Final Report22

7/31/2019 Final Report22

1/103

1

A Study Market Potentiality andcustomer satisfaction of after sales

services in SILVER SHINEDEVELOPERS PVT LTD.Final Report For S.I.P.-2009

Submitted by :SWAROOP CHOWDARY CH8NBHD055

Faculty Guide:Mr.Rajkumar Pillay9966997602Company Guide:Mr.Sridhar Reddy

9985900909

2009


2/103

A Study Market Potentiality and customer satisfaction of after sales

services in SILVER SHINE DEVELOPERS PVT LTD.

Submitted by

SWAROOP CHOWDARY CH

(8NBHD055)

INC-ASIM

Hyderabad

2


3/103

Acknowledgement

I would like to express my gratitude to my faculty guide

Mr. RajKumar Pillay, for his kind co-operation and guidance in doing this

SIP. He was ever helping and supporting which is enabling me to do my SIP

under the titleA Study Market Potentiality and customer satisfaction of

after sales services in SILVER SHINE DEVELOPERS PVT LTD.

I extend my sincere thanks to Mr. Sridhar Reddy, Company guide, for the

cooperation given during SIP.

This will certainly help me in building my career in future and will make me

stand in good position in my future academic pursuits.

Last but not the least I would like to thank INC-ASIM, Hyderabad for giving

me an opportunity to do my SIP successfully with their support.

3


4/103

Contents

Page No.

Chapter-1: Introduction

Chapter-2: Project objectives. 12

Chapter-3: Methodology

Chapter-4: Marketing objectives of the IP Firm 14

Chapter-5: Trends for the current year 16

Chapter-6: Marketing Plans of the IP Firm 18

Chapter-7: Marketing Plans of the IP Firm 19

Chapter-8: Porter's Generic Competitive Strategies 21

Chapter-9: Positioning image through perceptual mapping 23

Conclusions 28

References 28

4
http://www.ifm.eng.cam.ac.uk/dstools/paradigm/genstrat.htmlhttp://www.ifm.eng.cam.ac.uk/dstools/paradigm/genstrat.html


5/103

CHAPTER-1: INTRODUCTION

5


6/103

Company Profile:

The promoters of the company are

having vast experience in the real-estate market and are

been very successful in launching, promoting anddeveloping new real-estate ventures. Silver Shine

Developers is an ethically bound company, rich in its

ventures. All its forays are committed to its ethos. We are

intensely committed to playing a key role in discharging

the social obligations by adhering to specified norms of

legal, environmental and ethical practices. Our projects

are planned to become living legends of class, comfort

&elegance .The world class quality along with adequate

emphasis on developing and registering within the

stipulated time has given us an edge over others. We aim

at serving our internal & external customers well &

believe that a satisfied customer is the gateway towards a

companys success. Keeping this in mind, we have come

up with prestigious residential venture that plug the

unfulfilled needs of the customers. These projects are

completely packed with an assurance of high quality.

6


7/103

MISSION:

For every single customer, we will work as hard as we can help them to

achieve their dream house. We provide the most professional, informative,

loyal and dedicated service in the industy.The best interests of our customers

will always come first and we will place the customers concerns ahead of

our own in each and every transaction, as we are dedicated to the

development of long-term customer relationships Our team-approach

philosophy ensures customer needs are important to each and every member

of our organization.

VISION :

Guided by principles of trust, respect and integrity, we empower people to

achieve their dreams and to create an exceptional real estate services

experience that builds long lasting relationships. We want to provide a living

which is very affordable and a common man can say i too own a plot.

Silver City Layout:

7
http://www.silvershinedvelopers.com/silverpark.html


8/103

SWOT Analysis:

Project Highlights:

Close to Bangalore NH-7 and next to By-pass Road

Designed vaastu

As per HUDA & HMDA norms

Provisions for electricity

Secured Fencing

Club house

All BT roads

Underground Drainage

Avenue Plantation

Overhead Tank

Childrens Park

Spot registration

Construction undertaken, if required

Excellent growth in investment

Provision for common amenities

Location Highlights:

Asias biggest International Airport

Fab City

Hardware Park

Close to proposed Zoo Park

Prince Aga Khan Educational Foundation

Videocon (Millennium Home Appliances)

Hi-Tech Textile Park / Garment City

Georgia Tech American University

MNC Projects are under construction

Apparel Park

Nano-Tech Silicon India (NTSI)

A.P. State Trading Corporation (APSTC)

A.P. Gems & Jewellery Park (APGJP)

A.P. Food Parks

Proposed Asias Biggest Amusement Park

Corporate Hospitals Corporate Companies & Star Hotels

IT Corridor, Golf Course

Short Summary of the Project:

Silver City project is strategically located at Kodicherla

village, Kothur mandal.It is just a stone throw-away from By

pass road and closer to the NH7 Bangalore Highway. Thelayout is been planned and built with a fine taste of

8


9/103

Strength:

The employees have good networking and contacts with the

customers.

The Real Industry is future investment to the people.

Weakness:

The fields work in summer many government employees gone to

their native places.

The recession and slow down economy of the country and elections

has significant effect on the business.

Opportunities:

Good network in industry.

Good reputation in market for company.

Good contacts with people.

Threats:

The economic down trend is a threat.

After Election results telengana state will form also threat.

5 Cs Report:

9


10/103

1) Customers:

Silver Shine Developers Pvt Ltd. customers are corporate

people, industrialists, middle class people and professionals

etc. Customers play key for the development of a business ifa company or business provided good products and services

and if it satisfies the customers than new customers will

increase and its reputation also will increase. For Silver Shine

Developers Pvt Ltd has to satisfy the customers needs and

demands. Customers are looking of low prices, good

reputation and some are looking at future investment and

after one year the land rate increases double amount .Silver

Shine Developers is satisfying the customers by providing

reasonable rates and providing plots by customer

preferences east or west faces etc. For every customer the

company providing water connection and one plant to every

plot and drainage connection and current connection and

name plate to the plot.

2. Company:

Silver Shine Developers Pvt Ltd is one of the leading Real

Estate Company in Hyderabad who have chosen step out of

the crowd and make a bold foray into creating an institution

out of a business. This journey of success began with its first

small venture 18 acres land in near kothur. It now proudly

started 3rd venture with 180 acres .The company employees

are all worked before Eureka Forbes.

The company the venture Silver City 1st phase almost over.

The Company head office

At Khairatabad.

The Firm one Head office at Khairatabad and 13 regional

offices in the Hyderabad.

10


11/103

3. Competitors:

This field of service has many competitors and identifying

the competitors is very difficult to asses. This service is

usually done by real estate companies and by the marketexecutives by door to door knocking.

The persons or firms usually engaged in this service are

marketing managers, executives.

Some of the major players who can be identified in this field

are SUVARNA BHOOMI, SUTURE INDIA, BASHYAM, JANA

PRIYA, VVR etc.

4. Collaboration:

The Silver shine Developers Pvt Ltd is collaborated with

contractors and suppliers of cement and steel etc. And also

with other real estate agencies.

5. Context:

We are into real estate preparing and developments layoutsand constructions on sight.

11


12/103


13/103

Chapter-3: Methodology:

Type of study: Empirical.

Type of study: The study of the project to understand the

customer behavior and door to door knocking marketing and

explain product and broachers.

Type of the Data: The primary data collected from company

guide and company broachers.

Secondary data collected from company records and websiteSILVERSHINEDEVELOPERS.COM and information got from

other sites like MAYTAS.com and IVRCL.Com.

13


14/103

CHAPTER-4: SCOPE OF THE PROJECT

PART A

ET-Targets: The company guide given target is 5 plots sell

with in 90days.

Target achievements: Daily visited 100 customers by door to

door knocking and got appointment to visit sight on

Sunday.

