appss export house

8/8/2019 Appss Export House

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BUSINESS PLANOF

APPSS EXPORT

HOUSEWE EXPORT COMMITMENTS

Presented by:-ANIKET SETHI (109115)

PALLAVISEHGAL(109306)

POONAMYADAV(109308)


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SHALINIKATHURIA(109332)

SHIVALIGROVER(109333)

Executive Summary

APPSS is a start up export house for chicken suits manufacturer

(both mens wear and ladies wear and other households items). Its

strategy is to serve the upscale middle class and upper class. The

chicken work is basically done in Lucknow. The company

intention is to export its product to Islamic countries and to make

APPSS export house to be known brand name. A company longterm goal are to achieve 5 to 10% of market share, build brand and

brand equity through marketing, achieve a sustainable 30 to 35%

profit margin, and moderately price line with a good quality

product. APPSS is registered in Apparel Exports Promotion

Council of India and participating in various Export Promotion

Exhibitions like India International Garment Fair organized every

year in Pragati Maidan, New Delhi.

The Company

APPSS is a privately-held international corporation managed by

highly qualified professional entrepreneurs. Production takes place

in INDIA and sales and marketing are focused on the Saudi

Arabia, Afghanistan, and Kuwait.

Ownership is divided among five principal individuals who are

putting up the initial investment. These include:

Aniket - Head of Production Department,

Pallavi - Head of Sales and Marketing division,

Poonam - Head of Finance Department,

Shalini - Head of HR Department,


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Shivali - CEO of the Export House

The APPSS factory is located in Udhyog Vihar, GURGAON

(SEZ area). The factory is 1,000 square meters and should be large

enough for the first three years of the company's growth. Thefabric will be shipped to targeted country. The fabric will be

initially sold in Afghanistan.

.

The Products

The initial product line will be males and females wear with

sporting characteristics. The company plans to release two

versions, the "males and females wear and the "householditems.

The pricing strategy will be to initially undercut our main

competitors by 10%, using a market penetration strategy. Then,

pricing will be adjusted to be directly competitive with the other

major competitors. The price will vary as per the product category.

Financial Considerations

The Companys start up costs will be - Rs.1, 01, 70,000. Owners'

equity will provide Rs.76, 95,000. Another Rs.13, 50,000 in

funding will consist of short-term borrowing, and the rest will be

long-term loans. The majority of the start-up costs will consist of

rent, research and development, initial inventory, and a strong cash

account. The Break-even Analysis shows APPSS EXPORT

HOUSE will be able to make a steady profit by the second year.


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Objective

1. To make APPSS the number one EXPORT HOUSE.

2. To achieve 30 - 35% profit margin.

3. To achieve a 5 10% market share in the Islamic countries

like Afgnisthan, Kuwait and Saudi Arabia.

Mission

The company will build its image as a quality, and then will

begin selling higher profit, luxury garments.


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Key to success

To succeed APPSS EXPORT HOUSE must:

Build and sell high quality products.

Achieve 100% customer satisfaction.

Build brand image and brand equity through marketing.

Company Summary

APPSS export house sells quality product and provides excellent

customer service for customers seeking a reliable fabric. In thefuture APPSS export house intends to enter in decorative items

and will intends to use embroidery fabric for making further

product.

Company Ownership

APPSS export house is a privately held corporation. Production

takes place in Lucknow and sales and marketing are focused on theAfghanistan and gulf countries mainly.

Ownership:

All five owners are at equal ownership in the company so, profit

will be distributed equally.

Start-up Summary

Sixty percent (60%) of start-up costs will go to assets. Start-upcosts will be financed through the owners' investments, and loans.

The assumptions are shown in the following table and chart.


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Start-up Expenses

Legal Rs.9,00,000

Stationery etc. Rs. 22,500

Brochures Rs. 1,35,000

Consultants Rs.4,50,000

Insurance Rs.4,50,000

Rent Rs.9,00,000

Research and Development Rs.4,50,000

Expensed Equipment Rs.4,50,000

Other Rs.3,37,500

Total Start-up Expenses Rs.40,95,000

Start-up Assets

Cash Required Rs.31,50,000

Start-up Inventory Rs.11,25,000

Other Current Assets Rs.2,25,000


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Long-term AssetsRs.

15,75,000

Total AssetsRs.

