business plan tpad

2012

Managing and Financing Innovations MBA – 606/ Mr. Marcelly Tunoy Mukherjee

[BUSINESS PLAN - TPAD] A cost effective portable Tablet which is dedicated only to Readers, which would contain more than 50 books in a tablet, it is here to replace books.

2

submitted by Tunoy Mukherjee, Geneva Business School, May 2012-05-16

Business Plan “Tpad”

Idea

This product is unique in itself if I write this, it’s not completely true the technology has

advanced so much that it has launched various products of may be similar kind or has used

more dynamic approach like iPAD and other portable tablets which are soon going to replace

computers at offices and homes, having said that i also argue that this product is specifically of

one kind of use and that it what makes its unique and different from available pads in the

market, as we are quite aware that the only thing which is constant in this world is ‘Change’,

our focus today is to change or replace heavy books and bags that students carry to schools,

save paper (trees) looking into today’s environment, we have made a product called ‘Tpad’

(text-pad) which is a portable 9’ inch tablet with an operating system where you may load

books for a semester and hand over these tablets to students, the most unique feature of this

Tpad is that it comes with a preloaded software that would convert written text to spoken

words, all you need to do is select a part of text or a chapter and press a button you may be

able to listen to it. The product ‘Tad’ is the next generation text book that student would carry

to school, a device that is user friendly where if you don’t feel like reading text you may just

listen to it, vis-a-vis for schools and colleges it is a huge cost cutting by not buying course books

every year for new students and just uploading them in a Tpad and give it away(or may replace

3


it with the new semester Tpad). This not only makes the imparting of education easy but also

gives exposure to the technology.

Market Study

The introduction of a brand new type of device into the market is a challenging task. We’ve seen this

with the Apple Newton, PDA and Net books. Like any innovative product in the high-tech market, we will

have a monopoly until other products started to emerge. The Tpad will became a benchmark against

which all other tablets would be compared, ‘However with its unique focus on schools and colleges &

publishing house it will emerge as new age” book”.

To launch this product we will use the Blue Ocean Strategy

which looks at

Blue oceans, denote all the industries not in existence today – the unknown market space, untainted by

competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for

growth that is both profitable and rapid. In blue oceans, competition is irrelevant because the rules of

the game are waiting to be set. Blue ocean is an analogy to describe the wider, deeper potential of

market space that is not yet explored

Six Principles of Blue Ocean Strategy Formulation

Focus on the big picture, not the numbers

Reach beyond existing

Overcome key demand organizational hurdles

Reconstruct market boundaries

4


Build execution into Strategy

. Get the strategic sequence right

Time line to begin the work and actual execution :

In Totality the whole process to begin will take somewhere around 6 months

a) Contacting Chinese company who may manufacture Tpad at the most cost effective price

possible ,also stating the fact that it should be user friendly and should have scope of up

gradation of different software, which would require certain steps:

Contacting all small manufacturing Units in China asking them if they can produce such

a pad with all these below mentioned specifications:

9’ inch Tablet

OS which has the capability to loading text books

Storage Capacity upto 50 books

Excellent screen good for reading

Software which converts text into speech

Rewriteable memory (you may upload and delete infinite times)

8 hour battery back up

Short listing the manufacturing units, & asking them for a price Quote per unit

Thereon finalising a company which gives the best price per unit and also the kind of

credit availability and if ordered in bulk time for manufacturing and exporting the

products to Geneva.

5


After negotiation and finalising expected cost per unit chf 80/- (VAT included)

Sinning a contract with the Chinese company and the patent rights

(whole process may take up to 2 months of hard work and once we have the physical

availability of Tpad we move on to the next step)

b) Hiring a Marketing executive for marketing and launch of the product in the Swiss Market, we

begin the process from a small geographical area from Geneva.

c) Identifying our Target Market and our target audience :

School

Business School

Educational Institutions (Govt & Private both)

Publishing House

Book Stores

libraries

d) Once we have identified our target market we focus on marketing our product through

presentations in school, and various other identified audience which would involve certain

steps:

Finding all schools and educational Institutions

Calling the Deans and Heads of the Institutions for an appointment for a meeting

short listing the Interested prospects and going for a second presentation with students

involved and getting a first-hand feedback of the product

If successful taking orders and giving them a delivery date of Tpad

(The whole process may take up to 3 months )

6


e) Once the above steps are taken then finally ordering the partner company to manufacture and

deliver the product.

