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our target market is the students and the potential customers who live in the bashundhara area, Dhaka
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Bashundhara Departmental Store
Executive Summary:
Bashundhara Departmental Store is going to be a dynamic departmental store for the
young people, students of NSU and IUB including Baridhara-Bashundhara community. It
will be located near Bashundhara gate for the convenience of our customer. We extremely
hope that our business premises will become a center point for the younger generation of
Bashundhara.
Retail business is very common type of business in Dhaka city. It has enjoyed steady
growth so far. It will do well in next 10-15 years if some special and unique types of
services are provided to the customer. Thus we came up with some innovative ideas that
younger generation will like to spend their time in our business premises if they get Wi-Fi
connection and device charging facilities just buying some food items sitting in a warm
environment.
Our business will offer each and every types of food that can be found in a retailer or
confectionary shop. Besides that there will be book shop for IUB-NSU students, cosmetic
and household corner for general people.We are going to invest 10 million Taka in our
business. This huge amount of money will be connected from 3 main sources. The sources
are owners, bank loan and outside investors. Every owner will invest 1 million taka. 1
million will be collected from investors. And a bank loan will be made for 2 million taka.
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Bashundhara Departmental Store
3. The Business Description:History:
5 friends Saif, Hasib, Mehedi, Nafia, Giasuddin and Habib were dreaming about starting a
new business of their own. Once they came up with an idea to open a departmental store
near Bashundhara gate for the Baridhara-Bashundhara community.
The Business:
Our business will start-up with four departments such as food court, book shop, cosmetics
and household corner near Bashundhara gate that will provide interesting merchandise
options at bargain prices. 70 percentage of total financing will come from the private
investments of 7 owners. Rest of the amount will be collected from bank or any interested
investors. They will be given interests. Net income will be distributed equally among the
owners.
Our large capital investment is going to provide a unique and modern service to the
Baridhara-Bashundhara community. We are hopeful that our customers such as
households, local businesses, employees and large no of students are going to made us
successful.
The Market:
This business will serve as a departmental store with a variety of products. So it will be a
retailer. And its primary customer will be the students of NSU and IUB and GP employees.
Therefore, we will try to extend our business towards the Baridhara-Bashundhara
community. Moreover, we will look forward to open more outlets in Dhaka city.
Objectives & Goals:
1. To provide a variety of products at reasonable prices.
2. To earn a handsome profit margin.
3. To achieve a healthy net profit in next year.
4. To sell 20,000 Tk per day by 2nd month.
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Bashundhara Departmental Store
Keys to Success
To succeed in this business we must:
Sell a broad range of products.
Provide for the satisfaction of 100% of our customers.
Be an active member of the community.
Encourage customer input.
Financial Status:
Total investment will be Tk 10 million. Seven owners will invest 1 million each. The rest of
the amount will be collected from banks or interested investors. Most probably we will
take a loan of 2 million from bank at a rate of 15%. And the rest 1 million will be invested
by an investor who will receive 10% of net profit. Lastly, owners will distribute rest of the
income equally.
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Bashundhara Departmental Store
4. Products & Services:Our food court and stationary shop will sell a variety of quality merchandise products. At
start up various types of merchandise will be offered such as food court, stationary items
and NSU-IUB books. In future we would like to include dishware, household goods, toys,
cosmetics, mobiles & computer accessories, and a list of items too exhaustive to list here.
A dedicated staff is committed to providing excellent customer service.
Products will be purchased from a variety of well-known manufacturers such as Procter &
Gamble, Pran, Apex as well as a number of other popular branded companies.
Moreover,we will continue to find new product lines that can be added to our inventory.
We are able to sell products at very low prices, because we will purchase items from
discontinued lines, seconds, over runs, etc., that cannot be sold to a manufacturer's usual
retail customers.
On the other hand, we will provide some unique services to attract our customer. There
will be 50 sits in our shop for our customer so that they can eat food. Besides that we will
set a Wi-Fi connection in our shop. And our customers will be able to charge their mobile
or laptops there.
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Bashundhara Departmental Store
Business Environment Analysis:Industry Analysis
In an ever changing economy the departmental store model is becoming more popular
with the consumer. Providing a large selection of bargain-priced items is our intended
goal. Our business involved in retail industry. It is one of the fragmented industries in the
Bangladesh. Every time new retail or super shops are coming in the industry. Population
are increasing very rapidly, these people need extra foods, so retail business have great
opportunities. The degree of competition and Buying Patterns is changing day by day.
Consumers demand quality customer service, fair pricing, and a convenient location could
be our keys to success.
