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A web based business project with high profits.
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Description of project
• Research report by ITC funded by EU
• Report on Dubai Market for American exporters by American research institute
• Financial figures are based on dummy values
The Team
• Abdur Rehman 04
• Arbab Khan 10
• Muhammad Shahid 70
• Salman Raza Naqvi 91
• Hafiz Junaid 25
Product• Core
– Wood
• Actual
– Bed sets, chairs, tables, showcases, computer tables, partitions
– Handicrafts
• Animals, showpieces, clocks, chairs, tables
• Augmentation
– Fire resistant
– No woodworm
– Weather protection
ProductBed Sets
ProductShowcases
ProductComputer Tables
Show Pieces
ProductChairs
ProductTrolleys
Partitions
ProductTables
ProductDoors
Market Summary
Dubai is the selected market to start business operations
• Population
• Economy
• Tourism
• Construction
• GOVT Policies
Market SummaryThe estimated value of construction contracts awarded during 2005 was Dhs.58.8 billion (US$16.0 billion). By the end of 2006, this figure is expected to have reached Dhs.114.1 billion (US$31.1 billion) and by the end of 2007, the value is forecast to reach Dhs.120.2 billion (US$32.8 billion). By emirate of the UAE, estimated project value is distributed as follows
Market Summary
POPULATIOIN
• The resident population of Dubai increased by 292,000 in 2006 to become 1.422 million14 and is expected to grow to 2 million by 2010, doubling to 4 million by 2017.
• Western expatriates, highly-educated workers in the Nourishing service industries.
• The Richville advisory Group report expects the population to double to 2.5 million by 2010 with an additional demand for 480,000 residential units.
Market Summary
ECONOMY
Gross National Income (GNI) per capita in the UAE has risen from $19,270 in 2000 to $23,770 in 2005. GDP growth was a positive 5% in the year 2000, rising to 8.5% in 2004. Foreign Direct Investment in Dubai increased by 100% in the period 2004-2005 to USD 18 billion.17 Dubai has continued to expand its trading relationships both with the West and the East.
Market Summary
TOURISM
• In the early 90s, the number of tourists visiting Dubai was 30,000, by 2003 this had gone up to 5 million. In 2005 Dubai had 6.2 million visitors generating over $9 billion in hotel revenues. The government aims to increase the number of arrivals to 15 million by 2015.
• Dubai government forecasts that foreign visitors to the city will rise from 5.4 million in 2004 to 15 million in 2010.
Market Summary
CONSTRUCTION
• $2 billion Dubai International Financial Center, a huge office complex rumored to include a major skyscraper
• $2.5 billion expansion of the Dubai International Airport
• $3 billion Palm Island project
• $1.6 billion Dubai Marina leisure and residential development
• $1.6 billion Festival City mixed-use development
Market Summary
GOVT POLICIES
Free trade is another important cornerstone of the Dubai economy. Dubai has eight established Free Zones within which companies can operate free from the burden of taxes. There is no corporation tax. There are also no foreign exchange controls, quotas or trade barriers. The Dirham is freely trade-able and pegged to the USD.
Market Potential
• The biggest tradeshow in Dubai this year will not be the huge Gitex computer exhibition, but the Index furniture and interior design show.
• Furniture and interior products imported into the Gulf rose by six per cent last year and 10% in 2000,' said organizer Joe Berger of Index Exhibitions. Within the past 10 years this exhibition has grown six fold.
• There are plans to build 150 more hotels over the next five to seven years, expanding the number of hotel rooms from 20,000 in 1990 to 55,000 in 2008.
• Dubai technology and media free zone will employ around 50,000 staff within two years,
Market Potential
What is immediately obvious from these figures, is that the vast majority of construction projects are centered in the Emirate of Dubai. However, the table and chart also show that, while projects in Dubai are expected to tail off in 2007, they are expected to grow considerably in future.
Field Strengths of Pakistan
• Cultural Handwork
• Low-cost labor with better carving skills
• Quality raw material
• Unique designs and styles
• Traditional and distinct designs
• Ancient Mughals Work
Opportunities
• Construction boom, Tourism, Population growth with better per capita income and FDI encouraging policies of Dubai GOVT are the opportunities for Furniture market in Dubai.
Business Concept
• Not to create difference with other furniture businesses present in Dubai rather entry would be as an introducer of Asian culture in furniture market with compliance of handicrafts made by the artisans of Chiniot.
• WooD would collect master pieces from chiniot and its orders will be manufactured by Chinioti carpenters, WooD will set standards to manufacture its orders.