Identification of Segments: In the company many groups and

they give every group one area and door to door knockin that area and get 40 details and get 2 customers to

visit sight.

Plan to approach segments: Daily visit 100 houses by door to

door knocking and using broachers.

Communication strategy for achieving ET: Using door to door

knocking and explaining and giving broachers.

14


15/103

PART B

Product identification: The product is plots the sizes are 200

and 400 sq.yds .The venture at Kothur it is from

Shamshabad 19 kms away.

Identify industry based on product: This Company is real

estate Company the product they are selling 200 square

yards and 400 square yards.

Sales and profit ratio: Sales are 22 coresProfit ratio=9/22=0.409.

Key factors influencing the industry:

Door to Door knocking

BrochuresPorters 5 Forces:

New in trends: Door to door marketing.

Bargaining of power of suppliers: The Company supplies theproduct to the customers with low price rate.

Bargaining of power of buyers: The buyers buy the productwith security providing by the company and loyalty fromcompany and current trend from market.

Bargaining of power of substitutes: No.

Pest frame work:

Political: It influences the people the near politicians land

there the people ready to buy.

Economical: The Company selling least price after 1 year the

customers will get double amount.

15


16/103

Social: Moral support and marriages and childrens future

support.

Technological: Commercial wise good in future.

Chapter-5: Key players and porters model

This field of service has many competitors and identifying

the competitors is very asses.This Service is usually

providing by many companies.

The employees usually engaged with customers by door to

door knocking.

Portes model for evaluation:Barriers to Entry/ Threat of Entry:

It is not only incumbent rivals that pose a threat to firms in

an industry; the possibility that new firms may enter the

industry also affects competition. In the theory, any firm

should be able to enter and exit a market, and if free entry

and exit exits, then profits always should be nominal. In

reality, however, industries possess characteristics that

protect the high profit levels of firms in the market and

inhibit additional rivals from entering the market. These are

barriers to entry.

This field being not acquaint to many, there is not much

scope for people to enter into this unless they have got good

networks and contacts.

The exit barrier is to clear off jobs in hand and selling assets

if any .Clearing all liabilities and recovering any debts and

payment of utility bills etc.

Threat of Substitutes:

16


17/103

In Porters model, products refer to products in other

industries. To the economist, a threat of substitutes exists

when a products demand is affected by the price change of

a substitute product. A products price elasticity is affected

by substitute products- as more substitutes becomeavailable, the demand becomes more elastic since

customers have more alternatives.

The competition engendered by a Threat of Substitutes

comes from products out side the industry. The price of plot

constrained by the price of plot due to recession.

Supplier Power:

A producing industry requires raw materials- labor,

components, and other suppliers. This requirement leads to

buyer supplier relationships between the industry and firms

that provide it the raw materials used to create products.

The suppliers here providing free visit to the venture and

telephone services and personal approach to the customers.

Buyer Power:

The power of buyers is the impact that customers have on a

producing industry. In general, when buyer is strong, the

relation to the producing industry is near to what an

economic terms a monopoly- a market in which there are

many suppliers and one buyer.

The customers are usually known through the networking.

they come with various references.

17


18/103

CHAPTER-6: Cometative Strategy:

Competitive Strategy Parameters:

a) Changing Prices:The changing prices because of the recession and Real

estate marketing now not in boom. So the company

provides low cost of price to the customers.

b) Product Differentiation:Silver Shine Developers PVT LTD provides to the

customers negotiable prices are giving.

And also providing East and West facing plots required

by the

Customers. Corner Plot Square yard rates are increases.

Spot Registration and providing BT roads and solar

fencing to

the venture.

c) Channels of Distribution:

The Firm one Head office at Khairatabad and 13 regionaloffices in the Hyderabad.

d) Number of firms:

In Hyderabad 13 regional offices.

18


19/103

This is TYPE 1.

e) Customer Loyalty:Customer buys the second plot in the same venture giving

best discount on the prices and providing travelling

facilities and giving discount on registration prices also.

f) Exit Barriers:

The company has clearing loans and recovers debts

selling the asset in hand selling office furniture cancellingor subcontracting the lease for branch offices.

g) Industry Concentration:

The Herfindahl index, also known as Herfindahl-Hirschman

Index or HHI, is a measure of the size offirmsin relation

to the industry and an indicator of the amount of

competition among them. Named after economists Orris

C. Herfindahl and Albert O. Hirschman, it is an economic

concept but widely applied in competition law and

antitrust. It is defined as the sum of the squares of the

market shares of the 50 largest firms (or summed over all

the firms if there are fewer than 50 within the industry,

where the market shares are expressed as percentages.

The result is proportional to the average market share,

weighted by market share. As such, it can range from 0 to

10,000, moving from a huge number of very small firms to

a single monopolisticproducer. Increases in the Herfindahl

index generally indicate a decrease in competition and an

increase ofmarket power, whereas decreases indicate the

opposite.

19
http://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/w/index.php?title=Orris_C._Herfindahl&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Orris_C._Herfindahl&action=edit&redlink=1http://en.wikipedia.org/wiki/Albert_O._Hirschmanhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Competition_lawhttp://en.wikipedia.org/wiki/Antitrusthttp://en.wikipedia.org/wiki/Monopolyhttp://en.wikipedia.org/wiki/Market_powerhttp://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Industryhttp://en.wikipedia.org/w/index.php?title=Orris_C._Herfindahl&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Orris_C._Herfindahl&action=edit&redlink=1http://en.wikipedia.org/wiki/Albert_O._Hirschmanhttp://en.wikipedia.org/wiki/Economicshttp://en.wikipedia.org/wiki/Competition_lawhttp://en.wikipedia.org/wiki/Antitrusthttp://en.wikipedia.org/wiki/Monopolyhttp://en.wikipedia.org/wiki/Market_power


20/103

Formula:

In the real estate near Kothur mandal 10 companies of

ventures.

HHI=900.

Index below 0.1 (or 1,000) indicates an unconcentrated

index.

h) Fixed Costs:

Buildings, Land, Furniture, Maintenances cost and salaries

i) Industry Growth:

Industry growth is less due to market concentration low

and

High competition in the area. The Growth in the market0.5%

Due to Recession.

j) Brand Identity:

The Silver Shine Developers PVT LTD is Started in 2007

it is

growing company.

Company so it to improve brand identity in the market.

20


21/103

CHAPTER-7: Market Share and trends

As discussed earlier the market share and concentration is

very difficult to find in this industry. Since there manyplayers in the market and only few players in the market

with standing the major share.

Taking the profits into consideration, the market share of

Silver Shine Developers PVT LTD can be said to 1.84%on an

average. When the market being effected by recession the

market share of Silver Shine Developers PVT LTD , in and

around Hyderabad it falls to 1.36%.

Considering average increases of 0.01% of increases in

market share with every increase In Rs 15 lakhs in profit.

Index trends of the company for past two years

21


22/103

This company is not listed company. The market Share of

the company for last two years in below

From last two years market share represented in graph. The

market share decreased because of the recession.YEAR MARKET SHHARE %2007-08 1.842008-09 1.36

y = 0.68x - 0.2933

R2 = 0.5076

0

0.2

0.40.6

0.8

1

1.2

1.4

1.6

1.8

2

YEAR 2007-08 2008-09

YEAR

MARKETSHARE

Series1

Series2

Linear (Series1)

.

22


23/103

CHAPTER-8: Competitors strategies:

The company acquisition from other company.

