BCOM Final Report- Formatted 2

8/6/2019 BCOM Final Report- Formatted 2

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This Report Contains

Core Idea of the Businessand Product

Operational andFinancial Feasibility

Marketing Plan

Growth and ExpansionStrategy

Date:May24201

0

GroupNo.

10

Reeds Footwear

Business Plan


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Reeds FootwearA Business Plan


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Reeds Footwear

A Business Plan

Prepared For

Ms. Nyla Ansari

Lecturer, Business Communication

Institute of Business Administration

Prepared By

Nadia Naeem

Sarah Hussain

Mudassir Ali Soomro

Areeb Ekhlaque

Mohammad Salman Ghani

May 24, 2010


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Reeds FootwearPage 4

Contents

Executive Summary 5

Core Idea of the Business 6

Purpose 7

Tagline 7

Positioning 7

USP 7

Outlet Locations 8

Demographic Analysis 8

Product Categories 9

Methodology and Resources 9

Customer and Supplier Profile 10

Major Competitors 10

Operations 12

Marketing Plan 15

Financial Feasibility 16

Growth and Expansion Strategy 20


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Business Plan Page 5

Executive Summary

This project for Business Communication is aimed to serve as a

tool for relaying to potential investors and stakeholders the worth,

feasibility and viability of a business venture that has been care-

fully devised in order to convince and persuade these stakeholdersinto developing an interest in this plan.

The business venture, in a nutshell, is a service that sells custom-

ized formal shoes for men. It is aimed at creating a different,

unique market offering and targets a niche market that appreciates

choice, freedom of expression and convenience.

The business report has been structured into segments, each of

which focuses on a particular aspect of the service. These aspects

are basically the functional departments of the service: Marketing,

Operations, HR and Finance. Each department has been managed

by a particular representative of the company, such that we havebeen able to capitalize on each of the management and communi-

cation strengths of our members.

The major tools and focus used for communication were by em-

ploying a clear definition and purpose for this report, by maintain-

ing the emphasis on the salient features consistently and by using

our tools of persuasion, which have been specifically focused upon

in our marketing section.

This report is in essence, strong in terms of communication for it

goes into just the necessary amount of detail and uses precise tools

and methodology in order to make its point and create effective

communication.


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Core Idea of the Business

There is a shift in consumer markets towards

distinctiveness and greater customization. Even

though the apparel industry has captured thistrend, no such change is seen in the footwear in-

dustry. Our business is aimed at delivering the

superior fit and comfort that only customized

shoes can provide to customers. We provide

high quality, premier leather shoes to cater to

the needs of the high-end middle-aged male

customer.

We bring total shoe design and customization to

everyone whos serious about expressing their

individuality and achieving peak performance.

Visit our store where an expert will guide you to

the three step customization experience. It

starts with an individual computerized fit for

each foot, so no matter what design you havechosen, your finished shoe will be unique to

you. Now nothing can stand in your way.


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Purpose

There has always been a disparity between the

product available in the market and the image

of that product that the customer has in his/her

mind. A buyer is never satisfied with his pur-

chase when his needs arent satisfied. And here

we come not just to satisfy our customers but to

delight them. This is our basic purpose of com-

ing up with the idea of commencing this type of

business.

Tagline

Restart your artdesign your own.

Positioning

A customized footwear line for the corporate

male and youngsters

USP

Customization of colour, fabric, design and fit

A 30 day money back guarantee


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Reeds Footwear

Zamzama, Defence

Pak-Tower

Dolmen

Mall, Tariq

Road

Page 8

Locality of our Exclusive Outlets

Pakistani Demographics (2009-2010)

Roughly 36% of the total population of Pakistan

is between the ages 20 and 35.

Approximately 22% of the population falls be-

tween 25 and 40, which we classified as corpo-

rate males.

49% of our population are youngsters who have

keen interest in sports.

Source: Federal Statistics Board of Pakistan


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Page 9

Methodology and Resources

The business will operate from a flagship retail

outlet in Zamzama, Karachi which is one of the

biggest markets of consumer items in the city.

Space for the outlet has been identified and pre-

liminary negotiations have begun.

The craftsmen and machinery can be acquiredfrom the ShoeStore which has announced its

closing. This saves training cost for the human

resource and high initial cost for new machinery

and equipment.

Product Categories

Casual and formal shoes for men.

Sneakers and sports shoes for youngsters

Business Plan


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Key suppliers have been identified and contrac-

tual discussions are underway.

Customer Profile

LocalityClifton, DHA, K.D.A, Gulshan.

Male, belonging to Elite class who are conscious

about their dressing and lifestyle.

Young boys and sportsmen of ages 20-30.

Corporate males of ages 25-40.

