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Section 2 Group 14

The RICH Sofa

Miss. Saranrak Kittiratanapaisan ID: 5131205056

Miss. Thanaporn Thareelapraksa ID: 5131207009

Miss. Pattaraporn Pompoung ID: 5131207020

Miss. Karnhathai Malarat ID: 5131207039

Miss. Pattarada Hirunprateep ID: 5131207089

Miss. Suntaree Sangthong ID: 5231207118

Mr. Sirichok Wuthisakul ID: 5131207137

Miss. Varritta Puttajanyawong ID: 5231207509


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Preface

This project is a part of 1203302 Project Feasibility Study and Evaluation

course in the second semester of 2012 year academic. In this project is study the

feasibility of sofa business in Bangkok which are included generally of furniture

industry and business of furniture management, competition analysis, market

feasibility, the technical process in furniture business, financial feasibility and

also risk management. This project makes everyone who interested to get

knowledge and information about furniture business before make decision to

investment, including pre-operation process and operation process of furniture

business, for the benefit to investment and profit of doing this furniture business.

We expect that our project will provide benefit more and more interested person,

moreover, if they are any error in this project or whatever, our group will made

an apologize at this opportunity.


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Contents

PREFACEC ....2

CHAPTER 1..............................................................6

INTRODUCTION

Background and Significance of the project..7

Project Objective.....8

Benefit ofProject........8

Activity Time Frame......9

CHAPTER 2..10

INDUSTRY PROFILE

Nature of Industry...11

Raw materials.13

Product...17

CHAPTER 3..27

MARKETING ANALYSIS

Competition Analysis..30

Customers Analysis.....44

Competitive Analysis..47

STP Analysis..50

Marketing Mix Strategy...53

Sale Forecast/Profit Estimation..56


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CHAPTER 4... .60

INVESTMENT COST

Location.61

Facility Layout61

Decoration in shop......65

Machine/Tools/Equipment.67

CHAPTER 5..78

PRODUCTION AND OPERATIONS ANALYSIS

Product characteristics79

Operating Cost..80

CHAPTER6.82

ADMINISTRATION COST

Organization Management..83

Organization Chart.84

People in the organization...85

Administration cost...89

CHAPTER7....98

FINANCIAL ANALYSIS

Income Statement..99

CHAPTER8 .101

RISK MANAGEMENT

Planning and reducing risk103

Identifying a list of potential risks103

Type of risk..104

External risk ..104

Internal risk.105


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CHAPTER9

SUMMARY

Summary of Project106

REFERENCE. .108


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Chapter 1: Introduction


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Background and Significance of the Project

Nowadays, Thailand is one of the most developing countries in the world.

Thailand is growing up a lot from the past 20 years and developed to the next

step where competitions on every industry are high. As we look into the real

estate industry in Bangkok, Bangkok is one of the most prosperous parts of

Thailand, and heavily dominates the national economy (1),the price of landscape

and real estate are increasing a lot due to the increasing of many constructions

like Sky Train or BTS, Underground Train or MRT, many department stores

and office buildings. Moreover, many company who seeking for new

opportunities, they invest on the properties like Condo, Apartment, Housing

estate, Factory, and etc.

According to the above reason, it responds to the people life styles who

want to have their own home by staying alone or with their own family. When

the real estate industry is increase, it will indicate that our company has a

chance to respond the needs of any people in the market. Moreover, there are

many people who suffer from last years floods. These will be a great chance

for our company to serve needs of the market and also help to stimulate the

economic in our country which we can expand our business to the foreign

market in the future.

Therefore, there is a gap in the market connecting to the real estate

industry that our company can serve the market needs.
http://en.wikipedia.org/wiki/Bangkokhttp://en.wikipedia.org/wiki/Bangkok


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Project Objective(s)

- To study the situation of the sofa business.- To analyze the market in the sofa business.- To learn the technical and management process in sofa business.- To study the market trend of sofa business.- To study the consumers trend/behavior in sofa business.

Benefits of Project

- To know about how to run the business- To learn about the technical and process to do in the furniture business.- To learn about the market of sofa industry.- To learn about how to solve the problem during to do the business.- To know about marketing problem that occurs in business.- To understand about how to analyze the business in the different situation.- To understand the current market trend of the sofa business. - To understand the customer need/want and their behavior when

purchasing sofa products.


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Time Frame of the study

Since November2012-February2013

Activities

2012 2013

November December January February

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

To study the general of the sofa business in

Bangkok

To study management in the sofa business.

To study marketing and competition analysis.

To study the technical process in the sofa business.

To study the financial feasibility of sofa business.

To study and analysis risk of sofa business in

Bangkok.

To summary the feasibility of sofa business in

Bangkok.


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Chapter 2

Industry Profile


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Nature of Industry

A History of Sofa

As we take a lightening look at the sofa through the ages, we see it

emerge as an important symbol of modern life. As communities moved away

from a nomadic existence where they often pack up and move at short notice,the sofa comes to represent a settled life of permanence, safety and comfort.

The earliest sofa we know of was found in Egypt around 2000 years BC. In fact,

the word sofa originates from the Arabic word suffah or bench. These

magnificent seats were considered very luxurious and were made especially for

Pharoses and royalty. A little later on, the Romans also enjoyed lavish seatingand we often associate classic luxury with lounging chairs and elegant stone

benches. However, this kind of furniture was reserved for the elites and most

people using thick carpets or tapestry to furnish their homes and insulate them

from the damp and cold. Prior to the 1500s, woven artifacts known as tapestries

were the main source of insulation, protecting inhabitants from the damp and

cold that seeped in through their walls. Seating for two or more people was

usually supplied by a hard bench.

It was only when buildings became more solid that seats started to be seen as a

way to decorate a room. With European designers and textile producers letting

their imagination run wild, the history of the sofa suddenly went into fast-

forward mode. Contributions to interior design, Germans introduced the use of


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horsehair padding, still a central feature of properly upholstered furniture. The

English preferred dried sea moss. Italians introduced backrests and arms during

the Renaissance. Upholstered chairs had been invented already, but were not

popularized until this time. The sofa with a down cushion was an extension of

the upholstered chair. Minor adjustments were made to stuffing methods, such

as using buttons to secure padding rather than the practice of "tufting" (sewing

raised loops or cut pile into the fabric).

In the 18th Century, century "upholder" was a combination designer and

decorator who completed an architect's vision of a room by Cabinet makers

like Hepple white, Matthias Lock, Henry Copland, and the far more renowned

Thomas Chippendale. Thomas Chippendale extended their woodworking

enterprises into this new and exciting field of upholstery. He started publishing

catalogues, which they called pattern books in those days, booklets full of new

furniture design ideas. These included designs for early sofas. It was following

this period that the idea stopped becoming associated with luxurious elites and

became a commonplace household necessity.

During the nineteenth century, the advent of industrial technology had a major

impact on modern methods of upholstery. In 1850, coil springs were invented.

