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We can see that how people’s life and the overall surroundings are changing very fast
with the flow of time. In Bangladesh the growth of population can be seen with the
naked eyes as the number of houses, vehicles are increasing day by day. Because of
mass of population, we are facing load shedding. It is going to be a big problem in our
daily life. Previously people were more comfortable to live in a big joint family. Now a
day people are becoming more self-centered and the big families are breaking down to
micro families for which the number of apartments in increasing rapidly in the capital city
of Bangladesh and they need more electricity for those apartments. The apartments are
becoming small in size with the increasing number of houses. Living a happy and
comfortable life we may need many things and electricity is one of them. But we have
limited capacity of electricity. Day by day it is a big issue for us. Now we are using new
equipment or product that connected with electricity then the product will work. As like
rice cooker, machine powered by electricity, trimmer etc. Because of those type of
product or equipment, we also need more electricity.
Keeping these things in mind we have come up with a new business idea which is
generate electricity by footsteps. This project is all about generating electricity when
people walk on the floor. Think about the forces you exert which is wasted when a
person walks. Generate electricity by footsteps is a unique concept in Bangladesh. It
uses the power, created by people walking or running. The electrical energy produced
by pressure is captured by floor sensors and converted to an electrical charge This way
it can make cities work by itself to produce energy. And this power source has many
applications as in agriculture, home applications and street lighting. We said it is a new
process, for that might be we will face many problems. This device will use in all
crowded spots with a big number of pedestrians such as mosques, stadiums, big
shopping malls, theaters, movie hall etc. This technique of energy harvesting is suitable
for such applications as street lighting, advertising billboards, and information displays.
So, our ideal customer will be street people who walks on the street, also the people
who goes to the big shopping mall or movie hall or mosques. That indicate, we have lot
of customers. So, it is difficult to find the number of the customers.
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Problem statement and opportunity:
Price of electricity increasing day by day just because we have mass population and
also demand of electricity is so high but the supply is low. We find out some problems in
power/energy sector in Bangladesh.
At this where PAVEGEN steps in. We are coming up with this smart electricity concept
through human footsteps which is absolutely new for a developing country like us. We
can lead the market easily as no other company has come up with this idea and we can
avail the advantages of the first mover. We are going to make electricity easily through
human footsteps. This will help industry, shopping mall, bank, movie hall, theatre and
streets to reduce their expense and most importantly reduce the waste of electricity.
The GDP of our country is increasing that means the purchasing power of the people of
our country is also increasing and we can assume that people will like to spend their
money. People are getting more interested in technological based product so it is the
indication that people will appreciate this new smart electricity concept. Moreover we all
know how much important electricity is? So this might be more favorable for us to come
up with this new smart electricity concept.
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Value proposition:
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Market Analysis
PESTEL Analysis
PESTEL stands for political, economic, social, technological, legal and environmental
factors’ analysis that companies use as a tool to track the environment of a country. It’s
important to identify the benefits and potential risks of environment in order to get the
optimal return. Our products will be sold all over the country as like big shopping mall,
universities etc. And this analysis will facilitate us to understand macro-environmental
issues of Bangladesh and to develop the SWOT analysis thereafter.
Capital: Dhaka
President -Md. Abdul Hamid
Prime Minister -Sheikh Hasina
Languages –Bangla, English
Currency –Taka (BDT)
Political Factors:
Political instability exists in this country. There’re 2 parties ruling this country since
1991. Political parties rule our country. It originates an impact on every business. Like
other businesses it originates an impact of our business.
We are the distributor of PAVEGEN. We import our products. We face lot of political
trouble during product import. These kinds of uncertainties can be mischievous for our
business.
Economic Factors:
According to government of Bangladesh it was expected to rise GDP growth into 7%
however Country's GDP growth in the 2014-2015 fiscal was calculated at 6.51 % which
is below expectation’ (The Financial Express Online, May 14, 2015) but the economy
has grown over the past few years as well as its inflation has raised. The market-based
economy of this country is the 46th largest in the world in nominal terms, and 33rd
largest by PPP; it is classified among the Next Eleven emerging market economies and
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a Frontier market. This indicates that this is a very big market and we have opportunity
to go on.
Social Factors:
Almost 20 million people live in this country and every day thousands of people walk
around. Using their footstep, we can easily generate electricity. We adapt new
technology. Through this technology we can generate electricity from footstep.
Technological Factors:
Bangladesh Govt. is working on making this country digital and promised to create
“Digital Bangladesh”. Since then Bangladesh has been significantly improving by the
help of technology. We are gathering good technician from outside counties and also
the people of our country day by day gain enough knowledge about new technologies.
Example First mover like Pathao is an ideal example of how much Bangladesh has
improved by the help of technology. So, we are trying to apply our technological
knowledge to give the country a new thing.
Legal Factors:
Bangladesh legal factors or laws of Bangladesh protects business ideas and business
assets. It ensures that losses are borne by those responsible for causing them. It
provides the rules of commerce. Our business is B2B. So, we have responsibility to
deliver our products timely and satisfy them.
