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Exotica Melamine Ware

1. Executive Summary

The melamine product manufacturing sector is still in its growth stage. However, the concept of
manufacturing melamine products aims to reach current target group as well as higher middle class
people, corporate sector and exporting internationally. That is why the crucial task of creating the
appropriate culture and educating the customers about the quality and design of our products will be the
top priority of our business. We will differentiate our product by ensuring improved quality than the
market is serving now but at a lower cost because of our new technology at the price that market is
charging. Again, we will come with unique and attractive design and some sort of customization to grab
the higher middle class people, corporate sector and exporting.

The land for establishing the factory is owned by the partners will be leased. All the other requirements
like machine and others will be purchased by the business. However, political instability, local intruders,
inexperienced employees and customers, unawareness about the manufacturing firm of melamine
products would play a crucial role to defy the whole venture. Nevertheless, with rigorous direct selling
and advertisement, a culture towards using melamine products and awareness building will be done. As a
manufacturing firm, Exotica Melamine needs to create a strong, pro-active and effective human resource
base.

As the long term strategy, Exotica Melamine Ware visualizes to be a global brand. As the initial setup
cost is not huge in amount, so we forecasted to reach to break even within less than five years. It will be
easier for the firm to reach the customer easily as we will provide distinctive products at market price.
Along with this, the eventual employee experience, brand name and uniqueness of the product will help
the company in gain economies of scale through experience curve. Eventually, we hope that Exotica
Melamine Ware will be a distinctive manufacturing firm to provide people products with quality, unique
design, affordability and reliability.

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Team Profile
Sayba Kamal Athoi
061-479-030
Managing Director

Nibras Yaman
053-159-530
Chief Executive officer

Rehan Muhammad
053-368-030
General Manager

Mosharraf Hossain Saikat


053-141-030
Chief FinancialOfficer

Afsana Jahan
061-478-030
Head of Human Resource

M. Aminul Islam
053-413-030
Head of Marketing

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3. Company Overview

Exotica Melamine Ware is going to produce different kinds of melamine products to add
divergence to the customers’ dining table. It will be a partnership based company, formed by six
individuals having equal share each. Each of the partners of the company will be addressing a
managerial role in the organization and will be working as a team to take any sorts of decision
regarding the execution and development of the company.

We as entrepreneurs see immense opportunity in this sector. Because Melamine Industry is a


growing industry and it has a lot of export opportunities so we entrepreneurs are hopeful about
the success of EXOTICA MELAMINE WARE.

Initially Exotica Melamine Ware will start with 5 machineries and about 50 human resources in
Keraniganj near Dhaka. The company will start its operation with 25 crockery models. Our
product will be the best in melamine industry in Bangladesh. Our company will achieve a
tremendous success in respect of sales amount and market share within a very short time due to
its product quality and competitive price.

3.1 Mission Statement

We, the new generation of melamine producers, will focus on premium quality melamine
products with innovative style and design.

3.2 Vision Statement

Establishing a world wide brand Image by reintroducing Bangladeshi Melamine products in the
Global Market.

3.3 Key products

Different types of melamine cookeries.

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3.4 Strategic goals and objectives

1. We are targeting to capture 10% market share within the first five years of our operation.

2. Our target is to increase our turnover by 15% in the second year, 20% in the third year and
25% in the fourth and fifth year.

3. We want to export our products from the second year of our operation.

4. We want to provide high quality products with a competitive price.

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4. Industry Overview and Analysis

Melamine Industry is one of the many topics that did not get enough attention for research in
Bangladesh. Over and over again many big news papers and analyst has pointed out the
melamine in industry has huge potential in export sector. The industry overview analysis will
clarify the overall environment for this business so that an informed strategy can be put into
action. As our vision statement is to create a Global Brand the Bangladeshi Melamine Industries
competitiveness should be critically analyzed.

Bangladesh's melamine industry has carved a niche in the international market, having started its
journey only 15 years ago, alongside feeding domestic tableware market. The country went into
melamine production in 1989 when Nasir Group's Bangladesh Melamine ventured into the
business. The industry got major boost in the following year with Sharif Melamine coming in a
big way. Inspired by rising domestic and international demand, 13 other companies joined the
melamine bandwagon, creating a Tk 120 crore domestic market. Industry insiders say use of
high-tech machine and quality melamine resin and adoption of latest design have given
Bangladeshi melamine tableware a competitive edge on regional and international markets.

(http://www.bangladesh-web.com/view.php?hidRecord=26516)

Total
Melamine Market
Industry

Fig: Standing of the melamine industry in Bangladesh

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The Industry Over will be done in the following four components

Existing Melamine Companies:

• Sharif Melamine Industries

• Diamond Melamine Industries (PVT) Ltd.

• United Melamine Industry

• Classic Melamine Industries Ltd.

• Crown Melamine Industries Ltd.

• Bangladesh Melamine Industry Ltd.

• G.Q. Marketing Ltd.

• Gold Star Melamine Industries (PVT) Ltd.

• Nasir Group of Melamine Industry

• Sunrise Agencies

(http://www.bdyellowbook.com/catalog/Mills___Industries/Melamine_Industries/)

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4.1 Five Forces Model:

Michael Porter's famous Five Forces of Competitive Position model provides a simple
perspective for assessing and analyzing the competitive strength and position of a corporation or
business organization. The following figure gives an overview of the Model.

Porter’s Five Forces of Competitive


Position

New Market
Entrants, eg:

• entry ease/barriers
• geographical factors
• incumbents resistance
• new entrant strategy
• routes to market

Supplier Power, Competitive Rivalry, eg: Buyer Power,


eg: eg:
• number and size of firms
• brand reputation • industry size and trends • buyer choice
• geographical • fixed v variable cost • buyers
coverage bases size/number
• product/service • product/service ranges • change
level quality • differentiation, strategy cost/frequency
• relationships • product/service
with customers importance
• bidding • volumes, JIT

Product and Technology


Development, eg:

• alternatives price/quality
• market distribution
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• fashion and trends
• legislative effects
Exotica Melamine Ware

www.businessballs.com.

• New Market Entrants: As already outlined the industry has something around 13
companies that are functioning in the melamine sector. However, among them Diamond
Melamine, Bangladesh Melamine, Crown Melamine, Sharif Melamine are the major
players. The industry is mainly saturated with these players. The industry does not have
any complicated legal restrictions of entering as a result barrier to entry is not limited. A
company wishing to open up in this industry can just following legal rules of the
registration as a Limited Company and start its operation. As the company does not
produce any significant amount of water or air pollution so treatment plant is also not
necessary. So entry to this industry will be easy. In the front line of the industry are
mainly the Sharif Melamine and Diamond Melamine who differentiates their price
compared to the other players by positioning superior quality. As a New entrant to this
industry Exotica Melamine Ware should position themselves as high quality with
unique tasteful design. This is the route we wish to take.

• Supplier Power: Supplies for the industry comes mainly from Taiwan, Thailand, China
and locally made raw materials. However, only Sharif and Diamond Melamine produces
products with better quality than others thus they use Taiwan raw materials which
obviously increases their product cost. There are also some small melamine companies
that uses locally produced raw materials which make the product quality poor also
durability of the product also decreases. The companies in the industry can easily switch
from one supplier to the other therefore switching cost is low. Though supplier can
threaten to entre the market however most of the suppliers are from outside Bangladesh
so initially it won’t be a threat to us as we hope to capture local market then the

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international market. Overall the suppliers bargaining power is lot as companies can
switch to different supplier

• Buyer Power: The industry’s supply is divided into two segments one the corporate
clients that is there are many restaurants and organization that order the Melamine
company to supply their products with the name of those restaurants printed on the
product. These orders are usually quite large thus the corporate buyers have bargaining
power. That is since they buy in bulk so they can easily bargain for price. The segment of
the industry consists of mass customer who buy the product from the retail outlet thus the
buyer does not have enough bargaining power because buyers are not few. The switching
cost is though low but there is certain mark up of the product below no company will sale
and the price of the product is usually fixed and kept at that level. So two different
segments have different level of buyer bargaining power. However, both the segment
cannot threaten to enter the market because setting up cost is high enough.

• Product and Technology Development: The market has significant scope for product
development as the market in Bangladesh has been there for the last 13 years the
population of Bangladesh is experiencing a change in taste and design so it is high time
that the design and quality of the existing melamine products can be changed and thus
this can be used to capture the urban middle class. The technology used in the production
can also be developed so make the products more durable, better looking, and superior to
the ceramic products that is the substitute of melamine products. The designs can be
significantly changed to incorporate high class look and also cookeries for children can
be added. There is huge scope in this sector for product development.

4.2 Core Competencies

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Core competencies are those capabilities that are critical to a business achieving competitive
advantage. The starting point for analyzing core competencies is recognizing that competition
between businesses is as much a race for competence mastery as it is for market position and
market power. Senior management cannot focus on all activities of a business and the
competencies required undertaking them. So the goal is for management to focus attention on
competencies that really affect competitive advantage.
(http://tutor2u.net/business/strategy/core_competencies.htm)

Prahalad and Hamel suggest three factors to help identify core competencies in any business:

What does the Core Comments / Examples


Competence
Achieve?
Provides potential The key core competencies here are those that enable the creation of new
access to a wide products and services.
variety of markets
Since our product design is unique and we have a higher quality we hope
to target the local urban middle class and then the international. As given
in our Vision we want to create a brand that is known globally. The
durability, better quality and unique design is our positioning and thus
this gives us our first core competencies to capture the market.