Competition:
Competition is very tough with customer service and location key components. The
selection of merchandise a store provides is also very important. It is very competitive
business. New-new retail shops are coming to the industry with whom we have to
compete. In which area we are planning to set up our business, two super shops already
have there who provide similar types of products as we are planning to provide. So we will
face very high competition. Popular are increasing on that area, these additional
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Bashundhara Departmental Store
population need additional items, so we have great opportunities. Our main target
customers are the students of IUB& NSU, who have to go Nilkheet to buy their books at a
low costs or they have to buy from their universities book store at a high price. We will try
give them at a minimum costs.
Industry Background:Retail business is one of the most common businesses of Bangladesh as well as in
Bashundhara. Its expansion is keeping pace with population growth and changes in
consumption patterns, which are consistent with the growth of the economy. Bashundhara
is one of the busiest places in Dhaka city. So there is a chance that more people will start
living here in future resulting in an expansion of retail business in that community area.
But this expansion has not been structurally organized, because retailing had never been
perceived as an industry in Bangladesh.
Generally retail business is perceived as an individual or family business entity with a very
limited scope of organized expansion. So that very little information is available in the
market on the retail sector, but secondary sources indicate that the size of the food retail
sector in Bangladesh could be US$12-14 billion, and the number of retail grocery shops
could be around 1 million. Retail is also one of the biggest sources of employment (12
percent), and it contributed 13 percent (wholesale and retail trading) to Bangladesh’s
GDP.
There are almost 30 companies with more than 200 outlets in Bangladesh where the sales
growth rate is getting 15-20% sales growth every year and annual turnover of retail store
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Bashundhara Departmental Store
at around 15 billion(1500 core) according to Bangladesh supermarket owner
association(BSOA).
But an important fact is that retail trades are organizing day by day and creating huge
opportunity for enterprises. Retailers though sell other companies products work out their
own marketing strategies fixing their own target market towards providing customer
satisfaction separately. Various types of retail stores do exist in the market. They differ in
shape, sizes and services they offer such as Specialty stores, Department stores,
Supermarkets, Superstore, Convenience stores, Discount stores and so on.
Now we are going to establish such a departmental store that will distribute products to
the ultimate customers situating near to them for efficient distribution. We expect that we
will be able to run our business at a growth rate of 20% per year. Our competitive
advantages might contribute to future growth because we are going to set a Wi-Fi network
in our shop where customers will be able to browse internet or charge their mobile and
laptops sitting in a warm environment. Moreover, retailing business is operating in a
fragmented industry. No firm has a large enough market share in the total market of
Bashundhara. But there are some firms who will be our direct competitors.
Competitive analysis:
We are going to open a departmental store in Bashundhara gate. In this case we will face
tough competition among the retail firms that are operating in Bashundhara. We have
categorize our competitors into two broad categories such as-
Direct Competitors
Indirect Competitors
Here we are going to discuss about them.
Direct competitors:
There are many firms that will compete with us directly. But we are mainly focusing on
two organizations such as Genius and Nonstop Mega Shop.
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Bashundhara Departmental Store
Genius: It will be our main competitor. They are operating their business quite
successfully in Baridhara-Bashundhara community offering a wide variety of products to
their customer. Their products include foods, cosmetics, clothes, gaming instruments,
toys, electronic items and so on. They are also selling grocery items for households.
Nonstop Mega Shop: It is our direct competitor. They also sale products like Genius.
They sell mainly confectionary items. In electronics department they sale many types of
electronics products like speakers, multi plug and also sale CDs of movies, games etc. In
gaming product sectors they sale many types of gaming gun, doll, gaming cars for
children. They also sell vegetables, fruits, meat in one department. In cosmetics sector
they sale perfume, shampoos, nail police, lipstick etc.
Indirect competitors:
There are some small stores that are operating in the roadside near the Bashundhara
gate. We have to take them seriously because they will compete with us indirectly. They
sale different product individually, like grocery shop with grocery products, books store,
small hotel etc.
Jalil Shop &Cresent library will also be our competitors. So that we sell university books at
a cheaper price than them to compete in the market.
Strengths of the competitors:
All of them are providing wonderful customer’s services and also they have committed
workforce who give the best services. Their strength is they are doing their business for a
long period and they have huge number of customers specially Genius.
Weakness of the competitors:
Most the stores are very near to the gate but it is a residential area which people are living
inside the area they will look for their near option which we are will try to provide them,so
location is the weakness of them.