MAYTAS Company:

Fair Value=Equity share capital +Reserves&surples

=588.50+5939.94(From Balance sheet)

=6528.44(millions)

Investment= (Equity share capital

+Reserves&surples+Adujust PAT-Equity Dividend) x 30%

accusation

=588.50+5939.94+996.36-50(From balance

sheet)

=7474.80(millions) x 30%

=2242.44(millions)

IVRCL Company:

Fair Value=Equity share capital +Reserves&surples

23


24/103

=266.98+15788.61(From balance sheet)

=16055.59(million)

Investment= (Equity share capital

+Reserves&surples+Adujust PAT-Equity Dividend) x 30%accusation

=266.98+15788.61+2104.77-9.51(From

balance sheet)

=18159.85 x 30%

=5447.955(million)

CHAPTER-9: Competion strategies:

The companies also follow various strategies to capture the

Market share, with their products and different themselves in

many ways. Some of the strategies followed by them are

based on pricing, focus segmentation, product

differentiation, brand image, etc.

SILVER SHINE DEVELOPERS PVT LTD.

Suvarna Bhoomi:

They focus on research, risk and policy .They giving

advertisement with actors in media. They talk about brand

name and facilities providing to the customers.

Suture India:

They focus on rich and middle class people and attract the

people to giving plots to Cricket players who won the twenty-

20 World cup match.

24


25/103

Jana Priya:

They focus on middle and low class people and research

areas and rates negotiable prices and giving validity time to

pay money. And also installments with low prices proving tothe customers.

CHAPTER-10: Valuation exercise:

As my IP Company is not listed and the balance sheets are

not available two companies have been considered here for

the valuation exercise. The two companies are

Infrastructures and constructions. The following the financial

statements of balance sheets are below.

25


26/103

MAYTAS COMPANY BALANCE SHEET:

26


27/103


28/103

IVRCL COMPANY BALANCE SHEET:

28


29/103

Two companies valuation exercise are below.

MAYTAS Company valuation exercise:

1) EPS=Profit/no of share holders

=996360000/5403254

=18.44

2) P/E ratio=Market price of the share/EPS

=558.50/18.44

=30.293) P/Book value=Stock Price/Total assets-Intangible assets

=558.50/9069.51

=0.061

Particulars Maytas IVRCL

EPS 18.44 16.08

P/E 30.29 39.89

P/Book 0.061 0.154

Total assets to

EBIT

1912.31 3331.52

EBDT to Sales 1736.46 3181.48

EBDIT to Sales 2303.22 3659.70

PAT to Sales 996.36 2104.77

Cash Earnings per

share

1387.27 2432.95

Sales to Net fixed

Assets

3682.85 3732.80

29


30/103

4) Total Assets to EBIT=EBDIT-Depreciation

=2303.22-390.91

=1912.31

5) EBDT to Sales=EBDIT-Interest

=2303.22-566.76

=1736.46

6) EBDIT to Sales=Contribution-Fixed Cost

=2303.22

7) PAT to Sales=PBT-Interest

=996.36

8) Cash Earnings per share=PAT+Depreciasion

=996.36+390.91

=1387.27

9) Sales to Net Fixed Assets=Buildings and Land etc.

=3682.25

IVRCL Company valuation exercise:

30


31/103

1) EPS=Profit/No of share Holders=641500000/39894279

=16.08

2) P /E ratio=Market price of the share/EPS=641.43/16.08

=39.89

3) P/Book value=Stock Price/Total assets-Intangible assets=641.50/4175.96

=0.154

4) Total Assets to EBIT=EBDIT-Depreciation=3659.70-328.18

=3331.52

5) EBDT to Sales=EBDIT-Interest=3659.70-478.22

=3181.48

6) EBDIT to Sales=Contribution-Fixed Cost=3659.70

7) PAT to Sales=PBT-Interest=2104.77

8) Cash Earnings per share=PAT+Depreciasion=2104.77+328.18

=2432.95

9) Sales to Net Fixed Assets=Buildings and Land etc.=3782.80

Chapter-11: Marketing objectives of the IP Firm

Marketing objectives of the firm:

31


32/103

Silver Shine Developers Pvt Ltd are in to the business for the

past 2 years and they are having 13 regional offices. They

are providing plots, they providing reasonable prices to their

customers. 120 employees are working in Silver Shine

Developers Pvt Ltd and their objectives are:

To increase profits

To increase market share

To increase profitability

To increase sales

To Promote the brand image

To increase profits: Silver Shine Developers Pvt Ltd

objective is to increase profits and market share for that

they are doing mouth to mouth publicity and door to door

knocking and Distribute broachers and using mass media

and giving TV ads. By these they are doing publicity of

there brand name and attracting new customers and

existing customers and providing new offers like giving 5%

discount to the existing customer to buy new plot. These

following by Silver Shine Developers Pvt Ltd to increase

profits.

To increase profitability: profits mean income from

plot sales and trying to increase sales from those profits.

They are giving discount upto 5% for the existing customers

32


33/103

and providing additional benefits to customers by that there

are getting profits.

To increase sales: For increasing sales there giving

discounts and doing publicity live door to door knocking

,using broachers and using ads in mass media and TV ads

there sales are increasing.

33


34/103

Chapter-12: Trends for the current year:

Revenue:

Revenue generated for Silver Shine Developers Pvt Ltd is theplot selling to the customer with out rate prices andregistration charges. The revenue of a firm is usually through the salesof the products, through reserves and surplus, through Investment activities

and through the financial activities.

The total revenue for the company is around Rs. 17 cores previously. Thisyear till now it is around Rs. 7 cores was generated

Market Share:

The market share of Silver Shine Developers PVT LTD can be

said to 1.84%on an average. When the market being

affected by recession the market share of Silver Shine

Developers PVT LTD, in and around Hyderabad it falls to

1.36%.

Considering average increases of 0.01% of increases in

market share with every increase In Rs 15 lakhs in profit.

Index trends of the company for past two years

This company is not listed company. The market Share of

the company for last two years in below

From last two years market share represented in graph. The

market share decreased because of the recession. The

diagram already shown above.

34


35/103

Sales:

The company sales from last two years are 23 cores.

16

7.5 7

2

0

2

4

6

8

1012

14

16

2008 2009

sales (cr)

profit(lk)

35


36/103

Chapter-13: Marketing Plans of the IP Firm

Marketing Planning:

There is no commonly accepted definition or approach to marketingplanning. This is because of a number of problems that pepper the marketing

planning literature relating to the size of an Organization, the market or

sector in which it exists, its culture, and the human beings that work within

it. There is a huge body of research that has considered marketing planning

and its models, structures and processes, theory and typologies. The only

one thing that is certain is that, after considering the findings of a number of

studies and as the output of many informed views, there is no common

agreement on a single definition or approach to marketing planning.

After considering the market planning literature in depth, it was concluded

that marketing planning falls into as fallows:

To make smaller bits plots

To increase marketing work force

To advertise with mass media and newly in TV ads

To maintain good customer relationship

To promote brand image with door to door knocking

36


37/103

Chapter-14: Framework and Analysis of Marketing Plan

4P's Marketing Mix Model:

The Marketing Mix model (also known as the 4P s) can be used bymarketers as a tool to assist in implementing the Marketing strategy.

Marketing managers use this method to attempt to generate the optimal

response in the target market by blending 4 (or 5, or 7) variables in an

optimal way. It is important to understand that the Marketing Mix principles

are controllable variables. The Marketing Mix can be adjusted on a frequent

basis to meet the changing needs of the target group and the other dynamics

of the Marketing environment.

The 4ps are

1. Price2. Promotion3. Place4. Product

1.Price: The real estate companies show different prices.

Silver Shine Developers Pvt Ltd is providing reasonable

rates in Shamshabad. It is providing less prices to thecustomers rather than other competitors. Because of this

customers feel that plot price is high then the they will

explain why there is difference between them and others

and they will explain each and every thing very clearly. So

customers trusted them and existing customers

37


38/103

encourage new customers to purchase plots in Silver

Shine Developers pvt ltd. It makes the Silver Shine

Developers pvt ltd to be a cost leader ship.

