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Chapter 1 Introduction

In this competitive business world, information system and technology plays the vital role for success of any business. The way of doing business has changed due to change in technology. The biggest challenge the business has been facing is the changing operational scenario and highly fluctuating needs of customers. Information technology can help all kinds of businesses improve the efficiency and effectiveness of their business processes, managerial decision making, and workgroup collaboration, thus strengthening their competitive positions in a rapidly changing marketplace. This changing environment in marketplace has evolved the practice of electronic business which has now made business possible through single click 1.1 Objectives The main objective of the Milky Way Dairy is to promote suitable measures to empower the milk producers and farmers through methods that are equitable and also to ensure that they receive fair market price for their milk supplies. Our business strategy will therefore revolve around receiving milk from various suppliers and delivering processed quality milk and milk products to our various target customers subsequently meeting their expectations fully. For this, we have intended to hire a professional team to cater the customers demand and fulfill their needs. We will target our products to various market segments and do several marketing campaigns to promote our products and establish a clear advantage in this strong competitive market. Also, we shall position ourselves as a quality, reliable and healthy brand that is dedicated towards customers health, taste and satisfaction. In summary we intend to attain the following objectives: To provide on demand dairy product to the customers. To establish Milky Way as a synonym of quality, health and taste.

To explore the possibilities and capitalize the opportunities of online dairy business. To operate the industry making balance with the local environment. To use local employees and support domestic farmers by providing training and resources required. To meet the local demand of dairy products

1.2 Mission Our mission is to evolve as one of the industry greats in Nepal and lead the market of the online dairy product business making consumers available with the best quality and healthy products integrating the local resources and precise information technology. Meanwhile, we will also be focused towards the benefits and development of the local farmers and the society by providing specialized training, knowledge and resources required to them. 1.3 Keys to Success The keys to Milky Ways success will undeniably be effective market segmentation through identification of several markets and implementation strategies. Our business strategies will rotate around keeping in touch with our prime suppliers, establishing good rapport with them, entertaining their queries and feedback and most importantly delivering the best milk and milk products to our valuable customers to their fullest satisfaction. Hence our key success factors will include the following:
1 Delivering the promise: We intend to offer completely qualitative, delicious and above all healthy dairy products so as to ensure that customers are satisfied throughout the consumption of our products and intend to stick to our products. 2 Using precise technologies: New technologies and software for the required information system will be employed making users able to access to our website easily, manage the transactions effectively, order and do payment effortlessly. As a whole, it will make our business comparatively more advanced but secured, user-friendly and functional than the others. 3 Interactive marketing with the customers: We will be continually communicating with our valuable and loyal customers to ensure that we are being able to meet their expectations by answering their queries and addressing their feedback regarding our products. So, it will be a two 2

way process around where customers will be encouraged to give their important feedback and we will be focused on entertaining those issues effectively. 4 Strategic alliances: By tying up strategically and maintaining superior relationship with the local farmers and various stakeholders in the market, we plan to fulfill every needs and desires of our customers as the major concern of our business is to satisfy them ultimately.

CHAPTER 2 COMPANY SUMMARY

2.1 Company ownership Milky Way is a partnership business comprising of four partners: Mohammad Ishak, Rajeeb Giri, Sandesh Lamichhane and Tirtha Gurung. Each partner has equal share of 25 %. It has a start-up capital of Rs. 20,000,000 where the owner's equity comprises of Rs. 10,000,000 (Rs. 2,500,000 of each partner. 2.2 Company location Our company will be situated in Bhaktapur, Kathmandu. We chose Bhaktapur as a key location for carrying out our business operations because most of the people there are still engaged in agricultural and farming activities. So, it is one of the best places to start business like ours where we could easily collect milks from various suppliers at once without having any kind difficulties in collecting milks from different suppliers at different locations. However, we have decided to move our companys location to more accessible place like Dhulikhel/Panauti in the near future. 2.3 Product and Service Description: Milky Way aims to buy raw milk from the farmers and supply dairy products after processing the milk in a hygienic condition to the consumers. The prime objectives of our business are to process milk and produce milk related products. Milky Way will trade the dairy products as demanded by the customers for their changing needs. The following are the various products offered by MilkyWay: 2.4 Competitive Comparison Since our business is not a new one in the industry, there are already very competent players in the market who have positioned themselves strongly into the customers mind but we are among the few ones who are specialized in this particular field. There are many competitors offering
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services similar to ours and competing for the same customer base. Competitors like Sitaram, DDC and Rahul are some of the reputed brand names in the current market who have succeeded in establishing themselves as a strong brand. Hence, we, not only have to establish and position ourselves tightly in the market, but also correctly differentiate ourselves from the competitors. In the course, one key factor that will differentiate our firm from others is the employment of the latest information technology in our business that will make our business more functional, effective and better than others. Other companies in the industry may be potential threat to our company but we will move ahead with our every defensive and offensive strategy to come across these competing firms. 2.5 Sales Literature Our business will initially begin with publishing of general brochure that includes information regarding our company and the various sorts of products we will be offering to our prospective buyers, advertisers and other interested parties .This will eventually help us to position ourselves in the market and generate awareness of the company and the products it aims to deliver. Also, because it represents the company, we also intend to have pamphlets in our sales promotion routines that will provide other important information 2.6 Sourcing and Fulfillment Milkyway is planning to buy unprocessed milk from the suppliers in a bulk and process it to manufacture various other milk related products. In a sense Milkyway will be internally sourced so as to minimize the costs. Similarly, our employees, the key value of our company will be delivering the products and the services as promised according to the needs and requirement of the customers. Our professional expert team will make sure that the products and services we deliver to them are beyond the expectations of our customers. 2.7 Technology Milkyway will make sure that it employs some of the best suited and latest computer technology in its system so as to guarantee that the company is continuously running at its 100 percent endeavor. The technology will continue to develop, changing what we market as well as how we market it. Our aim is to be aware of the new technology and utilizing it in our existing

framework. We also intend to have the latest and most efficient software to enable smooth operations. The following are the technology that we are employing in our business. Hardware Requirement Different kinds of hardware is needed to run the , followings are the requirement of hardware;