Environmental Factors:
Environmental instability exists in Bangladesh. Every summer Bangladesh face huge
load shedding problem. According to the official statistics, the country’s electricity
shortage gone up 1000 megawatts (MW) to 1259 MW with the demand of 4806 MW on
2006. In Bangladesh electricity power is not generate as much as our demand. The vast
population also produce so much carbon dioxide for generate electricity. We need to
reach those problems. We want to recover this problem through our business.
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Porter’s five forces
High Low
Competition in the
industry
Potential of New
Entrants into an
Industry
Bargaining power of
buyers
Bargaining power of
Suppliers
Treats of substitutes
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Bargaining Power of Buyers:
As our price is fixed and also customers have poor information regarding our product,
actual market price and supplier cost. This makes the bargaining power of buyer low.
SWOT Analysis
Strengths:
Weaknesses:
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Opportunities:
● We are facing more load shedding. So, people have demand for electricity.
● We have opportunities Product diversification
● High value addition potential
● High cost
Threats:
● Political instability, Corruption.
● Technological problem.
● In our country we have many investors. That’s why, in future may be people
wants to build this business.
Operational Plan
PAVEGEN is a franchise company where we are going to sell PAVEGEN tiles which
generate electricity. As a franchise company we sell our tiles business to business just
like British PAVEGEN Company. PAVEGEN creates high engagement with citizens by
converting their footsteps into energy and data. To ensure proper distribution of the
goods PAVEGEN will also have to be in touch with the suppliers of the goods. The day
to day activities to ensure the operational process of PAVEGEN are given below:
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work? How can they implement it? How it will benefit them in long run? We are
going to enter the market with all the answers of the questions that our
consumers will have. We will have to monitor the customer demands,
preferences, latest fashions and other concerns of our business.
● Production Forecasting: The operational manager will have to be well aware
about the quantity of the production of the products. It is also another duty to
forecast the future orders and productions of the goods.
● Communicate with the Suppliers: It is necessary to communicate with the
suppliers on daily basis. The production cost, materials requirement and other
important data has to be updated frequently.
PAVEGEN is a new company in this country and a new product. By the perfect
operational plan, it can go big. Every privets company is going to use our tiles,
PAVEGEN tiles will be used in every government project as it will lower the cost of
electricity and our cities will be developed.
Market Plan:
Product: PAVEGEN will provide the technology-based tiles that generate electricity at every
footstep. PAVEGEN creates high engagement with citizens by converting their footsteps into
energy, data and rewards. PAVEGEN tiles are rectangular shape tiles and when people walk on
PAVEGEN system, their body weight compresses the electromagnetic generator below and it
produces 2 to 4 Jules off grid electricity. It has a low power Bluetooth connection that connects
with smartphones and can also connect with the building operating system. We will be the
franchise of PAVEGEN and will be only distributor of PAVEGEN Bangladesh. We will also
provide add on products like lamp shade, Mattress and decoration services.
Price: As it is a high-tech product and we will sell them at very specific places, we have set the
price rate keeping that in mind. We will buy PAVEGEN tiles at 6,833 bdt per tiles. As there will
be shipping cost, import tax delivery cost and marketing cost we will sell them at 11,000 bet per
tiles. So here our profit will be 4,167 bdt per tiles. We will also sell add on products which are
exclusive and unique than others. We will keep the price range of those products from 5,000 to
20,000. We will also provide up to 10% discount on price who will buy a big lot of PAVEGEN
tiles.
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Place: As we will be the distributor of PAVEGEN, there will be a storeroom where we will keep
our products after the shipping. When our business will expand, we will set up a big storage to
maintain our inventory.
Promotion: For the product promotion we will follow different strategies. We will divide our
target market in three groups. Government Projects (Examples: Metro- rail station, Hatirjheel
project), Public Infrastructures (Examples: Hospitals, Airports, Stadiums, Parks, top grade
private Universities etc.) and Big Companies (BAT, Square LTD, Walton, Beximco etc.). We will
target our audience based on these markets. Our main target will be the big fat businessmen
who are owners of big companies. To target them we will use business magazines and daily
newspapers. Business magazines like Ice Business Times, Techworld and Corporate etc. will
help us to get their attention. On the other hand, to grab the attention of government we will use
national magazine “Arthokatha”.
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Promotional Campaign:
We will target different institutions like – Private medical colleges and private varsities for
our campaign. Our product is new in Bangladesh and is technology based. As young
generation is very much technology oriented, they will be able to adopt and know about
the technology very first. There will be booths where they can take pictures and talk/post
about our products on social media. This will be a positive marketing for us.
Then we will target corporate offices, shopping malls and street marketing. There will be
the concept of guerrilla marketing in our all shopping mall and street campaigns that will
help us to grab more audiences at lower cost.
Our campaigns will run for 1 month and Weekly 4 days. 1st week the campaign will be
held in medical colleges and different private universities. 2nd week it will be held in
different corporate offices. And in last two weeks it will be held in shopping malls and in
the open street. For each campaign there will be paid volunteers. They will receive
certificate from us and from them one best performing volunteer will get additional best
performer certificate from us.
