Business Plan (OASIS)

8/8/2019 Business Plan (OASIS)

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[Document Title]

by

[Students Name][Class Name][Teachers Name]


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TABLE OF CONTENTS

CHAPTER 1 #

S ECTION 1.1 #S ECTION 1.2 #S ECTION 1.3 #

CHAPTER 2 #

S ECTION 2.1 #S ECTION 2.2 #S ECTION 2.3 #

CHAPTER 3 #

S ECTION 3.1 #S ECTION 3.2 #S ECTION 3.3


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EXECUTIVE SUMMARY

Oasis Homes is a product, which is a breath of fresh air in the real estate sector. It is abold step by Oasis Company to come up with a unique product, which relieves thecustomer from headaches of buying and then constructing a home.

In light of recent frauds and bogey schemes, Oasis offers a safe investment for thepeople, wanting to invest in a profitable project, which can secure their savings as wellas provide shelter in the form of luxurious homes available at competitive price.

Oasis offer a product, which none of its competitors offer in the city that is 400 squareyard plot of land and then take the liberty to build a home for the customer.


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INTRODUCTION

It is a headache to buy a piece of land, which is safe and secure. Then to bare theagony to construct a home on that piece of land is a complicated matter. There is aneed of the people to make this matter trouble-free. Considering this demand of thepeople, a project to fulfill this necessity Oasis Group of companies have decided to

make a housing society, high on quality available on reasonable prices to cater theshelter needs of hard working middle/upper middle class. With the demand of half amillion houses annually 1, this project is shaping up to be successful.

1 http://jang.com.pk/thenews/may2009-weekly/busrev-25-05-2009/p2.htm


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MISSION STATEMENT

To built dream homes for every hard workingperson, with a touch of elegance and

compromise on quality. We aspire to becomethe biggest builders of Pakistan, and to

become the candidate for all majordevelopment programs in construction.


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VISION STATEMENT

In few years time, we want to be knownwithin Pakistan, gain trust of people and to

instill that with the name Oasis", comesquality at competitive price. We want achieve

such level of excellence in our field that weare known as the benchmark for the rest to

follow.


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AIMS AND OBJECTIVES

Our aim is to provide high customer satisfaction, capture the vision of canvas into thereal world that is to come up with fresh and unique products. We want to increase our Brand power and want to expand. This project is the first small step in our list of projectswaiting in the pipeline. Our aim is to discover different aspects of home construction andthen to move forward in other sector of construction.


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CURRENT MARKET SITUATION

The current market situation is that a lot of developing projects are going on. The city isexpanding day by day with the increase in population. Due to population densitygeographic shifts are taking place. For the reason most of the builders have launchednew housing schemes in Karachi. Apart from population factor real state business isone of the profitable businesses. And people are investing in real state business as theyreap high profits from fewer investments. Even though there are countless residentialprojects going on both in private and government sector, but apart from small privateconstructing projects there few larger residential projects going on, e.g. farzana royal

city, Noman royal city, etc. hundreds of similar projects were completed and yet many tocome up.

But if we compare these projects with our housing scheme so the current marketsituation wont affect our project to that extent. Because the total number of residentialprojects that we have mentioned above includes residential apartments, cities, andtowers. where as our project consists of only 200 bungalows of same size, so there isno other similar housing scheme currently going on in Karachi city.


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MARKET NEED

There is a requirement of half a million houses annually i to fulfill the demand of the ever increasing population of demand. But only 200,000 houses are built, leaving a gap of 300,000, hence we can safely conclude that there is a need of a product of this sort,which is fulfilling the basic need of the people.

MARKET GROWTH

The real estate sector, is a developing sector, it contributes to the GDP from 10% to12% ii. With the increase in population, the real estate sector has also shown anincrease, many projects were started in the current year, in Karachi only, e.g. FarzanaRoyal City, Taeser town, Noman Royal Villas, Rufi Dream Land, etc. Hence it is visiblethat even though recession has slowed down the rate, it has not been able to stop theincrease in real estate sector.