S.N 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Descriptions Mother Board CPU RAM HDD Keyboard Casing with Power Supply Color Monitor Mouse DVD RW Speaker Set

Type P-4 C2D-2.93 2 GB 500 GB 108 Keys Keyboard ATX LCD 21" A4 Tech 1000 KB Sony

Software requirement MilkyWay requires one of the following operating systems: Windows XP Windows Vista Windows 7 MilkyWay can also work on the following operating systems:
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Windows 95 Windows 98 Windows ME Windows NT 4.0 MilkyWay anywhere requires an Internet connection for synchronization with the DairyLive server Network requirement Routers Switches Network interface card Cables High speed internet 2.8 Future Products and Services The primary focus of Milkyway is to offer hygienic and nutritional milk products to the customers and satisfy them to the fullest. Currently, we have planned to provide items like milk, curd, cheese, and paneer only as we are the immature player in the market and we want to avert risk of introducing number of products at once. However, in the near future, Milkyway is planning to broaden its products offering by introducing various other products that have not been introduced yet. For this purpose, Milkyway will co-ordinate the customers entire experience regarding the consumption of our delivered products to the expectations regarding our products. As time progresses, we will also work towards providing variety of milk related products that are globally recognized at a reasonable price to our customers. Hence, Milkways entire effort will spin around on providing qualitative products to the customers and fulfil their changing demands no matter if we have to introduce additional products under our brand name.

Chapter 3 Market Analysis Summary

Dairy Industry is growing industry in context of Nepal where milk and milk related products are frequently consumed. Because of Nepalese trend of consuming these products we have the high potentiality of upward growing. After going through a rigorous study and research of the market, we realized that somewhere there was need for milk and milk related products. Milk and milk related products are something that people consume on daily basis especially the ones who are highly conscious about their diets and health. However, there are many strong established brands operating successfully in the market but we also believe that we can give all of them a tough competition by establishing ourselves as one of the strong brands in the market. So we have seen the potentiality of our survival. We are also aware of the fact that it requires establishing good rapport and strong strategic relationship with various hotels, restaurants, supermarkets, vendor street tea shops including individual households. Hence, we intend to provide products of the highest level of standards that aims to satisfy those customers by having good relationships among all of these customers. According to our research, initial market share will be 10%of the market. So, we have decided to implement aggressive marketing strategies to penetrate the market supported by our other strategies. 3.1 Market Segmentation MilkyWay's target customers are the people who are health conscious and prefer consuming dairy related products for milk contains vitamins, proteins and minerals necessary for the proper growth of the body. Small growing children and older people are the main consumption of our products as they are considered the major recipient of the vitamins. However, people falling in between are equally the potential consumer of our products as people here consume dairy products either for daily purpose or for religious purpose. As mentioned earlier, our business is technologically enabled one; one variable of our customer segmentation will be the customers
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who have access to the internet. In this sense mostly young customer are focused who have access to IT so that they can place their orders through our website. These customers will be marketed thorough different communication means.

3.2 Target Market Segment Strategy MilkyWay will target the special niche of population and price dairy products accordingly. The niche of the population would be growing children and old age people because they are usually high consumer of milk and milk related products and they are or can spend fair amount of money on our products. For communication among these targeted market segments, different means will be effective such as newspapers, magazines, advertising, personal selling and internet medium are best to use. Similarly, we will tie up strategically with many restaurants, hotels and supermarkets to enter into the market more rigorously and robustly. Thus, our marketing strategy will be based entirely on making the right products available to the right target customer at the right price.

3.2.1 Market Needs Because of the rapid changes in need and demand of dairy products over the last few years; many other companies have come into existence to satisfy the customers by catering various products. So, Milky Way has decided to enter the market with different approaches. Gone are the days when people used to walk miles to purchase a bottle of milk. Now people's lifestyle and access to information technology has created the possibility of delivering products and service through the click of the mouse. People want to get their product on their doorstep. Because of this perception of consumers and easy access of information technology, the market opportunity is created in dairy business. 3.2.2 Market trend As the number of consumer (population) is increasing day by day, the demand for milks and milk related products is also increasing but supply is not adequate. Since supply hasnt met the demand, people are compelled to consume powder milk as a substitute of milk. So, market trend shows the opportunity for dairy business in Nepal.