We will use our domestic plant as a production base for exporting goods
to foreign markets. Initially we will export to India and Bhutan from the
second year of our production. It will minimize both risk and capital
requirements. We will enter the foreign market by contracting with
experienced foreign wholesalers to handle the distribution.
Makes a significant The fundamental customer benefit that we would provide is - Reliable
contribution to the and efficient delivery infrastructure (product picking, distribution,
perceived customer customer satisfaction handling). We will introduce products which are
benefits of the end very unique in design, appearance and features. Our pattern designs are
product combined beauty, elegance, usability and durability .Our products will
have the appearance of the ceramics products but with much better

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features: bright color, non-toxic material, no smell, endurable of acid,


not get fragile easily, can be applied for the dishwashers. We will bring
in many different types of models with unique shape that are widely
used by families, restaurants and hotels all over Bangladesh and abroad.
Therefore we will follow a differentiation strategy.

We will try to improve our supply chain efficiency on a continuous


basis. We will collaborate with our suppliers to design new products and
to reduce the time it takes to get new products into the production.

We will make tight collaboration with our distribution channel partners


to wring out distribution cost savings.

We will set up complaint box and suggestion box in each show rooms.
A red box will be placing for taking complains and white box will be
placing for taking suggestions.. All complain will go to the Six Sigma
team of EMW. The problems will be sorted out as early as possible.

Difficult for A core competence should be "competitively unique": In many


competitors to industries, most skills can be considered a prerequisite for participation
imitate and do not provide any significant competitor differentiation. To qualify
as "core", a competence should be something that other competitors wish
they had within their own business.

Core competencies that are difficult for the competition to imitate:

- Minimization of working capital in the production process

- High manufacturing and distribution quality - reliable products at


competitive prices

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- Strong human resource base

-Strong ethical code of conducts

4.3 Industries SWOT

 Strengths:
The company’s strength lies in authority product, better cost control, stiff control of management
over its all activities. To ensure better quality product the company uses best quality raw
materials, highly skilled work force and to motivate workers. Diamond melamine industry use
performance evaluation system. There is a reward system for the out standing performer, in term
of promotion and increased pay which motivates worker to be work efficient and productive.
Where as the company has lowest wastage rate in the industry and high production rate per
employee.

 Weakness:
The weakness faced by the company is consecutive effects from its budget constraints. Due to
unavailability of funds, the company is not able to expand its current production facilities, excess
to proper distribution channel, advanced technology and finally promotion to its products, which
is holding the company back to achieve economies of scale and greater market share.
 Opportunities:
Better activity products, efficient management creates goodwill for the company in the market,
as we mentioned earlier. The demographic and general economic of the country gives the
company the opportunity to expand. Moreover the liberalization trade policy gives the company
an opportunity to expand internationally. Company’s goodwill helps it to get loan facilities from
the financial institution.
 Threats:
It mainly comes from new entrants, pressure from political parties, weak and corrupted legal and
law enforcement structure in Bangladesh, inefficient port management, rising price of oil,

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inflation, exchange rate fluctuation and lack of policy continuity from government part. The new
entrains are posing serious trouble for the company both internally and externally. Most of the
new entrants are using low quality raw materials from China, selling them at a much lower price
and they are taking out the experienced workers by offering high wages and salaries. Hartal,
strike, bribe, container jamming in port, inflation and other raise the cost of production by 20%
more.

TOWS Matrix:

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Internal factors Internal strength: quality Internal weakness: budget


product, cost control& efficient constraints, lack of advanced
management control. technology& lack of proper
distribution channel.

External factors

External opportunities: SO strategy: maxi-maxi WO strategy : mini-maxi


domestic expansion,
Take borrowing to expand To limit the budget constraints
international expansion,
production facility to capture the company should use borrowing as well
goodwill, access to
larger market share as sources of financing, convenient to it
borrowings.
domestically& internationally to mature the opportunity it has.
with strict internal control for
interval strength.

External threats : ST strategy: maxi-mini WT strategy: mini-mini

Competition, political By strengthening the internal If the company can increase its budget then
instability, macro economic strength through by continuous it almost can reduce its internal weakness.
instability, law& order and improvement. The company The threats from external environment are
mostly uncontrollable by the company; to
corruption. should minimize the threats poses
be competitive it should be more efficient
from external environment.
in its production, distribution activities. On
Overtime production, distribution
the other hand to minimize the risk arises
at night at hartal period reducing
from economic, political, law& order etc.
the effect of flying cost by proper company should be aware of them & has to
cost control. find out the way how it can best manage
the situation.

4.4 Competitive Advantage

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A competitive advantage is an advantage over competitors gained by offering consumers greater


value, either by means of lower prices or by providing greater benefits and service that justifies
higher prices. (http://tutor2u.net/business/strategy/competitive_advantage.htm)

In order to achieve a superior profitability we wish position our product Exotica Melamine Ware,
as a symbol of quality and unique design. This can only be achieved by pursuing a
Differentiation strategy. By definition Differentiation Strategy is:

This strategy involves selecting one or more criteria used by buyers in a market - and then positioning the
business uniquely to meet those criteria. This strategy is usually associated with charging a premium
price for the product - often to reflect the higher production costs and extra value-added features provided
for the consumer. Differentiation is about charging a premium price that more than covers the additional

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production costs, and about giving customers clear reasons to prefer the product over other, less
differentiated products.

(http://tutor2u.net/business/strategy/competitive_advantage.htm)

Here our selection of criteria is unique design and high quality which will justify our premium
price. No one company in the industry targets the higher income earners. Most companies like
Sharif, Crown targets the middle income group which rightfully reflects the product design,
quality even the marketing strategies. However we beg to differ in our product by following the
BEST COST STRUCTURE. The best cost structure is the combination of low cost strategy with
differentiation. We will produce competitively priced products that charge the same price as the
premium quality producers existing in the market however the look of the product will be
refreshing, attractive and tasteful. The core competences described above will help us to achieve
this Strategy. Since we are group of new generation melamine producers we know the total
quality management effectiveness in the production system. The efficiency level will rise.
Greater international correspondence will help us to attract the foreign market.

http://www.12manage.com/methods_porter_competitive_advantage.html

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5. Market Overview

5.1 Potential Customers


The nature of the industry, level of buyers, general economic conditions of Bangladesh and the nature of
the product don’t give the scope to any melamine company to adopt differentiated marketing strategies.
So the company will offer an undifferentiated product, but the target customer group will be the middle
income group to upper income group, those who can afford it. Our geographical target area in terms of
the domestic market will be the urban and sub-urban cities. Though the company is a consumer goods
producer, sometimes it will supplies products to business for their specific order such as SMC (social
marketing company), Hotel Radisson, and over hundreds of decorators including defense mess. Talking
about the foreign markets, we think our neighboring country India has a very strong customer base for our
products. So, we have planes to export our products to India through Bhutan. Exported items will be
produced according to the specification of importer country. The company will also produce customized
products for special orders comprising or more units. Customized product’s features will include
demanded logo, design, size and other such attributes.

5.2 Size and growth of the market

Melamine is not that huge in size yet in Bangladesh, but the growth rate is quite high as the number of
companies and scale of operation is increasing day by day. It replaces the traditional concept of crockery
ceramics, tin, glass etc. by offering affordable, quantity, durable & nice designed products. It got
popularity due to its affordable price and durable quantity. It is durable in a sense that it lasts for 10-12
years without any major damage. It gets popularity with in very short time; the growth of the industry was
so high that was completely unbelievable. It is partly because it positioned itself against high priced
crockery and partly against low priced crockery. As it is for middle class income people its market share
increased rapidly due to socioeconomic structure of our country. Today the total number of firms in this
industry is about 15 to 20; the number is not sure as no published data regarding the industry is available.
Melamine industry is a new concept for the cookeries in Bangladesh since 1987. Before that cookeries
means ceramics, tin made cookeries etc. The ceramic was costly in that sense. It is fragile. On the other
hand tin made cookeries are not standard in good outlook. As melamine combines the feature of
durability & good out look .It can captures the cookeries market rapidly. The demand of melamine
product is increasing day by day. Which creates an opportunities to expand the industry further .The
industry is now its growth stage. Melamine product is mainly for the middle class people. The

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demographic condition of Bangladesh comprises mainly middle class people and the GDP growth rate
over the year is increasing in a positive way, which gives the industry a greater prospective market. The
cheap labor cost of Bangladeshi labor gives the industry a competitive position over its international
competitors. In global market more over the liberalization of trade gives the industry an opportunity to
expand its market internationally.

5.3 Strategic Group Analysis


Strategic group Analysis is used to determine:

 Different competitive positions of companies in the industry


 Intensity of rivalry within and between groups
 Profit potential of various groups
 Implications of competitive position

Positioning Map

Exotica Melamine

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Data presented in the figure has been taken from the results of a survey conducted by Diamond Melamine
Industry and our company is positioned based on our assumptions.

As it can be seen from the above included graph, among the five major competitors in the market, United
Melamine offers the product at the cheapest possible price, but the quality of their product is also lower
compared to others. Crown Melamine offers their products in a better quality, but charges a bit higher
price. The current industry leader, Sharif Melamine is able to charge the highest price for their products
due to their established brand name. Sharif Melamine’s closest competitor Diamond Melamine offers a
little better product, but charges a little lower price and they are gaining market share quickly. Now our
company is expected to offer products which are of the same quality as of Diamond Melamine’s, but we
will be offering our products at a little cheaper than them in order to have a competitive edge. Moreover,
our unique designs should give us an upper hand over all the established melamine companies.

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6. Overall Strategy

Exotica Melamine ware aimed at producing high quality product at a moderate price by using high quality
raw materials and efficient production technique. We will pursue a strategy of progress and innovation to
produce good quality, value for money melamine products.

6.1 Long term and short term strategy

Short term strategy

Minimizing cost We will try to reduce our cost by building efficient scale facilities, establishing tight
control of production and overhead cost, minimizing the cost of sales, products and
investing in the state of the art manufacturing technologies. (Open learning world
2007).