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COMPANYS MICRO ENVIRONMENT

COMPANY:


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SUPPLIER:We have different suppliers in accordance with our location, we do have a common

problem that is inflation, and global economic crises which has severely effected theconstruction sector in Pakistan due to overwhelming increase in prices if raw materiale.g. cement, iron and bricks etc. on the other hand suppliers are more interested toexport and smuggle cement and iron to Afghanistan owing to its desirable price due toits great demand there, as Afghanistan is going through the process of reestablishment.

Since we have to cop up with this problem no matter what happens therefore we havedeveloped two strategies, and it will be decided according to situation whether to apply1st strategies or 2nd.

It is added in our terms and conditions that if inflation affects the constructionprocess the amount will be paid by customer.

Fix 3% fluctuation rate.

CUSTOMER:After studying the five types of consumer market closely we have the followingconsumers.

Consumer market: it includes those consumers who will purchase our product for personal consumption or personal use only. Since our prime priority is consumer

satisfaction so firstly we will target consumer market.Reseller market: Resellers are allowed to purchase our product. This will prompt our sales process.

Since it is a local private housing scheme therefore no business, government andinternational market is involved.


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COMPETITOR:There are a lot of competitors in our field. But for this project there is almost no threat of

competitors as this housing scheme is unique in itself. For the first time we haveintroduced such housing scheme in Karachi as it has never been done before inKarachi. However several housing schemes of this type have been introduced anddeveloped in other cities of Pakistan e.g. Lahore and Islamabad. If any competitor wants to develop same type of housing scheme, there are many barriers for entry i.e.finding any prime location which is a key to the success of any housing scheme.


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COMPANYS MACRO ENVIRONMENT

DEMOGRAPHIC:

Trend of Population Growth in Karachi:

The population and demographic distribution in Karachi has undergone numerouschanges over the past years. Non-governmental and international sources report thatKarachi's current population is estimated to be 20 million a huge increase over itspopulation.

The city's population is currently growing at about 5% per year (mainly on account of rural-urban internal migration), including an estimated 45,000 migrant workers comingto the city every month from different parts of Pakistan. Karachi is the one of the largestmegacities in the world.

Currently, these older groups of people and continuing migration from different parts of Pakistan have contributed to a rich and diverse mix of people that live in Karachi. Thishas given the city a very metropolitan character.

YEAR Urban Population1856 56,8751872 56,7531881 73,5601891 105,1991901 136,2971911 186,7711921 244,1621931 300,7991941 435,8871951 1,068,4591961 1,912,598

1972 3,426,3101981 5,208,1321998 9,269,2652006 13,969,2842007 14,500,000


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The total area of Karachi is 3,527 km, for convenience the City-District of Karachi isdivided into eighteen towns. The towns are sub-divided into 178 localities. Karachisdensity is 4,115 persons/km.

ECONOMICS:Being the business Hub of Pakistan, Karachi is generating 65% of the total nationalrevenue. This means that people of Karachi hold great wealth. Therefore we have themost suitable customers living in Karachi as far as economical factors are concerned.

NATURAL:

As construction is all about fixing finished goods together, so we have got nothing to dowith the natural environment because all the raw materials we receive are manufacturedin the factories and are finished goods. And nothing that we use in construction processis neither harmful for the environment nor for human health.

TECHNOLOGICAL ENVIROMENT:

In the housing scheme the maximum height of a house will be two stories only. Sincethere is no huge building there in the housing scheme so we do not need any high techmachines or newer technology for the construction process. We will be using ordinarymixer machines, trucks, tractors, rollers, loaders, excavators etc.

POLITICAL ENVIROMENT:

Any change in political environment will affect the whole construction sector together.Therefore we work according to new modification made by the entire sector. Yet there isanother option that is to work on smaller scale as it wont involve that mush

governmental or political factor.


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CULTURAL ENVIROMENT:

Cultural environment is favorable for our company. As we know that there was a strong joint family system in Pakistan. But now with the changing environment people prefer tolive separately. This is helping us to construct smaller homes in less time and quick

sales.