• Idea will cut the initial fix cost of the company
• Aim to introduce Chinioti carpenters in the world
• Introducing ancient Mughal designs which is only present in Pakistan and India.
• High quality and high class product
• Handicrafts
Competition
• Infect, WooD don’t face a direct competition in Dubai as IKEA doesn’t manufacture heavy or ancient styles and all wood based furniture.
• Secondly, WooD’s business would be based on handicrafts of Chinioti carpenters that is a unique concept
• IKEA is the main player of business and residential furniture in Dubai
• "Souvenir Gifts“, a Pakistan based company is working in UAE from 1992, its major operations are in Sharja. The company doesn’t use “Chinioti Furniture” idea.
Positioning
• Promotional campaigns will not be launched to create difference with other furniture businesses, present in Dubai rather entry would be as an introducer of Asian culture in furniture market of Dubai with compliance of handicrafts made by the artisans of Pakistan. Promotional campaign for such a high class product needs to cover these headings.
• Building brand name
• Durability of products
• An image of Introducer of Asian furniture culture
• High class image
Promotion
• Advertising
– Celebrity testimonial
– Media channels
– Shopping channels
– Billboards
– Business Newspapers
• Public Relations
– Interior Decorators
– Construction Companies
– Leasing Businesses
Promotion
• Sales promotions
– Exhibitions
– Relaxations for elite class hotels
– Partnership for providing furniture
• Direct Marketing
– Catalogues
– Direct mail
– E-mails
Promotional Budget Distribution
Total budget 15,000,000.00 PKR
– Advertising 30% 4,500,000
– Public Relations 25%3,750,000
– Sales promotions 25%3,750,000
– Direct marketing 15%2,250,000
– Web marketing 5%750,000
Resource Requirements
Technology
Initially Chinioti local-production-house would be used as base camp. These local production houses lacks state-of-the-art technology, lower speed of work would be the impact of this technology.
Distribution
Initially WooD would setup two showrooms in free trade zones of Dubai. These showrooms are necessary because studies on UAE market has showed that customers need an eye to eye contact before buying shopping goods.
Goals and Objectives
• Building brand name
• Meeting breakeven point in first year
• Getting engaged in at least 3 contracts with interior decorators
• At least one partnership with interior decorator, hotels or residential unit
• 3-D virtual showroom on web
Risks and Rewards
Risk
• A generalized regional political breakdown seems the only credible threat, and Dubai has lived with regional instability since forever.
Rewards
By starting business in Dubai a fundamental reward would be
In a short time WooD will also be introduced in the whole world, as Dubai is a hub of international business and tourism.
Financial PlanEstimated Cash Flow of 2008
Initial Out flow Rupees
Head Office 500,000.00
Showrooms at Dubai 5,000,000.00
Warehouse Faisalabad 1,100,000.00
production centre chiniot 1,000,000.00
Employee hiring 2,500,000.00
Office Furniture 3,500,000.00
Office Equipment 200,000.00
18,800,000.00
Financial Plan
Promotion%age of
budget Total budget
Public relations 25% 15,000,000.00 3,750,000.00
Advertising 30% 15,000,000.00 4,500,000.00
Sales Promotion 25% 15,000,000.00 3,750,000.00
Direct marketing 15% 15,000,000.00 2,250,000.00
Web Marketing 5% 15,000,000.00 750,000.00
15,000,000.00
Revenue
Inflow Unit Sold per unit price
Bed sets 7 300,000.00 2,100,000.00
Computer Tables 50 90,000.00 4,500,000.00
Handicrafts (3,750,000.00)
(3,750,000.00)
Showcases 10 1,500,000.00 15,000,000.00
Chairs 20 75,000.00 1,500,000.00
Tables 10 100,000.00 1,000,000.00
Doors 15 1,500,000.00 22,500,000.00
42,850,000.00
Future plans
• Near term
– Online order taking will be next first future project
– 3-D Virtual showroom
– Bedroom furniture and handicraft developing center at Chiniot
– WooD will participate in 'Office 2008', the Middle East's premier exhibition in office furniture solutions
Future plans
• Long Term
– Business furniture assembly plant at Dubai free zone areas
– Three more showrooms will be opened to cover full market as the sales starts grow
– An R&D center in china, to meet customer’s requirements and to set new standards of furniture business
Social Responsibilities
Following social responsibilities are need to be fulfilled, to avoid allegations in future.
• Better education, health and shelter facilities for carpenters and their families
• Scholarships for plants breeding students
• Funding Agricultural Universities
• Support for tree growing campaigns
• Scholarships for ‘fast growing trees’ researchers
Thanks