A modern sofa typically, though not always, contains springs to even out weightdistribution. The sewing machine was also developed during this period,

speeding up the upholstery process. New improvements such as modern welting

would not be possible without the sewing machine. When sewing machines

came along, manufacturers were suddenly empowered to make sofas much

more quickly and at more affordable prices. With improved machinery,

factories started to put springs in sofas making them even more bouncy andimproved the level of padding. In the 1960s designers came up with plenty of


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quirky design ideas from inflatable sofas to water cushions as furniture became

a way for people to make a fashion statement through their home.

Nowadays, Society and the fashion world have become obsessed with thelook and feel of leather, and almost to the point of neuroticism. They look cool,

they feel great, they make one seem sharp and chic, and they're easy to clean

with fantastic range of elegant and high quality furniture. (2),(3)

Raw Materials

The frame of a sofa is made most often wood, though newer options

include steel, plastic, and laminated boards or a combination of the above. Kiln-

dried maple wood deemed free of knots, bark, and compromising defects is used

under the upholstery. The show wood of the legs, arms, and back can also be

maple, but sometimes mahogany, walnut, or fruitwoods are used for carved legs

or moldings.

Padding is primarily made from animal hair, particularly hog or horse. Other

paddings used in mass production are foam and polyester fiberfill wrap. Some

preprocessing may be necessary, as with the permitted rubberized hair, where

animal hair is arranged and bonded into shape with glue.

Cushions are fashioned from polyurethane foam, polyester fiber, down,

cotton, latex, or cotton-wrapped springs.

A sofa may be covered with any choice of synthetic, natural, or blended

fabric. Wool and nylon are the best choices in their respective categories of

natural and synthetic fibers, but cotton, acetate, rayon, and polyester have their

own functional properties. Exterior fabric may be finished with a protective

anti-stain coating.


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When used, springs are made of tempered steel. A typical sofa calls for

15 yd (13.71m) of burlap and at least 10 yd (9.14 m) of muslin for the interior.

All materials are fastened with approximately 1,000 or more tacks, over 200 yd

(182.8 m) of twine, and hundreds of yards of machine sewing thread. (4)

Leather

Leather is a durable and flexible material created by the tanningof animal

rawhideand skin, often cattle hide. It can be produced through manufacturing

processes ranging from cottage industry to heavy industry. For leather sofa

industry, they usually use one of three leather :-

Aniline Semi-aniline Pigmented (protected)

The type that leather sofa industry chooses depends on the appearance they

want, the productand the usage which the product receives:-

Figure 2.1

Full grainpigmented

leatherAniline

leatherSemi-aniline

leather

Corrected grainpigmented

leatherPigmented

leatherSemi-aniline

leather
http://en.wikipedia.org/wiki/Tanninghttp://en.wikipedia.org/wiki/Tanninghttp://en.wikipedia.org/wiki/Tanninghttp://en.wikipedia.org/wiki/Rawhide_%28textile%29http://en.wikipedia.org/wiki/Rawhide_%28textile%29http://en.wikipedia.org/wiki/Cottage_industryhttp://en.wikipedia.org/wiki/Cottage_industryhttp://en.wikipedia.org/wiki/Heavy_industryhttp://en.wikipedia.org/wiki/Heavy_industryhttp://en.wikipedia.org/wiki/Heavy_industryhttp://en.wikipedia.org/wiki/Cottage_industryhttp://en.wikipedia.org/wiki/Rawhide_%28textile%29http://en.wikipedia.org/wiki/Tanning


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Full grain pigmented leather

Full grain leather refers to hides that have not been sanded, buffed, or

snuffed (as opposed to top-grain or corrected leather) to remove imperfections(or natural marks) on the surface of the hide. The grain remains allowing the

fiber strength and durability. The grain also has breathability, resulting in less

moisture from prolonged contact. Rather than wearing out, it will develop a

patina over time. High quality leather furniture and footwear are often made

from full-grain leather. Full-grain leathers are typically available in two finish

types:anilineand semi-aniline.

Aniline leather is the most natural looking leather with the unique

surface characteristics of the hide remaining visible. Aniline leather is coloured

only with dye and not with a surface coating of polymer and pigment. A light

surface coating may be applied to enhance its appearance and offer slight

protection against spillages and soiling. Aniline leather

Semi-aniline leather is more durable than aniline whilst still retaining a

natural appearance. The increased durability is provided by the application of a

light surface coating which contains a small amount of pigment. This ensures

consistent color and imparts some stain resistance.

Corrected grain pigmented leather

Corrected-grain leather is any leather that has had an artificial grain

applied to its surface. The hides used to create corrected leather do not meet the

standards for use in creating vegetable-tanned or aniline leather. The

imperfections are corrected or sanded off, and an artificial grain impressed into

the surface and dressed with stain or dyes. Most corrected-grain leather is used

to make pigmented leather as the solid pigment helps hide the corrections or
http://en.wikipedia.org/wiki/Patinahttp://en.wikipedia.org/wiki/Patinahttp://en.wikipedia.org/wiki/Aniline_leatherhttp://en.wikipedia.org/wiki/Aniline_leatherhttp://en.wikipedia.org/wiki/Aniline_leatherhttp://en.wikipedia.org/wiki/Aniline_leatherhttp://en.wikipedia.org/wiki/Patina


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imperfections. Corrected grain leathers can mainly be bought as two finish types:

pigmented and semi-aniline.

Pigmented Leather is the most durable and is used in the majority offurniture upholstery and almost all car upholstery. The durability is provided by

a polymer surface coating which contains pigments.

Semi-aniline leather is more durable than aniline whilst still retaining a

natural appearance. The increased durability is provided by the application of a

light surface coating which contains a small amount of pigment. This ensures

consistent color and imparts some stain resistance. (5), (6)


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Leather Products in Thailand

Through marked improvements over the past 20 years, Thailand's leather

industry is establishing itself as a major player on the world stage. Despite

fierce competition from high-end manufacturers based in Europe and low-cost

manufacturers in China, Indonesia and Vietnam, leather exports have been

increasing steadily and appear poised for future success in the global market.

Thailand's leather industry draws support from the extensive leather-

tanning sector present in the country. While imported leather is used extensively

for highest quality exports, over 130 tanneries supply a large portion of the

processed leather used in the production of a variety of products including

luggage, shoes and boots, gloves, toys, pet accessories, handbags, apparel, belts

and purses. Tanneries in Thailand boast an annual production capacity of

approximately 15,000 tons of leather, largely produced from cowhide and

buffalo. Importing hides for processing is common, with over 50% coming from

China and premium quality hides shipped from America for processing. The

majority of these tanneries are located in the SamutPrakarn province, 20

kilometers southeast of Bangkok.

The leather industry in Thailand receives extensive support and

assistance from both government organizations and trade association in thecountry. The Department of Export Promotion (DEP) organizes a yearly

industry trade show in Bangkok, which attracts interested buyers from around

the world. In addition, the DEP champions the export of leather exports abroad

and assists exporters to participate in important overseas tradeshows. Also

supporting the interests of the leather industry are the Thai Leather Goods

Association, the Thai Footwear Association, the Tanning Industry Association,


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the Leather-based Industry Club, the Federation of Thai Industries and the

Footwear Industry Club.