Flawless quality For ensuring continuous success and patronage of our clients, we, Exotica
Melamine Wares, have etched the philosophy of maintaining top-notch
quality in our working methodology. Keen attention is paid to major and
down to the minutest of the details in every process, thereby making it
possible for us to manufacture customized melamine crockery, unbreakable
melamine crockery, dinner sets, serving trays, bowls, gift sets, tableware, etc.
Only the best grades of raw materials are employed in the processes which
are sourced from authentic vendors of the market. With its superior quality
products and competitive prices, the company aims in maintaining a long-
lasting relationship with its clients.
Unique products We will introduce products which are very unique in design, appearance and
features. Our pattern designs are combined beauty, elegance, usability and
durability .Our products will have the appearance of the ceramics products
but with much better features: bright color, non-toxic material, no smell,
endurable of acid, not get fragile easily, can be applied for the dishwashers.
We will bring in many different types of models with unique shape that are
widely used by families, restaurants and hotels all over Bangladesh and
abroad. Therefore we will follow a differentiation strategy.
Competing Initially we will compete internationally. This will help us to gain new

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Internationally customers and to achieve lower cost and enhance the firm’s competitiveness.
By entering the markets of foreign customers we will able to strengthen our
revenue base and long term growth.(Thomson and Strickland 2003)
Export strategies We will use our domestic plant as a production base for exporting goods to
foreign markets. Initially we will export to five countries. It will minimize
both risk and capital requirements. We will enter the foreign market by
contracting with experienced foreign wholesalers to handle the distribution.
Improving We will try to improve our supply chain efficiency on a continuous basis. We
supply chain will collaborate with our suppliers to design new products and to reduce the
efficiency time it takes to get new products into the production (Thomson and
Strickland 2003).
Improving We will make tight collaboration with our distribution channel partners to
distribution wring out distribution cost savings.
channel
strategy

Increasing We will set up complaint box and suggestion box in each show room. A red box will
customer be placing for taking complains and white box will be placing for taking suggestions..

responsiveness All complain will go to the Six Sigma team of EMW. The problems will be sorted out
as early as possible.

Implementation We will strictly follow the codes of ethics and will try to incorporate ourselves with
of codes of ethics corporate philanthropies.

Long term strategy

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Best cost provider strategy: we will provide our customers more value for the money by
integrating good-to-excellent product attributes at a lower cost than our competitors (Thomson
and Strickland 2003). Our target is to achieve the lowest (best) cost and best prices compared to
rivals offering products with comparable upscale attributes.

TYPE OF COMPETITIVE ADVANTAGE

ADVANTAGE BEING PURSUED

Lower Cost Differentiation

M A Overall Low Broad


a Broad Cost Differentiation
r Cross- Leadership Strategy
k Section Strategy
e Best – Cost
of Provider
t Buyers Strategy
Focused
Focused Low Differentiation
T
Cost Strategy Strategy
a A
r Narrow
g buyer
e segme
t nt

Source: Adapted Michael E. Porter Competitive Strategy (New York Free Press, 1980), pp 35-40

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By following Best Cost Provider Strategy we will able to incorporate following features for the
company:

Match the price


Value - conscious More value for of rival and
Buyers the money provide better
features

Develop unique Good-to- excellent


Build a
expertise in attributes several-
reputation for
simultaneously to-many upscale
delivering the
managing costs features depending
best value
down on product type

Incorporation of
upscale features
and attributes at
low cost

Robust Infrastructure: A strong infrastructural setup aids in meeting the rigors of production
and marketing with perfect ease. Exotica Melamine Ware will have a superlative infrastructural
backup by way of hi-tech manufacturing facilities, a large warehouse and well built marketing as
well as research & development unit. Employing cutting edge strategies, we will successfully
manufactured premium quality crockery and other items, thus, fulfilling all of our business
objectives in the most comprehensive manner.

Competing Globally: We will try to become a global competitor. Although global competition
does not exist to a grater extent for melamine industry but we want to capture the market
opportunities wherever possible to become pioneer in delivering high quality melamine products.
The reason behind competing globally is to capitalize on the core competencies and to spread the
business risk across a wider market base.

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Incorporating internet technology in the supply chain and distribution channel: We will
incorporate internet technology to our supple and distribution channel. It will help us to
procuring raw materials from suppliers, reducing inventory requirements, expediting the design
and production of new components, and engaging in mutual beneficial collaboration with
suppliers. Internet technology will help the distribution proportion in two ways; (1) it will allows
us to bypass retailer/wholesale dealers and sell directly to end users and (2) to build a strong
collaboration with distribution channel members.

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7. Company value chain analysis and operational plan:

7.1 Existing core competencies:


• Flawless quality
• Unique products
• Strong customer responsiveness

7.2 Future competencies:

Even if there are possible emergences of some new melamine businesses in future, we will
able to hold larger market shares because of some of our future competencies.

In Future, our company will be able to achieve superior efficiency through functional level
strategies like

 Economies of Scale:
Scale: According to our expansion plan, we will posses the ability to serve
a large number of variety customers to achieve greater division of labor and
specialization. Specialization among employees will lead us to provide superior quality
services to our customers.

 Learning Effects:
Effects: Learning by doing will help us to attain a lower cost structure; and,
over time, as we learn the most efficient ways to operate our business, there will be
further cost saving. Also, we will be able to develop a more trained and efficient labor
force in future. Thus, operating cost would decline because of increasing labor
productivity.

 Experience Curve:
Curve: If our company can pass some good years at the beginning in terms
of revenue, customer number, customer satisfaction etc, we will be the holder of large
market share. By expanding our business, we will be able to serve a large number of
customers and to hold a larger market share, which will lead to systematic lowering of
our cost structure compared to rivals.

 Strategic Alliances and Expansion: opportunities with various techniques and future
expansion plans of our camping business to different places like United States of
America, Norway, Sweden, Russia, Finland, Kazakhstan, Kingdom of Saudi Arabia

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Qatar, Oman, Abu Dhabi,, Dubai, India, Bhutan and Australia and Some other places will
give us the opportunity to differentiate our services and to charge a premium price.

7.3 Product and service overview:

Exotica melamine will produce export quality high class household crockery (dinnerware and
tableware) from melamine. Products made from melamine are extra durable (practically
unbreakable) and long lasting. Our products are shatterproof, dishwasher safe and also
microwave safe. There is no other plastic crockery in the market that has the highest scratch-
resistant than the melamine crockery. Exotica Tableware’s products combine strength and beauty
with marvelous design and are the very best choice for plastic tableware that stands up to
everyday use.

Exotica melamine product line: There are 48 melamine items that make up Exotica
Tableware’s product line.

The following shows the different types of items will produce at Exotica Tableware’s factory:

 Soup Plate
 Coup Plate
 Dinner Plate
 Rice Bowl
 Serving Bowl
 Soup Bowl
 Firni Bowl
 Serving Tray with Handle
 Serving Tray
 Oval Tray
 Cover Bowl
 Tea Cup & Saucer
 Glass/Cup

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Exotica Melamine Ware

 Mug
 Big Rice Spoon
 Curry Rice Spoon
 Coup Spoon
 Service Spoon
 Salt Pot

7.4 Facilities:

Process Layout
Since the Exotica Melamine is following the Batch process, so that their facility layout will also
fall under the process layout. They have eight departments. The layout of the plant has been
designed in such a way so that all the manufacturing activity is under one roof such that the flow
of material processed at one stage automatically flows to a next stage of processing thereby
reducing manpower to handle the material from one place to another and avoid waiting time for
the next process.
The advantages of process layout:
• The system can handle a variety of processing requirements

• System are not particularly vulnerable to equipment failure

• Equipment maintaining cost is lower

• Possible to use individual systems

The departments for Exotica Melamine process layout are:


• Stock Warehouse
• Glue & Heating Department
• Cutting Department
• Production Department
• Grinding & Polishing
• Sreening Department
• Washing Department

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Exotica Melamine Ware

• Packing Department
Some physical layout of the departments is provided in the appendix section.

Stock Warehouse:

The raw materials the Exotica Melamine use are 1. melamine compound, 2. melamine shiner, 3.
printed tracing paper. Since the first two mateials are not readily available in the markaet so
Exotica Melamine has give the purchasing order in advance. it takes at least 3-4 weeks to
recived the goods after Exotica melamine made the purchaing order. Therefore Exoticamelamine
keeps ample amount of raw materials on hand so that if there is any sudden increse in demand
they donot run out of stock.

Glue & Heating depatment:

In this department glue is added to the tracing paper and the is dried using industrial elecric oven.

Cutting:

In this department the designed paper is cut into desired shaped and arranged together in such a
way so that it will be easier for next department. The Cutting department and the Glue & Heating
department is situated next to each other to achive efficiency.

Production Derparment:

In the production department all the compiling, compressing & heating are done to give the
product its shape & size. This is largest department and takes up most of the plant space. In this
department there 22 compressing machine so that multiple items can be made at a time. The raw
materials are inserted from one end and the finished product comes out from the other end. The
machines used in the production department are semi-automatic.

Grinding & polishing department:

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Exotica Melamine Ware

Situated next to the Production department is the Grinding & Polishing department. In this
department rough edges of the finished products are smoothed out and polished. This department
has two doors, one door is used to rough edges product and the other is used to sent finished
product out of the department to the next department.

Screening:

In this department products will be tested so that it would meet Exotica Melamine standards. The
producted will be tested using electronic weighing machine and skilled person to identify
discoloration. The job in this department is time consuming, so its takes a lot of time for the
product to pass through this department.

Washing:

Situated near the screening department is washing department. In this finished products are
washed with soap water and left to dry. This department is also large as it needs a lot space to
dry the products.

Packing:

This department has two doors, one of them is connected to the plant and the other is connected
to finished goods storage. In this department, the products are packed and sent to the storage.