Supplier Profile

Leather is supplied from the Pakistan Leather

Manufacturer, situated in Punjab.Other raw materials for the trim department are

bought from factories in Kasuri, Punjab.

Trained employees hired to supply the finished

shoes to our specific outlets.

Major Competitors

ENGLISH BOOT HOUSEPark Towers

Shop #120, Shahrah-e-Firdousi

Seaside, Clifton

Tel: (92-21) 3-583-0294, 3-583-0217


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FOOT PRINT (CUSTOM-MADE SHOES)

Shop #1, 10-C, 5th Commercial Lane, Zamzama

Phase 5, D.H.A.

Karachi, Pakistan.

Tel: (92-21) 3-537-1717

ZAPATERIA

Shop #1, Plot 40-C, Street 10, Badar Commercial Area

Phase 5, D.H.A.

Karachi, Pakistan.

Tel: (92-21) 3-534-1206

URBAN SOLE

Dawood Center 124-R, Shop #3Block 2, Main Tariq Road

Karachi, Pakistan.

Tel: (92-21) 3-454-8281

Atrium Mall, GF 54-33, Atrium Mall, Saddar

Karachi, Pakistan

Tel: (92-21) 3-564-1013

Page 11Business Plan


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Operations

People who want to buy customize shoes canvisit our exclusive outlet and can order of theirown choice or from our catalogue. Footwear can

be defined as garments that are worn on thefeet. Footwear has become an important com-ponent offashion accessories.The leather is bought from the Pakistan LeatherManufacturer situated in Kasuri, Punjab. Thenthe leather is used to fulfil the need of the cus-tomers through different departments.

Clicking or Cutting DepartmentIn this department, the top part of the shoe orthe "upper" is made. The clicking operative isgiven skins of leather, mostly cow leather butnot restricted to this type of leather. Using metalstrip knives, the worker cuts out pieces of vari-ous shapes that will take the form of "uppers".This operation needs a high level of skill as theexpensive leather has to be wasted at the mini-mum level possible. Leather may also have vari-ous defects on the surface such as barbed wire

scratches which needs to be avoided, so thatthey are not used for the uppers.

Closing or Machining DepartmentHere the component pieces are sewn together byhighly skilled machinists so as to produce the
http://www.teonline.com/textile-accessories/fashion-accessories/footwear.htmlhttp://www.teonline.com/textile-accessories/fashion-accessories/http://www.teonline.com/textile-accessories/fashion-accessories/http://www.teonline.com/textile-accessories/fashion-accessories/footwear.html


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completed upper. The work is divided instages. Various edge treatments are also doneonto the leather for giving an attractive look tothe finished upper. At this stage only, the eyelets

are also inserted in order to accommodate thelaces in the finished shoes.

Lasting & Making DepartmentThe completed uppers are molded into a shapeof foot with the help of a "Last". Last is a plasticshape that simulates the foot shape. It is laterremoved from the finished shoe to be used fur-ther in making other shoes. Firstly, an insole tothe bottom of the last is attached. It is only a

temporary attachment. Sometimes, mostlywhen welted shoes are manufactured, the insolehas a rib attached to its under edge. The upperis stretched and molded over the last and at-tached to the insole rib. After the procedurecompletes, a "lasted shoe" is obtained. Now, thewelt- a strip of leather or plastic- is sewn ontothe shoe through the rib. The upper and all thesurplus material is trimmed off the seam. The

sole is then attached to the welt and both arestitched together. The heel is then attachedwhich completes the "making" of the shoe.That was the process for heeled shoes. When aflat shoe is in the making, there are considerably


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fewer operations. The insoles in this case is flatand when the uppers are 'lasted', they are glueddown to the surface of the inner side of the in-sole. The part of the upper, that is glued down,is then roughed with a wire brush to take off the

smooth finish of the leather. This is done be-cause rough surface absorbs glue to give astronger bond. The soles are usually cut, fin-ished and prepared as a separate component sothat when they are glued to the lasted upper, theresult is a complete and finished shoe. Soles canalso be pre-molded as a separate component outof various synthetic materials and again glued tothe lasted upper to complete the shoe.

Finishing Department and the Shoe RoomThe finishing of a shoe depends on the materialused for making it. If made of leather, the soleedge and heel are trimmed and buffed to give asmooth finish. To give them an attractive finishand to ensure that the edge is waterproof, theyare stained, polished and waxed. The bottom ofthe sole is often lightly buffed, stained and pol-ished and different types of patterns are markedon the surface to give it a craft finished look. A"finished shoe" has now been made.For shoe room operation, an internal sock is fit-ted into shoe which can be of any length- full,half or quarter. They usually have the manufac-


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Marketing Plan

We will be advertising in popular magazines

and local publications that are aimed at the

target market we plan on selling our productto.