(This whole process may take upto 6 months or may be even longer depending upon all factors

falling in place)

Organisation

Selling : To brief the selling process it is a “hit and trial ” method with a very low investment.

we produce the first 5 Tpad and go to different identified buyers give them a presentation tell

them about the pros and cons of the product, & also tell how it is now time for change and with

development it is time for every individual to switch to Tpads, which would :

Saves paper (we don’t have to cut trees and make the environment worse and too at

the time of Global Warming when all of should take this fact under consideration of

saving trees)

Prepare the students well ahead during their learning stage to get exposed to Pad which

later on they may use for job and other dealings(as with the launch and rapid growth of

technology people are shifting to ipad which is going to replace the computer soon.)

it is here to replace books, the huge amount of weight the people carry when they want

to read.

its Unique selling preposition – converting the text to speech is specially designed for

the readers who are on-the-go, in their busy life people might not find time to read they

may just plug into Tpad and can listen to it while travelling, working etc. it gives an extra

edge to our product, it will be popular among students as well, who cannot sit for long

hours and read which is boring can learn their lessons by simply listening to them.

7


Ease of Use

Easy to carry

Store multiple books in one pad

Low priced product

Two years Guarantee

First bulk Delivery within two months of Order(then it will be readily available)

Production : It will be On order delivery , produced and manufactured in China where will have all

the rights of intellectual property.

Distribution : Supply chain management is very transparent at the initial stage, we get orders from

the buyer- we order our manufacturing company in china to produce those many pieces of our

product, we ship from china and deliver it to our clients.

It is a unique product which would be available to general public through either the retail book

stores, or to students from their schools, we may take orders online as well ,’however to begin

with we are looking at market of Geneva in prime but would be open for other cities and

countries once we have the proper exposure.

Organisation Structure:

I have mentioned in the text above that we will start small and avoid any extra cost, the

organisational structure remain very small until we grow from our roots.

We begin small, we would have three people in our Organization that would include :

8


We look to expand the staff once we receive bulk order , and it is subject to our requirement.

Development Plan

Business Strategy and development plan of ‘Tpad’ is the oldest one ‘ the bait & hook business model ‘

we will sell the products for a very minimum price with few applications and then by every semester

passes by will be introducing new and advanced applications and will charge for the upgrade.

The bait and hook business model (also referred to as the razor and blades business model or the

tied products model) was introduced in the early 20th century. This involves offering a basic

product at a very low cost, often at a loss (the "bait"), then charging excessive amounts for refills or

associated products or services (the "hook"). Examples include: razor (bait) and blades (hook); cell

phones (bait) and air time (hook); computer printers (bait) and ink cartridge refills (hook); and

cameras (bait) and prints (hook). An interesting variant of this model is a software developer that

Sales & Operations

Director (i)

CEO Sponsor

Marketing Manager

9


gives away its word processor reader for free but charges several hundred dollars for its word

processor writer.

Market really Exists : the proof that market really exists is that colleges and schools giving away

photocopied spiral books and passing photo copied handouts from the reference books buying just one

copy of the book. teachers and profs passing handouts whereas with Tpad life becomes much easier.

This is directly linked with the company strategy, sell the initial product for less price and once we

manipulate the market and have sold our patent products to everyone we start earning on the upgrades

of various application.

The First Upgrade : by the end of one year and beginning second year will be introduction of a inbuilt

dictionary.

Year Two – Up Gradation

IN- BUILT – DICTIONARY- it is simple the way people would highlight text to listen to it, if they do not

understand a particular word simply highlight the word and press the dictionary button it will give the

meaning along with it they may be able to listen to the pronunciation of the word. which would come

handy if they are not the native speaker of the language.

Year Three – Up Gradation

Language – Translator- it will work in a conventional way you highlight a text and choose a language and

it will translate it into that particular language, to begin with it will be available in French, German &

Italian the three official languages of Switzerland.