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Exotica Melamine Ware

Raw Materials
Diamond Melamine Process
Layout: (Functional)
Department 1

(Stock)

Department 2

(Glue & Heating)

Department 3

(Cutting)

Department 4

(Production Department)

Department 5

(Grinding & Polishing)

Department 6

(Screening)

Department 7

(Washing)

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(Packing)
Exotica Melamine Ware

Value Chain Analysis: The value chain a systematic approach to examining the development of
competitive advantage. In order to find out the source of competitive advantage we must do
value chain analysis. The organization is split into 'primary activities' and 'support activities.

Primary Activities:

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Exotica Melamine Ware

Inbound logistics: Our main Inbound logistic is raw materials and the Exotica Melamine use
raw materials are

 Melamine compound,

 Melamine shiner,

 Printed tracing paper.

Since the first two mateials are not readily available in the markaet so Exotica Melamine has
give the purchasing order in advance. it takes at least 3-4 weeks to recived the goods after
Exotica melamine made the purchaing order. Therefore Exoticamelamine keeps ample amount
of raw materials on hand so that if there is any sudden increse in demand they donot run out of
stock.

7.5 Production

 The Process Type at Exotica Melamine

Exotica Melamine uses Batch Processing for production. The main reason for using this
particular process is that, Exotica being a melamine company need some moderate variety in its
production process. Example- the production of different kinds of melamine products is more or
less similar (raw material remains same). Their only difference is in their design and processing
time. Therefore, we may say that the key factor in process selection of Exotica Melamine is
moderate variety in production. Another factor is that, a batch manufacturing facility produces
intermediate volume of each good.

The advantages of batch processing are as follows:

• Production flexibility is there.


• Per unit cost will be less than job shop.
• Planning and scheduling of production process will be moderate than the job shop.
• Output variety can be increased but at a less cost.
• Equipment utilization will lead to high usage of total capacity.

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Exotica Melamine Ware

• Batch processing can be performed with semi skilled workers that will reduce the labor
cost.
Theoretically, moderate volume can be a disadvantage of batch processing. But, as Exotica melamine
needs a few more varieties to be added, batch processing helps it to do that. For example, as Exotica
melamine has to produce different varieties of similar products (exp-Dinner plates) to meet what the
customer really expects from them, batch processing is an effective process with which this company can
satisfy the hidden demands of its customers. Besides this, the company is able to maximize the utilization
of its total capacity, which will help to compete within the industry as it did before.

The Production Process of Dinner Plates:


Exotica Melamine produces more than 48 brands of melamine products. It must be said that most of those
follow a similar production process. For example-the production process of Dinner Plate is quite the same
as Soup Bowl. The basic difference is in the design\shape and time required to process those inputs. Also
different products require different sets of conditions for production. This means things like- temperature,
amount of materials varies for different product while they are produced.

Exotica melamine first receives the raw materials from supplies and stores them at the
warehouse. A sample of the raw materials is sent to the Exotica’s Quality Control Department.
There intensive testing is done on the samples (of raw materials) and then they are compared to
the standard required to produce the melamine. If the raw materials meet the standards then they
are approved by the Exotica’s Quality Control Department and sent for processing (production).
If they fail to meet the standard then they are rejected and sent back to the supplier.

Our product under study “Dinner Plate” has 12 sub-processing units in its production line.

The manufacturing process of Dinner Plates can be described in the following manner:

Adding Glue to Paper:

The printed tracing paper that Exotica melamine outsourcers from other companies, those are
basic print design on the melamine product. Then synthetic glue (cyanoacrylate) is added on the
opposite side of the printed-paper. Labor skill: low

Heating:

After adding the glue, the paper is then dried in a large electric oven. Labor skill: low

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Exotica Melamine Ware

Cutting:

After the paper is dried it cut into desired shape according to the design. Labor skill: high

Weighing:

The ingredients (melamine molding compound- 0.1 to 10 percent of N-methyl-2-pyrrolidone and


a resin selected from the group consisting of epoxy, phenolic and silicone resins) are first
weighted. For dinner plate 125g. Labor skill: low

Heating the Compound:

After weighing, the compound is heated in the furnace for 40 to 60 seconds at 120˚ Celsius.
Labor skill: low

Compressing:

This process is machine intensive. The preheated compound is placed into the machine. The
machine compresses the compound at 180 psi and apply heat at 150-160˚ Celsius for 30-50
seconds to form the basic shape of the plate. Labor skill: moderate

Adding the designed paper:

After forming the basic shape the worker add the designed paper on the plate, then the machine
compresses again at 120 psi and apply heat at 140˚ Celsius. This process attaches the print design
on the plate. Labor skill: moderate

Adding Melamine Shiner:

After adding the print design the worker add melamine shiner (Methyl Ethyl Ketoxime) on to
plate. Then the machine compresses again at 80 psi and at 100˚ Celsius. This process makes the
melamine to shine which would otherwise look dull and gloomy. Labor skill: moderate

Grinding:

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Exotica Melamine Ware

After the plate has been made, the edges of the plate are grinded using a grinding machine to
smooth the edges. Labor skill: moderate

Polishing:

After grinding, the plates are polished to shine even more and look nice. Labor skill: moderate

Plastic Wrapping:

To prevent from dust and other harmful particles the plate are wrapped in plastic; usually three
plate together. Labor skill: low

Packing:

After plastic wrapping the plate are packed into boxes; usually six plate in a single box. The
boxes are made from recycle paper which the Exotica melamine outsources from other
companies. Labor skill: low

At last the finished products go to inventories. The production process ends here. They fulfill the
order slips provided by the marketing department. Thus they meet production schedule.

Exotica’s Quality Control Department plays a crucial role in the whole process. Their task begins
from checking the raw materials (as mentioned earlier) to packing. They can check quality at any
stage of production to assure the best quality.

At Exotica Melamine if the raw materials are rejected before production only then it is sent back
to the suppliers. But if at any other stage of the process a fault is found the rejected items will be
considered just as scrap. The production process is stopped immediately.

Analysis of the process of Exotica Melamine:

Activity Batch At Exotica Melamine


Work in process Moderate Moderate-High
Cost per unit Moderate Moderate-High
Equipment Flexibility Moderate Moderate

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Exotica Melamine Ware

Fixed costs Low-Moderate Moderate


Variable Cost Moderate Moderate
Labor skills Moderate Moderate-low
Volume output Low Low-Moderate
Weighing melamine
Scheduling Moderate Complex Low Complex mounding compound
Job Variety Moderate Moderate to High

Heating the compound


Exotuca Melamine (dinner plate) Production process: (Batch)
Putting the preheated
SHAPE \* MERGEFORMAT
compound in the
compressing machine &
apply heat to form the
basic shape

Adding the designed


Adding glue to the printed-
paper & compressing
paper
again with heat

Adding melamine shiner


Heating the paper to dry
& again compressing
with heat

Cutting the paper into


Grinding the
desired shaped according
to design edges

Polishing

Outbound logistics: Our outbound logistics will be


Plastic wrapping
 Warehousing

 Order fulfillment

Packaging
 Transportation

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Discharge
Exotica Melamine Ware

 Distribution management

4. Marketing & Sales: Marketing and sales activities will be included following

 Channel Selection

 Advertising

 Promotion

 Selling

 Pricing

 Retail management

Supporting activities:

1. Firm Infrastructure:

 Organizational Structure ( we will follow horizontal organizational structure)

 Quality management ( We have product quality control department)

 Company culture

 Public affairs

2. HRM: (Employee recruiting, hiring, training, development, and compensation)

The company follows on the job training for its production workers. To motivate employee the
company pays a performance bonus, promotion. On the other hand company uses a non pay
motivation technique by high lighting the best performer of the month in various sectors.

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Exotica Melamine Ware

3. Technological development: (Process automation, design, redesign)

It uses world-class technology from the Long Chung Company of Taiwan. The sources of raw
materials are mainly from Taiwan, Indonesia, Thailand and China. The best raw material comes
from Taiwan.

4. Procurement: (Purchasing inputs such as raw materials, supplies, and equipment)

 Some office equipments: (Computers, Printers, Fax machines, Power Generator, Copier,
etc.)

 Technical and Manufacturing equipments: (Semi- automated machine, High-frequency


preheating machinery, etc.)

7.6 Equipment & Machineries:


Since our business will produce melamine products, there will be maximum usage and need for
equipment and machineries in producing the products. However, in running the overall business
we will be using different equipments. We will basically be needing equipments and machineries
for two purposes. One purpose will be to carry out our day to day work in the office and other
purpose will be for manufacturing the products

Some office equipments are listed below:

1. Computers
2. Printers
3. Fax machines
4. Power Generator
5. Copier

Technical and Manufacturing equipments - High-frequency preheating machinery (for melamine


industry):

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Exotica Melamine Ware

Function:
It is mainly used to the preheating process before moulding of thermo set materials, such as
melamine. It enhances the liquidity of materials, and decreases harmful ingredient and increases
the glossiness of the product surface.

Features:
1) Introduce advanced technology from Japan. World famous brands are adopted for the overall
unit. Thus the performance is guaranteed.
2) Full automatic hood structure requires no air supply. Accurate switching is ensured.
3) Modification is convenient; only one press is required for the operation.
4) Safety protection -- Multi-protection measures are taken to ensure the man/machine safety

Exotica Melamine Ware Equipment

Commutator Machinery

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Exotica Melamine Ware

The device is mainly applied for the pre-heating processing for thermo-set resin material such as
melamine, epoxy, bakelite and urea plastic, etc., including preformed project such as compressed
molding, transfer molding and extrusion molding, etc.
The H. F. Preheating process is widely applied for Thermo-set plastic molding such as for
electric components, mechanical parts, bakelite products, urea products, melamine table wares,
and packaging of IC, commutator, transistors and other micro-electronic components.
The device can be used to improve the surface glossiness of (imitating ceramic) products,
prevent water-like wrinkle and strengthen the fluidness of powder resin. It can pre-heat and
soften the powder resin (caking) prior to the plastic packaging for the electronic components and
semi-conductor IC, so as to improve the grade and performance for the products.