Online advertising on social networking sites

such as Orkut, Twitter and Facebook, which

are used by a wide number of corporate males

and youngsters who are of school and univer-

sity going age.

Marketing partnerships and alliances will be

formed with schools, universities, corporate

turers details or a brand name wherever appli-cable. Depending on the materials used for theuppers, they are then cleaned, polished andsprayed. Laces and any tags that might have tobe attached to the shoes, such as shoe care in-

structions, are also attached. The shoes, at last,get packaged in boxes. These operations can bechanged to meet the needs of the customer.


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firms, government organizations, mens ap-

parel stores and sporting goods stores.

Word of mouth.

Target MarketLocalityClifton, DHA, K.D.A, Gulshan.

Male, belonging to Elite class who are conscious

about their dressing and lifestyle.

Young boys and sportsmen of ages 20-30.

Corporate males of ages 25-40.

Market Research

We have conducted telephonic and survey-

based interviews with sample audiences in ourtarget market.

Localized and extensive secondary and primary

market research has been undertaken.

Ethnographic and observational study has also

been carried out.


Financial FeasibilityStart-up Capital needed is estimated to bePKR 13.8 Million out of which 8.8 million will

be financed internally and 5 million exter-

nally.


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PKR 2 million will be kept as a reserve in a

bank at a rate of 12% interest annually in or-

der to meet the requirements of negative cash

flow for initial four years or to finance any un-

expected problem in the business.External funding is divided into 20 equal por-

tions and each portion is work PKR 250,000.

These portions have been created for inves-

tors looking to make 14% ROI per year, for a

initial period of 5 years. Each investor will re-

ceive PKR 35,000 yearly as a return on his/

her initial investments.

It is estimated that the firm will reach Break-even by the 51st month of its operation, when

operations will yield positive returns for the

business. After 51 months, Profit Margin is ex-

pected to remain 17%-19% each year.

Initial inventory to be bought in the start of

the 1st month of operations is estimated to be

PKR 260,000, after which Sales are expected

to start.Cost of Goods Sold will represent 40% of the

sales.

Advertising, utilities, labour and transport

will be our biggest expenditures with Adver-



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tising being the highest in the first few months

so that the target market is made aware of the

existence of this business. After that the ad-

vertising expense is decreased as innovative,yet cost-effective techniques will be employed

to promote the business to the target market,

which cannot be used initially as awareness

will not be present for the business.

Depreciation is done under the straight line

method for a period of 10 years.

Estimated financial results for the first five

years of operation follow.


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Year1

Year2

Year3

Year4

Year5

Revenues

PKR650,0

00

PKR1,1

50,0

00

PKR1,4

50,0

00

PKR1,7

00,0

00

PKR2,3

00,0

00

CostofSales

260,0

00

460,0

00

580,0

00

680,0

00

920,0

00

GrossProfit

390,0

00

690,0

00

870,0

00

1,0

20,0

00

1,3

80,0

00

InterestEarned

240,0

00

180,93

7

147122

129184

123,4

78

OperatingExpenses

400,0

00

415,0

00

425,0

00

440,0

00

455,0

00

DepreciationExpense

7800

7800

7800

7800

7800

ROIExpense

700,0

00

700,0

00

700,0

00

700,0

00

700,0

00

Taxes

14390

29,9

34

33,8

09

35,0

46

38,1

56

NetProfit/Loss

-492,1

90

-281,79

7

-149,4

87

-33,6

62

302,5

22


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Growth and Expansion Strategy

The business idea that has been presented has

much opportunity and potential to grow in the

long term. To start, the business will establishitself in the high-end male niche market, build-

ing a reputation for quality and comfort.

Our short -term expansion strategy is two-

pronged:

1. We are currently in the negotiation phase of

a partnership contract with NIKE and expect

within the year to expand into a line of cus-tomised sportswear to capture younger cus-

tomers.

2. Take the business virtual by allowing cus-

tomers to participate in the design and cus-

tomisation process and consequently provid-

ing shipping option to customers residing

outside of Karachi


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The long-term strategy for growth includes

1. Acquiring the latest German three dimen-

sional digital technology which enables many

manufacturing processes from foot mappingand cutting to stitching to be digitally exe-

cuted through robotics cutting costs, turn-

over time per shoe and enabling greater flexi-

bility.

2. Opening retail outlets in major cities of Paki-

stan including Lahore, Islamabad and Mul-

tan.


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Reeds FootwearPage

Conclusion

On the basis of the exhaustive financial and op-

erational feasibility analysis and our sound mar-

keting plan, you can see that our business ideahas great potential to cater to an untapped mar-

ket and provide impressive returns on your in-

vestment. Project


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Phone: 111-1-REEDSE-mail:[email protected]

www.reeds footwear.com

115AJason Trade TowersSharae FaisalKarachi

Documents

BCOM Final Report- Formatted 2