2. Promotion: Silver Shine Developers pvt ltd promotionstrategy is entirely different from others. They have

started their business in 2007. Now 2nd year is running.

They promote about their company by door to door

knocking and using broachers and ads in news papers and

media. Now they are having 13 regional offices in

Hyderabad. They are having good relation with customers

and there publicity is done thorough mouth to mouth. New

customers are coming through old customers and when

ever customers want to purchase the company providing

car visit to the venture.

3. Place: They are having 13 regional offices in around

Hyderabad and their main branch in Khairatabad. They

are having good reputation and they are having good

customers form around in Hyderabad with the existing

customers new customers are coming. The venture is near

kothur. In that area already all ventures over nearShamshabad it is only and also near Fab city and hard

ware park etc. The venture is near to the JP Darga.

4. Product: Silver Shine Developers Pvt Ltd is

providing100, 200, 400 square yards plots and also

constructed villas also. The plots constructed by demand

of customers also.

Target segmentation position:

Silver Shine Developers Pvt Ltd target upper middle class

and high income group who are interested invests the

money in land or build own house.

Customer acquisition and customer retention:

38


39/103

Customer acquisition plays a vital role for the growth of the

firm for Silver Shine Developers Pvt Ltd is attracting new

customers through providing showing strategic locations.

Customer retention also plays a vital role for Silver ShineDevelopers Pvt Ltd is attracting existing customers giving

5% discount for plot.

Product value addition:

Celebrities brought plots near by it has got popularity.

Chapter-15: Porter's Generic Competitive Strategies

Michael Porter regarded the selection of a defendable position within an

industry as the end result of a competitive strategic analysis. He argued that

successful, profitable companies generally choose to compete on either low

costs or by differentiating their products to meet specific customer needs.Although these two strategic options are mutually exclusive, he added a

third category of firms as niche players that serve a specific market or

product .

Porter's three generic strategies are:

1. COST LEADERSHIP

Pursue lower costs in a broad target market.

2. DIFFERENTIATION

39
http://www.ifm.eng.cam.ac.uk/dstools/paradigm/genstrat.htmlhttp://www.ifm.eng.cam.ac.uk/dstools/paradigm/genstrat.html


40/103

Strategic locations of site location or layout location and development of

sights.

3. FOCUS

Pursues lowest cost or delivers differentiated products to a specific niche

market.

Porter emphasized the mutual exclusivity of cost leadership and

differentiation based on his observation that companies risk getting 'stuck in

the middle' where competitors surpass them both on cost and superior

product offerings. The distinction between the two options applies as well to

his 3. focus strategy.

The industry's character determines the range of effective

strategies. In a commodity market, only costs matter. In

economic terms, this means "perfect competition". The

haute couture business, on the other hand, is driven solely

by differentiation. Price is not a factor in a customers

purchase decision. Most industries tend to be mixed where

one cost leader flourishes and opportunity exists for multiple

differentiators.

Porter proposed a three stage analysis to determine and

execute a competitivestrategy:

1. analyze and choose the industry in which to compete (fiveforces);

2. Analyze and choose the organizations competitive

strategy (generic strategies);

3. Implement the strategy by managing the firm's activities

40


41/103

(value chain analysis);

A firm's position must be modified when the relationship

between the five forces in the industry change.

Chapter-16: Positioning image through perceptual mapping

Perceptual Mapping:

In helping you develop a market positioning strategy for your product orservice, perceptual maps or positioning maps as they are sometimes referred

to, are often used to help the organization identify a positioning strategy.

When plotting a perceptual map two dimensions are commonly used. Below

is a very basic perceptual map. If we plot the UK chocolate market we can

identify those brands which are high price and high quality. Belgium

chocolates are plotted as high quality and high price, and Twix is plotted one

low quality low price brand. Once completed the perceptual map could help

identify where an organization could launch a new brand perhaps at the

medium price and quality range.

In our basic map, you can see there is not much competition within that

particular area.

We must remember that perceptual maps are plotted on the basis of someone

s perception and what maybe a quality product to one person, may not be

perceived as quality to another.

41


42/103

Diagram: Perceptual Map UK Con

fectionery Brands

42


43/103

Perceptual Questionnaire Forum

Name:

Age:

Gender:

Location:

Q 1) In come Group?

1) 2lakhs 2) 3-4 lakhs 3) above 4 lakhs

Q 2) What would you prefer to buy?

1) Open plot 2) Independent House 3) Flat

Q 3) How the feel about rate in Silver Shine Developers Pvt

Ltd ?

1) Low 2) Moderate 3) High

Q 4) Are you satisfied with venture of Shine Developers Pvt

Ltd ?

1) Poor 2) Good 3) Very Good 4) Excellent

Q 5) How do you feel about facility location?

1) Poor 2) Good 3) Very Good 4) Excellent

Q 6) Are you cost compare with other companies?

1) Low 2) Moderate 3) High

Q 7) How much time take for delivery of the title of the plot?

43


44/103

1) Delayed 2) Moderate 3) Quick

Using SPSS as below.

Case Processing Summary

Valid ActiveCases

20

Active Caseswith MissingValues

0

SupplementaryCases

0

Total 20

Cases Used inAnalysis

20

Iteration History

IterationNumber

VarianceAccounted For Loss

TotalIncrea

se Total

100(a)2.5895

01

.00004

3

4.410499

a The iteration process stopped because the maximum number ofiterations was reached.

Model Summary

Dimension

Cronbach's Alpha

Variance Accounted ForTotal(Eigenval

ue) Inertia% of

Variance

Total(Eigenval

ue)

1 .778 3.000 .429 42.856

2 .631 2.179 .311 31.130

44


45/103

Total 5.179 .740

Mean .716(a) 2.590 .370 36.993

a Mean Cronbach's Alpha is based on the mean Eigenvalue.

Quantifications

Plot

Category Points

Dimension 1

3210-1-2

Dimension2

2

1

0

-1

-2

-3

quick

moderate

delayed

high

moderate

low

excellent

very good

good

excellent

very good

good

high

moderate

low

flat

independent house

open plot

4 lakh above

3-4 lakhs

2 lakhs

Joint Plot of Category Points

Q7

Q6

Q5

Q4

Q3

Q2

Q1

Variable Principal Normalization.

45


46/103

Correlations Transformed Variables

Dimension: 1

Q1 Q2 Q3 Q4 Q5 Q6 Q7

Q1 1.000 .648 .217 .410 .176 .186 .606Q2 .648 1.000 .356 .464 .428 .427 .388Q3 .217 .356 1.000 .126 .344 .603 .263Q4 .410 .464 .126 1.000 .330 .177 .018Q5 .176 .428 .344 .330 1.000 .164 .245Q6 .186 .427 .603 .177 .164 1.000 .220

Q7 .606 .388 .263 .018 .245 .220 1.000Dimension

1 2 3 4 5 6 7

Eigenvalue

3.000 1.210 1.061 .792 .409 .354 .174

Correlations Transformed Variables

Dimension: 2Q1 Q2 Q3 Q4 Q5 Q6 Q7

Q1 1.000 .567 -.133 -.066 .177 .441 .118Q2 .567 1.000 .044 -.024 .216 .046 .217Q3 -.133 .044 1.000 .362 .034 .286 .146Q4 -.066 -.024 .362 1.000 .273 .384 .249Q5 .177 .216 .034 .273 1.000 .049 .495Q6 .441 .046 .286 .384 .049 1.000 .144Q7 .118 .217 .146 .249 .495 .144 1.000Dimension 1 2 3 4 5 6 7Eigenvalue

2.179 1.574 1.226 .797 .571 .457 .196

46


47/103

Objects

Object Points Labeled by

Dimension 1

3210-1-2

Dimension2

2

1

0

-1

-2

-3

20

19

18

17

16

15

141312

11

10

9

8

7

6

5

4

3

2

1

Object Points Labeled by Casenumbers


47


48/103

Discrimination Measures

Dimension Mean

1 2 1

Q1 .552 .326 .439Q2 .714 .284 .499Q3 .389 .130 .259Q4 .292 .288 .290Q5 .321 .376 .348

Q6 .359 .362 .360Q7 .374 .413 .393

ActiveTotal

3.000 2.179 2.590

% ofVariance

42.856 31.130 36.993

48


49/103

Dimension 1

0.80.60.40.20.0

Dimension2

0.5

0.4

0.3

0.2

0.1

0.0

Q7

Q6

Q5

Q4

Q3

Q2

Q1

Q7

Q6

Q5

Q4

Q3

Q2

Q1

Discrimination Measures


49


50/103

Chapter-17

Executive Summary

Introduction:

Omkara Solutions will provide computer and

technical consulting to local small businesses as well as

home PC users. In doing so the company will focus on

marketing,esponsiveness, quality, and creating and retaining

customer relations.