The export of leather goods from Thailand can be broken down into threemain categories. Leather footwear shipments make up 50% of the total export of

leather goods, consisting primarily of name-brand sports shoes produced for

leading international companies sourcing production in Thailand. General

leather goods consisting of handbags, folders, wallets, and premium leather gifts

contribute 27% of total leather exports, while tanned leather used in the

production of furniture, office equipment and in automotive interiors make up

the remaining portion of the category.

Analysts believe that Thailand's export of leather goods will continue to

increase in the near future. At present, most importers of leather elect to order

goods through trading companies based in Hong Kong, Taiwan, Singapore and

South Korea. In turn, these trading companies frequently order products from

countries that have lower production and labor costs, including Thailand, China,

Indonesia and Vietnam among others.

Due to significantly higher labor costs, the Thai leather industry is no

longer able to compete on price alone, and is being pressured to adjust its

production and marketing strategies to ensure export competitiveness over the

long-term. More emphasis is being placed on the development of production

technology and product designs to match industry leaders in the global market

place.

Thailand's leather industry has gone through three distinct stages of

development. Initial efforts by leather product manufacturers resulted in lower

quality products for the domestic market and limited exports, which were

mostly competitive on price. The second phase resulted from the continued


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efforts to increase the quality of products and found Thailand becoming a key

destination for international brands to base their production. The final stage of

development finds Thai manufacturers developing and marketing high quality

products internationally under their own brand name.

While individual companies within Thailand's leather industry operate at

varying stages of development, the DEP and the Thai Leather Goods

Association have been promoting Thailand as a competitive place for foreign

companies to base their production and helping Thai exporters to develop their

own brand names. Over the past four years, Thailand's leather exporters and

designers have been collaborating with Linea Pelle, a renowned Italian design

house, focusing on upcoming fashion trends as well as materials and accessories

needed to transform products into finished collections. Through these efforts, a

select group of Thai leather goods producers is beginning to make progress on

the international scene and are competing directly with Europe's leading

manufacturers.

Despite strong competition from regional countries, Thailand's leather

industry should remain on course for further gains in the future. Liberalized

trade within the Association of Southeast Asian Nations (ASEAN) region slated

for 2003 along with gains in product design, fashion trend awareness and

upgrades in technology will likely allow further increases in the volume of Thai

leather products shipped to destinations around the world.

Our company named The Rich, we establish in year 2012. Our head

office and showroom is located at Central World, the biggest shopping mall in

the central of Bangkok. We are the modern furnitures and decorations shop

who design the furniture or decoration in luxurious style with unique

contemporary designs for all lifestyles.


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We are partnership with the factory which located in the Samutprakarn,

Thailand. We are very fortunate that our partner establish in this industry over

20 years which they have many workforce of skilled technicians who combine

time honored manufacturing techniques, and the highest quality materials, to

hand build each piece of furniture for our customers home. Their dedication to

their craft, combined with our dedication to maintaining the highest product

quality standards, corporate efficiencies, and continuous improvement, make

The Rich Furniture Company vision is to be the furniture industry leader in

producing quality home furnishings. Our mission from the beginning was to be

recognized by our customers as the leader in premium home furnishings by

exceeding their expectations for excellence in quality, fashion, innovation, and

service. The mission still continues. We are very proud to present The Rich

Furniture Company products to you for your home.

The materials used to craft our furniture are selected for their natural

beauty, elegance and quality. The Rich uses the finest quality of leather. The

frame is constructed from selected hardwood lumbers which are carefully dried,

milled and processed to remove any structural defects or weakness. High quality

cushion with pocket springs and duck feather fillings give our furniture

maximum durability and luxurious comfort. Use of the best quality materials

along with exceptional craftsmanship to form the unique design distinguishes

The Rich from other brands.


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Our companies have many products such as sofa, armchair, and stool

-Product/Service (in General)

Sofa

Figure 2.2

Figure 2.3


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Figure 2.4

Figure 2.5


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Figure 2.6


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Figure 2.7

Figure 2.8

Figure 2.9


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Armchair

Figure 2.10

Figure 2.11

Stool


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Figure 2.12

Figure 2.13


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Chapter 3

Market Analysis


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Market Analysis

Thailands furniture industry continues to be one of the strongest in the

region due to production quality, innovative and modern styling, and flexibility

in material use. The quality of its infrastructure is better than most of its

neighbors like Vietnam, Cambodia, Laos, Philippines and Indonesia.

In a report by the vice president for research and planning at Kiatnakin

Bank, PiyasakManason, believes Thailands GDP will contract sharply for at

least two consecutive quarters in 2012. Thailands economy will grow at

between around one percent and 2.8 percent in 2011 - 2012. There are two main

reasons for this.

The first is the structural damage wrought by the floods. Mr. Manason

believes that the floods effect on the economy will be long-lasting. Public as

well as private infrastructure needs to be repaired or reconstructed. During that

reconstruction period, production will not return to full-capacity, which willlead to contraction in the manufacturing dector.

The Kiatnakin Banks second point is the dim outlook for the global

economy is due mainly to the intensifying European debt crisis. European and

IMF inefficiency in coming up with a deal to restore investors confidence will

make matters worse. This matter will not be resolved in the near future,

confidence will erode and financial markets will remain volatile. Subsequently,

the real sector will be hit by a slowdown in consumption and investment in the

West, which will lead to a slowdown in exports from Asia, including Thailand.

However, furniture and furnishings stores have continued to show an

improving trend, showing five percent current value growth in 2010. This is

largely due to government policies to stimulate demand in the Thai property

market. For instance, the government reduced the transferrable fee on property


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purchases from two percent to 0.01 percent, and also introduced a tax

exemption on properties purchased in 2009 until June 2010. (7)

In 2011, Thailand has a GDP at current market prices of THB10.54trillion (USD345.65 billion approx ) with the growth rate of 0.1 percent, much

lower than the expected growth rate of 3.5 percent due to severe damage from

the historic flood the Kingdom confronted mainly in the last quarter of the year.

In 2012, the Thai economy is expected to grow by 5.5-6.0 percent, a V-shaped

recovery from last years flood.(8)

Figure 3.1

However, according to the research of Bangkok University, it shows that

the confidential economic index per economic status in Thailand is 45.57 which

is lower 1.74 from 47.31 on April 2012. They estimate that the index will

decline until Jan 2013. (9)

Competition Analysis

Since sofa industry established for a long time, there are many companies

in the market which we can classify into:-

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45.5

46

46.5

47

47.5

Confidential economic index


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1. Direct competitor2. Indirect competitor

- Direct Competitor

Our direct competitors are the company who sell leather sofa with the same

price range and similar quality which are show below:-

Sesia

figure 3.2

Figure 3.3

(Resource:10)
http://www.sesiafurniture.com/http://www.sesiafurniture.com/http://www.sesiafurniture.com/http://www.sesiafurniture.com/


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Strength

- Good Quality compare with Pricing theproduct

- Design of the products quite easy to fitthe room

- Variety of theproducts

Weakness

- Low communication ininternet or facebook

- Not too many sales staff inthe showroom

Studio 128

Figure 3.