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MARKET SEGMENTATION

GEOGRAPHIC SEGMENTATION

The city of Karachi is a metropolitan city; it generates the highest percentage to theGDP of the country. Therefore it attracts investors, skilled and unskilled labor to the city.New settlements have started in the suburbs of the city due to overpopulation in themain city. Therefore people will look to buy a house in such a city.

DEMOGRAPHIC

Age and Life cycle ; a person over the age of 35, who is looking for a home to settlewith his family will look to buy a home, as only an establish person with a family wouldwant to and will be able to buy his own home.

Income; a person of middle/upper middle class with a income level of 100,000 per month or over is our target, as a person below that will not able to buy a house of 400square yards in a developing area such as Gulshan-e-Maymar

PSYCHOGRAPHIC

Shelter is a basic need, which needs to be fulfilled; this factor will affect the user to buy a home, as with a home comes security. A home also satisfies the socialneed of a person.

The idea of a lavish and luxuries lifestyle will prompt a person to buy our product.

BEHAVIORAL

Occasion;

when a person is looking to settle with his family

when a person is looking for a shelter


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when he is financially strong and is able to buy a home

when a person is looking to live independently with his own family, moving awayfrom a joint family system

Benefits;

A friendly environment for families to live in

Same social class (middle/upper middle) will be living in Oasis Homes, as weoffer only 400 square yard houses.

It also offer a status symbol for the people

Fulfills the needs such as security and social needs.

USER STATUS

Potential user; a person looking to settle with a familyFirst time user ; people who dont a home of their own, people who live in rentedhouses or dont have a house in the city of Karachi.


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TARGET MARKET

Our target market is middle/ upper middle class having an income of 100,000/monthand over, the skilled labor force of our country working in large national andmultinational companies.

Age: above 35, looking for a comfortable and affordable home for his family, or peopleabove 40, who has saved up earning to buy his own house.


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POSITIONING

We position are self one of the best housing scheme in the county. We are here tosatisfy the needs of our customer by providing them best service at a valuable price. Weare providing an environment in which people of same social class will live together.The thing which makes us superior to our competitor is that we are providing villas of same size.


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PRODUCT

Our aim is to build hundred houses of 400 square yards each of high standards.For the convenience of residents we will build two commercial areas equipped withbasic resources. Our plan is to build one masjid substantial in size, which can easilyaccommodate all the residents and more. Keeping the necessity of parks in mind, onepark in the middle of the society will be build. Our aim is not only to build homes butcreate a healthy environment for the families to live in, therefore an alluring communityhall for residence so that they can arrange events in their area, whether it is to celebratea birthday or an engagement their, or any other event, they can do it in the society itself

rather than book a hall somewhere else in the city. It also provides a chance for thefamilies to congregate and to get acquainted with each other.

Traffic is always a problem in Karachi, even though hundred houses wont create muchtraffic yet for the comfort of our customers our plan is to construct wide roads.

For the security measures we intend to build a boundary wall, which will surround theOasis Homes society along with that we will hire a private security company so that our residents can feel secure.


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PRICE

We are following general pricing method. As compared to our competitors we areoffering very convenient prices. One of our largest competitor is Rufi Builders they areoffering 200 yard2 at a price of 6000000/= Rs per house. Which means that charging20% more than then our price. Whereas we are offering 400 Yard2 house at price of 10000000/= Rs which is much less then any competitor. Therefore it is concluded thatour pricing is one of our strengths.

Similarly we are providing extremely convenient payment schedule compared to our

competitors. Along with this we are offering discounts as an opportunity to our customers.


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Payment Schedule:

Mood of payment Residential Discounts

Booking 150000

10% if paid at the timeof booking

Allocation

In 180 days after booking

350000

Confirmation 500000

108 months Installments (42000108)

4500000

Payment to start quarterlyinstallments

500000

12 Quarterlies (25000012)

3000000

On possession

6 month + 6 months

(5 lac+5 lac) 10000000

Total cost 10000000 Rs.