Marketing strategies:
Both the direct and indirect competitors use paper advertising and dish channel
advertising for their products.Our store consists of several department, a) books
department b) food zone c) household chores d) cosmetics. And our main target
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Bashundhara Departmental Store
customers are the students of NSU and IUB. There will be also Wi-Fi connection in our
store at food zone area where will also 50-60 chair for our customers where they can take
their foods.
Our business wills the great threat to our competitors. Most of them don’t provide these
services in their stores. The customers also enjoy the strong brand recognitions of our
products. In some cases the existing stores will try to block the entrance of a new rival like
us but it is very difficult in these sectors. They can recognize our services and products
and they can include these with their products but it will not be so much easy to them,
because it’s required more space which is be difficult to them to get new space.
Market analysis:Market analysis is very important element for business. As if investor don’t have any
knowledge on market then how their product and service will reach to customer. It is
necessary to evaluate market analysis and there are some key points which are our target
customer and what is unique service from other competitors we are providing. This kind of
question has to know the answer or it is difficult to run the business. I am going to explain
key points such as target customer, market size and vale proposition and etcetera below:
The market’s size and growth:
Total population of Bashundhara is around 50,000 people. Bashundhara is a residential
area and it is situated near Baridhara in Dhaka. The name of our business is Bashundhara
departmental retail store. There are some departmental stores here and also lot
competitors here. It is busy area like others area such as Gulshan, Banani. There are
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Bashundhara Departmental Store
bangle and English medium school and college and there are two reputed private
university is situated and also another private university’s construction is going on. It has
a really huge market for departmental store. Our retail department store has some
different category such as confectionary item, cosmetics, household and stationary shop.
There is a huge demand of those things. I believe that our retail department store will be
able to expand through those product and services in the market. Departmental stores are
going up rapidly.
Market segment:
Geographical area: only Bashundhara in Dhaka
Demographical area
Age: 5-15, 16-25, 26-40
We have chosen Dhaka city to segment our market. That’s why we have chosen city area.
We have chosen demographical segmentation. There are different types of items such as
age, gender, race and income level, occupation etc. under this segmentation. We have
targeted age and occupation. Basically this area is residential area and there are different
types of age consumer live here. That’s why we think this kind of segmentation will be
effective to achieve the goal. We have targeted different types of age group so that it is
easy to get the goal. First age group is basically children who love chocolate, chips and
etc. we have targeted these items for this age group. This is the very important age group
for our business and there are a lot of student lives here. There are two private
universities and bangle and English medium schools for this targeted group and we are
offering books and fast food item for this targeted customer. The last target customers are
employees who are doing job. They need to buy goods such biscuits, fast foods for
providing this group people.
Target market:
Basically our target customers are young people more specifically who are student. There
are lots of school, college, and university. And also lots of students lead to their life
Bashundhara area to study. They have come from different district of Bangladesh. It is
also mixed type customer. It is really difficult to serve them. It is challenge and also
business means challenge. We have four different segments to target customer. Whole
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Bashundhara Departmental Store
students of Bashundhara area are confectionary food and same target customer for
stationary shop. As student need book and other book a related material that’s why we
target whole student for this area for stationary shop. Other item we are going to offer
cosmetics it is basically targeted for female student. As a large number of female student
s are studying in different kinds of school, college and university. They try to use
cosmetics to beautify themselves more. In that sense we chose the customer based
segmentation for female students. As a whole it is our target market.
Value proposition:
Our retail department store is creating some value propositions on our product and
service. Our departmental store room capacity will be large where over 50 sites will be
there to sit. And it is really different thing from other competitors. Bashundhara place is
very costly where we are going to give this kind of facility. And also we are giving Wi-Fi
connection since most of the university students are using smart phone and they use
internet to use browsing such as Facebook and others. And other facilities are being
offered by retail departmental store which is mobile/laptop charge system. I think most of
our competitors is not giving this kind of facility it is really innovative. And we are giving
this facility related to target customer so that they can enjoy this kind of facility. It will
effective to increase our sales.
Sales and marketing plan:
Sales and marketing are important parts for our business. We cannot run our businessif we
cannot sell our product and service. We have to make a plan for selling our product. It is
called marketing plan. This plan is essential for business plan. We want to increase 15 to
20% market share within 2 years.
Objectives:
We will try to deliver best quality All products are available
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Bashundhara Departmental Store
Reasonable price Retain
Goals: Within 10 years we want to reach top departmental store in Dhaka city.
Marketing Mix:
Product line
There are so many product lines are available in our department store.
NAME CATEGORY TARGET MARKET
Food items and drinks Fast foods, soft drinks, energy drinks etc.
Young people
Chips, Chocolates, Ice-creams etc.
Children
Stationary Books, magazine, paper, pen, spiral bindings, photocopy, print etc.