According to the statistics, total demand for the milk is 400,000 litres per day and is on increasing trend. Meanwhile, the supply is only 350,000 liters. We can see the shortage of 50,000 litres still. So there is an opportunity to grow in this dairy business. 3.2.3 Market growth: Many people are going vegetarian these days, they demand for paneer and other milk related products, increasing craze in ice-cream, chocolates, sweets and coffee. Also increasing consumer demand for milk shows that market is unsaturated and tremendous growth. 3.3 Industry analysis: According to statistics, 1.49 million tones of milk is produced every year in the country, but the quantity is not sufficient to meet the growing demand. Demand for milk in the Corporation, the state-owned enterprise, has been importing 50,000 liters of milk daily from India. Prime minister during visit to India admitted to get 10000 improved breed of cow from India to meet the demand. On the other way milk powder companies have always sought for shortage, so big companies have been established. No companies have yet facilitated the automated supply chain of milk and milk product to ultimate target customer. Only manual distribution with a nominal use of information technology is used. 3.3.1 Industry participants: For the smooth operation of our business, we need farmers and co-operatives, who will be supplying us with required milk, and also restaurants, hotels, supermarkets for which we will be delivering required materials. 3.3.2 Distribution pattern: MilkyWay is automated dairy company. The company plans to distribute its products by maintaining a relationship with its customers. In this regard, relationships mean having good links with the hotels, lodges, restaurants, supermarkets. We will have 35 outlets in 35 wards of Kathmandu. Milk and its related products are sold to retailers from companys owned outlets. The orders are placed through SMS by the customers in the evening and orders are processed by the delivery van early in the morning. For assistance, if excess products are demanded then
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customer who placed order before 8:30 in the morning are processed till 9 am and then if order are placed after that then the ordered is placed at 2:30 pm from the subsequent outlets through delivery van.

3.3.3 Competition and buying pattern: There is intense competition among different companies and they have almost made oligopoly (mutual contract). Since milk has been basic product and demand is greater than supply so competition is to grow market share rather than to develop quality and manage appropriate price. As report reveals that people are not very much concerned about the price. They are willing to consume at the available market price. Peoples demand is almost consistent every day. Quality seeker people get milk and their related products directly from farmers. There is a rush of selling in the peak hour or on the special occasion and festivals like dashain and tihar. 3.3.4 Main competitors: As the industry demand and profitability is booming. Different old companies are increasing their production and newly companies are esatablished with new plans and aprocedures. Precisely talking, our competitors are Sitaram Gokul mills Ktm ltd. Kathmandu dairy pvt ltd, Bhagwati dairy, Pandav dairy farm, Nepal dairy, Krishna dairy etc.These competitors may be threat for us, but we can prosper as we are doing our business differently, we have got first mover advantage in automated supply chain of dairy products and we are going to achieve a higher market share soon.

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Chapter 4` Strategy and Implementation Summary


Initially MilkyWay will focus on local market of Kathmandu valley. Being relatively the new company will mostly focus on milk and some certain kind of milk related products. The strategy of market segment will be mostly concerned with child and old age people. Therefore the initial strategy will be to raise awareness and confidence in our products. 4. 1 Strategy Pyramids The Strategy Pyramid places strategy at the top, supported by tactics in the middle, and programs at the base. Strategy means nothing without tactics and programs to make it real.

This illustration shows a basic Strategy Pyramid for marketing plans. The Strategy Pyramid emphasizes the practical importance of building a solid marketing plan structure. Most marketing plans are developed from the top-level strategy first.

Strategy, at the top of the pyramid, is a matter of focusing on specific markets, market needs, and product or service offerings of MilkyWay. Tactics follow and set the marketing message and the

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way it should be transmitted. Programs, at the base of the pyramid, provide the specifics of implementation. Programs include specific milestone dates, expense budgets, and projected sales results.

4.2 Value Proposition Although there are many dairy business operating their businesses in Nepal, MilkyWay Dairy has a new idea of using IT to differentiate itself from the compititors. Customers can easily interact with the firm via our websites and through feedback feature which makes two-way communication more effective. The information about the customers needs, wants collected through IT will help the business to know much more about the customer. Hence, understanding the need of customer and deliver product and services accordingly definitely add customer value to the business. 4.3 Competitive Edge Milkyway will have the ability to produce goods and services more effectively than competitors do, thereby outperforming them. This means Milkyway must stay ahead in four areas: being responsive to customers, innovation, quality, and efficiency.

4.4 Marketing Strategy The marketing strategy will be based on generating awareness about milkyways products. The strategy will rely on several different forms of communication. Milkyway will tie advertising efforts into a comprehensive marketing strategy that will be carefully designed to attract attention in the marketplace. Advertising campaign will be used as the means of marketing strategy. The main venues for advertisements will be on TV, radio, magazines etc.

4.5 Positioning Statements MilkyWay portrayed itself in the customers mind as an e-commerce portal which enables them to purchase milk and related product without visiting physical marketplace. The slogan for this product is" Healthy food; Healthy family"

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4.6 Pricing Strategy As there are many dairy companies, operating their businesses in Nepal, we have to compete with them in term of price.So, we have decided to charge reasonable and affordable price as compared to our competitors so that they are not frightened by our price range and they donot feel cheated in terms of price..Also, our price will depend on the Break Even Point (BEP) analysis. It will be done for determining price of our products after analyzing the BEP and Compeititors' price. 4.7 Promotion Strategy Our promotional strategy will be entirely based on promoting our products that we will be offering to our prospective customers by informing them about our products and making the right information available to our target customer. Promotional schemes such as discounts and other incentives will be provided in a bulk purchase. We are determined to leverage our presence using quality brochures and other sales literatures. We intend to spread the word about our business through the following. Advertising: This shall be undertaken through trade and industry publications, which are read by tourists, as well as the local newspapers. Advertisement through sales literature will be mainly targeted at potential clients and placed or made available at strategic points, such as travel agencies. With time we also intend to utilize billboards to advertise ourselves, likewise located at strategic points. Hence, we intend to design and put up posters communicating the services we provide located around hotels, lodges, airports and other such areas where tourists typically pass by. Personal Selling: Undoubtedly customer solicitation face-to-face will be a powerful form of promotion mainly due to the fact that its flexibility will enable us to match the customer's needs to specific attributes of our services as well as giving concise details of what we have to offer. Another important determinant in utilizing personal selling is the fact that we are relatively new on the market.