15% extra amount on corner plots.

10% extra amount on plots in front of park.


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PLACE

Location that our team of experts has chosen is near Gulshan-e-Maymar, opposite toAhsanabad. There are many reasons to why we have selected this area. The populationof our country is increasing day by day, so is the population of the Karachi. The maincity is becoming over populated day by day. The suburb areas of Karachi are starting to


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get the attention of the people. Suburb area of Karachi include Surjani Town, Gulshan-e-Hadeed, MDA, Steels Mill and Gulshan-e-Maymar

Out of all these areas Gulshan-e-Maymar has been the shinning star. The prices of landin the past increased and in the future they are again expected to rise as there is high

expectancy that investors will make Gulshan-e-Maymar their center of focus, it is duethe fact the people are willing to buy land in that part of the city.

Though Gulshan-e-Maymar is away from center of the city road such as Super Highway and Lyari Express Way connects this area to the center of the city.

Gulshan-e-Maymar is in itself a large area, the specific location of Oasis HousingSociety is, east to Super Highway, opposite to Ahsanabad. The belt along the Super Highway has experienced a boom in recent years. When prices of 400 square yards inMDA were declining from 12 lakhs to 2 lakhs, prices of 100 square yard in Lyari Basti,

located near Gulshan-e-Maymar rose from 1 lakh to 4 lakhs.The reason we choose to build our product on the east of Super Highway, the

area on the left side of Super Highway is already developed quiet a lot, hence prices of undeveloped land has also risen, price of 400 square yard in that area is almost 35lakhswhere as the land opposite to it, our project location is almost its half, therefore this is awise move as an investor by the company.


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PROMOTION

Promotion will be through advertising, satisfying costumer from booking to the hold of the house.

ADVERTISING OBJECTIVES

The first advertising objective of oasis will be to create brand awareness for the targetedmarket. Oasis advertises usually strives to achieve two advertising objective

TRIAL: to encourage customers to make an initial purchase. Its difficult encourages

people to try this product because a person buys home once or twice in a lifetime. Butour all the efforts of advertising will be to attract customers at least to the booking office.

BRAND SWITICHING: to change the habit in such a way that people may switch to our product as they find new and innovative features and will find different from our competitors. And this can only be possible through unique and different advertisingstrategy from our competitors.

The campaign for oasis is designed in such a way that it will continuously strike peoples

mind and retrieve them to know the brand name and product, so that they can consider it while making a decision about buying a house.


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PROMOTIONAL STRATEGY 1st MONTH

In the first month of campaign Oasis will utilize two sources for promotion with theplacement of brochures and flyers in different places. The objective for the first month isto introduce the brand name and brand sponsorship with decent style which creates thevalue for the brand in the eyes of the people.

PRINT MEDIA

As most of the people reads news paper especially on Sundays, we will just publish afront page color add on THE JANG and THE DAWN. These print ads will only bepublished on Sundays edition.

THE JANG: we have chosen this news paper because it is delivered and been read inalmost each and every upper middle class home. And it is a perception in peoples mindthat as The Jang has quality and name, the advertisement printed in this will also havequality and value.

THE DAWN: as The Dawn is the most valuable and reliable English newspaper andbeen read by offices and business executives, this will help in creating Oasis brandname in the market.

BILLBOARDS

As not to overload peoples mind and not to irritate them with huge publicity Oasis willonly be hiring one billboard at the most busiest place of Karachi which connects I.IChundrigarh road. The board is in the way through to Sharah-e-Faisal to I.I Chundrigarhroad, because many offices executives pass through that place.

PLACEMENT OF BROCHURES

Brochures and flyers will b placed in different clubs, resorts and banks.

CLUBS : many upper middles class people are fond adventure and fun, enjoyingSunday are their hobby and for that purpose they join different clubs. So that is the


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reason why Oasis have decided to place flayer and Brochures in clubs like Dreamworld, Pavallion end, Karachi club, Karachi gymkhana. Etc.