We will sponsor a business game show in a TV channel that will help us to grab the
attention of people of Bangladesh.
We will use posters with a campaign theme to attract people. Our campaign theme will
be “Make Every Step Count”
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Business Model Canvas
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Financial Analysis:
Statement of Financing:
The initial capital will be from five entrepreneurs, family and friends. The individual
entrepreneur will contribute 1,500,000 Taka each with a total capital of 7,500,000 Taka.
This capital will be use to set up the firm’s office, licensing, warehouse, website and
other basic things. In the table below we listed all possible activities and items which
need financing and their required budget.
Total 6,255,000
The required budget for initial startups is shown above. The rest amount will be needed
in case of emergency and also will be used as our working capital. As we will have an
office and warehouse website, we have to incur web hosting and maintenance costs
also.
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With the amount that we have shown in the table, we can import initially around 316
square feet of PAVEGEN tiles.
As per square feet of tiles cost in around $60 which is (60*84.44) = 5066.4 BDT
According to the latest Bangladesh’s import tariff rate, 1 square meter of importing tiles
cost 25% tax.
1𝑚2 = 10.76 𝑓𝑒𝑒𝑡 2
So around 11 square feet of PAVEGEN tiles tax cost = {(11*5066.4) =55730.4 * 0.25}
=13932.6 BDT
So, total cost of importing 11 square feet of tiles is (55730.4 + 13932.6) =69663 BDT
Which indicate,
Per square feet tiles import cost is 6333 BDT
(2,000,000 / 6333) = 315.80
Approximately, we could import 316 square feet of PAVEGEN tiles with the initial 20
lacs Taka.
Pricing Model:
We will be following cost-based pricing or cost-plus pricing for our products. This is
agreed upon to be most effective for us because it will allow us to charge the right price
for the product as well as stay competitive. A price too low (penetration pricing) for
Innovative technology is not ideal as it may be interpreted as inferior quality, while a
price too high will interfere with our acceptance into the market as it is a new product in
our market and we have to create customer need for this product. Therefore, a cost-
based pricing model will enable us to recover our Importing & storing costs as well as
other significant costs that we incur in the selling of our products.
Importing & selling cost (per square Selling price (per square feet) in BDT
feet) in BDT
Importing cost (5066.4+1266.6) = 6333
BDT Selling price of per square of Tiles
+ =11000 BDT
Selling & maintaining cost = 500 BDT
Total cost = 6833 BDT
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Break-Even point:
To properly manage the business and find out the time when going to make profit from
our business, we must figure out the Break-even point for firm. With that we can
estimate the time how much time to get our business successful and how many projects
we have to get to achieve that.
An Approximate estimate shows that if we can get 1 project by a quarter year having
each project size contain 250 square feet of PAVEGEN tiles installation. And if our
business could have growth rate of 10% each quarter, we can achieve our Break-even
point by end of the first year.
From the graph, we see that after selling 1021 units of tiles we will reach break-even
point. Which can be achieved through getting at least 4 projects in the first year.
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Business Growth
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Every footstep produces energy to keep a low power LED lamp for 30 seconds. Our
country has a mass population by thousands of footsteps we can generate enough
electricity for Dhaka city. Bangladesh’s annual economic growth of 7% calls for the
scalability of its power infrastructure to keep up with the demands of industry and
increased urbanization. Bangladesh’s demand may reach 34,000 MW by 2030. In 10
years PAVEGEN will meet the demand of Bangladesh. We can supply electricity not
only in Dhaka but also in the whole country by using our tiles all over the country.
Bangladesh is a developing country for which investing in Bangladesh will be huge
success for PAVEGEN.
Risk management:
Political Risk:
Each and every business have political risk so we are not out of this risk. From the
investor’s point of view, this political risk will lag behind the investor to fund in the
venture. Again, during election there is so much bad situation all over the country. So, it
will be considered as a risk. Another thing is that we need to sell only 901 tiles to reach
the breakeven point.
Product Risk:
There are very few chances not to accept the technology base product like this.
Because people have less idea about technology-based product like this. They may be
not accepting this so it will be our risk as well.
We are predicting that our product failure rate will be low and our product development
strategy is moderate.
Financial Risk:
There is very low probability to reach on the breakeven point. But there could be some
issues of account receivables delays which will lead to working capital shortage. There
are low chances to increase the price of technological things.
Market Risk: Market risk is unavoidable. It states that new product once developed
will not meet the needs of the market and will not meet the needs of a customers
because of other market related obstacles. All new enterprises have to go throughout
this risk. We took market risk under consideration and we have contingency plans to
reduce these risks as much as possible.
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Pricing: Price setting is a very risky undertaking in any kind of product-oriented
business. Wrong pricing can
● Minimize product demand.
● Increase financial risk such as liquidity risk
Brand Risk: As we’re not the manufacturer of our product, in that case product quality
can be lessened by manufacturers’ mismanagement which can reflects on our brand. It
can reduce reputation, customer satisfaction and product demand.
Conclusion
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