60,75,000

Total Requirements Rs.1,01,70,000

Start-up Funding

Start-up Expenses to Fund Rs.40,95,000

Start-up Assets to Fund Rs.60,75,000

Total Funding Required Rs.1,01,70,000

Assets

Non-cash Assets from Start-up Rs.29,25,000

Cash Requirements from Start-up Rs.31,5,000

Additional Cash Raised Rs.0

Cash Balance on Starting Date Rs.31,50,000


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Total Assets Rs.60,75,000

Liabilities and Capital

Liabilities

Current Borrowing Rs.13.50,000

Long-term Liabilities Rs.20,000

Accounts Payable (Outstanding Bills) Rs.2,25,000

Other Current Liabilities (interest-free) Rs.0

Total Liabilities Rs.24,75,000

Capital

Planned Investment

Investors Rs.76,95,000


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Additional Investment Requirement Rs.0

Total Planned Investment Rs.76.95,000

Loss at Start-up (Start-up Expenses) (Rs.40,95,000)

Total Capital Rs.36.00,000

Total Capital and Liabilities Rs.60.75,000

Total Funding Rs.1,01,70,000

Company Locations and Facilities


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The Lucknow factory is located at Industrial Area, Post

Sikandarpur Banthara, Lucknow.

The factory is 1000 square meters and should be large

enough for the first three years of the company's growth.

The fabric will be initially sold in Afghanistan.

Product Description

APPSS export house provide a quality suits for both menswear and

ladies wear and other households product like table cloth, sofa

cover, TV cloth etc. The work done on the garments is a handmade

chicken work which is basically done in Lucknow.

Competitive Comparison

APPSS EXPORT HOUSE will have the following sustainable

competitive advantages:

1.High quality at a moderate price.

2.Elegant and ergonomic styling.

3. Indian marketing skills.

Sales Literature

APPSS EXPORT HOUSE will use advertising, public relations,

and sales programs to make the public aware of the Chicken

Fabrics.

Advertisements and public relations pieces in local

newspapers - particularly Times of India, Delhi times.

Full-color brochures will be distributed at the various outlets

where the chicken suits are sold. Export Promotion through exhibitions like India India.

International Garment Fair organized in Pragati Maidan,

New Delhi every year.

Organizing Fashion Shows around the world.


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Sourcing

We will only sell/export garments produced at our production

units, therefore additional sourcing will not be necessary.

However, the sourcing of raw materials for the manufacturing ofthe garments will play a constant role in the firm's profitability.

MARKET ANALYSIS SUMMARY

The purchase of mid-level and high-level Lucknow fabrics has

increased by 50 percent over the past two years. We expect the

sales to continue growing, and to capitalize on this ever-present

market for fabrics- people will always need and buy fabrics.


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MARKET SEGMENTATION

The market segmentation is divided into the leading target

markets. The division reflects the differences in marketing strategythat will be used to target each different market.

The people who follow trends

Older adults who simply have good taste and a sense of style.

Wealthier college students.

Still fashionable senior citizens.

TARGET MARKET SEGMENT STRATEGY

The fabric industry, particularly the upscale markets, is growing

faster than ever. Potential fabric buyers are willing to spend

moderate to high amounts on garments because they can make the

customer look good - and hence feel good about them. In addition,

customers will see the inherent value in the fabrics.

The upscale niche market that APPSS has targeted is competitivebecause of the competitors and the discerning consumers it serves.

However, the competition is based more on quality than price

unlike the discount market.

MARKET NEED

The upscale Garment industry is currently in a growth period, so

now is an ideal time for entry.


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MARKET TRENDS

1. The cost of marketing the new product is expected to be

the biggest challenge for APPSS. The initial use of

distribution channel will allow for cost savings.

2. The lack of an existing recognized brand name will be an

initial problem, but in a few years APPSS FABRICS

intends to have achieved powerful brand equity -

allowing it to rely on, and succeed because of its brand

name.

MARKET GROWTH

The leading competitor is Saqlain Exports, Lucknow.

Consumers often only buy new FABRICS every 5 to 10

MONTHS, yet they purchase them often as gifts. Therefore,

advertising will be increased during the Eid holidays.

The intended retail outlets are full price and full service, therefore

APPSS will not need to use an extreme price penetration strategy

to gain a foothold in the market.

MAIN COMPETITORS

Our main competitor is Saqlain Exports, Lucknow.

Our next closest competitor is MODELAMA EXPORTS,

GURGAON.


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Both of these firms have strong brand equity, but there is room in

this market for a new company as brand loyalty is not high on

potential consumers' reasons for purchasing.

Management Summary

APPSS export house is currently not hiring any more employees.