BANKS : people come to bank for financial activities. Some come for house loan also.Placing the vrochers their may give them one more option or may be the right one by

getting a free vrocher from bank.

DIGITAL MEDIA

Oasis will have its own website for information to costumers and details of the project.

But along with this ad banner (234*60 pixels) will b published on different heavy trafficwebsites, on their home page, so that they can b linked to our website and can have theproject details asily.

2nd MONTH

The objective of 2nd month will be to strike the target market which the Oasis hasplanned, the upper middle class. In the 2nd month one more medium will b use as theads in the newspaper and billboards from first month will remain in action.

TELEVISION MEDIA

The 30 sec. tele ad will be on aired on different channels at different timings. The ad willcontain only basic information about the product, the location, features and little bit of price. Not to show different males and females singing a song as this kind of stuff isdisliked by people and is portraying a bad image of brand.

BUSINESS CHANNELS : the idea of choosing business channels is to convey themessage to the right person. Because business channels are viewed by different

investors and the person who watch situation of stocks and business updates regularly..


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3rd MONTH

The objectives of 3rd month will b to reduce the weight of advertisement and to start lowexpense advertising, so as to maintain the balance between the marketing the brand

name and expense. This period will also continue television advertisement but with lightweight age this time. And other thing to cut expense is to slow down the number adadvertisement in newspaper. This time the ads will b published in alternate Sundaysmanner.

PUBLIC SERVICE MESSAGES : Oasis will on air public survey messages based onenvironmental violation and social responsibility. This will add oasiss brand name avalue because serving society always please people and this is like a free marketing,channels sponsors these kinds of activities.


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SWOT

STRENGTH

- Unique product ; not many building companies have attempted to build housesof 400 square yards, at least in Karachi. Many towns which are offering 400square yard land are only selling the land, not building the houses (e.g. Taesar Town). Where as builders who are offering too built houses are not building 400sqaure yards, e.g. Rufi pearl city are building houses, ranging upto 240 squareyards

- Development of Gulshan-e-Maymar ; Gulshan-e-Maymar has shown that it haspotential to be the hub of investors plan regarding construction and development.The recent development supports this facts,

- Access to citys center ; Lyari Express Way connects Gulshan-e-Maymar to thecenter of city. Super Highway connects with M.A. Jinnah road

- Limited number of homes ; as there are only 100 homes, which means that theywill be easy to maintain and hence recovery of investment will be quicker.

- Economical prices of land ; compare to nearby places, our project place isreasonable cheap. Our Project site is opposite to Ahsanabad, where land ratesare almost double. This means that we are saving our cost here.


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WEAKNESS

- No Brand Power ; as we are new company, therefore we have no brand power,which means that people can be reluctant to buy our product. People are evenmore cautious when it comes to buying a house.

- No big hospital near by ; though there are many clinics present but there lacks ahospital that is well equipped, like Agha Khan Hospital .

OPPORTUNITY

- No major competitor ; there are no major competitors of our product; hence wehave an edge in market over others.

- Increase in Population ; as the population is increasing, people will need to fulfilltheir basic need of shelter. The main city of Karachi is already densely populated;hence new settlements will be done in the suburbs of the city.

- Availability of Labor ; Cheap labor is easily available in Karachi .


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THREATS

- Government policies; the government hasnt taken any steps to encourage theinvestors in real estate, rather discourage them by increasing CVT [capital valuetax] on real estate to 4% from 2%.

- Recession ; as currently our economy is in recession, therefore people might nothave the power to but the product.

- Fluctuating rates; The prices of raw material keep on fluctuating in Pakistan,which makes it difficult to cover in the estimated cost and complete the project ontime.

- Current security situation ; the current security situation of Pakistan is anightmare for an investor, as no investments are safe due to security threats.

- Linguistic conflicts ; few months backs there were clashes between Urdu-speaking and Pashto-speaking, it made the air tense in area of Gulshan-e-Maymar and its surroundings.


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COMPETITION

Direct competition : the housing schemes in Karachi are our direct competition. Our company doesnt face a stiff target from any of our competition as we have a product,which is unique.

