School of Business POKHARA UNIVERSITY

PRESENTATION
Business Development Plan
(Graduate Seminar- 1 credit Hour)

MBA – IV Trimester August 23, 2011
3/22/2012 Binay Thapa MBA IV Trimester, SOB,PU 1

Business Development Plan of
Annapurna Organic Tea Sardhikhola, Kaski

Name of Student: Binay Thapa Roll No.: 6 IV Trimester

3/22/2012

Binay Thapa MBA IV Trimester, SOB,PU

2

PU 3 .Highlights of the Project • Name of Company : • Name of Project : • Promoter(s) : Annapurna Organic Tea Organic Tea Production Binay Thapa & Community People International Market.000 Kgs • Duration of Projection: 5 years • Major products: Organic Tea (Grade 1-5) 3/22/2012 Binay Thapa MBA IV Trimester. SOB. • Objective of Project: To export Organic Tea In • Capacity : 40.

• He was relaxing in the garden with a cup of boiling water. • The UK is the largest importer of tea. • The English quickly developed an almost unquenchable thirst for the drink and began searching for a way to get tea in other countries.PU 4 . He enjoyed the taste of the tea and the pain relief of the drink was so much. • The first tea used in England came from China.History • Tea was discovered accidentally by Emperor Shen Nung back in 2700BC. Unnoticed he consumed the drink. SOB. At that time some leaves from a nearby tree fell into the cup. 3/22/2012 Name of student MBA IV Trimester.

It is grown organically from the high elevation gardens of Himalayan range close to Mount Annapurna and Fishtail.Introduction • Reason for selecting this project  The Annapurna Organic Tea is a gift from the silvery mountains.PU 5 . The local farmers are the growers and processors of the tea. You will enjoy the freshest and finest tea with exclusive taste and aroma from the Annapurna Himalayas. • Uniqueness / product features :  The quality and high value of this tea is attributed to the fresh soil and. SOB. the fresh water and the fresh air of the Annapurna region. 3/22/2012 Binay Thapa MBA IV Trimester. It possesses delicate flavour along with strength and brightness.

Production Plan  First the company will focus on the plantation of tea in Sardikhola VDC about 3000 hectares with the coordination of ACAP. technical/resources people. SOB. clubs.  After two years the company will collect the raw material from the farmers for the production of tea.PU 6 .  Step I Collection of green leaf from collection centre  Step II Weathering  Step III Rolling  Step IV Fermentation  Step V Heating  Step VI Shorting  Step VII Savaging  Step VIII Separating Grade  Step IX Packaging 3/22/2012 Binay Thapa MBA IV Trimester. local communities. etc.

• HR Policy  HR policy will be based on the nations law.  Performance appraisal on every quarter. SOB.PU 7 . • Expert in this project  ACAP will be the prime organization that will provide the technical assistance.  Compensation based on performance. 3/22/2012 Binay Thapa MBA IV Trimester. Secretary .Project Management Plan • BOD  CEO would be the major person in this organization with President. Vice president.

Management Plan • Organization Chart CEO Finance/Account Manager Marketing Manager Supervisor Labors 3/22/2012 Binay Thapa MBA IV Trimester.PU 8 . SOB.

SOB.needs to establish its position in the market place.• Strength SWOT Analysis  Local community will favor.  New company .  Demand all over the world.  Increasing importance of organic foods in the world.PU 9 .  Emerging issues of the health of the people. • Weakness  Nepal is out of insurgency and the nation have instable politics.  Consumers prefer quality products that offer true value. • Opportunity  Consumers are living a more healthy lifestyle. 3/22/2012 Binay Thapa MBA IV Trimester.

 High quality tea prices will increase moderately.  Limited number of raw materials .  Unstable tea supply of high quality tea.SWOT • Threats  Needs to compete with foreign goods that are produced with sophisticated technology. SOB.PU 10 . 3/22/2012 Binay Thapa MBA IV Trimester.

• Marketing Plan  Marketing communication campaign  Marketing Promotion Campaign. SOB.Marketing Plan • Marketing Strategy  With the brand Anna Organic Tea we are going to introduce innovative products in an existing market and focus on Market Development  We will spread awareness about the health betterment by consuming the Tea and capture the educated and health conscious class of people.PU 11 . 3/22/2012 Binay Thapa MBA IV Trimester.

SOB.  We are going to set up original events in order to attract new customers and consumers of other tea brands.PU 12 .Marketing Plan • Role of Marketing Departments & Staffs  The selling process is vital in the decision making process. 3/22/2012 Name of student MBA IV Trimester.  The clients needs to be assured in quality in order to make them more confident the product.  The selling is making by the advice. • Promotion  The promotion is the most important point to launch our products because we want to be able to compete with our competitors.

1.11.Financial Projection • Assumption of Financial Calculations: Year 1 2 3 4 5 40 % 50% 60% 70% 80% Capacity % Sales Rs.92.PU 13 .06.38.65.87.000 1.33. SOB.84.60.13.000 3/22/2012 Binay Thapa MBA IV Trimester.000 1.000 1.000 2.

000 • Market Scenario :  Since people are being aware of the importance of the organic foods.  Major competitive countries in tea in the world are Sri Lanka.Rs. 3/22/2012 Binay Thapa MBA IV Trimester.27.  It occupies an important place and plays a very useful part in the national economy . China and Indonesia. Kenya.Financial Projection Assumption of Financial Calculations: • Demand :3000 Kgs • Variable Cost :.80.PU 14 . 1.  The tea industry in Nepal is about 150 years old.00.Rs. they are ready to pay high for these goods.000 • Fixed Cost :.26. SOB.