Company:

Omkara Solutions will initially be a sole proprietorship startswith an initial capital of $12,500 and with minimum outside

financing. Omkara Solutions will be a home office start-up,

utilizing one studio room in the owners home and serving

customers in the local Andhra Pradesh and surrounding area.

Omkara Solutions will be owned initially by CH.SWAROOP

CHOWDARY. Depending on growth, the company will

possibly add additional employees and expand operations.

Market:

Market research indicates an available is niche market, able

to be occupied by additional businesses of this nature. The

very nature of the computing industry, with its extraordinary

rate of technological development, creates a constant need

for businesses skilled in updating and advising customers on

computer-related issues. Home PC users will provide the

majority of our business revenue. These jobs will typically

consist of minor upgrades services and advising. BusinessWeek expects the computing industry to grow at a rate of

12% and the processor speeds to continue to expand for

years to come, providing a rich resource for sales.

50


51/103

Omkara Solutions has decided to focus mainly on the home

PC market for many reasons. These home customers

typically request jobs that are easier, faster, and less

resource intensive then the opposing small business

customer. In addition, this market tends to offer moreflexibility for service times allowing a more productive

workday.

Our target market will focus in Andhra Pradesh and the

surrounding areas. Market research indicates there is an

abundance of business for a small company such as Creative

Concepts. If a need exists for increased business, such

promotional mediums as radio or print ads will be explored.

There are two main competitors for the computer upgrade

business. These companies are VOS and Suntech

Computers. Both of these companies charge rates in excess,

therefore we expect to be able to attract the price-sensitive

market without much work.

51


52/103

Chapter-18

Financial Considatation: Total start-up expenses are

modest. Since this is a service business and not product

oriented, operational costs should remain low through the

start-up process.

Fixed costs have been set at a reasonably accurate monthly

level. This should allow for equipment maintenance and

purchase or replacement of basic tools used in performingour services. Variable costs have been set per unit to allow

for additional expenses such as gas or other travel costs

specific to each job.

18.1 Objectives

1. To provide a service to the community that is in

sufficient demand as to generate a profit.

2. Gain a strong repeat customer base to maximizegrowth.

3. Become a positive influence in the community in

which we operate.

18.2 Mission

To become a contributing unit of industry through delivering

a product of exceptional quality, value and in a timely

fashion. We will treat every customer as if they were our

only customer.

18.3Keys to Success

Marketing and Networking (being known to the public).

52


53/103

Responsiveness (being an on-call computer paramedic

with fast response time).

Quality (getting the job done right the first time,

offering 100% guarantee).

Relationships (developing loyal repeat customers

retainers).

Chapter-19

Company Summary:

Omkara Solutions will initially be a sole proprietorship.

The goal will be to start the venture as inexpensive aspossible, with minimal outside financing.

Omkara Solutions will be a home office start-up,utilizing one studio room in the owners home.

19.1 Start-up Summary

Total start-up expenses are modest. This is composed ofmostly equipment costs along with a few dollars for researchof consumer wants and desires and a few pads of stationary.Exact allocations are shown on the table. Since this is aservice business and not product oriented, operational costsshould remain low through the start-up process.

19.2 Company Ownership

Omkara Solutions will be initially owned by Abhijeet Singhas a sole proprietorship. Possibly later adding additionalemployees and expanding operations as well as clientele.

19.3 Competitors

53


54/103

Although there are many players in the market, I have taken

two main competitors for the computer upgrade business in

this area.

1. VOS. They are a well established provider of

computer upgrades and services.

2. Suntech Computers. Smaller and less known then

VOS, Suntech provides many services for residents

living in Jublee Hills and Banjara Hills.

Both of these companies charge rates in excess of the other

players in the market, we will be able to attract the price-

sensitive market without much work. Our second main

advantage is the accessibility of our services. The time

conscientious customer will appreciate our swift work.

19.4 Customers

Omkara Solutions will offer computer support and upgrade

service to clients of two major categories, home PC users

and small office users. These categories will define 95% of

our operations.

Start-up Capital Requirements

Start-up Expenses

Legal $150

Stationery etc. $50

Brochures $0

Consultants $0

Insurance $0

54


55/103

Rent $0

Research and development $20

Expensed equipment $500

Other $0

Total Start-up Expenses $720

Start-up Assets

Cash Required $280

Other Current Assets $0

Long-term Assets $0

Total Assets $280

Total Requirements $1,000

55


56/103

Start-up Funding

Start-up Expenses to Fund $720

Start-up Assets to Fund $280

Total Funding Required $1,000

Assets

Non-cash Assets from Start-up $0

Cash Requirements from Start-up $280

Additional Cash Raised $0

Cash Balance on Starting Date $280

Total Assets $280

56


57/103


58/103

Chapter-20

Services

Omkara Solutions will offer computer support and upgrade

service to clients of two major categories, home PC users

and small office users. These categories will define 95% of

our operations.

20.1 Service Description

Our services can be obtained through direct hourlycompensation, or if preferred or more applicable, through a

contract situation with pre-defined limits.

20.2 Competitive Comparison

Our services are more thorough and precise than any

existing competition in the surrounding metro area. Since we

have no extravagant overhead we can be focused on

delivering exactly what the customer wants, somethingother computer support providers in this area have a hard

time with.

20.3 Technology

58


59/103

Omkara Solutions will operate in an environment with

technology that is constantly evolving. Keeping up to date

will be of vital importance to the profitability of this venture.

Keeping this in mind, we will maintain working, as well as

functional, knowledge of all the latest software available tothe public. Our customers will receive the most current

versions of all software and hardware upgrades requested.

Chapter-21

Market Analysis Summary

Omkara Solutions will provide computer support in both a

consulting and technical capacity to home PC users as well

as small business owners. Since Omkara Solutions will begin

with a one man operation it will be limited in growth to the

capacity of work able to be completed.

Personal market research indicates an available market

niche able to be occupied by additional businesses of this

nature. The very nature of the computing industry, with its

extraordinary rate of technological development, creates a

constant need for businesses skilled in updating

and advising customers on computer-related issues.

21.1 Market Segmentation

59


60/103

The existing computer service market is so extensive

categorizing it is a rather difficult task. For our revenue-

oriented purposes we will define the market into home PC

users and small business clients. Home PC users will provide

the majority of our business revenue. These jobs willtypically consist of minor upgrades services and advising.

The small business market will be defined as customers with

five or more computers or a network requiring service or

repair.

Market Analysis

Year

1

Year

2

Year

3

Year

4

Year

5

PotentialCustomers

Growth CAGR

Home PCUsers 2%

25,000

25,500

26,010

26,530

27,061

2.00%

SmallBusinessContracts 1%

10,000

10,100

10,201

10,303

10,406

1.00%

Other 0% 0 0 0 0 00.00%

Total 1.72%35,000

35,600

36,211

36,833

37,467

1.72%

60


61/103

21.2 Target Market Segment StrategyOmkara Solutions focus is mainly on the home PC market for

many reasons. These home customers typically requests

jobs that are easier, faster, and less resource intensive then

the opposing small business customer. In addition, this

market tends to offer more flexibility for service times

allowing a more productive workday.