(Resource: 11)
http://www.128studio.com/http://www.128studio.com/http://www.128studio.com/


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Strength

- Neat quality of the products especially productof Thailand

- Design of the products quite easy tofit the room

- High Brandawareness

- Neat sewingproducts

Weakness

- High price ofproducts

- Design is similar to someimport brand

Kevin Giormani

Figure3.5


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Figure 3.6

(Resource:12)

Strength

- Many type ofleathers

- Design isso simple

Weakness

- Low quality leather (Corrected grain )
http://www.kelvingiormani.com/http://www.kelvingiormani.com/http://www.kelvingiormani.com/http://www.kelvingiormani.com/


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P9

Figure 3.7

Figure 3.8

(Resource: 13)

Strength

- Sub brand of Studio128

- High Brandawareness

- Neat sewingproducts


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Weakness

- Lowquality

leather

- Design is similar to someimport brand

- Some design looklike old design

JAS

Figure 3.9

Figure 3.10

(Resource: 14)


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Strength

- The cost of the product is notso high

- Products produce from theirown factory

Weakness

- Lowquality

product

- Design isnot

modern

- Indirect CompetitorOur indirect competitors are the company who sell leather and fabric sofa

with high price and great quality, mostly are import from Italy and other countries,

and also sofa with low price and low quality which are show below:-


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Strength

- Very high designproducts

- Many designers design the product that fit toeach life style

- Very good quality of sewingand production

- Very good rawmaterials

Weakness

- Very high price because of the import tax andthe price they set

- Some design is quite hard to fit toThai people house


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B&B

Figure 3.11

Figure 3.12 (Resource: 15)

Chanintr Living

Figure 3.13

Figure 3.14 (Resource: 16)


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Marthastewa

Figure 3.15

Figure 3.16

(Resource: 17)

Plotrona Frau

Figure 3.17


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Figure 3.18

(Resource: 18)

Dellarobbia

Figure 3.19

Figure 3.20

(Resource:19)
http://dellarobbiathailand.com/http://dellarobbiathailand.com/http://dellarobbiathailand.com/http://dellarobbiathailand.com/


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Index, Concept, Ikea

Strength

- Low priceproducts

- Variety ofdesigns

- Convenience to shop because of they have manyshowrooms

Weakness

- Low quality ofmaterial

- Low quality of sewing andproduction

Index Living mall

Figure 3.21


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Figure 3.22

(Resource: 20)

SB furniture

Figure 3.23

Figure 3.24

(Resource: 21 )


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IKEA

Figure 3.25

Figure 3.26

(Resource: 22)

Koncept Furniture

Figure 3.27


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Figure 3.28

(Resource: 23)

Customer Analysis

Regarding to the customer income rate, the national statistical office had

been study on year 2554 or 2011about the income rate per month of Thai people

and also the percentage of household income rate of all over the country as shown

below:-

Figure 3.29

5,141

9,854.00

14,817.00

22,953.00

63,011.00

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Group A Group B Group C Group D Group F

Income

Income


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Regarding to the figure 3.2, we can classify the ranking of income rate per

month into 5 different groups which are

Group A5,141 baht per month

Group B9854 baht per month

Group C14,817 baht per month

Group D22,953 baht per month

Group F63,011 baht per month

It means that Group A is the people who got lowest income per month to

Group F is the people who got the highest income per month.

Figure 3.30

According to the figure 3.3, we can classify the percentage of household

income rate per year into 5 different groups which are

Group A6.6% or 7%

Group B10.3% or 10%

Group A

7%

Group B10%

Group C

14%

Group D

20%

Group F

49%

Percentage of household income rate


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Group C14.3% or 14%

Group D20.2% or 20%

Group F48.6% or 49%

It means that Group F is the highest group percentage of household income

rate per year. On the other hand, the lowest group percentage of household

income rate all over the country is Group A. (24)

Moreover, according to the last year flood, many people had been suffering

from the damage which results after the flood were gone. They need to renovate

their house and furniture. In addition, some people might have to rebuild their

house to protect for the future.

Competitive Analysis

According to the real estate information center news on 28 January 2005,

they said that the overall furniture market is 10 billion baht. The market share of

sofa is 60% which are 40% is fabric sofa and 20% is leather sofa. However, out

of the 60% of sofa market, there are 20% of sofa market are import from other

country. (25), (26)

Nowadays, there are many brands from domestic brands and also some

other countries brands who come to sell their product in Thailand. We can

classify them into 3 different levels as show below:-


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Figure 3.31

For Hi-End market, most of them are import brands like B&B, Minotti,

Poltrona Frau, Baxter, Seasons and etc are placing their price around 300,00

500,000 baht or higher than 1,000,000 baht. This market is very niche and unique

because of the quality of raw materials they use which are very hard to find in

Thailand and the skill of their craftsman are very high.

For Hi-End to Mid-End market, most of them are domestic brands like

Studio 128, Sesia, P9, Jas and etc and also some brands who import their brands

from China which are Kevin Giormani, Mobella. They are placing their price

around 60,000 baht to 200,000 baht. This market will be replaced for the

customer who wants to have good quality product like import brand but they

cannot afford to pay. However, the quality of the product is good refer to the

price.

Hi-Endmarket

Hi to Mid-Endmarket

Low-End market


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For Low-End market, most of them are mass production market like Ikea,

SB furniture, Concept furniture, Index living and etc and also factory brands

which you can see when you go to the furniture fair or exhibition at Bi-Tec

Bangna or Impact Arena Muang Thong Thani. They are placing their price

around 5,000 to 50,000 baht. This market will not concerning about the raw

materials they used on production because they want to sell at low price. (27)

STP Analysis

Market Segmentation

We can classify our segmentation into 2 groups of people:

- Endusers- Interior/Architect

For the first group, endusers, we will segment our market by income.

According to the figure 3.2 and 3.3 on customer analysis, the income of our

customers is the most important factor whether they can afford to pay for our

products or not. Therefore, the group of people who earn 20,000 baht or higher

would be able to afford to purchase our products which are Group D and Group

F.

For Interior/Architect, we will segment our market by needs of

interior/architect and the trend of design. By doing so, the interior or architect

will be able to spec our product in their project that match to the customer need.

However, this segment would be easy to place order but it is also depends on

the price list or discount too.


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Targeting

Our target market in sofa market is a group of people who building a new

house or buying a new condo and looking for new furniture to decorate their

home. Moreover, our target market would be a group of people who love leather

or like the advantage of the leather more than fabric even the price of leather

might higher than fabric.