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Direct Marketing: This will be used but only to a limited extent in the form of telemarketing and informing potential customers and obtaining referrals where possible through e-mails, telephone, fax, letters, and social networks.

Events: These are increasingly becoming important as more firms establish in the country and hence the need to be known. The organization aims to promote itself through attending trade shows and expositions. Not only will these increase awareness of our services and business name, but also enable us to interact with potential clients who may decide to utilize our service. Trade shows that come to mind include International Trade Fair 2012, Visit Nepal 2012 etc.

In all the above we intend to communicate our ability to deliver a good service that will satisfy the customers needs. Hence, our messages will influence the engagement decision of prospective customers by emphasizing our customer focus and, persuade prospective clients that we are different from our competitors 4.8 Sales Strategy Milkyways sales strategy will be based on the conversion of qualified sales leads into paying customers. The key emphasis here is customer satisfaction. We recognize that customers desire and their needs are taken care of. Additionally, Milkyway will provide a sales commission to retailers to promote the sales of our products. Milkyway recognizes that the transactions should not be thought of as individual sales, but as long-term relationships. This is a reasonable assumption based on the fact that the customers consume milk ev8ery day, that they will continually have the need for milks. And milkyway will provide quality milk for them. 4.8.1 Sales Forecast The sales forecast indicates that growth will be slow but steady. Growth will be slow because of the time and effort needed to develop the customers. Production is not the slowing element as Milkyway can increase the level of production as per the demand. Sales are expected to increase by
10% for the first three years. We anticipate actual sales will be much higher after the renovation,

but we want to plan for other contingencies.

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4.9 Milestones The value of Milkyways milestones is in creating a set of measurable activities that will be achievable goals. The achievement of the milestones will be closely monitored and the assigned person will be held accountable for hitting the milestones.

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Chapter 5 E-commerce Plan Summary

5.1 Analysis of available delivery channel (market industry analysis) There are number of Dairy manufacturing industry in Nepal. But their delivery channels are still operating in traditional way. The company directly delivers the product to the retailers through the use of their logistics. The retailers ask the product as per their forecast and the company delivers as per their order. The order is mainly done once in a day i.e. in morning and there is no any other time for delivery of the product even when there is scarce of the product. The delivery is mainly made through mini trucks when there is large number of demand.

5.2 Rationale of choosing the delivery channels Since competitors are following only traditional means of delivery channels, we come with the new idea of using technology in our delivery process. Our delivery channel can be explained through the figure below:

Retailer

S1 S2 S3

O1 O2 O3

Retailer Retailer

MilkyWay

Retailer Retailer Retailer

In above figure, S1, S2 and S3 are the suppliers of MilkyWay. They are the collectors of milk form the local farmers. MilkyWay will collect the milk from these suppliers and distribute to its customers. We have our different outlets O1, O2, O3 in different part of Kathmandu city. Through these outlets retailers are delivered the products. Outlets are connected with main office through intranet by the use of information technology. Server is located at the central office and these servers are directly connected with the outlets. When there is shortage of milk in the outlets then the system will be informed at the central server and inventories are fulfilled accordingly.
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These outlets will supply the demanded milk to the retailers. As there are numbers of retailers, products are delivered to them through the outlets established by MilkyWay. 5.3 Payment system: The payment systems of the MilkyWay for the transaction are as follows: 1. Cash: Cash is one of the simplest payment methods in our business. Cash is paid at the point of transaction. Real time transaction occurs while transacting via cash. 2. Bank cheques / Deposit slip: The buyers can pay through cheques or deposit slip at point of sale. The bank account of MilkyWay is credited when cheques or deposit slips are issued.

3. Payment Gateway (e-Sewa): A payment gateway is a way to process electronic transactions. Payment gateways provide the tools to process payments between customers, businesses, and banks. Payment system can be described as follows:

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1. (Order Placed): Customer places order through secure connection on website, or merchant manually keys in transaction. 2. (Authorization Request): Payment Gateway receives the transaction through the secure internet connection, encrypts it, and submits an authorization to the credit card issuing bank. 3. (Authorization Response): Credit card issuing bank either approves or declines the request and sends a response back through the payment gateway to the website. 4. (Order Fulfilled): Once approved the merchant processes and ships the customer's order. 5. (Settlement Request): The Payment Gateway sends a settlement request to the merchant account provider each day that transactions are processed.

6. (Settlement Deposited): The merchant account provider deposits the amount


for each settlement into the merchant's bank account.

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eSewa is the payment gateway of Milkyway. While payment is made through online system eSewa act as a medium of such payment. eSewa offers extremely high security as well as user
friendly environment. The settlement bank of Esewa is Laxmi Bank Ltd. Customer can recharge their account of eSewa either through ESewa Recharge Cards or through partners bank e-banking system or Counter Deposit in Partner Banks. While charging their account by customers if customer has his/her account in Kist Bank (assume) then following transactions will take place. At eSewa: eSewa at Laxmi bank Dr To eSewa A/c Cr

At Kist Bank (Partner Bank) Customer A/c Dr. To Payable (eSewa) Cr.

