISCOUNT (25%)  
DEVELOPMENT COSTS $750,000 $33.75 PRICE TO RETAIL    
DISCOUNT RATE PER YEAR 12.00% $6.75 LESS WHOLESALE DISCOUNT (20%)  
    $27.00 MFG SELLING PRICE    
             
ANNUAL COSTS AND SALES   2016 2017 2018 2019 2020
PRODUCER'S PRICE PER UNIT   $27.00 $27.00 $27.00 $27.00 $27.00
VAR COSTS PER UNIT   $15.00 $14.00 $13.50 $13.25 $12.00
FIXED COSTS PER YEAR   $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000
RETAIL SALES FORECAST [MIL $]   $524 $574 $616 $672 $721
INDUSTRY SALES PER YEAR [UNITS]   10,480,000 11,480,000 12,320,000 13,440,000 14,420,000
COMPANY MARKET SHARE [UNITS]   3.00% 5.00% 8.00% 10.00% 11.00%
COMPANY  SALES PER YEAR [UNITS]   314,400 574,000 985,600 1,344,000 1,586,200
             
  BEFORE          
INCOME STATEMENT RELEASE 2016 2017 2018 2019 2020
SALES REVENUES   $8,488,800 $15,498,000 $26,611,200 $36,288,000 $42,827,400
VARIABLE COSTS   $4,716,000 $8,036,000 $13,305,600 $17,808,000 $19,034,400
FIXED COSTS $1,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000
PROFITS ($1,000,000) $1,772,800 $5,462,000 $11,305,600 $16,480,000 $21,793,000
CUMULATIVE PROFITS   $772,800 $6,234,800 $17,540,400 $34,020,400 $55,813,400
NET PRESENT VALUE $35,823,504