PU 15 . 3/22/2012 Binay Thapa MBA IV Trimester. SOB.  Tea proves as refreshing drink as well as medicine and offer better health & immunization as it is consumed twice to thrice a day. Internal factor  The employees are very important since they represents the image of the brand. the taste of the product.Market Scenario • Government Policy • Industry related factors  Tea is hot beverage consumed by people all over the world at highest after water.  The employees and more particularly the commercial people are trained in order to know the product and sell it properly.  The employees explains the quality.

218 Equity Capital: Rs. 2. 91.01.97. 50.319 Total Equity & Liabilities: Rs. 91.73.218 3/22/2012 Name of student MBA IV Trimester.40.40.01.500 – Working Capital Requirements: Rs.88 Total Assets: Rs.08.Financial Projection • Initial Investment : – Fixed Assets Requirements: Rs.52. 34.500 • Initial Capital Structure Current Assets: Rs. 54.26.350 Long Term Loan: Rs. 34.03. SOB.011 Fixed Assets: Rs.868 Current Liabilities: Rs.PU 16 . 45.

Financial Projection • Income Statement Summary 100% Year Sales VC 26.44 6.22 10.19 10.87 0.69 5.52 0.04 2.61 5.08 9.08 EBIT Interest EBT Tax Earning After Tax Dividend Retained Earnings 3/22/2012 4.22 3.64 3.26 6.08 8.54 7. SOB.03 6.85 6.95 0.08 7.06 50% 2 13.45 6.45 1.02 1.90 1.82 17 Name of student MBA IV Trimester.03 7.14 6.59 0.63 6.38 10.75 5.46 1.36 8.50 7.08 0.26 2.39 0.08 11.65 40% 1 10.32 60% 3 16.PU .59 70% 4 18.04 7.44 3.63 8.59 2.82 3.85 In Million 80% 5 21.71 8.36 4.09 2.12 Contribution Margin FC 5.63 2.36 6.96 2.72 3.73 12.19 2.

7 5 10.0 6.7 .7 4.8 5.5 7.4 2 3 4 8.1 4.9 4. SOB.3 5.PU 18 In Million 1 3.Financial Projection • Cash Flow Summary Year Operating cash inflow Financing cash inflow Investing cash Inflow Total cash Inflow (A) Operating cash outflow Financing cash outflow Investing cash outflow Total cash outflow Operating cash Outflow (B) Cash Balance (A)-(B) Add :Opening Cash balance Closing Cash Balance 3/22/2012 Name of student MBA IV Trimester.

PU 19 . SOB.Financial Projection Capital Budgeting Summary Initial Investment Total Present Value Non Discounted Pay Back Period Discounted Pay Back Period Net Present Value (NPV) Internal Rate of Return(IRR) Profitability Index 3/22/2012 Name of student MBA IV Trimester.

76.60.278 1.690 34.08.393 91.40.996 1.631 3.16.011 34. SOB.022 0 75.24.977 Fixed Assets Total Assets Current liabilities Long Term Loan Total equity Total Equity &liabilities 40.94.415 2.43.48.PU 20 .00.218 1.Projected Balance Sheet Year Current Assets 1 50.08.048 28.993 4.35.05.47.137 3.54.016 20.50.437 91.00.911 1.242 31.03.39.54.01.230 1.33.889 4.372 3 4 5 90.278 1.062 1.81.01.12.01.71.43.16.592 1.52.10.97.05.319 2.01.239 1.868 2 67.52.84.239 1.218 1.350 37.83.062 1.24.64.60.014 27.266 1.02.05.50.415 3/22/2012 Name of student MBA IV Trimester.48.019 10.76.90.08.

3 BEP % ROI ROE ROA Current Ratio Interest/Sales 6.45% 44.BEP & Major Financial Ratio Year BEP Sales 1 1.51% 43.63% 3.64% 38.88% 26.809.73% 4. SOB.1 3 1.27% 43.0 5 1.93% 0.91% 24.3% 51.915 9% 43.27% 31.3% 28.PU 21 .1 2 1.648.55% 32.970.12% 1.88% 54.9% 42.568 11% 42.284 18% 31.91% 3/22/2012 Name of student MBA IV Trimester.839 14% 38.91% 53.696.333 8% 43.9 4 1.750.45% 35.55% 48.

132 12. SOB.140 If cost increases by 10% Year BEP Sales 7.857.515.PU 22 .666.100 3 4 5 13.080 8.176 1 2 3 4 5 3/22/2012 Binay Thapa MBA IV Trimester.580.Sensitivity Analysis  If sales price decreases by 10% Year 1 2 6.225.610 10.160 BEP Sales 9.088 9.476.238.160.654 14.870.120 11.047.

Year BEP Sales 1 6909084 2 8636355 3 10363626 4 12090897 5 13818168 3/22/2012 Binay Thapa MBA IV Trimester. SOB.PU 23 .Sensitivity Analysis • If cost increases by 5% and sales decreases by 10%.

PU 24 .Recommendation • Considering the above analysis and projection based on above assumptions. • Expand its production in others places of Nepal. I would like to recommend that : -. • The concept of the project is good and well planned. • Advertisement should be done consistently 3/22/2012 Binay Thapa MBA IV Trimester. SOB. The customers are large in numbers and the product has high demand all over the world. • Net Present Value of the project is positive. • The Internal Rate of Return (28%) is greater than project cost of capital (18%).

PU 25 .Any Questions??? 3/22/2012 Name of student MBA IV Trimester. SOB.

SOB.Thank You 3/22/2012 Name of student MBA IV Trimester.PU 26 .

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