At Laxmi Bank (Settlement Bank) Kist Bank A/c Dr To eSewa A/c Cr

During the payment process following transaction will take place. Case 1: If both customer and MilkyWay have account in Laxmi Bank Customer A/c Dr To MilkyWay A/c Cr.

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Case 2: If customer has account in Kist bank and MilkyWay has account in Global Bank. Then At Kist bank (Customer's bank) Customer A/c Dr. To Payable Cr. At Settlement Bank Kist bank A/c Dr To Global Bank Cr At Global Bank (MilkyWay) Receivable A/c Dr. To Customer A/c Cr.

5.4 Detail functionality of each module of the software systems The different kinds of software needed for online business of MilkyWay are: Database management system (DBMS): A DBMS is a system software package that helps the use of integrated collection of data records and files known as databases. It allows different user application programs to easily access the same database. DBMSs may use any of a variety of database models, such as the network models or relational models. In large systems, a DBMS allows users and other software to store and retrieve data in a structured way. Instead of having to write computer programs to extract information, user can ask simple questions in a query language. Thus, many DBMS packages provide Fourth-generation programming language (4GLs) and other application development features. It helps to specify the logical organization for a database and access and use the information within a database. It provides facilities for controlling data access, enforcing data integrity, managing concurrency, and restoring the database from backups. Customer Relationship Management (CRM) Software: It is a cross functional e-business application that integrates and automates many customer serving processes in sales marketing, account and order management, and customer service and support. This company requires CRM which have following features: Contact and Account Management
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Sales optimization tool: Cross sale and up sale Marketing and fulfillment Customer service and support Retention and loyalty Programs

Enterprise Resource Planning (ERP) Software ERP systems are designed to tackle the problems mentioned above by integrating all of the regular functions of business (finance/accounting, human resources, customer relationship management, manufacturing, project management, sales, supply chain management etc.) and providing a means to better manage the companys resources.

5.5 Development Requirements MilkyWays's website will be initially developed with few internal technical resources. Bent Ray Hosting will host the site and provide the technical back end. Bent Ray Hosting is a leading web hosting and server solution company in Nepal. It has been providing the cheapest and the best web hosting services to its clients. The clients includes government agencies, large corporate houses, US based business houses, NGOs and INGOs etc. Webtech Nepal will produce the graphics, logos, artwork, and flash media as they will be developing our website from scratch. Our site will be maintained by one of the owners.

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Chapter 6 Security measures and disaster recovery plan


6.1 VeriSign: VeriSign is an online security & SSL certification provider. Websites having authentic seal of VeriSign are secure and protect privacy. The authentic website is indicated with VeriSign .The process how VeriSign work is described Browser checks the certificate to make sure that the site you are connecting to is the real site and not someone intercepting. Determine encryption types that the browser and web site server can both use to understand each other. Browser and Server send each other unique codes to use when scrambling (or encrypting) the information that will be sent. The browser and Server start talking using the encryption, the web browser shows the encrypting icon, and web pages are processed secured. The website with these VeriSign sign is considered as highest secure page. Customers can make any transaction more trustworthy and reliable when they are certified by VeriSign. . 6.2 Disaster Recovery Plan It is not possible to run any business without information, so organization should make good plan to preserve and reduce the risk of loss of data. Loss of data means loss of customer information without which survival of the organization is not possible. Hence, the firm largely depends on IT as to have a Disaster Recovery Plan (DRP). Backup and recovery is more challenging than ever with exponential data growth, sprawling virtualized environments, ever shrinking backup windows, and escalating storage and tape costs. The main focus of the Disaster Recovery Plan is to restore the operability of the system that supports mission-critical and the critical business processes. Controlling the occurring events to reduce the risk of any additional loses is a must during the recovery phase.

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6.3 Classification of Disasters Disaster can be classified in two broad categories: Some of the well-known natural disasters are floods, hurricanes, tornadoes and earthquakes. While preventing a natural disaster is very difficult, measures such as good planning which includes mitigation measures can help reduce or avoid losses. The second category is manmade disasters. These include hazardous material spills, infrastructure failure or bioterrorism. In these instances surveillance and mitigation planning are invaluable towards avoiding or lessening losses from these events. 6.4 Control measures in recovery plan Control measures are steps or mechanisms that can reduce or eliminate computer security threats. Different types of measures can be included in BCP/DRP. Disaster recovery planning is a subset of a larger process known as business continuity planning and should include planning for resumption of applications, data, hardware, communications (such as networking) and other IT infrastructure. A business continuity plan (BCP) includes planning for non-IT related aspects such as key personnel, facilities, crisis communication and reputation protection, and should refer to the disaster recovery plan (DRP) for IT related infrastructure recovery/continuity. This article focuses on disaster recovery planning as related to IT infrastructure. Types of measures: 1. Preventive measures - These controls are aimed at preventing an event from occurring. 2. Detective measures - These controls are aimed at detecting or discovering unwanted events. 3. Corrective measures - These controls are aimed at correcting or restoring the system after disaster or event. These controls should be always documented and tested regularly.