21.2.1Market Needs

As reported by ComputingNet magazine, there is a

substantial need for individuals capable of performing

computer upgrades and repairs in a timely and cost-effective

manner in this region. Omkara Solutions is directed

specifically at that market niche.

21.2.2 Market Trends

Both the software and hardware side of the computer

industry continue to turn out new and revised computer

components at alarming rates. For Omkar Solutions this

means job security well into the future.

21.2.3 Market Growth

61


62/103

As reported by the Wall Street Journal, there seems to be no

end to the development of the computer market.

Business Weekexpects the computing industry to grow at

a rate of 12% and the processor speeds to continue to

expand for years to come.

21.3 Service Business Analysis

Secondary market research shows computer service

customers tend to be very loyal providers that do good work

and satisfy their needs. An analysis of Omkara Solutions

main competitors shows no overwhelming strengths that

would be significant barriers to possible success. Likewise,

identifying competitors weaknesses has illuminated several

areas that Omkara Solutions can target as marketing

strategies.

21.3.1Main Competitors

Although there are many players in the market, I have taken

two main competitors for the computer upgrade business in

this area.

1.VOS. They are a well established provider of computer

upgrades and services.

2.Suntech Computers. Smaller and less known then

VOS, Suntech provides many services for residents living

in Jublee Hills and Banjara Hills.

Both of these companies charge rates in excess of the other

players in the market, we will be able to attract the price-sensitive market without much work. Our second main

advantage is the accessibility of our services. The time

conscientious customer will appreciate our swift work.

21.3.2 Competition and Buying Patterns

62


63/103

As previously noted, there are other providers of similar

services in the area. Our services will be second to no one

and our prices will be rock bottom. By providing superior

service word of mouth alone will bring in many new clients.

The satisfaction our consumers find will keep them as ourbusiness.

21.3.34Ps Analysis

1. Price: The software companies show different prices.

Omkar Solutions can provide reasonable rates depending

on project. We are providing a less price than other

competitors in the market. So there is a scope of

increasing the trust of the customers and getting new

customers through providing quality work at a better

price.

2. Promotion: Omkara Solutions promotional strategy is

entirely different from others. The promotion of the

company in the starting stage depends on the

entrepreneur as being a sole member of the firm the

diversification or spreading of roots may not be so easy.Omkara Solutions promote the firm from all marketing

aspects. We have a clear idea of what a customer seeks

when he goes to purchase a PC and for a better price.

Handle the projects and also giving ads in local channels

and using mass media. We want to start the branches

around Hyderabad first and later in all districts of Andhra

Pradesh. Having a good Customer relations, will lead to

Vocal publicity that is mouth to mouth. Old customers will

be encouraged through giving good discounts, which lead

to arrival of new customers through old customers.

3. Place: As the taken statistics and the current market

situations mentality of the customers it is clear that the

63


64/103

customers do not want to keep their computers upgrading

all the time, once at the time of purchasing they need a

highly configured Computer and for that they keep

wasting the time for consulting the shopkeepers, friends

and relatives. Omkara Solutions main focus is towardssmall firms and students mainly teenagers as teenagers

requires computers for gaming and entertainment and the

students requires for educational software, applications,

etc and the small firms requires the accuracy and safety

for the data.

4. Product: Omkara solutions, is handling software projects,

broadband connections, Games, all type of educational

and entertainment CDs, Hardware and software.

21.3.4TOWS Analysis

Threats:

1. The economic slowdown leads to decrease in theincoming projects.2. Current state of IT Industry in the Country may lead

to the decrease in the development of the firm.3. As the firm has a single proprietor there is a lessscope of expansion of the business.4. It becomes difficult to analyze and rectify theloopholes of the business.

Opportunities:

1. Good networking techniques which leads to thedevelopment of the business.

2. The employees got a good experience in troubleshooting all types of problems either it could be aSoftware of a Hardware.

64


65/103

3. In the present market situation there is a greatscope of development for the companies whichcomes out through Creative thinking.

4. Being a sole proprietor there is no chance ofleaking of business secrets

Weakness:

1. Owned by single person.2. As being a new firm there is less scope ofdeveloping.

3. If a consequence arises it will be faced by theentrepreneur.

Strength:

1. Having a good Technical Solutions team.2. Well trained employees for trouble shooting.3. Quality reporting with a better and low price.4. Creative thinking for promotion of business.

65


66/103

Chapter-22

Strategy and Implementation Summary

A value proposition of timely and practical solutions, at a

reasonable rate, coupled with a 100% guarantee.

A competitive edge based on cultivating existing customer

relationships.

Our target market will focus is Andhra Pradesh and

surrounding areas. Market research indicates there is an

abundance of business for a small company such as Omkara

Solutions. If apparent a need exists for increased business,

such promotional mediums as radio or print ad could be

explored.

22.1 Competitive Edge

Our competitive advantage will be our ability to quickly take

in a request from a customer and complete the requested

task in a timely fashion. Typically we will strive for a 48-hour

completion of most home PC user requests and slightly

longer for small business obligations. In addition we will

conduct our services at the going wage or slightly below.

Setting marginal revenues to marginal costs, until we

establish a substantial customer base if not forever. With

this strategy we can undercut most competitors and gain

local market power.

22.2 Value Proposition

Our business will be simple. Provide quality services at

reasonable prices and take care of the customer, for theyare your business.

22.3 Sales Strategy

66


67/103

Happy customers will be repeat customers. If the customer

feels satisfied he will tell his friends and more business will

come in the door.

Sales forecast figures are based on industry figures for the

typical growth of a consulting start-up and reflect repeat

business generated through meeting customer needs.

22.3.1Sales Forecast

The sales strategy is a prediction of slow, controllable

growth. As being a sole employee, focus will be on quality

and attention to detail, especially in the beginning to avoid

some potential pitfalls encountered by many newbusinesses. The predicted growth is very moderate in the

home PC market and the small business arenas. This should

allow for careful examination of variations in demand with

regards to season or holidays and still allow enough

flexibility to sufficiently compensate.

Sales Forecast

Unit Sales Year 1 Year 2 Year 3

Home PC Unit 396 475 570

Small Business Unit 214 235 259

Other 0 0 0

Total Unit Sales 610 710 829

Unit Prices Year 1 Year 2 Year 3

Home PC Unit $30.00 $33.00 $36.30

Small Business Unit $30.00 $36.00 $43.20

Other $0.00 $0.00 $0.00

67


68/103

Sales Year 1 Year 2 Year 3

Home PC Unit $11,874 $15,674 $20,690

Small Business Unit $6,415 $8,468 $11,178

Other $0 $0 $0

Total Sales $18,289 $24,142 $31,868

Direct Unit Costs Year 1 Year 2 Year 3

Home PC Unit $5.00 $7.00 $10.00

Small Business Unit $7.00 $10.00 $13.00

Other $0.00 $0.00 $0.00

Direct Cost of Sales Year 1 Year 2 Year 3

Home PC Unit $1,979 $3,325 $5,700

Small Business Unit $1,497 $2,352 $3,364

Other $0 $0 $0

Subtotal Direct Cost of

Sales $3,476 $5,677 $9,063

68


69/103

69


70/103

Chapter-23

Management Summary

Since Omkara Solutions is a sole proprietorship, this topic is

currently not valid. So, all the management activities will be

undertaken by the proprietor itself.

23.1Personnel Plan

The following table shows my expected compensation. Since

I am the sole employee I am the only one on the books. I

have decided to have my pay directly reflective of the

businesses success. Additionally, I have decided to leave a

residual amount of income with the company each month.