10


Financial plan

Financial plan for this project is extremely transparent

First Year- Launch of the Product

Start Up Cost

Heads Cost CHF

Research & Development 5000

Business Registration 5000

Domain name Registration 2000

Solicitor’s fee 5000

Sundries 5000

Total 22000

Profit & Loss Account Forecast Year One

Employees apart from Sponsor

Director (Monthly Wage) = CHF 4000/-

Marketing Manager (Monthly Wage) = CHF 2000/-

Cost of one Tpad :

Manufacturing and Shipping Cost = CHF 60/-

Selling Cost = CHF 80/-

We receive a order in the month of August for 1500 Tpads

Total Manufacturing Cost and Shipping = CHF 90000/-

11


Discount (as it is a bulk order ) = CHF 10000/-

Our Selling Cost 1500 * 80 = CHF 120000 + 10000

Total Income = CHF 130000/-

Another order in December for 2000 Tpads

CP per Tpad @50 = 2000*50 = 100000

SP @80 = 2000*80 = 160000

Year 2012-13 Income & Expenses Total

Months Income (Sales) Expenses Marketing EX Wages

June - - 1000 6000 -7000

July 1000 6000 -7000

August 130000 80000 6000 44000

September 1000 6000 -7000

October 1000 6000 -7000

November 6000 -6000

December 6000 -6000

January 160000 100000 6000 54000

February 1000 6000 -7000

March 1000 6000 -7000

April 1000 6000 -7000

May 1000 6000 -7000

Year End 290000 -180000 -8000 -72000 30000

Total Profit 290000 – 180000 – 8000 – 72000- = 30000

Total profit at the end of the year = CHF 30000/-

12


Considering the Setting up Cost We have profit of CHF 8000/- The First Year

Setting Up Cost 22000

Year End Profit 30000

Tax 2000

Profit After Tax 6000

Starting Second year

Up gradation with inbuilt dictionary in Last Year sold 3500 tpad @ CHF 50/- =175000/-(june)

Softawre for inbuilt dictionary installed lump sum @10000/- (Cost Price)

Sold 2000 more Tpad with up gradation

SP = 50+80 *2000 = CHF 260000/- December

CP = CHF 100000/-

Hired a IT guy for up gradation & Marketing Compensation CHF 3000 per month



June 1750000 10000 1000 9000 155000

July 1000 9000 -10000

August 1000 9000 -10000

September 1000 9000 -10000

October 1000 9000 -10000

13


November 1000 9000 -10000

December 260000 100000 1000 9000 150000

January 1000 9000 -10000

February 1000 9000 -10000

March 1000 9000 -10000

April 1000 9000 -10000

May 1000 9000 -10000

Year End 435000 -110000 -12000 -108000 205000

Total Profit 435000 – 110000 – 12000 – 108000 = 205000/-


Starting Third Year

Up gradation of 5500 tpads @ 50 = CHF 275000/-

Buying this Translator software for lump sum CHF 25000/-

Hired an office assistant for calling and fixing appointment and keep track of accounts @ 3000/

per month

Received order from Zurich of 4000 Tpad with up gradation

CP @ 50 *4000 = CHF 200000

SP @ 80+50+50*4000 = CHF 720000

Hired another IT guy @ 3000/ per month

Raised salary of Marketing Manager to 3000/-

14




June 275000 25000 2000 13000 235000

July 2000 13000 -15000

August 2000 13000 -15000

September 2000 13000 -15000

October 2000 13000 -15000

November 2000 13000 -15000

December 720000 200000 2000 13000 505000

January 2000 13000 -15000

February 2000 13000 -15000

March 2000 13000 -15000

April 2000 13000 -15000

May 2000 13000 -15000

Year End 995000 -225000 -24000 -156000 590000

Total Profit 995000 – 225000 – 24000 – 156000 = 590000


Balance Sheet

Assets Amount Liabilities Amount

Capital 22000

Cash - Account Payable 180000

Petty Cash - Marketing Expenditure 8000

15


Accounts Receivable 290000 Taxes Payable

Income Tax 1000

Sales Tax 1000

2000

Payroll Accrual 72000

Profit 290000 - 284000 6000

Total 290000 Total 290000

Break even Analysis

Debit Credit

Average Selling price / unit 80

Average Cost price/unit 60

Gross Profit Margin/unit 20

Fixed Cost - 22000

CHF break Even

No. of unit sales to break even 1100 units *80 = 88000/66000=22000

16


Conclusion

The Product will have its own unique market segment which will further expand in future, ‘ Tpad ’ is

here to stay and reach great heights, with its low pricing , light weight and unique features it will entice

more and more customers towards it, it will bring about a change in all of reading fraternity it will be an

evolution in the Hi-tech market with very less innovation but dedicated towards a unique process.

business plan tpad

Business

blue oceans

tpad textpad

new semester tpad

market boundaries

market study

hightech market

business plan tpad idea

new students