The decision has been made to postpone further hiring until the

company begins to succeed.

After analysing the result of one year, we will expand accordingly,

Organizational Structure

APPSS Exports is split by both location and functionality. Theproduction units are in Lucknow (for Embroidery work by Artists )

and Gurgaon (for Machinery Work ) . The sales and marketing,

and finance and administration divisions are located in Gurgaon

run by five people.

Management Team

ANIKET SETHI: head of production department.

PALLAVI: head of the marketing department.POONAM YADAV: head of the finance department.

SHALINI: head of the HR department.

SHIVALI: CEO of the export house.

Management Team Gaps

The following important gaps exist:

The present team has little sales experience.


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There is no current in-house designer - this should be

corrected within a year.

There is no international manager.

Personnel Plan

The personnel plan calls for adding six employees by the end of

the first year for a total of eight. And the hiring will give priority to

experience people or people from National Institute of Fashion

Technology as designers. After the second year, employment is

expected to increase by another twelve. These new employees will

go into production and sales.

Approximate number of workers (in both units) :-

Position ~Number of workers

Tailors 60

Fabric Cutters 15

Thread-cutters (use embroidery machines) 15

Pressers 8

Fabric and Accessories Storage WorkersHelpers 7

Accounts personnel 3

Miscellaneous 3

Total number of workers in both units: 110-120

Machines Used:-

Machinery includes Auto Zing Machine, Auto Pocket Welting

M/C, Programmable Sleeve Setter Stations, Auto Surging

Machine, Auto Dart Making Stations, Pneumatic Button Hemming


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Stations, Differential Feed Machines Needle Feed Machine, Top,

Differential and Bottom Cylindrical Bed Unison Feed Machine,

Blind Hemmers, Auto Belt Attaching Stations, Multifusing with

Three Track of Loading (High Performance Macpee). Other

machines required are:

Textile dyeing and finishing machines.

Textile knitting machines.

Textile fabric printing machines.

Embroidery machine.

Some of our Suppliers:-

Company Name: BHADANI INTERNATIONAL

Street Address: 351, New Cloth MarketCity: Ahmedabad (Gujarat)

Company Name: SILVER SPRING SPINNERS INDIA

PVT LTD

Street Address: 118 / A, Velayutham Road

City: Sivakasi (Tamil Nadu)

Company Name: Polyfibre Industries Private LimitedStreet Address: 82 Maker Chambers III, Nariman Point

City: Mumbai (Maharastra)

Company Name: Natural Clothing Pvt. Ltd.


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Stree Address: A, Esplanade East, 2nd Floor

City: Kolkata (West Bengal)

Projected profit and loss:-We expect losses in the first few months, because it will take time

for the store to build momentum and generate traffic. However,

once sales increase, the results are positive because many of the

other expenses will remain fixed. In fact, we expect that sample

inventory costs will actually go down in years to come. Some rawmaterial suppliers will provide raw material at deep discounts once

good credit terms are established.

Some of our Collections:-


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PORTERS FIVE FORCE MODEL

1. RIVALARY AMONG EXISTING FIRMS:As there are many firms and export houses who

are also deals in exporting chicken suits like

Saqlain creations in Lucknow and modelama

exports in Gurgaon and they export chicken suits

and other products to US, UAE and other

countries.

2. THREAT OF NEW ENTRANT:

In future if the exporting firms or export houses

plans to expand their business and start dealing

in same countries in which we are dealing, then

it will be a threat to us. Also the new export

houses can target the same product in the same

countries.

3. THREAT OF SUBSITUTES:

Threat of substitute can be garments with stud

work, cotton embroidery, can be garments in

other fabrics etc.

4. BARGAINING POWER OF BUYER:As per our information we are the only exporters

of chicken suits fabrics in these countries. Other

exporters are dealing or exporting medicines, oil


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wool, food product etc. The barging power of

buyer is less in our case.

5. BARGAINING POWER OF SUPPLIER:

As we are the only exporters of chicken suits

garments and until and unless there is no

substitute in market we have more barging

power.


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REGISTRATION OF APPSS EXPORT

HOUSE

EXPORT PROMOTION COUNCIL OF

HANDICRAFTS.

EXPORT PROMOTION BUREAU U.P.

APPAREL EXPORT PROMOTION COUNCIL.

INDIAN TRADE PROMOTION COUNCIL.

DIRECTOR GRNERAL OF FORIIGN TRADE.

SMALL SCALE INDUATRIES, LUCKNOW.

appss export house

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