Positioning

Figure 3.32

-4

-3

-2

-1

0

1

2

3

4

5

6

-4 -2 0 2 4 6

Quality

Price

Brand PositioningThe Rich

Studio 128

B&B

P9

Jas

Index

Ikea

Vinotto

Seasons

Sesia

The Rich


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Marketing Mix Strategy

Product

Our company branding The Rich as Luxuary Leather Furniture which

we sold mainly leather sofa. We use the front that represent smooth and luxury.

For our slogan, we are using We made what you want is to clarify that we try

to design our products to serve to everyone lifestyle. Moreover, we try to design

our products like European style ( Over sizing ). It means that the size of the

sofa would be bigger than normal sofa as you can see in the market.

For our products, we can classify our product into 4 difference categories

which are show below:-

3 Seated

Figure 3.33


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Sofa 3 Seated is the type of sofa with the size around 1.80 meter to 2.60

meter. The smallest size can put into the condo and the bigger size can put in

the house. We try to make our product as the master piece in every house.

L-Shape

Figure 3.34

Sofa L-Shape is the type of sofa that combines 3 Seated with Couch

together. So the sofa is looking like L alphabet as we called it Sofa L-

Shape . The sizing of Sofa L-Shape is from 2.60 meter to 3.20 meter depends

on the size of the cushion which we can add or remove them out.

Armchair/ Cozy Chair

Figure 3.35


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Armchair or Cozy Chair is the type of sofa for 1 person. It is design for

small spaces where you can sit or relax while you reading a book or relax.

Stool/ Ottoman

Figure 3.36

Stool or Ottoman is the type of sofa that we use to put our leg once we sit

on the 3 Seated or Armchair. Stool or Ottoman is very small size 50 meter to 90

meter depends on the design.

Pricing

The Rich plan to sell the product to endusers with B+ grade or higher or

Mid-End or Hi-End. As we calculate the cost of production with the raw

material we use, we can calculate the price as show below:-

Product Price ( in Baht )

3 Seated 50,000120,000

L-Shape 150,000250,000

Armchair/ Cozy Chair 40,00080,000

Stool/ Ottoman 20,00050,000

Figure 3.37


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Place

For the location that we would sell our product, we would choose

department stores or villa market as our first choice because it is easy to travel,

easy to increase awareness of brand, easy to promote and high traffic per day.

Therefore, we choose CentralWorld in Bangkok as our first showroom. It is

located in the center of Bangkok with good transportation like Bus and BTS.

Promotion

Promotion is the most important part for this market because it will create

brand awareness, idea for the customer to decorate their own house, brand

recognition and etc. By doing so, we are choosing the promotion as show

below:-

Discount

Figure 3.38

By using discount, we plan to discount our product randomly one or two

item to motivate sale each year. Moreover, for some events like End year sales,

Mid year sales, Thailand new year, Showroom grand opening and etc will be

special discount for many items.

Magazine


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Figure 3.39

We plan to advertise our brand in the furniture and decoration magazines

every month by asking theme and concept of each month from every magazine

and choose the one that match to our objective.

Events

Figure 3.40

We plan to go out to the exhibition like Architect Fair, Furniture Fair and

etc to gather contact of our customers and try to expose our brand to Interior,

architecture and endusers.

Facebook Activities


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Figure 3.41

We plan to use facebook as another media to advertise and give

knowledge and know-how to our customers who interest in our product to

follow and discuss when they got any problems with the products. Moreover,

we also use facebook as another channel for activities like games, post pictures,

notification and etc.

Sale forecast/ Profit estimation

According to the promotion campaign, we try to use discount promotion

and promote on other media for the first 5th

year to motivate and increase

awareness of our brand. We estimate that our sale forecast in pieces might show

as the follow table:-

YEAR 1 Month

Product Type 1 2 3 4 5 6 7 8 9 10 11 12 Total

3 Seats 2 1 1 2 2 4 2 1 1 4 2 3 25.00

L-Shape 1 0 0 1 2 2 1 1 0 2 2 3 15.00

Armchair & Stool 1 3 1 3 5 5 4 3 2 1 6 5 39.00

Total in Pieces 4 4 2 6 9 11 7 5 3 7 10 11 79.00

Figure 3.41


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YEAR 2 Month


3 Seats 3 2 1 2 2 3 2 1 1 2 3 4 26.00

L-Shape 3 1 1 2 1 2 1 1 0 2 2 3 19.00

Armchair & Stool 4 3 2 3 3 6 4 2 3 3 6 6 45.00

Total in Pieces 10 6 4 7 6 11 7 4 4 7 11 13 90.00

Figure 3.42

YEAR 3 Month


3 Seats 4 3 2 2 3 3 2 2 2 3 4 5 35.00

L-Shape 3 1 1 2 1 3 2 2 1 3 2 3 24.00Armchair & Stool 6 4 3 5 4 8 6 4 4 5 6 8 63.00

Total in Pieces 13 8 6 9 8 14 10 8 7 11 12 16 122.00

Figure 3.43

According to the figure 3.41-3.43, we forecast that our sales would

growth about 10% for the first year [(90-79)/79] x100 = 13% and increasing

about 30% for the second year [(122-90)/90] x100 = 35%.

EAR 1 Month

roduct Type 1 2 3 4 5 6 7 8 9 10 11 12 Total

Seats 180 90 90 180 180 360 180 90 90 360 180 270 2,250

-Shape 150 0 0 150 300 300 150 150 0 300 300 450 2,250

Armchair & Stool 50 150 50 150 250 250 200 150 100 50 300 250 1,950

otal in Baht(in

housands) 380 240 140 480 730 910 530 390 190 710 780 970 6,450

igure 3.44

EAR 2 Month


Seats 270 180 90 180 180 270 180 90 90 180 270 360 2,340


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-Shape 450 150 150 300 150 300 150 150 0 300 300 450 2,850

Armchair & Stool 200 150 100 150 150 300 200 100 150 150 300 300 2,250

otal in Baht(in

housands) 920 480 340 630 480 870 530 340 240 630 870 1,110 7,440

igure 3.44

EAR 3 Month


Seats 360 270 180 180 270 270 180 180 180 270 360 450 3,150

-Shape 450 150 150 300 150 450 300 300 150 450 300 450 3,600

Armchair & Stool 300 200 150 250 200 400 300 200 200 250 300 400 3,150

otal in Baht(in

housands) 1,110 620 480 730 620 1,120 780 680 530 970 960 1,300 9,900

Figure 3.45

According to the figure 3.43 - 3.45, we calculate the total sale(in

thousand baht) of each month by estimating the selling price to each product

type times with the pieces we estimate to sell on figure 3.4 as show below:-

3 Seated = 90,000 Baht

L-Shape = 150,000 Baht

Armchair & Stool = 50,000 Baht

If we assume that cost of production is 40% of the selling price, then our

profit without any expense except cost of production would be

First year: 6,450,000x40% = 3,870,000 baht

Second year: 7,440,000x40% = 4,464,000 baht

Third year: 9,900,000x40% = 5,940,000 baht

Marketing Expense (Sale incentive)