This is intended to allow a means of adaptation or evolution

of the business should circumstances dictate expansion or

the hiring of additional employees in the future.

Personnel Plan

70


71/103

Year 1 Year 2 Year 3

Owner $8,102 $12,071 $15,934

Other $0 $0 $0

Total People 0 0 0

Total Payroll $8,102 $12,071 $15,934

Chapter-24

Financial Plan

The following sections include the annual estimates for the

standard set of financial tables. Detailed monthly pro-forma

tables are included in the appendix.

24.1 Important Assumptions

Omkara Solutions customer base would fluctuate if there

was a recess in the economy or other extenuating

circumstances that pertain directly to consumer or industry

behavior.

General Assumptions


Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

71


72/103

Tax Rate 25.42% 25.00% 25.42%

Other 0 0 0

24.2Break-even AnalysisFixed costs have been set at a reasonably accurate monthly

level. This should allow for equipment maintenance and

purchase or replacement of basic tools used in performing

our services. Variable costs have been set per unit to allow

for additional expenses such as gas or other travel costs

specific to each job.

Break-even Analysis

Amount

Monthly Units Break-even 28

Monthly Revenue Break-even $834

Assumptions:

Average Per-Unit Revenue $29.98

Average Per-Unit Variable Cost $5.70

Estimated Monthly Fixed Cost $675

72


73/103

24.3 Projected Profit and Loss

The profit and loss shown for this company is a source of

inspiration. For the first year of operation the books show a

modest net profit. This should allow for great flexibility and

survival in the start-up phase in case of unexpected

problems or expenses. The profit margin declines

incrementally in the following two years as greater payrollallocations are made. These increased allocations will be

contingent upon the continued success of this going

concern. Additionally, since this business is operated out of

the home, expenses such as rent, utilities, and insurance are

sunk costs and not reflective of the business venture.

Projection of Profit and Loss


Sales $18,289$24,142 $31,868

Direct Cost of Sales $3,476 $5,677 $9,063

Other $0 $0 $0

73


74/103

Total Cost of Sales $3,476 $5,677 $9,063

Gross Margin $14,814

$18,46

5 $22,804Gross Margin % 80.99% 76.48% 71.56%

Expenses

Payroll $8,102$12,071 $15,934

Sales and Marketing and OtherExpenses $0 $0 $0

Depreciation $0 $0 $0

Leased Equipment $0 $0 $0

Utilities $0 $0 $0

Insurance $0 $0 $0

Rent $0 $0 $0Payroll Taxes $0 $0 $0

Other $0 $0 $0

Total Operating Expenses $8,102$12,071

$15,934

Profit Before Interest and Taxes $6,711 $6,394 $6,870

EBITDA $6,711 $6,394 $6,870

Interest Expense $0 $0 $0

Taxes Incurred $1,702 $1,598 $1,746

74


75/103

Net Profit $5,009 $4,795 $5,124

Net Profit/Sales 27.39% 19.86% 16.08%

75


76/103

24.4Projected Cash Flow

Projection of Cash Flow


Cash Received

76


77/103

Cash from Operations

Cash Sales $0 $0 $0

Cash from Receivables $12,657$22,340

$29,488

Subtotal Cash from Operations$12,657

$22,340

$29,488

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0

New Current Borrowing $0 $0 $0

New Other Liabilities (interest-free) $0 $0 $0

New Long-term Liabilities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

Sales of Long-term Assets $0 $0 $0

New Investment Received $0 $0 $0

Subtotal Cash Received $12,657$22,340

$29,488

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $8,102$12,071

$15,934

Bill Payments $4,391 $7,464$10,519

Subtotal Spent on Operations $12,493$19,535

$26,453

77


78/103

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0

Principal Repayment of CurrentBorrowing $0 $0 $0

Other Liabilities PrincipalRepayment $0 $0 $0

Long-term Liabilities PrincipalRepayment $0 $0 $0

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0Dividends $0 $0 $0

Subtotal Cash Spent $12,493$19,535

$26,453

Net Cash Flow $164 $2,804 $3,035

Cash Balance $444 $3,248 $6,283

78


79/103

24.5 Projected Balance Sheet

The information projected in this balance sheet is completely

fictious and taken on a rough estimates.

Projected Balance Sheet

Assets Year 1 Year 2 Year 3

Current Assets

Cash $444 $3,248 $6,283

Accounts Receivable $5,633 $7,435 $9,815

Other Current Assets $0 $0 $0

Total Current Assets $6,076$10,683

$16,098

Long-term Assets

Long-term Assets $0 $0 $0

Accumulated Depreciation $0 $0 $0

79


80/103

Total Long-term Assets $0 $0 $0

Total Assets $6,076$10,683

$16,098

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $787 $598 $888

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $787 $598 $888

Long-term Liabilities $0 $0 $0

Total Liabilities $787 $598 $888

Paid-in Capital $1,000 $1,000 $1,000

Retained Earnings ($720) $4,289 $9,085

Earnings $5,009 $4,795 $5,124

Total Capital $5,289$10,085

$15,209

Total Liabilities and Capital $6,076 $10,683

$16,09

8

Net Worth $5,289$10,085

$15,209

80


81/103


82/103

Long-term Assets 0.00% 0.00% 0.00% 28.10%

Total Assets100.00%

100.00% 100.00%

100.00%

Current Liabilities 12.95% 5.60% 5.52% 51.40%

Long-term Liabilities 0.00% 0.00% 0.00% 19.10%

Total Liabilities 12.95% 5.60% 5.52% 70.50%

Net Worth 87.05% 94.40% 94.48% 29.50%

Percent of Sales

Sales 100.00%100.00% 100.00% 100.00%

Gross Margin 80.99% 76.48% 71.56% 0.00%

Selling, General &Administrative Expenses 38.70% 65.72% 64.96% 80.70%

Advertising Expenses 0.00% 0.00% 0.00% 1.20%

Profit Before Interest andTaxes 36.69% 26.48% 21.56% 1.70%

Main Ratios

Current 7.72 17.86 18.12 1.27

Quick 7.72 17.86 18.12 1.01

Total Debt to Total

Assets 12.95% 5.60% 5.52% 70.50%

Pre-tax Return on NetWorth 126.88% 63.40% 45.17% 3.50%

Pre-tax Return on Assets 110.45% 59.85% 42.68% 11.80%

82


83/103

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 27.39% 19.86% 16.08% n.a

Return on Equity 94.71% 47.55% 33.69% n.a

Activity Ratios

Accounts ReceivableTurnover 3.25 3.25 3.25 n.a

Collection Days 55 99 99 n.a

Accounts Payable

Turnover 6.58 12.17 12.17 n.a

Payment Days 27 35 25 n.a

Total Asset Turnover 3.01 2.26 1.98 n.a

Debt Ratios

Debt to Net Worth 0.15 0.06 0.06 n.a

Current Liab. to Liab. 1 1 1 n.a

Liquidity Ratios

Net Working Capital $5,289 $10,085 $15,209 n.a

Interest Coverage 0 0 0 n.a

Additional Ratios

Assets to Sales 0.33 0.44 0.51 n.a

Current Debt/TotalAssets 13% 6% 6% n.a

Acid Test 0.56 5.43 7.07 n.a

83


84/103

Sales/Net Worth 3.46 2.39 2.1 n.a

Dividend Payout 0 0 0 n.a

Chapter -25

Insurance Requirement:

84


85/103

India insurance is a flourishing industry, with several

national and international players competing to excel. With

several reforms and policy regulations, the Indian insurance

sector has witnessed tremendous growth in the recent past.

The history of the Indian insurance sector dates back to

1818, when the Oriental Life Insurance Company was formed

in Kolkata. A new era began in the India insurance sector,

with the passing of the Life Insurance Act of 1912.