6.5 Strategies for data protection


The following is a list of the most common strategies for data protection:

Backups made to disk on-site and automatically copied to off-site disk, or made directly to off-site disk.( use of portable hard disk)

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In addition to preparing for the need to recover systems, the firm must also implement precautionary measures with an objective of preventing a disaster in the first place. These include the following measures:

Local mirrors of systems and/or data and use of disk protection technology such as RAID Uninterruptible power supply (UPS) and/or backup generator to keep systems going in the event of a power failure Fire preventions alarms, fire extinguishers Anti-virus software and other security measures

Firewall A firewall is a part of a computer system or network that is designed to block unauthorized access while permitting authorized communications. It is a device or set of devices which is configured to permit or deny computer applications based upon a set of rules and other criteria. Firewalls can be implemented in either hardware or software, or a combination of both. Firewalls are frequently used to prevent unauthorized Internet users from accessing private networks connected to the Internet, especially intranets. All messages entering or leaving the intranet pass through the firewall, which examines each message and blocks those that do not meet the specified security criteria. We are planning to use the following firewall as it meets our requirements and is within our budget.

Brand name: NETGEAR Model no: FVS318 Throughput: 12.5 Mbps LAN to Wan throughput 1.2 Mbps 3DES throughput Size: 10*7.1*1.4(inches) Weight: around 1 kg.

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6.6 Websites Home Interface

6.7 Content of MikyWays website


The.com is a simple and understandable website that is newly offered to the customer. It provides all the required information so that the customers can easily view and order the products which they want. The site disseminates all the information about types of milk-related products. Customer can login as per their login id and username to view and order the products. Detail information about our organization has also been contained in the website.

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Home Home page of the shows the products and their details. Customers can view and order the products by visiting the home page. The search facility is made in order to facilitate the consumer to search the desired product quickly. User can login into account with their own user id and password to know more about products and order them. Register (Sign up) Customer who wants to buy the milk-related products through our website needs to register with all his detail information of name, address, city, country, etc. Once he/she is registered into our website he/she will be provided with a permanent username and password so that she/he need not to register for a new id time and again. Once a customer creates a profile into our system, she/he gets updated about the arrival of new products. The so registered profile information will be automatically stored in our database.

Login The costumer, after having the id and password, can login to their account and use all the features of the website. S/he can also send feedbacks, lodge complaints and suggest the products to their friends and relatives who are registered members of the website
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Product directory The page will contain all the product-related information such as names of products, the ingredients each product contains, prices, delivery timeframe, etc. Costumer support This caption will contain the information such as firm's helpline, email addresses, Frequently Asked Questions (FAQ), etc so that customers can easily order and get information of the products they want to buy or want to know about. If customer found any problem then they can mail to the MikyWays e-mail address and can get solution of that problem. Feedback If a customer feels like giving a positive or negative response to the goods and services provided to them, the Feedback page will help them do so online by entering their user id followed by the feedback they want to give.

About us This page will provide all the company-related information such as its inception, location, branches, location of the branches, business partners, company's goals and visions, etc. which will help customers get to know about the company and make deals confidently.

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CHAPTER 7 Management Summary

The four founder of the MilkyWay Dairy are Mohammad Ishak, Rajeeb Giri, Sandesh Lamichhane, Tirtha Gurung. They will be the main owner of the company with the responsibility and authority solely based on them. Each member is expert in their respective work that may be either in marketing, finance, human resource management or in information technology etc.

7.1 Organizational Structure

Organization is hierarchical in structure. The decision flows from top to bottom. This will follow participative approach to make decision so there is two-way flow of information. All functions of organization are integrated so employees can provide feedback and suggestion to the top level management. This feedback and suggestion helps to make proper decision. Every Departmental Manager will be given duties and responsibilities along with the adequate authority to take any kind of decision related to their working area.
Top Level Management

IT

IT Dept.

Production Dept.

Accounting & Finance Dept.

Sales and Marketing Dept.

HRM Dept.

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Fig: Two-way flow of information Top level management provides guidelines to employees either by conducting meetings or by sending message via LAN (Local Area Network) Shows Information flows downward from top level management Shows flow of feedback and suggestion from each department

7.2 Management Team Milkyway will have the owners in the management as they all have the necessary skills and qualification related to different aspect of the management like Human Resource, Sales and Marketing, Accounting and Finance, Information technology etc.

CEO (Sandesh Lc)

Production Manager (Manish Sharma)

Accounting & Finance Manager (Mukunda Aryal)

Marketing Manager (Ishak Mohammad)

IT Manager (Rajeeb Giri)

HR Manager (Tirtha Gurung)

7.3 Management Team Gaps

As all of the owner are fresh MBA graduates and they will be responsible for handling different department according to their skills and specialization in their academic degree there will be lacking experience among them. Hence after doing their responsible work for certain period of

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the time, they will be able to handle each key job in efficient and effective way and they will be assigned respective job accordingly.