7.7 Research and development

R&D department will have a research team comprising engineers, psychologist technicians to
find new information on consumer behavior and competitors. Exotica’s R & D department can
use other researches as a secondary source of data. However, there is very limited amount of
research & development in this sector. Almost all the manufacturers in the country still depend
on research & development done in the other countries.

7.8 Quality Assurance:

Exotica’s Quality Control Department plays a crucial role in the whole process to maintain the
product quality. Exotica melamine first receives the raw materials from supplies and stores them
at the warehouse. A sample of the raw materials is sent to the Exotica’s Quality Control
Department. There intensive testing is done on the samples (of raw materials) and then they are
compared to the standard required to produce the melamine. If the raw materials meet the
standards then they are approved by the Exotica’s Quality Control Department and sent for
processing (production). If they fail to meet the standard then they are rejected and sent back to
the supplier. Moreover, we are careful to assure the best quality of each factors related to the
product manufacturing.

8. Marketing Plan

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Exotica Melamine Ware

8.1 Brand Elements

Company Name: Exotica Melamine Ware

Mission: We, the new generation of melamine producers, will focus on premium quality melamine
products with innovative style and design.

Vision: Establishing a worldwide brand Image by reintroducing Bangladeshi Melamine products in the
Global Market.

Brand Slogan: Creating a divergence in your tableware

8.2 Product, Place, Pricing & Promotion strategies of the company (4P’s):-

 Products: -

Our Melamine Industry produces crockery at the cheaper possible price with high quality and unique
design. Our main differentiation from the competitors will be achieved through this unique design of
product, which will serve as the unique selling proposition of our products. In its product assortment it
will include various sizes and designs of Mug, glass, Plates, Bowl, Tray, Spoon, Salt pot & Tea cup. As
crockery melamine endures longer than that of ceramics, glass, and tin made products, we expect to
capture market share of our product quickly. Where as it will use best quality food graded raw materials,
which is hygienic and approved by BSTI (Bangladesh standard and testing institute). Quality product,
attractive designs and standard packaging and distribution system will gain the confidence of customers,
distributors and retailers. This ultimately turns the product as a highly accepted brand among its
customers.

 Place (distribution):-

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Exotica Melamine Ware

The company follows dual distribution system to distribute its products. It uses 3 distribution
vehicles to transport its product straight to the door of retailers and distributors. More over the company
has two authorized agents through which it tries to cover its distribution needs. The company’s markets
sphere extends beyond the domestic market. After functioning fully in the domestic market, the company
will also start to export its products into India through Bhutan. Our marketing research indicates that we
have a huge sales potential in India. Since exporting any product from Bangladesh to India is restricted,
we have decided to open an agency in Bhutan. This will not be like a foreign direct investment, but we
will give dealership to a local company in Bhutan to act as our buying house to import our products. Then
we will export our products from Bhutan to India. This how our overall cost will be lower and we will be
able to capture the Indian market.

The domestic Market- (initially)

 Pricing:-

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Exotica Melamine Ware

To be competitive in the market, the company will adopt target-pricing strategies. Actually
success in target pricing completely depends on how well a company can control its cost. To provide
better quality products at an affordable price normally less than other branded products of same quality.
To reduce cost, by keeping the quality intact, the company reduces its wastage of raw materials, other
resources, and better-trained human resources management. The wastage level of the company is 50%
lower than its competitors. More over the Management of the company will ensure to reduce wastage
level further more. By being effective & efficient in using raw materials, human resource and
machineries, the company will achieve lowest possible cost for its products than its competitors. Through
standard setting for workers the company increases its production to the highest level at the industry,
which reduces cost in turns.

 Promotion (Advertising):-

The company will maintain the best quality for its products and use selected advertisement
medias like radio, television and print media. For radio commercial- the company shall use attractive
music tune and voice of a housewife to grab listeners attention. Advertisement in T.V will be given
between prime Dramas and different cooking shows. The company will specially advertise on ATN
Bangla. In terms of advertising, the company will use attractive models as housewives using the products.
As mentioned earlier, the company will also use print media. Colorful ads will be given in different
newspapers and different cooking/ household related magazines. Moreover, the company will distribute
free calendar, T-shirts for its distributors, sellers & buyers. It will also participate in DITF (Dhaka
International Trade Fair) as a form of advertisement to enhance its brand image, at the same time generate
sales.

This is how we have allocated our budget-

1. TV commercial- The advertisement will be shown only on ATN Bangla, every weekend at once a day
for the whole month. Emphasize will be during the night soap opera and cooking shows. Moreover,
special emphasize will be given in showing the ad on Friday evening during Bengali movie (this is the
most important ad to reach the rural people.

Cost of Commercial: 8*1*Tk.1,000*10s= Tk. 80,000

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Exotica Melamine Ware

2. Radio commercial- The radio commercial will be broadcasted only at ‘Radio Today’ every
alternate weekend at once a day for a month.

Cost of Commercial: 4*1*Tk.1000*10s=Tk.40, 000

3. Print Media- The print advertisements will be put only at ‘Prothom Alo’ on friday (5 col.inchs)

Cost of Commercial: 4*5*Tk.2, 500=Tk.50,000

 Total Cost= Tk. 170,000 (per month)


 Total cost= Tk. 2,040,000 (1st year)

Summery-

Promotion Type Media Frequency Est. Cost-yr1

TV Commercial ATN Bangla Every weekend, once a 960000


day

Radio Commercial Radio Today Every alternate weekend, 480000


once a day

Print Media Prothom Alo Every Friday, 5 column 600000


inch

Total Yearly Expense 2,040,000

8.3 Segmentation, Targeting and positioning strategies of the company:-

o Segmentation: -

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Exotica Melamine Ware

The company will mainly use mass marketing strategy through out the country. Due to the
limitation of resources the company will first operate in some selected districts. In future the
company has its vision to expand its market area all over the country. Though the company is a
consumer goods producer, sometimes it will supplies products to business for their specific order
such as SMC (social marketing company), Hotel Radisson, and over hundreds of decorators
including defense mess. Exported items will be produced according to the specification of
importer country. The company will also produce customized products for special orders
comprising or more units. Customized product’s features will include demanded logo, design,
size and other such attributes. The company will follows a micro marketing practice with
inclination to build a strong bond of customer relationship with its customers.

o Targeting: -
Market targeting refers to the selection of one or more market segments to which a
company can serve with its resources after considering the alternatives and the potentials of the
market. The nature of the industry, level of buyers, general economic conditions of Bangladesh
and the nature of the product don’t give the scope to any melamine company to adopt
differentiated marketing strategies. So the company will offer an undifferentiated product, but
the target customer group will be the middle income group to upper income group, those who
can afford it. Our geographical target area in terms of the domestic market will be the urban and
sub-urban cities. Through out its production, distribution, pricing and promotional activities there
is no differentiation, either for customers or for any geographical segment in the country. To
capture the export market for melamine products, the company will provides better quality of
products, packaging at a lower price in comparison to the domestic market. Company will reduce
its price from the exported products to the extent it gets tax rebate from tax authority. This gives
the company a competitive advantage in the export market compared to the domestic market and
also over the foreign competitors.

o Positioning: -
The primary target of our company is to re-introduce melamine to both domestic and foreign markets.
Positioning is the combination of marketing strategies which aims at occupying a certain position in the

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Exotica Melamine Ware

buyers’ minds. A company might obtain the position in the buyers’ mind through better product
attributes, price or quality, offering the product in a different way than the competitors and so on. Our
company will offer improved quality of products in the industry at a lower price even than the market
leader, which ultimately helps to position the product in the buyers’ minds as the best quality product.
The market share of the company is expected to grow at a steady pace. The brand 1 melamine, Sharif
melamine is an old and reputed company in the market. It has an establish brand loyalty, good customer
base for which it is less emphasizing less on quality and charging more price comparative to its quality.
Where as our company will be a new company and still trying to make a strong customer base and brand
loyalty in the market, for this reason it is more emphasizing on quality and charging more reasonable
price to its quality.

Positioning Map

Exotica Melamine
Ware

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Exotica Melamine Ware

Data presented in the figure has been taken from the results of a survey conducted by Diamond Melamine
Industry and our company is positioned based on our assumptions.

As it can be seen from the above included graph, among the five major competitors in the market, United
Melamine offers the product at the cheapest possible price, but the quality of their product is also lower
compared to others. Crown Melamine offers their products in a better quality, but charges a bit higher
price. The current industry leader, Sharif Melamine is able to charge the highest price for their products
due to their established brand name. Sharif Melamine’s closest competitor Diamond Melamine offers a
little better product, but charges a little lower price and they are gaining market share quickly. Now our
company is expected to offer products which are of the same quality as of Diamond Melamine’s, but we
will be offering our products at a little cheaper than them in order to have a competitive edge. Moreover,
our unique designs should give us an upper hand over all the established melamine companies.

9. Human recourse strategy and planning

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Exotica Melamine Ware

It is very important for any company to have a well-defined and apparent HR policy to run the
firm smoothly. It starts from recruitment and continues to turn off. All aspects are included here.
In one word, a company is nothing without an excellent HR. The EXOTICA MELAMINE
WARE also has an HR Policy; but, before that there the some basic principles and
commitments which the company has to maintain; they are-

Basic Principles of the HR Policy


Prohibition of Child Labor
Prohibition of any form of Discriminations (Gender,
Age, Sex, Race, Religion, Status)
Equality
Freedom of Association and the Right to Collective
Bargaining
No Harassment
Maintaining all Possible Legality
Compliance of Occupational Safety & Health
Provisions
Prohibition of Forced Labor
Compliance of Environmental & Safety Provisions
Affirmative Action
Ensuring Social Compliances

And the commitments towards the workforce are as follows-

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Exotica Melamine Ware

Lowest
Wage & Proper
Overtime No Child
Salary Environme
Payments Labor
nt

Social
Discipline Training
Complianc
& Rules Programs
es

Legality&
Compensa
No
tions &
Discrimina
Benefits
tion

Factory
Culture

The HR Policy of the EXOTICA MELAMINE WARE starts following-

Recruitment Process

Recruitment is an important job for any organization. To recruit there are some steps that the
EXOTICA MELAMINE WARE will go through.