Competitors such as;

PRIEMIER REGENCY VILLAS (240sq yard single story bungalows)

NOMAN ROYAL VILLAS (80sq yard single story, 120 square yard single story)

RUFI DREAM LAND (offers; 240sq yard single story bungalows)

They all offer bungalows less 400 square yards, and they also offer houses of differentsizes in the same housing scheme, where as We offer houses of only one range that is400 square yards. And their target market is middle and lower class

Indirect Competition : our indirect competitor is Bahria town as they offer houses of different ranges for middle/upper middle and upper class. If Bahria town decides toexpand in Karachi, it will become our direct competitor.


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BUDGETS

VARIABLE COST

Cost/unit No. units Total Rs

House Construction Cost 7,200,000/per house 100 720,000,000

*construction cost is 2000 Rs/Feet2 & construction cost includes labor + material andmachinery cost)

Park and Masjid cost 8000000

Road cost 135000/running meter 130 17,500,000

Total Variable cost 745500000


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FIXED COST

Cost/unit No. units Total Rs

Land cost 8896000/Acre 12 106752000

*Market value of land is 11000000. According to Sindh govt lease policy will get land atvalue 19 % less then market value.

Office rent and salary expense 200000/month 12 2400000

Gas Connection cost Main supply line to housing Scheme 50000

4500 single meter installment100 450000

Total 500000

Electricity Connection cost 120000 per transformer8 9600006000 single meter installment 600000

Total 1560000

Water connection cost 650400Rs

Sewerage Cost 677430Rs


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Employees salaries for the project 87000000 Rs

MARKETING EXPENSE :

ADVERTISING BUDGET FOR FIRST MONTH

PRINT MEDIA Rs.563400

BILLBOARD rentper month (size2700 sq.fit)

Rs. 108000

PRINTING OFVROCHERS

Rs. 10000

WEBADVERTISING(for three months)

Rs.30000

TOTAL FOR 1stmonth

Rs. 711400


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ADVERTISING BUDGET FOR SECOND MONTH

PRINT MEDIA Rs. 563400

BILLBOARD rentper month (size2700 sq.fit)

Rs. 108000

TELEVISIONMEDIA (morningshow+ day time)

Rs.30000+ Rs.22500=Rs.52500

TOTAL FOR 2ndmonth

Rs.723900

ADVERTISING BUDGET FOR THIRD MONTH

PRINT MEDIA Rs.281700

PUBLIC SURVEYMESSAGES

Rs.30000

TOTAL FOR 3rd

month

Rs.311700


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Total Fixed cost 122986830

Contribution margin= selling price/unit variable cost/unit

10000000 7455000

=2545000

Break-even= fixed cost cont margin

112539830 2545000

49 houses


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SALES AND PROFIT FORECAST :

1st year

70 houses booking 19250000 Rs

Fixed cost 1st year income

122986830 - 19250000

1st Year loss 103736830 Rs


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REFERENCES

www.pro-paksitan.com www.statpak.gov.pk www.cia.com www.zameen.com www.dawn.com www.defence.pk www.realmarketing.com www.Starmarketing.com www.gov.pk www.rufibuilders.com www.bahriatown.com
http://www.pro-paksitan.com/http://www.statpak.gov.pk/http://www.cia.com/http://www.zameen.com/http://www.dawn.com/http://www.defence.pk/http://www.realmarketing.com/http://www.starmarketing.com/http://www.gov.pk/http://www.rufibuilders.com/http://www.bahriatown.com/http://www.pro-paksitan.com/http://www.statpak.gov.pk/http://www.cia.com/http://www.zameen.com/http://www.dawn.com/http://www.defence.pk/http://www.realmarketing.com/http://www.starmarketing.com/http://www.gov.pk/http://www.rufibuilders.com/http://www.bahriatown.com/


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i http://jang.com.pk/thenews/may2009-weekly/busrev-25-05-2009/p2.htmii http://iiu.edu.pk

Documents

Business Plan (OASIS)