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As we already mention on Promotion part, we would do advertising in

Magazine, Events, Public relation, Brochure and Catalogue, Media printing,

sticker and etc. We estimate marketing expense on table 3.6

Description Price Quantity

Total

Amount

Magazine 30,000 24 720,000

Event 200,000 2 400,000

Construction for Event 100,000 1 100,000

Brochure and Catalogue 25 3,000 75,000

Media printing 50 500 25,000

Sticker for promotion 6 3,000 18,000

Public relation 5,000 2 10,000

Total 1,348,000

Figure 3.46

For Magazine, we plan to advertise our product in 3 magazines which are

Elle Decoration, Wallpaper, and Casaviva. Our plan to advertise on table 3.7

which shows below:-

Magazine Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Elle Decoration

Wallpaper

Casaviva

Figure 3.47

For Event and Public Relation, we plan to go to exhibition twice a year

with the construction cost for construction booth. We might hire part time sales

or MC to give some information about our products on an event.

For Brochure and Catalog, we plan to print 3,000 pieces for 1 year

because we need to add up some new production inside the catalog every year.


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For Media printing and Sticker, we plan to use them when we have a

promotion of our showroom. We might ask the department to help us promote

but we might have to print all of our promotion printing by ourselves.

For Sales incentive, we plan to give commission to our sales

representative by 3% of total sale each month. The one who got the highest

sales will get 1% commission of total sale each month in order to motivate our

sales representative to compete with each other to get the highest sale.

EAR 1 (in Thousands) 1 2 3 4 5 6 7 8 9 10 11 12 Total

otal Sales 380 240 140 480 730 910 530 390 190 710 780 970 6,450

ales Commission @ 3% 11.4 7.2 4.2 14.4 21.9 27.3 15.9 11.7 5.7 21.3 23.4 29.1 168.5

ales Commission @ 1% 3.8 2.4 1.4 4.8 7.3 9.1 5.3 3.9 1.9 7.1 7.8 9.7 64.5

gure 3.48


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Chapter 4: Investment Cost


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Chapter 4: Investment Cost

Location

- 8*15 meter

- Central world Bangkok

- Near Platinum, Pantip

- Next to Patumvanaram Temple, Siam Paragon

- 165,000 Bath/2 big rooms

We will rent 2 big rooms in Central WorldRent Cost = 165,000 Bath

Building

Cost of real estate = 165,000 baht / 2 big rooms


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Facility Layout

Pattern of the store building structure

The building of the Rich Sofa has just one floor. The size of the building

is 8*15 meter. There are 2 big rooms inside the place. The wall is height 3

meters and width 8 meters.

3

8

The pattern inside the store

The size of the building is 8*15 meter. There are 2 big rooms inside the

place. Inside our store has to set the sofa zone in many style, a small office that

to support the customer service and staff room.


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Staff room Zone A-E

Small office Relax zone

Zone A

Zone B

Zone C

Zone D

Zone E


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Staff room

Small office

Relax zone

Sofa

Table and chairs

Water cooler

Table and chairs

Water cooler

Sofa


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Zone A-E

Decoration in shop.

Sofa in many

style


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Machine/Tools/ Equipment

Office- Computer Acer

-Intel PDC E2220 (2.4 GHz)

-Linux, MEM

-1GB DDRII 800-HDD 320GB SATAII

-SATA-DVD-RW

-Multi in One Card Reader

- (PS.V740C.007LE)

-Acer LCD 17 inch X193WAbd 5ms, 10000:1, DVI (ET.CX3WA.A01)

-Price with vat 15,900 baht


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Printer cannon image CLASS MF4412

Stylish, space-saving design

Easy to use intuitive 5-line LCD display

23ppm (A4), 9 seconds First Copy out Time

Up to 1200 x 600dpi resolution for prints and copies

All-in-one cartridge system for cost-efficient supplies replacements

Energy Star Qualified

The Canon image CLASS MF4410 features a simple and intuitive5

lines LCD interface designed for easy operation. Scan up to 9600 x 9600dpi.

Files can be scanned directly to e -mail, or as searchable PDF using the MF

Toolbox, enabling easy text searching

Price with 5900 baht.

Office desk-Price disk size 150* 80*70cm

-Price 3000 bath.


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Chair

-Price 1200 baht.

Fax mfc 3360c

- Fax machine paper roll.

-Auto cut paper (fax, photocopying, answering machine)

-Modem Speed 14,400 bps.

-send a time sheet 10 bit. Price 6590 baht.

Paper A4

-Photocopying paper: Double A

-Photocopying: 80 Grammy for the photocopying and Printing.

-Quantity: 500 sheets/Dream

-Price 90 baht per pack


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Clip files s-size 240*350cm

-Price 50 bath

Laser stamp pad Horse stamp ink

-Size 7.9*12-Two color red and blue -Size 30 cc-Price 50 bath -Price 10 bath


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Max Stable max

-Price 60 bath. -Price 50 baht

Punch machines Scissors

-Price 300 baht -price 100 baht

Pencil Easer

-Price 70 baht -Price 10 baht.


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Pen Liquid paper

-Price 5 baht -Price 70 baht

Scotch tape Plug



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Air- Conditioner HITACHI RAS-S24CE

- Air Wall Type- Size 23700 BTU- Disinfection of bacteria with light & UV-

Nano Titanium filter discs eliminate bacteria- Speed Cool cooling system;

accelerate faster- Silent Cool system noise reduction-Panel cooling large

increases in thermal efficiency

-price 39900 baht

Glass Rubber Stamp

-Size 20cm* 10cm-Price 40 baht. -Price 160 baht


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Bill Book Shelves documents


Clip Highlight Pen



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Capet

-Price 1,090 baht

Capet feet

-Price 150 baht

Tissues

-Price 45 baht


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I phone 4s

-Price 16000 baht

Chandeliers Refrigerator

-Price 12000 baht - Price 21,990 baht

Water filter

-Price 23,500 baht


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Pail Swab

-Price 20 baht -Price 1,290 baht

Internet

-3BB

-Price 699 baht


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Chapter 5: Production and

Operations Analysis


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Chapter 5: Production and Operations Analysis

Product Characteristics


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Operating Cost

Operating costs are recurring expenses (per month) which are related to the

operation of a business, such as sales and administration, as opposed to

production, also called operating expenses. It includes;

Location

- 8*15 mater

Cost of Labor (per month)

Position Amount Salary Total

Safe staff 2 15,000 30,000


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Overhead Cost (per month)

Charge Total

Electricity 4,000

Fee Of Department Store 50,000

Rent 165,000

Logistics Management

- Rent a car from a private company to deliver a product.

- Shipping rate.

- Bangkok Metropolitan Area 1800-2500 Baht.

- Country (depending on distance).