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Exotica Melamine Ware

Manpower Analysis
Job Analysis
of Number

Recruitment Selecting Internal


or External

Job Analysis

The main analysis should be conducted by the supervisors. There are certain reasons to assign
them to analyze-

• They can understand the posts needs as they observe closely


• They can easily figure out the problems with the existing systems
• They would have direct communications with the workers

They needs to figure out or define the following things-

• Job Content- what are the responsibilities and the duties the workers need to perform.
How to work or perform the tasks.
• Requirements- they should figure out what types of skills and capabilities are needed in
the people. What qualifications are required? It is to be done based on the qualitative
approach.
• Relationship & Environment- they should figure out how the worker should behave, to
whom and how they will be liable, what conditions they would work what type of work
environments are there and so on.
After they do the analysis they would hand over their findings to the upper level management.
After their analysis the management would again give the supervisors for the manpower analysis.

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Exotica Melamine Ware

Manpower Analysis

Manpower planning at the EXOTICA MELAMINE WARE would be divided into two parts;
which are-

 Manpower Plan for workers


 Manpower Plan for management

Manpower Plan for workers

As it is a manufacturing company its success mostly depends upon the productivity of the
workers. Therefore, to make a good manpower plan for the workers is very important for them.
To plan accordingly the supervisor & the HR department goes through the following three steps-

 Calculation of Manpower Required


 Permission from Higher Authority
Manpower Plan for management

 Calculation of Positions Required


 Approval from Higher Authority

Selecting Internal or External

External Recruitment

Whenever there would be any empty entry-level post, or lack of internal supply, or new
employees needed then the company should look for the external recruitments. By many sources
and by many methods it can be done. Besides, the market of the labor should be considered;
whether it is tight or loose labor market or not. Normally most of the time there is good supply
of workers; therefore recruiting right person would be difficult due to large number of supply;
whereas, in the management level yet now people do not prefer the Garment industry as a
lucrative place to join. Thus, EXOTICA MELAMINE WARE should do something to make it
lucrative place to join. EXOTICA MELAMINE WARE can brand as an attractive recruiter.
Based on these the management should decide whether to go for internal or external recruitment.

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Exotica Melamine Ware

Recruitment

There are some principles which the EXOTICA MELAMINE WARE would follow while
recruiting. These are-

Principles While Recruiting

Prohibition of Child Labor


Prohibition of Forced Labor
Equality (EEO)
No Discrimination
Employment Contract

At first recruitment notice would be given or published. Then recruitment would be done. For
this following recruitment channels or the methods can be used-

Direct Applications-

• Advertise through Newspapers


• Electronics Media
• Posting

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Exotica Melamine Ware

Selection Process: To select from the recruited people the management can go through the
following procedures-

Steps When to do Who to do Description

1. Pre- after getting all Immediate It is mainly the screening of the


Screening the application supervisor; in recruitment after getting all the
forms & applies some cases HR applicants
executives

2. Initial After selecting HR executives & In the management level it


interview the screened Supervisors would be mostly the written test
applicants to figure out their knowledge;
in the worker level it would be
the promises of their ability

3. Reference/ot After selecting Supervisors It is to check the references; it


her checks candidates from also can be the checking of
the initial proper birth certificate to
interviews eliminate child labor; to check
the academic transcripts.

4. Testing To check the Supervisors & For the worker level it would be
capabilities after Line mangers checking the production
initial interview capacity; for the management it
would be checking their
capability to handle the blue-
collar

5. Interview Final interview For the It is the formal procedure to


after testing management- know about the candidates and
HR Director, rank them to final selection
HR manager

For the worker-


HR executive,

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Supervisors

6. Job offer & Formally offer HR personnel Based on the ranks the selected
Salary the position to through the deserving candidates would be
Determinati the recruited departmental given the employment letter &
on candidates after supervisor contract to join the company
the interview where all the terms &
conditions would be written,
which would be kept both to the
employee & employer; besides,
pay grade will be determined in
this stage. For the workers &
lower levels they will be given
specific pay grade, and there
would be chance for bargaining
for the upper management

7. Other Formal By the Other testing would be done if


testing & ID procedures after responsible required; such as medical
Card final selection people testing with validity; and they
will be given the ID card
(Appendix-02) which they have
show in their work area

(Selection Steps)

(All the history of the candidates would be recorded in the skill inventory and HRIS which is
discussed later.)

Terminations & Unemployment Compensation

To recruit new people to have empty posts is necessary which a resultant of termination is. The
EXOTICA MELAMINE WARE would follow mostly the industry practices in this regard. There
are certain ways to terminate which the EXOTICA MELAMINE WARE is going to follow.

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They are-

 Retrenchment
 Discharge
 Dismissal
 Termination
 Due to disciplinary action
 Retirement

 Retrenchment- according to the labor law 2006, section 20, the EXOTICA
MELAMINE WARE authority would be able to retrench any worker if there is
unnecessary internal labor supply.
 Discharge- according to the labor law 2006, section 22, the EXOTICA MELAMINE
WARE authority would be able to discharge any worker if he/she has physical or mental
disorder approved by any registered doctor.
 Dismissal- for misbehave and criminal activities the EXOTICA MELAMINE WARE
would be able to dismiss any worker without giving any pre-notice and any
unemployment compensation. Besides, if the worker or employee is being dismissed
due to doing misbehave then they will not get any recovery. Followings will be regarded
as misbehave-
 Termination- there is mainly two ways to terminate people. They are-
a) Termination by employee- any permanent worker can resign from the post by
giving a written notice of resignation before 60 days of leaving. Besides, a
temporary worker or employee can resign from the post by giving a written notice
of resignation before 30 days of leaving. These are according to the labor law
2006, section 27. But rather giving written notice the worker can leave the
origination paying the same amount of the money he/she would get for that time.
b) Termination by employer- employer can also terminate the employees or
workers through the proper way. There are certain unemployment programs they
need to go through.

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 Retirement- according to the Bangladeshi labor law after the age of 57 people should
retire from the position.

Retirement Benefits

According to the labor law 2006 section 26(4) retired workers should be paid all the deserved
and previous dues. Moreover, there should be some retirement benefits for the retired people.
There should be Provident Fund for the employees and workers. In the entire job period an
amount should be saved for them as for the fund which they would get after the retirement. If
any employees get terminated of switched then the saved fund up to that period he or she can
take with him or her.

Training & Development Programs

To enhance the productivity of the entire organization it is very important to provide training and
development programs for the employees and the workers. The EXOTICA MELAMINE WARE
would also provide training and development programs to the employees and the workers. All
the programs would serve the purpose of-

 Career planning
 Assessments
 Competency Modeling
 Skill-based training
 Company university

Health & Safety

Health and safety issues are vital for any company. The EXOTICA MELAMINE WARE would
also provide the health and safety facilities and required training programs to the employees and

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the workers. After certain periods, such as 3-4 months these sorts of trainings would be
conducted. To conduct the programs specialists from outside would be hired. Based on special
needs, like- seasonal diseases, epidemics, these sorts of programs can be organized. These sorts
of training programs are for awareness of the employees and the workers about how to prevent
from the health damages and how to keep safe own-self and the company’s wealth.

COMPENSATION PLAN

Salary and wages will be maintained in following ways to cope up with the legality of the labor
laws.

 Salary & wages pay- this should be paid after determining the regular duration of
workings and the extra work hours.
 Increment of salary or wages & Promotion- based on ability and experience salary and
wages would be incremented. Increment will be for 2 times by 10% of the basic for the
management. After that he/she will be promoted.
 Payment time- after giving the salary of the first month within next month’s first seven
days it must be paid.
 Salary/Wage slip- while giving it slip of clear explanation should be provided.
 Defer of salary/wage- wages of worker should never be deferred.
 Minimum Wage/Salary- the EXOTICA MELAMINE WARE would pay according to
the following described process or grade ways comparing to the Bangladeshi law.
 Deduction from wages- according to Bangladesh labor law 2006, section 125 (2) for
following matters or discipline breaks salary or wages can be cut which can be regarded
as the punishments or negative compensation of the workforce-

Rewards and Incentives

Other than the compensation programs and the benefit programs there will also be some rewards
and incentives for the workers which are-

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Reward for crossing target (Recognition)

If the workers of the production floor can achieve the target of cross the target of the production
before the dead line then they will be given incentives. It can be

 Recognition to All
 Vocal Appraisal
Reward for extra-units produced (Piece Rate

If the worker can produce beyond the target within his or her time period then he/she can be
rewarded financially with piece rate pay.

Worker/Performer of the Month

Every month the best performer from every unit and from every floor will be rewarded the
recognition of the “Worker of the Month”. In every floor on the notice board their photos will
be hanged for the whole next month so that the entire workforce can recognize them, which will
also be motivating for all.