7.4 Personnel Plan HR Department will be main responsible for the personnel plan of the every employee needed for the company. The lists of the needed personnel for the first year of the operation are as follows:

CEO: Department Manager: Supervisors: Outlet Employee: Sales Representative: Factory Worker: Technician: Driver: Security Guard:

1 5 5 70 35 50 4 15 5

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CHAPTER 8 Financial Plan


The financial plan is to borrow RS. 10,000,000 as a long-term loan from Nabil bank at an interest rate of 12%, to make the building along with to buy necessary plant and machinery. We will repay this loan over 10 years. We will secure this loan with our equity in the value of the existing property. The installation of advance technology will open up a new revenue stream for the business, and attract new steady customers. Capital structures Composition Personal Contribution (4*2,500,000) Bank Loan Total Weightage 0.5 0.5 1.00 Amount (Rs) 10,000,000 10,000,000 20,000,000

With aggressive target marketing and the sales strategies outlined above, we will increase sales over 5% in the first year. We expect a bigger increase in year two, with the extensive renovation generating some free publicity and with existing customers making referrals, but the largest expansion is planned for thought the year 5. 8.1Costing of System As we are planning to automate our dairy business we need to have heavy investment in the installation of the system along with the plant and machinery needed to operate the business in best possible way. 8.2 Important Assumptions This business plan was developed for Milkyway, assuming the following: For the initial implementation of plans adequate loan will be taken from the bank. Competition and buying patterns remain similar to those used for forecasting. Long-term interest rate will be no more than 12%.
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New customers will be gained through direct sales and advertising. Sales will increase 5% in second year of operation. All the financial statements are assumed under the use of e-commerce platform.

If Milkyway will not use the e-commerce platform for doing the business, the initial investment needed will be lower than the mentioned below. Although the installment of the system cost high at the initial phase it will reduce the operating expenses, which will definitely help to achieve higher profit along with providing platform to communicate directly with the customer.

8.3 Break-even Analysis Break-even is based on fixed costs of approximately Rs. 1,200,000 including loan repayment, insurance, maintenance and labor. Additionally, controllable such as service labor, taxes, advertising and legal/professional fees are included. Margins are harder to assume. Our FY 2005 gross margin is forecasted at 69.98%. In the following years our gross margin will continue to grow beyond our starting point because of the continued growth in total product sales. Break-even Analysis Monthly Revenue Break-even in Rupees Assumptions: Average Percent Variable Cost Estimated Monthly Fixed Cost 40% 1,200,000 Rs.2, 000,000

8.4 Projected Profit and Loss Cost of sales reflects our cost to manufacture the feed and purchase all other non-manufactured products. Gross margin will continue to rise at a steady pace throughout the years forecasted. Advertising and marketing expenses (news ads, magazine ads, etc.) are projected to increase as net profits increase and positive results are accomplished as a direct result of the same marketing and advertising.
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Depreciation forecasted includes normal wear and mechanical tune-ups on plant and machinery, trucks and all equipment in the factory. Fuel and electricity costs are projected to grow as the amount of sales made that require delivery increase. This projected expense includes electricity, fuel for the vehicles etc. Projected income statement (using e-commerce) Amt (Year Amt (Year Particulars sales revenue Total revenue Less: Variable cost Service Charge to eSewa Direct Material Cost Rent expenses Advertising and promotion Insurance expenses Water and electricity Telephone expenses Stationary expenses Fuel expenses Maintenance expenses Total Variable Cost Less: Fixed Cost Salaries and wages Domain Name Registration Website hosting Rent Depreciation Total Fixed Cost Total Cost (Fixed + Variable) 8,500,000 1,000 96,000 1,800,000 1,750,000 12,147,000 36,245,000 8500000 1,000 96,000 1,800,000 1,750,000 12,147,000 38,654,800 1,798,000 11,000,000 1,500,000 3,000,000 1,300,000 1,700,000 850,000 250,000 1,750,000 950,000 24,098,000 1,977,800 12,100,000 1,650,000 3,300,000 1,430,000 1,870,000 935,000 275,000 1,925,000 1,045,000 26,507,800 1) 62,000,000 62,000,000 2) 68200000 68200000

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EBIT (Earnings before Interest and Tax) Less: Interest EBT (Earnings before Tax) Less: Tax @ 40% Net Profit

25,755,000 1,200,000 24,555,000 9,822,000 14,733,000

29,545,200 1,200,000 28,345,200 11,338,080 17,007,120

If e-commerce platform is not used than some of the expenses will not incurred such as service charge to eSewa, domain name registration, website hosting etc. But while operating the business it will reduce the operating cost of the business. If e-commerce platform is used for doing business, it will be easy to process the order, it will reduce the human resource needed etc. The income statement without using e-commerce platform will be as follows. Projected income statement (without e-commerce) Amt (Year Amt (Year Particulars sales revenue Total revenue Less: Variable cost Sales Commission Direct Material Cost Rent expenses Advertising and promotion Insurance expenses Water and electricity Telephone expenses Stationary expenses Fuel expenses Maintenance expenses Total Variable Cost Less: Fixed Cost 2,500,000 11,000,000 1,500,000 3,000,000 1,300,000 1,700,000 850,000 250,000 1,750,000 950,000 24,800,000 2,500,000 12,100,000 1,650,000 3,300,000 1,430,000 1,870,000 935,000 275,000 1,925,000 1,045,000 27,030,000 1) 58,000,000 58,000,000 2) 63,800,000 63,800,000

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Salaries and wages Rent Depreciation Total Fixed Cost Total Cost (Fixed + Variable) EBIT (Earnings before interest and Tax) Less: Interest EBT (Earnings before Tax) Less: Tax @ 40% Net Profit

8,500,000 1,800,000 1,750,000 12,050,000 36,850,000 21,150,000 1,200,000 19,950,000 7,980,000 11,970,000

8,500,000 1,800,000 1,750,000 12,050,000 39,080,000 24,720,000 1,200,000 23,520,000 9,408,000 14,112,000

Net income using e-commerce is higher than without using it because of the operating cost reduction due to e-commerce platform.