Facility Management

- Air conditioner

- Sofa

- Table

- Chair

- Water cooler


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Chapter 6: Administration

Cost


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Chapter 6: Administration Cost

Organization management

The Rich is a company owned and operated by 8 partnerships, as a limited

company. Each partnership is the developer of the products and manages the

company.

This below is the name of the partnership who invest in The Rich company.

Miss Saranrak Kittiratanapaisan

Miss Thanaporn Thareelapraksa

Miss Pattaraporn Pompoung

Miss Karnhathai Malarat

Mr. Sirichok Wuthisakul

Miss Pattarada Hirunprateep

Miss Suntaree Sangthong

Miss Varritta Puttajanyawong

The company have approximately 7 staffs including 5departments :

1. General management department

2. Sale and marketing department

3. Financial department

4. Production department

5. Human Resource department


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The board of directors has five functional departments; they are the

general department, the finance department, production department, human

resource department and sale and marketing department. Every department have

a clear division of work, the unity cooperation, forming a tight unit.

The production department colleagues have quite a number of workers

and management personnel go into workshop production first line, responsible

for the real-time supervision and production.

Sales department consists of a group of experienced sales personal; they

are responsible for the network promotion and marketing of companys

products.

Organization Chart


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People in the organization

General Manager (1 position)

Task

Training the employee To report to the managing director Having direct responsibilities for all the day-to-day company operations To plan, implement and control the overall management of the business To prepare reports of the company activities for the shareholders Being responsible for the human resource management To approve the price decision proposed by the marketing manager To advise and monitor the marketing and sales activities To monitor the service quality to ensure customer satisfaction To order and check the products.

Characteristics

Female age 25-45 Bachelor Degree in related field Strong communication skills (verbal, listening, writing), strong

presentation and platform skills

Able to effectively manage labor productivity in addition to usingstandard software applications and FHB systems including other related

software.

Ability to develop and implement successful sales strategies forindividual accounts of revenue management functions and account

profitability

Financial management skills e.g. ability to analyze P&L statements,develop operating budgets, forecasting and capital expenditure planning


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Designer (1 position)

Task

Help ensure the usability and appearance of the site ishigh class.

Play a key role in the visual design of new featureslaunching on the site.

Strive for design perfection but love to release anditerate.

Designing and creating comfortable and functionalenvironments that represent client's lifestyle, taste

and budget

Characteristics

Male/female age 24up Bachelor Degree in related field Can use HTML, CSS, AJAX, prototype.js, jQuery, etc.

Accountant (1 position)

Task

Accounts payable and fixed assets / VAT /Withholding Tax

Characteristics

Male/Female age 25-35 Bachelors degree in Accounting or higher 3 - 5 years experience in MANUFACTURING / Accounting function /

or ELECTRONIC company background is preferable

Satisfy English communication both in writing and reading


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Good in Excel / word processing / Power point Good communicate and relationship with all concern

Cashier (1 position)

Task

Receive payment by cash, check, credit cards, vouchers, or automaticdebits.

Issue receipts, refunds, credits, or change due to customers. Count money in cash drawers at the beginning of shifts to ensure that

amounts are correct and that there is adequate change.

Greet customers entering establishments. Maintain clean and orderly checkout areas. Establish or identify prices of goods, services or admission, and tabulate

bills using calculators, cash registers, or optical price scanners.

Resolve customer complaints. Answer customers' questions, and provide information on procedures or

policies.

Characteristics

Male/Female age 24-38 Bachelor Degree in related field Honest Endure Flexibility


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Sales personal (2 positions)

Task

To establish better relationship and follow up with the customers to closesales

Handle sales and marketing activity to meet customer inquiries andcompany market

Prepare documents, conduct marketing plan and sales plan

Characteristics

Male/Female, Age about 25-34 years old Bachelor Degree in related field Experience about 1 years in Sales Fair command in English Both Reading & Writing Computer literate (Microsoft Office, Outlook and Internet).

Maid (1 position)

Task

Sweep, scrub, wax, and/or polish floors, using brooms, mops, and/orpowered scrubbing and waxing machines.

Dust and polish furniture and equipment

Characteristics

Female age 20-50 Honest Endure


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Administration cost

Employee salary

Wage rate for the Rich Company

General Manager 1 person 35,000 baht

Designer 1 person 32,000 baht

Accountant 1 person 18,000 baht

Sale person 2 person (2

12,000) 24,000 baht

Maid 1 person 9,000 baht

Total salary Expense per month 118,000 baht

** Remark Give 0.02% commission of total sale for sale person, which is not

include the salary

Rental fee

We plan to rent area at Central World for sales and show our products.

The price for rent area 1 square meter equal to 1,500 baht and also have to pay

center service 100,000 baht. Centre service is all service that renter provide for

leaseholder; such as, electricity, water, security, housekeeping, telephone fee

internet and etc. So, we choose to rent the area 110 square meter.

110m21,500 baht = 165,000 baht

165,000 + 100,000 = 265,000 baht


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Therefore, each month we have to pay 265,000 baht per month for rental

fee. Stationary expense

Item Product Description Quantity

(Unit)

Price

(Baht)

Amount

(Baht)

1 Calculator 2 410.00 820.00

2 Paper A4 3 110.00 330.00

3 Fax paper 5 125.00 625.00

4 Ink tank 1 590.00 590.00

5 Film fax 2 390.00 780.00

6 Stamper 3 90.00 270.00

7 Max 2 60.00 120.00

8 Staple max 2 65.00 130.00

9 Punch machine 1 280.00 280.00

10 Scissors 3 75.00 225.00

11 Thermal paper 5 180.00 900.00

12 Pen 12 10.00 120.00

13 Liquid paper 3 50.00 150.00

14 Scotch tape 5 32.00 160.00

15 Cutter 2 95.00 190.00

16 Clipboard 2 80.00 160.00

17 Highlight 2 20.00 40.00Total stationary

expense

5,890.00

Table 1 : Stationary expense


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Insurance

We choose to making insurance with Bangkok Insurance for protect our

store at Central world. We choose the insurance protect our store like Politicalviolence, strikes, riots, civil war, terrorism, sabotage, disaster. Property

insurance coverage to insure the event and unrest offers comprehensive

coverage of assets fully. Home mortgage stores, shop in the department store

and factory in the limit of a maximum of 10 million baht.

If we want to get 5 million baht from the insurance, we will have to pay

12,630 baht per month for insurance fee.

Figure6.1

1 2 3 4 5

1,080 1,900 2,580 3,440 4,050

1,050 1,850 2,500 3,350 3,900

/ 2,970 5,910 8,060 10,750 12,630

2,920 5,850 7,950 10,600 12,500


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6 7 8 9 10

4850 5240 5990 6270 6970

4,750 5,100 5,800 6,050 6,750

/ 15,150 16,360 18,700 19,580 21,760

2,920 5,850 7,950 10,600 12,500

Figure 6.2 (28)

StaffsUniform

Our company has a uniform for the employees. Uniform differenced

depending on employees position. So, we will pay for staffs uniform in the

first year of doing the business or the first time that the employee start to work

with us.