The Indian Insurance Companies Act was passed in 1928.

This act empowered the government of India to gather

necessary information about the life insurance and non-life

insurance organizations operating in the Indian financial

markets.

India general insurance was nationalized with the General

Insurance Business (Nationalization) Act of 1972. By this

process of nationalization, the government of India took

charge of about 55 insurance companies in the country and

about 52 insurers who were in the general insurance

business. The General Insurance Corporation of India saw its

inception from Section 9(1) of GIBNA.Under section 6A and 6B of GIC act 1912, and section 13 and

section 15B the firm is being insured.

Which deals with Electronic equipments and Portable

computers of National Insurance Corporation of India? Says

that the loss or damage of computers and other electronic

equipments, can be covered on the basis of the policies

under taken. Apart from the above Section 15B for

Workmen Compensation Insurance and Section 13 Cost ofRe-instatement of Data / Program are also applicable.

85


86/103

Chapter -26

Risk:

It is a well-known fact that every enterprise or even a small

entrepreneur to a local vendor faces risks in business. Before

your business falls into a snare, one must take effective

precautions to minimize the chances of risk. Or, if you have

already entered the risk zone, you need to handle it carefully

and smartly.

Risk can also be called a silent threat which is uninvited

and a true business killer. The management of business risks

may utilize certain techniques and methodology to evade

risks. Business risks can be posed either within the company

in the form of operation, financial, scientific, technical,

human resources or from outside in the form of market

investment risks.

This paper will discuss the risks posed by obsolete computer

equipment in a corporate environment. Many people may

not ever think about these risks as their new computer or

laptop is installed and their old outdated machine is hauled

off. However, those who are security minded willimmediately inquire what is to be done with the old drive

that is still full of data? The answer to this question varies by

organization. Surprisingly there are companies who simply

do nothing more that palletize old equipment and auction it

off! Other companies have a more reserved approach and

take the time to format the hard drives before donating

them to charity, needy families, employees, or a local public

school system.

Although risks are common among all corporations the

solutions will vary based on application. This paper is

intended to raise the awareness of these risks and get you

started on the road to minimizing these risks to an

acceptable level or eliminating them all together.

86


87/103

There are many companies, large and small, that never

consider the risks associated with purchasing computer

equipment and how to get rid of it at the end of its lifecycle.

If a company has 10,000 pieces of computer equipment in

production with a three year lifecycle turnover, there willconstantly be a supply of surplus computing equipment. A

company this size can expect to have around 3,000 pieces of

surplus computer equipment every year.

Examining the Risk of Residual Data

So, how can data to be protected? How about selecting all

of the sensitive files and pressing the delete key? How about

formatting the hard drive? The truth is that many people see

these methods as a secure way to destroy their valuable

data, but they are wrong! It is very easy for even a novice

user to recover some deleted files with freeware products

available for download on the Internet. Formatting and using

the recovery disks are effective deterrents for casual data

snoops, but a determined hacker can dig into the guts of the

hard drive and carve out old data.

Types of Risk:

Benefits of managing risks:

Better business decisions

It helps the senior managers to make future business

decisions better and faster. The goals and mission

statements are better understood and achieved. They are

also redefined and restructured if any risks are perceived.

Cost-reduction and Redemption on extra expenditure

87


88/103

By effectively knowing and managing risks, companies

can reduce costs on capital and human resources. Also

the company is saved from further losses due to future

investments and subsequently there is better allocation of

resources.

Better Social Image

Once the risks are managed effectively, the company

acquires a good reputation in the eyes of its customers,

business associates, suppliers and partners.

Since the ball of risks may revolve around each and

every corner of the company evading the entire functional

areas, still the risks can be categorized and calculated.The following risks are the ones which you should be

aware of:

Marketing Risks

You launch a new product in the market and the

customers do not like it, or your competitors enter into the

same product category and you are defeated on the

quality rating.

Financial Risks

You have taken a business loan and you are not able to

pay it because of a sudden downfall in business. Or you

have delivered the products on credit to a consumer and

you are having difficulty in getting your arrears back.

Operational Risks

You are running a production unit of your products and

your employees face risks with regard to machine

breakdown or low performance, health hazards, risk of low

product quality etc.

Information Technology risks

88


89/103

The risks associated here are enormous and may range

from hard disk crash to collapsing of entire system

networks. Theft of data, spamming and viral attacks are a

common phenomenon in the IT industry and so adaptive

measures have been taken in this respect.

Strategic Risks

These may arise due to the new initiatives taken up with

regard to technology innovation, new product launch or

new plans for expansion, mergers, collaborations etc.

HR associated Risks

These includeemployee risks with regard to their healthand safety, the risks linked to their performance, the

potential risks associated with their retention etc. The

employees sometimes defer with the Board of Directors

decision and the risks can be regarding the loss of control

on them by the management.

89


90/103

Chapter-27

Legal Considerations/Obligations:

These risks include risks connected with new laws, rules and

regulations. For Example, you as an IT entrepreneur decide

to enter into an agreement with your partner over the access

to your datacenter, but there is infringement of rights as thedata secrets are passed on from the second part to the third

party. Then, Government enacts new laws regarding this

situation. You also need to abide by the market rules and

often comply with the customers requirements. Also there

are fears of new tax regulations each time the new budget is

proposed.

90


91/103

CHAPTER -28

Sensitivity Analysis

Input VariablesInputCells

LowerBound

BaseValue

UpperBound

Charter Price/Hour $3,476 $3,120 $3,476 $9,063

Number of Calls $30 $25 $30 $35

Equipments 800 500 800 1000Capacity of Supply ofEquipments 50% 40% 50% 60%Proportion ofEquipments 0.5 0.45 0.5 0.7

Rent $245 $230 $245 $260

Insurance $20,000 $18,000 $20,000 $25,000

IntermediateCalculations

Total Revenue$1,420,4

00

Total Cost $216,000

PerformanceMeasure

Annual Profit $1,204,400

91


92/103

92


93/103

93


94/103

Annual Profit

Output Value Per

Low Base High Swing Swin

-$6,000 $14,000 $34,000 $40,000 46

$2,000 $14,000 $26,000 $24,000 16

$1,250 $14,000 $22,500 $21,250 13

$4,000 $14,000 $24,000 $20,000 11

$11,000 $14,000 $26,000 $15,000 6$9,000 $14,000 $22,000 $13,000 4

$9,000 $14,000 $16,000 $7,000 1

94


95/103

95


96/103

Corresponding Input

ValueInput Variable Low Output Base CaCapacity of Supply ofEquipments 40% 50%Rent $230 $245Equipments 500 800Costs of Sales $3,120 $3,476Proportion of Equipments 0.45 0.5Wage $25 $30Insurance $25,000 $20,000

96


97/103

AnnualProfit

Input Value as

% of Base

Output

ValueLow % Base % High % Low Base High Swin

80.0% 100.0% 120.0% -$6,000$14,00

0$34,00

0 $40,00

106.1% 100.0% 93.9% $2,000$14,00

0$26,00

0 $24,00

62.5% 100.0% 125.0% $1,250$14,00

0$22,50

0 $21,25

92.3% 100.0% 107.7% $4,000

$14,00

0

$24,00

0 $20,00

90.0% 100.0% 140.0% $11,000$14,00

0$26,00

0 $15,00

95.0% 100.0% 108.0% $9,000$14,00

0$22,00

0 $13,00

125.0% 100.0% 90.0% $9,000$14,00

0$16,00

0 $7,00

97


98/103

98


99/103


100/103

100


101/103


102/103

REFERENCES:

Company Broachers and record s of Silver Shine

Developers PVT LTD.

Wikipedia.org.

Google.com.

ICFAI Financial Management Text Book.

ICFAI Accounting For Managers.

102


103/103

Documents

Final Report22