Employee, student
others Cosmetics, lotion, soup, brush etc.
All people
Place: Bashundhara residential area, Dhaka -1212
Price:
Promotion
Promotional strategy:
• Any communication by a retailer that informs, persuades, and/or reminds the target market about any aspect of that firm.Our total budget 5, 00000 taka for promotional activities. We want to customer awareness by promotional activities within our
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proposed budget. We know that promotion will play a big role to retain our customers.
Promotional Objectives:
• Increase sales
• Stimulate impulse and reminder buying
• Raise customer traffic
• Get leads for sales personnel
• Present and reinforce the retailer image
• Inform customers about goods and services
• Popularize new stores and Web sites
• Capitalize on manufacturer support
• Enhance customer relations
• Maintain customer loyalty
• Have consumers pass along positive information to friends and others
Promotional elements:
Advertising—cable TV
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Improve Long-Run
Performance
Improve Short-Run
Performance
Store Image and
Positioning
PublicService
Increase Existing
Customer Patronage
Attract New
Customers
From Existing
Trade Area
ExpandTrade Area
Bashundhara Departmental Store
Billboard Print media Magazine
Budgets for promotional activities: our total budget for promotional activities 500,000 taka. We will expense our budget for following criteria
Advertising – cable TV 100,000 (TAKA)Billboard 50,000 (TAKA)Print media 50,000 (TAKA)magazine 200,000 (TAKA)
Special offer to motivate our customer:
We are offering Wi-Fi connection to our customer Mobile and laptop charge system Seasonal discount Low price books
Operational Plan:Operational plan is the work of the business; it is the transforming of the ideas or the raw materials into the final products or services to be sold to the customers.
As our business is a departmental store most of our products will be bought from the outside suppliers. Some of our products will be made by us. As there will be a food department, that’s why some food items will be produced in our store. For produce these item we will use stove. We are looking for operating our business through this way. Another important part of every business is to find out the breakeven point. It is very helpful for a business for long time surviving. Breakeven point is the situation where your combination of fixed and variable cost is equal to your revenues. As we are looking for retail business and our budget is ten million. Our store will be allocated around 2000 square feet area.
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Our business is a retail shop, so technological innovations are not so important for us but distribution process is very important for our business. We are operating our business in Bashundhara residential area and our first target customers are the students of NSU and IUB, so it is geographically favorable for us. But in this area there are two others retail shop and near this area there is retail so it is not very favorable for us in the view point of competitors. As we set up business in the capital city suppliers are easily available and the labor forces are easily available in this area. Though it is one of the expensive areas in the Dhaka city it is very tough to find out inexpensive labor for our business but we’ll try to find out. We will provide them some intensives like bonus, good job environment etc. to select labor. We will allow part job searchers also.
We will try to adjust pricing to the needs of the individual market segments. In case of our own product we will try to provide them at a very minimum level.
Flow Chart:
11. Management Summary:Bashundhara Departmental Store will be maintained directly by its owners. Five owners
will be the head of five different departments. Following chart entails this thing-
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Readymade Products
Suppliers
Pricing Level
Customers
Own Products
Raw Materials
Value Adding
Customers
Bashundhara Departmental Store
Financial Plan:The financial plan is very crucial for our business plan. It will translate all other parts of the
business --- the opportunity, the operating plan, the marketing plan, the management plan
--- into probable financial results.