Evaluation of Production & Performance

In each steps evaluation or auditing of the production and the performances will be done. By
evaluating the production and the performances the strength and the weaknesses will come out
which will helpful for the betterment of the production. To evaluate the production and the
performances the evaluation or auditing technique will be as follows

Total Quality Management

It sustains the competitive advantages by consistently exceeding the current and future
expectations of customers, based on continuous improvement in all processes, goods and
services through the creative involvement of all employees and workers. All the people have to
work on it. Every people will be careful regarding the Quality of the products every time so that
the Quality improves continuously. The EXOTICA MELAMINE WARE will firmly follow
Total Quality Management to construct own self more spirited in the comprehensive apparel
trade market after post MFA era. The quality management objective will be ‘Quality at First

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and Forever’ in the business plan and communicated to all level of employees from top level to
lowest level for focusing on the buyers’ desires and expectations with regards to-

Balanced Scorecard

Balanced Scorecard will also be maintained so that every time the true picture of the production
and performances come out towards the management. The immediate supervisors in every
department will liable to record the findings and to report to the immediate ones, in following
ways the reports will go to the HR personnel so that they can measure or evaluate the
performances.

Leadership

To run the EXOTICA MELAMINE WARE solely depending on autocratic or democratic


leadership style would not be viable. To some extend autocratic is required like as while
controlling the workers; to few extend democratic style is required like as while getting feedback
or suggestions; where as phantom style is also to be used.

Control Power

While controlling the wages, salary, compensation there should be a dictation. The main power
will be in the hand of the management so that the workforce feels that they are liable to the
management. Beside, when supporting them, giving them the compensation there will be the
friendly leadership. The management should understand the mentality of the workers. While
taking the feedbacks from the workers they should behaved friendly so that they feel part of the
company. When suggestions are taken from them then fully autocratic style should be there.
Therefore, it can be said that leadership should vary according to the needs. If the power controls
of the management and the participation of the workforces comply with each other then the
overall mission, vision, or the goal of the company will be achieved.

10. Foreseeable and Unforeseeable Risk

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10.1 Foreseeable Risk

Θ Melamine industry is a lucrative industry. Therefore high expected profit will encourage other new
entrants to come to the industry.

Θ Foreign firms may show their interest in this industry which may decrease our customers.

Θ Increasing price of raw materials is a big threat to us. It may decrease our profitability in the long run.

Θ Unpredictable political situation of the country is another threat to our business. Political instability has
always hampered business of all types in Bangladesh. Sudden hartal, street agitation or highway blockage
by political parties will be great barriers for Exotica Melamine Ware.

10.2 Unforeseeable Barriers

Θ A sudden change in government policy about melamine sector can hamper the operation.

Θ The natural calamities may suddenly take place and that will hinder the operation.

Θ Chances of maritime accident.

Θ Economic downturn can hamper Exotica Melamine Ware as overall income level would go down.

Θ Decrease in purchasing power of the customers.

Market risk
Public demand for melamine product may change drastically over the time. In addition to that, different
external environmental causes like political and legal issues may results in highly risky market situation.
For example, increasing inflation can increase the cost of the company. However, we expect the demand
for melamine product will increase day by day because we are producing a product with ceramic look but
unique in design and high in quality. This intuition regarding the market indicates that there are lots of
prospects for melamine.

Operational risk

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The Company has only 50 employees. The absence of the office employees will not hamper the
operations that much. However the absence of lower level workers may create problem.

Credit Risk

Initially the company will need money to raw materials, equipment and machinery. This money is
expected to finance by taking loans from the bank and from our funds. So if we encounter loss it will be
tough for the company to pay back its debts.

Liquidity Risk
In the first 2 years the company is expected to loss substantial amount of cash due to startup costs. As a
result the company may face huge cash crunch due to losses. In that situation the company may have to
take additional loan from the banks. However, a substantial portion of asset of the company will be
pledged for bank loan. This may force the company into a short-term liquidity crisis.

11. Financial Management Plan

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Melamine is not a new line of business in Bangladesh. Already there are many melamine companies that
are performing in the industry. However it seems to be very prospective as the market is not yet in its
mature stage.

As the new entrants in this market we need to be very cautious about the quality of products, different
promotions, price and also the advertising expenditure which are needed to boost up sales.

As we are going to be market follower, we need to be very much cautious about cost reduction through
improved efficiency and good supervision, not at the cost of bad quality.

General Background

• Number of machines will be five.


• Each machine is capable of producing different categories of Melamine product.
• There is no tax for the first five years for the new company situated in Dhaka and Chittagong, and
as we have decided to set our business in Dhaka so we do not need to pay tax for the first five
years.
• We plan to use electricity as the main source of energy, for the initial stage to reduce extra cost.

11.1 Assumptions

After conducting all the required research, forecasting and analysis, we have found that the initial
investment or project cost of our business would be Tk.21000000. We have studied our market and made
some financial assumptions which would help us to invest this total investment effectively and would
give us the maximum return.

The assumptions we have made during estimating our balance sheet for the first five years of the business
are:

• 2 bighas of lands is bought at Tk.3000000 per bigha.


• Office building of 2000 sq. feet will be rented with a monthly rent of Tk.25000.
• Office furniture, computers, printers will be bought by investing 500000 and will depreciate at
the rate of 20% per year.
• Machinery will depreciate at the rate of 10% per year. ( As per Income Tax Ordinance 1984)
• 3 delivery vans will be bought at 1000000 each and will depreciate at the rate of 10% per year.

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Revenue and cost related assumptions

It is assumed that:

• Revenue will grow at 15% at the second year, 20% at the third year, and 25% at the 4 th and 5th
year initially.
• Cost of goods sold is 50% of the revenue.
• Wastage level will reduce by 6% for the learning effect and hence increasing operational
efficiency.
• Salaries and wages is 15% of the revenue.
• Other expenses are 12% of the revenue.
• Selling and distribution is 25% of the revenue.
• Other expenses in year 1 comprise business start up cost of Tk. 850000 and each year it will
reduce by Tk.50000 because of efficiency and also because of the reduction in the wastage level.
Other Assumptions

• Firm will run more on equity than debt, because at initial stage it will be really hard to attract debt
capital.
• Market Interest rate is taken to be 14.5% per annum. It is used to calculate the weighted average
cost of capital of the company which is then used to discount the Free Cash Flows of first 5 years’
expected values.
• It is assumed that business will run for the foreseeable future.
• And as a result we will have to find a terminal value for the company to get an idea about the Net
present Value.
• We will follow Straight-line Depreciation method for our fixed assets.
• 9% interest on the short term investments is considered and the company will get if it invests any
excess cash in hand.

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Depreciation

Fixed Asset Schedule Cost in Tk. Dep. Rate

Land 6000000 0%

Building 2500000 20%

Machine (5) 7000000 10%

Office furniture, computers, printers 500000 20%

Delivery Van (3) 3000000 10%

Total Fixed Assets 19000000

11.2 Financial Plan

• Out of total capital requirement of Tk.21000000, Tk.17000000 will be provided by the six share
holders and the rest Tk.4000000 will be financed by loan from friends and family.
• Lease facilities will not be allowed as business is in its infant stage probably no company will be
interested to invest in such a new venture.

Total investment required in this project

Breakdown of Investment Tk.

Investment in Fixed Assets 19000000

Investment in Working Capital 2000000

Total 21000000

Fixed Cost at initial stage Tk.

Owned Land (2 Bighas @Tk 30 lakhs) 6000000

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5 Machines @ Tk. 1400000 7000000

Building / Factory Premises 2500000

Office furniture, computers, printers 500000

3 Delivery Van @ Tk. 1000000 3000000

TOTAL 19000000

Working Capital Requirement

• There will be approximately Tk.2000000 required for working capital for purchase of Raw
material, payment of wages and all other day to day expenses for running the business.

11.3 Budgeted Income Statement

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Exotica Melamine Ware

Details Year 1 Year 2 Year 3 Year 4 Year 5

Tk. Tk. Tk. Tk. Tk.

Revenue 10,000,000 11,500,000 13,800,000 17,250,000 21,562,500

Cost of goods sold (5,000,000) (5,750,000) (6,900,000) (8,625,000) (10,781,250)

Gross Profit 5,000,000 5,750,000 6,900,000 8,625,000 10,781,250

Expenses:

Selling and distribution (2,000,000) (2,875,000) (3,450,000) (4,312,500) (5,390,625)


expenses

Administrative expenses:

Salaries (1,500,000) (1,725,000) (2,070,000) (2,587,500) (3,234,375)

Other expenses (1,200,000) (300,000) (250,000) (200,000) (150,000)

Interest Expenses (580,000) (580,000) (580,000) (580,000) (580,000)

Operating Profit (280,000) 270,000 550,000 945,000 1,426,250

Interest income - 49,875 49,875 125,210 177,802

Net Profit / (Loss) (280,000) 319,875 599,875 1,070,210 1,604,052

11.4 Budgeted Balance Sheet

Details Year 1 Year 2 Year 3 Year 4 Year 5

Assets: Tk. Tk. Tk. Tk. Tk.

Fixed Assets:

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Land 6,000,000 6,000,000 6,000,000 6,000,000 6,000,000

Building 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000

Machinery 7,000,000 7,000,000 7,000,000 7,000,000 7,000,000

Delivery Van 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000

Office equipment 500,000 500,000 500,000 500,000 500,000

Total Fixed Assets 19,000,000 19,000,000 19,000,000 19,000,000 19,000,000

Accumulated depreciation (1,600,000) (3,200,000) (4,800,000) (6,400,000) (8,000,000)

Net Book Value 17,400,000 15,800,000 14,200,000 12,600,000 11,000,000

Current Assets:

Cash 2,920,000 1,889,875 1,475,000 3,527,585 4,267,500

Investments - 525,000 525,000 1,318,000 1,871,600

Accounts Receivables 1,500,000 3,625,000 5,939,750 6,764,375 9,404,912

Total Current Assets 4,420,000 5,514,875 7,414,750 10,291,960 13,672,412

Total Assets 21,820,000 21,839,875 22,139,750 24,209,960 26,544,012

Liabilities and equities

Short term liabilities:

Sundry Creditors 1,100,000 800,000 500,000 1,500,000 2,230,000

Long term liabilities:

Loan 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000

Total liabilities 5,100,000 4,800,000 4,500,000 5,500,000 6,230,000

Equity:

Share capital 17,000,000 17,000,000 17,000,000 17,000,000 17,000,000

Retained Earnings (280,000) 39,875 639,750 1,709,960 3,314,012

Net Equity 16,720,000 17,039,875 17,639,750 18,709,960 20,314,012

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Total of liabilities and equities 21,820,000 21,839,875 22,139,750 24,209,960 26,544,012

11.5 Weighted Average Cost of Capital

We know that weighted average cost of capital is the average of the after-tax costs of each of the sources
of capital used by a firm to finance a project. The weights reflect the proportion of the total financing
raised from each source.