We order our staffs uniform from Song Samai Company. Price of general

managers uniform is 2,790 baht (including the nameplate120) per 1 uniform

and 2,190 baht for sales personal and cashier uniform (including the

nameplate120baht) per 1 uniform. And the price of shirts 250 baht (per 1shirst)

for Designer, Accountant, and Maid shirts.


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Sample of uniform

Figure6.3: General Manager

Figure6.4: Sales personal and Cashier (woman)


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Figure6.5: Sales personal and Cashier (Man uniform)


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Figure 6.6: Designer, Accountant, and Maid

Figure6.7: Nameplate1Figure6.8: Nameplate2


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Address

Song Samai Bang kapi Co., Ltd.

166/29-30 Serithai Rd., Khlong Chan,

Bang Kapi, Bangkok, 10240

Tel :02-3776360,02-7333121,02-3779254,

089-6681908

Fax :02-7333122

Figure6.9

Song Samai Bang Kapi tailor is produces our companys staffuniform.

Staffs uniform Expense

General Managers uniform (1 position) 2,790 baht

Sales personal and Cashier (3positions) (2,1903) 6,570baht

Designer, Accountant, and Maid (3 positions) (2503) 750 baht

Total price staff uniform10, 110 baht


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Table : Administration Cost Year 1

Table: Administration Cost Year 2

Table: Administration Cost Year 3


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Chapter 7: Financial


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ncome Statement

Income Statement Year 1



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Chapter 8: Risk Management


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Risk Management

Risk management is a logical process or approach that seeks to eliminate or at least

minimize the level of risk associated with a business operation. Essentially, the process

identifies any type of situation that could result in damage to any resource within the

possession of the company, including personnel, then take steps to correct factors that are

highly likely to result in that damage.

Once the business model is understood, it is possible to identify specific risks that are

present throughout the production process, including the delivery of goods and services to

buyers. As those risks are identified, they are analyzed for ways to alter the process so that

the end result is still achieved, but the degree of risk is minimized or removed altogether.

Risk management may be an extremely complicated process or require nothing more than

making a few minor adjustments. (29)

Planning and reducing risk

- The risk of delivery product, when our company delivery the product, it can be on

some risk and cant be avoid. So, we must have the solutions that can fix the problem

immediately. For example when have traffic jam or car accident, it will used long time to

send order to the customer. This situation we will fix the problem by contact with the

transportation companies to transfer our products for fast and enhance efficient service and

shipping. Its can making reliability of customers to our company.

Identifying a list of potential risks.

Risk is a measure of the ability. The purpose of the work to be carried out

successfully. Under the budget, schedule, and technical constraints faced such a project is a

set of activities. To take action on an issue in the future. Using the limited resources available.

Continue to be successful. Under a limited time frame which is scheduled to perform in the

future. Risks that may occur at any time. Because of the uncertainty and resource constraints


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of the project. A project manager must manage the risk of the project. So the problem is

reduced. And can be operated successfully. Set goals effectively and efficiently.

Types of risk

- Power of purchasing risk: The risk that the purchasing power of money decreases.

Which mainly affect the purchasing power is inflation.

- Market Risk: Deals with different types of market risks, such as interest rate risk,

equity risk, commodity risk, and currency risk.

- Business risk: The risk arising from changes in the profitability of the company. As

a result, investors have lost money, Financial or investment risks,

- Risks in the industry: Market risk is the loss of investments due to changes in the

price of the securities to investors. Which is based on demand and supply of the market.

- Financial Risk Management: The process of financial risk management can be

defined as minimizing exposure of a firm to market risk and credit risk using various

financial instruments. Financial risk managers also deal with other risks related to foreign

exchange, liquidity, inflation, non-payment of clients and increased rate of interest.

- Interest rate risk: The risk that arises from changes in the rate of return on

investment. Due to changes in market interest rates.

External risk

- Risk form the factory : Our Company is required to order the leather from factory if

the factory have a problem about delayed delivery it make delayed for customers order.


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Internal risk

- Risk of the customer need and customer behavior: Sometimes you may be a delay

for transportation which is to satisfy the customer. You will lose the income of the delayed

delivery. Sometimes food may be damaged during transportation. All customers who do not

want to wait too long.

- Financial risk: Risk arising from insufficient funding for operational and/or strategic

priorities examples of risk events insufficient program funding, inability to recapitalize in

infrastructure.

- Partner and supplier risk: Risk that actions taken by partners or suppliers may

negatively affect the product. So should make understand that matching between our business

and other factory and check communicate system for ensure that not have the problem.

Risk of sale growth 35% in Year 4 and growth 30% in Year 5


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Chapter 9

Summary


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The Rich sofa project is the sofa company that operates in Bangkok. Our project

business is sofa store. Sofa store businesses have many types for sale and response to

customer need and want such as3 Seated, L-shape sofa, Armchair/ Cozy Chair Stool/

Ottoman and etc. In the middle of Thailand, furniture store is possible business that can make

high profit and easy to growth especially in Bangkok .In the market feasibility study we

found that there many information thats support the market to be feasible for example the

growth rate of gross provincial profit, personal and household good, and the growth rate of

population in the Bangkok. The Rich sofa has the core competency about the middle-end to

hi-end cost of sofa, because we will selective more about the suppler, who will give us the

middle-end to hi-end price as much as possible especially, from Samutprakan. The Rich Sofa

also provides the variety way of purchasing for the customer. There are three mainly type

of product of The Rich sofa which are L-shape sofa, 3 Seated of a, and Armchair. We set the

main target market at the middle-end to high-end market. And the target group is people who

just married. For the sale forecast from feasibility of the potential market, the target market of

The Rich sofa, as well as strategy and core competency of The Rich sofa, we confident that

The Rich sofas can generate the sale 1% of the potential marketer about-2,355,140.00 baht

that at the first year and continuously growth every year. We rent the land in Central World

which we need to pay in advance for each year. The Rich sofa need to build our own

company that there are 1 mainly zoned. We find out the source of funding from the investor

that we will offer the interest rate about 15% per year and will pay all of the interest rate at

the end of year 5that we guarantee the all of principal of the investor by we have the backup

plan forth investor In the financial analysis that represent in 3 financial statement, The Rich

sofa have strong in the financial status that also represent in the ratio analysis. For the risk the

mainly of risk for The Rich sofa in both business risk and financial risk is quite be and can beacceptable. However, we also prepare about the handle of risk by using the risk management.


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Reference


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BY:

Miss. Saranrak Kittiratanapaisan ID: 5131205056

Miss. Thanaporn Thareelapraksa ID: 5131207009

Miss. Pattaraporn Pompoung ID: 5131207020

Miss. Karnhathai Malarat ID: 5131207039

Miss. Pattarada Hirunprateep ID: 5131207089Miss. Suntaree Sangthong ID: 5231207118

Mr. Sirichok Wuthisakul ID: 5131207137

Miss. Varritta Puttajanyawong ID: 5231207509