Capital Required:16 | P a g e
Owners
Neloy
Finance & Accounting
Azizur
Inventory Control
Cosmetics & Households
Hasan
Inventory Control
Food Court & Book Shop
Zahir
Sales & Marketing
Lukman
Personnel Management
8 Salesmans 4 Security Gurds
Bashundhara Departmental Store
As we stated before that we are going to establish a business of a retail store will be open
near Bashundhara Gate for the Baridhara-Bashundhara community. This business will
need an investment of 10 million Tk. More detailed information about estimated capital is
given below-
Capital
Needed:Taka
Trade License 50,000
Inventory 5,000,000
Equipment 450,000
Building
Position2,000,000
Furniture 1,000,000
Cash in Hand 1,500,000
Total10,000,00
0
Sources of Funding:
Pro Forma Income Statements:
Forecasted income statements for five year is given below---
2014 2015 2016 2017 2018 Comment
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Total Capital10 million Tk
Owners5 million
Bank Loan3 million
Investor2 million
Bashundhara Departmental Store
Revenue:
Sales Revenue7,200,0
008,640,0
0010,368,0
0012,441,6
0014,929,9
20 increase at 20%
Cost of Goods Sold6,120,0
007,344,0
008,812,80
010,575,3
6012,690,4
32 85% of Revenue
Gross Profit1,080,0
001,296,0
001,555,20
01,866,24
02,239,48
8
Expenses:
Salaries & Wages 100,000 100,000 100,000 100,000 100,000
Rent 50,000 50,000 50,000 50,000 50,000
Advertising 500,000 400,000 320,000 256,000 204,800 decrease at 20%
Utilities 50,000 55,000 60,500 66,550 73,205 increase at 10%
Depreciation 10% 145,000 145,000 145,000 145,000 145,000straight line method
Total Expenses 845,000 750,000 675,500 617,550 573,005
EBIT 235,000 546,000 879,7001,248,69
01,666,48
3
Less: Interests (15%) 450,000 450,000 450,000 450,000 450,000 Bank Loan
Earnings Before Taxes(215,00
0) 96,000 429,700 798,6901,216,48
3
Less: Taxes 30% (64,500) 28,800 128,910 239,607 364,945
Earnings After Taxes(150,50
0) 67,200 300,790 559,083 851,538
Less: Investors Earnings (10%) (30,100) 13,440 60,158 111,817 170,308
Earnings Available to Owners
(120,400) 53,760 240,632 447,266 681,230
Earnings Per Owner (24,080) 10,752 48,126 89,453 136,246
Balance Sheet:
2014 (Jan)Assets:
Cash 1,500,00
0Inventory 5,000,00
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Bashundhara Departmental Store
0
Equipment 450,00
0
Furniture 1,000,00
0
Building Position 2,000,00
0
License 50,00
0
Total Assets 10,000,00
0
Equity 5,000,00
0Liabilities
Bank Loan 3,000,00
0
Investors Investment 2,000,00
0Total Equity & Liabilities
10,000,000
Projected Cash Flow:
Net cash flow = Net income + Depreciation
2014 2015 2016 2017 2018
Net Cash Flow
(5,500) 212,200 445,790 704,083
996,538
Key Dimensions:
2014 2015 2016 2017 2018ROE -3.01% 1.34% 6.02% 11.18% 17.03%ROI -1.51% 0.67% 3.01% 5.59% 8.52%Net Margin -2.09% 0.78% 2.90% 4.49% 5.70%Net Cash Flow (5,500) 212,200 445,790 704,083 996,538
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Bashundhara Departmental Store
Risk management plan:Risk is the part and parcel of every business. There is a proverb’’ there is no risk no gain.’’ In our business we’ll also face some risks. In our business we will face rivalry risk, credit risk etc.
Rivalry risk: We are going to set up our business at Bashundhara area where there is already a retail shop. We have to compete with this established shop. Retail industry is very fragmented industry, everyday new- new retail shop are coming in the industry with the same types of products and services. So in this case our rivalry risk is very high. To get some competitive advantages over the shop we planned to provide some additional services for the customers, like wifi connection in our department, free ATM booth service of two banks and a huge parking space.
Payment risk: We will start our business with loan amount getting from a bank, so we will face payment risks. Payment risk arises when anyone unable to pay his loaning amount. As we will take loan, we have to pay this loan otherwise we will lose our business.
Substitute products: There is already a shop in this area that provides same items for their customers, so we’ll face very high substitute products risks.
Supplier’s risk: In case of suppliers bargaining power of suppliers is very high because there are other customers or retailers are available.
Bargaining power of buyers: Here bargaining power of buyers is very high in some case. As there are other direct and indirect competitors on that area.
Loan Proposal:Uses of Loans:
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Bashundhara Departmental Store
Conclusion:People are getting dependent on time-consuming services. Bashundhara Departmental
Store will be bound to provide such technologies to keep clean appearance of its
customer’s cars. At the starting point it may not be profitable or well known. But it will be
the quality leader in retail industry in the nearest future through its technological
advantage, efficiency, quality and customer care.
Bangladesh's food retail sector is dominated by traditional shops. It has shown growth
and modernization, keeping pace with overall economic growth, the increase in middle-
class consumers, and changes in consumption patterns. The organized retail sector,
including supermarkets and departmental store, remains relatively small, but consumes
increasing volumes of imported food products and exhibits the fastest growth.
Besides our mission is within 5 years we are going to start another departmental store in
northern part of Bashundhara. And our vision is to be the best departmental store not only
in bashndhara but also in the whole town. Because we are opting to open more branches
in other parts of the city by establishing good branding of our organization.
So we hope that our business will meet customer’s demands according to our expectation.
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Bank Loan2 million Taka
Purchase of Position
1.5 million Taka
Furniture.5 million Taka