Now we look at WACC, and we see that its WACC hovers around some 12.90% in the first 5 years of the
business.

The interpretation of this value would be that the ‘rate of return’ or IRR (Internal Rate of Return) has to
be higher than this WACC value to have the project profitable for investors. So, the decision criteria for
whether to run this project or not would be,

IRR > WACC

In this case,

IRR has to be > 12.90%, on average.

WACC CALCULATION

Details Year 1 Year 2 Year 3 Year 4 Year 5

Long-term Liabilities 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000

Equity 17,000,000 17,000,000 17,000,000 17,000,000 17,000,000

Total LT Debt & Equity (4) 21,000,000 21,000,000 21,000,000 21,000,000 21,000,000

Weight of Debt Wd 0.1904 0.1904 0.1904 0.1904 0.1904

Financial Exp (Int) 580,000 580,000 580,000 580,000 580,000

Cost of Debt, Kd** 0.145 0.145 0.145 0.145 0.145

Owners' Equity (3) 17,000,000 17,000,000 17,000,000 17,000,000 17,000,000

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Weight of We 0.8096 0.8096 0.8096 0.8096 0.8096

Cost of Equity (Ke) (b) 0.1250 0.1250 0.1250 0.1250 0.1250

WACC 12.90% 12.90% 12.90% 12.90% 12.90%

** cost of debt is taken 14.5% as any loan provided by Standard Chartered Bank over one year is
charged @ 14.5%

Further Assumptions for NPV

• A terminal value will be calculated to calculate the net present value.


• It is assumed that the FCF of the company will become constant after the 5th year.
• Company does not need to pay tax for the five years, because it will be under tax holiday scheme
approved by government of Bangladesh.
Net Present Value
The company has a positive NPV. We took 5 years projected cash flow and came up with NPV of
positive value which means that the project is a feasible one.

Terminal Value = FCF of 5th year / WACC

= 3,996,708 / 0.149

= 26,823,545

FREE CASH FLOW CALCULATION

Details Year 1 Year 2 Year 3 Year 4 Year 5 Total

Tk. Tk. Tk. Tk. Tk.

FCF= Rev- 1,320,000 1,919,875 2,199,875 2,670,210 3,204,052


expnses+Dep-
CAPEX

Terminal Value - - - - 24,837,612

Total cash flow 1,320,000 1,919,875 2,199,875 2,670,210 28,041,664

Discounted cash 1,169,176 1,506,208 1,528,679 1,643,500 15,287,416 21,134,979


flows

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Initial investment (21,000,000)

Cumulative NPV (19,830,824) (18,324,615) (16,795,937) (15,152,437) 134,979 134,979

PAYBACK PERIOD = 4.99 years or 4 years and 11.88 months

11.6 Break-Even Analysis

If we look at our break-even trends over time, we can easily see a satisfactory downward trend in all of
the burden values. Since break-even point are the minimum points required to be achieved by business
simply to cover its fixed cost, the smaller the values, the less the burden on us. We have done the
breakeven point analysis on the yearly basis. We calculated the break even point on the sales value as the
range of products of our company is more so it will be very critical to calculate the breakeven point on a
unit basis.

BREAK EVEN POINT

Details Year 1 Year 2 Year 3 Year 4 Year 5

Tk. Tk. Tk. Tk. Tk.

Depreciation 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000

Salaries 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000

Start up cost 850,000 - - - -

Total fixed cost 3,450,000 2,600,000 2,600,000 2,600,000 2,600,000

Variable costs:

Cost of goods sold 5,000,000 5,750,000 6,900,000 8,625,000 10,781,250

Selling and distribution 2,000,000 2,875,000 3,450,000 4,312,500 5,390,625


expenses

Admin exp. - Fixed salary 850,000 1,025,000 1,320,000 1,787,500 2,384,375


exp.

Total variable cost 7,850,000 9,650,000 11,670,000 14,725,000 18,556,250

Revenue 10,000,000 11,500,000 13,800,000 17,250,000 21,562,500

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VC ratio to sales 0.785 0.839130435 0.845652174 0.853623188 0.86057971

1-VC i.e. CM ratio 0.215 0.160869565 0.154347826 0.146376812 0.13942029

So, Break Even 16,046,512 16,162,162 16,845,070 17,762,376 18,648,649

11.7 Internal Rate of Return

Here, we calculate the internal rate of return of our company for the first 5 years of operation, which is a
capital-budgeting criterion that represents the rate of return that a project earns.

IRR CALCULATION

Details Year 1 Year 2 Year 3 Year 4 Year 5 Total

NPV @ 12.90%

Total cash flow 1,320,000 1,919,875 2,199,875 2,670,210 28,041,664

Discounted cash flows 1,169,176 1,506,208 1,528,679 1,643,500 15,287,416 21,134,979

Initial investment (21,000,000)

NPV 134,979

NPV @ 13.5%

Total cash flow 1,320,000 1,919,875 2,199,875 2,670,210 28,041,664

Discounted cash flows 1,162,996 1,490,326 1,504,563 1,609,022 14,887,593 20,654,499

Initial investment (21,000,000)

NPV (345,501)

IRR=13.07%

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The IRR = 13.07 so it is greater then the WACC which is 12.9% so this shows that the project is
feasible.

11.8 Ratio Analysis

LIQUIDITY RATIO

Details Year 1 Year 2 Year 3 Year 4 Year 5

01. NWC to Total Asset Ratio 0.17 0.25 0.36 0.46 0.60

02. Current ratio 4.02 6.89 14.83 6.86 6.13

There is a trend of Net Working Capital to increase over time. The current ratio is also in a very good
situation which is always above the required ratio.

EFFICIENCY RATIO

Details Year 1 Year 2 Year 3 Year 4 Year 5

01. Total Asset Turnover ratio 0.53 0.61 0.73 0.91 1.13

02. NWC Turnover ratio 0.33 0.41 0.50 0.51 0.53

Overall, the company seems to be getting more efficient over time. Its total asset turn over has increased a
lot in first 5 years of operation and the net working capital turnover ratio also represents a good sign.

PROFITABILITY RATIO

Details Year 1 Year 2 Year 3 Year 4 Year 5

01. Return on investment -1.35% 1.52% 2.77% 4.71% 6.60%

02. Operating profit margin -2.80% 2.78% 4.35% 6.20% 7.44%

03. Fixed asset turn over in 0.53 0.61 0.73 0.91 1.13
times

04. ROA -1.47% 1.68% 3.16% 5.63% 8.44%

05. ROE -1.67% 1.88% 3.40% 5.72% 7.90%

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The company’s return on investment has improved over the time and will stand at 10.49% at the fifth
year. The operation seems to be fine as well, since it has a positive operating profit margin of 9.82% after
five years. This improvement is mainly due to the efficiency in operating expenses in those later years of
business operation.

The companies fixed asset turn over is expected to remain very low. However, this ratio is expected to
take off and be in a good position over time. Because, any business needs to utilize its fixed assets in a
profitable way over time, once they are well experienced into the business.

Finally, to measure, the company’s profitability, we look at their ROA (Return on Assets) and ROE
(Return on Equity) ratios. Both of them show similar patterns. Starting with negative values in the first
year, they are expected to grow at a constant rate in the near future.

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12. Long Term Sustainability

Exotica Melamine Ware will able to sustain in the long run because we are offering more value
for the money by providing a blend of good quality melamine product at a competitive price. Our
existing and future competencies will help our company to survive in the long run. For example
our product designs are very unique and high quality. Therefore we will be able to target the both
local and international customers. As we have said earlier that we want to become global. So we
will give more emphasis on durability, design and better quality. Therefore we will able to create
a global brand name. In addition we will build a robust infrastructure within a decade. It will
help us to enjoy economics of scale and better placement of products to the customers.

MGT 489.8 Page 75


Exotica Melamine Ware

13. References

Open Learning World, Cost reduction strategy, retrieved from www.openlearningworld.com


on 25th march,2009.

Thompson, A. , Strcikland, A. J. Strategic Management, 13th ed. , New Delhi: Tata McGrahill
Publishing Company Limited.

Bangladesh Web. 2007. Melamine Industry. Avaiable at


(http://www.bangladesh- web.com/view.php?hidRecord=26516)
[ accessed on 20th , March2009]

www.vaaluebasedmanagement.net
[ accessed on 25th March, 2009]

(http://www.bdyellowbook.com/catalog/Mills___Industries/Melamine_Industries/)
[ accessed on 25th March, 2009]

www.businessballs.com.
[accessed on 25th March, 2009]

(http://tutor2u.net/business/strategy/core_competencies.htm)
[accessed on 26th March, 2009]

(http://tutor2u.net/business/strategy/competitive_advantage.htm)
[accessed on 26th March, 2009]

http://www.12manage.com/methods_porter_competitive_advantage.html
[accessed on 26th March, 2009]

Adapted Michael E. Porter Competitive Strategy (New York Free Press, 1980), pp 35-40

Income Tax Ordinance, 1984. Dhaka. Bangladesh Gadget

www.decentplastic.com [accessed on 26th March, 2009]

MGT 489.8 Page 76