8.5 Projected Cash Flow

The cash flow projection for Milkyway shows that provisions for ongoing expenses are adequate to meet the needs of the company, as the business generates sufficient cash flow to support operations and future expansions. Cash flow projections are critical to our success. The monthly cash flows for the first year are shown as follows: Particulars 1. Cash-flow from operating activities Net Income Adjustment of non-cash expenses: Depreciation Adjustment of change in working capital Increase in inventory Increase in accounts receivable
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Year 1

Year 2

14,733,000

17,007,120

1,750,000

1,750,000

(2,400,000) (2,000,000)

(240,000) (200,000)

Increase in accounts payable Increase in Accruals Net cash from operating activities

1,560,000 1,440,000 15,083,000

156,000 144,000 18,617,120

2. Cash-flow from investing activities Purchase of Furniture purchase of vehicle purchase of plant and machinery Purchase of office supplies Net cash from investing activities (1,200,000) (5,500,000) (6,420,000) (800,000) (13,920,000) (5,637,120) (800,000) (6,437,120)

3. Cash-flow from financing activities

Net change in cash Add: Cash and bank at the beginning of the year Cash and bank at the end of the year

1,163,000 4,637,000 5,800,000

12,180,000 5,800,000 6,380,000

8.6 Projected Balance Sheet The Balance Sheet shows healthy growth of net worth, and strong financial position. It is a summary of the financial balances of the company. Milkyway is strong enough to meet the any obligation at required time. There are two different balance sheets presented below, one is balance sheet if doing business using e-commerce and another one is without e-commerce.

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Projected Balance sheet (using e-commerce) Assets Year 1 Year 2 Lib. and Equity 1. 1. Current Assets Cash Bank 2,700,000 3,100,000 liability 2,970,000 Account payable 3,410,000 Accruals Total Inventory Account Receivable 2,400,000 2,000,000 2,640,000 liability 2,200,000 2. Equity 11,220,000 Equity loan @ 12% 1,200,000 5,500,000 -550,000 800,000 1,200,000 5,500,000 -550,000 800,000 Retained earning Total equity 10,000,000 10,000,000 10,000,000 10,000,000 4,950,000 24,950,000 5,670,000 25,670,000 current 3,000,000 3300000 1,560,000 1,440,000 1716000 1584000 Current Year 1 Year 2

Total current assets 10,200,000 2. Fixed Assets Furniture Vehicles Accumulated dep. Office supplies Equipment Accumulated dep. Total fixed assets

12,000,000 12,000,000 -1,200,000 -1,200,000

17,750,000 17,750,000 Total liability &

Total Assets

27,950,000

28,970,000 equity

27,950,000

28,970,000

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Projected Balance Sheet (Without e-commerce) Assets 1. Current Assets Cash Bank 2,700,000 3,100,000 Year 1 Year 2 Lib. and Equi 1. Cur liability 2,970,000 Account/P 3,410,000 Accruals Total current Inventory Account Receivable 2,400,000 2,000,000 2,640,000 liability 2,200,000 2. Equity 11,220,000 Equity loan @ 12% 1,200,000 5,500,000 -550,000 800,000 9,000,000 -1,200,000 1,200,000 5,500,000 -550,000 800,000 9,000,000 -1,200,000 R/E Total equity 10,000,000 10,000,000 10,000,000 10,000,000 1,950,000 21,950,000 2,670,000 22,670,000 3,000,000 3300000 1,560,000 1,440,000 1716000 1584000 Year 1 Year 2

Total current assets 10,200,000 2. Fixed Assets Furniture Vehicles Accumulated dep. Office supplies Equipment Accumulated dep. Total fixed assets

14,750,000 14,750,000 Total liability

Total Assets

24,950,000

25,970,000 & equity

24,950,000

25,970,000

8.7 Business Ratios Milkyways projected business ratios areas bellows.

Current Ratio = Current assets / Current Liabilities

Year 1: 10,200,000/3,000,000 = 3.4 times Year 2: 11,220,000/3,300,000 = 3.4 times

Quick Ratio = Quick Assets / Current Liabilities


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Year 1: 7,800,000 / 3,000,000 = 2.6 times Year 2: 8,580,000/ 3,300,000 = 2.6 times Debt to assets ratio = Total debt / Total asset

Year 1: 10,000,000 / 27,950,000 = 0.3578 Year2: 10,000,000 /28,970,000 = 0.3452

Net profit margin = Net Income/ Total Sales Year 1: 14,733,000/62,000,000= 23.7629% Year 2: 17,007,120/68200000 = 24.9371% Percent of Total Assets Year 1 Inventory 7.16% Year 2 9.11% 29.62% 38.73% 61.27% 100.00%

Other Current Assets 27.91% Total Current Assets 36.49% Long-term Assets Total Assets 63.51% 100.00%

8.8 Long-term Plan Milkyway, is expected to grow at a steady pace. As we expand our customer base, offer more products and bring more demand in the existing market, we will be positioning Milkyway amongst the elite Dairy factory in the nation. We will continuously review our business plan as we implement changes. By doing so, we will ensure accuracy and stability. Our goal is to take over this great business, protect it, nurture it, and provide for it. Doing these things will enable us to grow and expand the business in a professional atmosphere. Milkway is planning to increase the sales volume by 15% in the year 3 and thereafter. Having advance technology and doing business in e-commerce platform will help milkyway to grab the large number of customer in the future too. Although the installation of the system costs high at
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first it will provide the competitive advantage for the company and reduce the cost also accordingly in the following year.

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