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Company Summary:
The Homeward is a one in its own beautiful facility that provides individuals a home away home facility. The Homeward offers seven individually furnished rooms, each with its own antique theme. We are a complete bed, breakfast and all services required by any individual in their home. The basic objective of the company is to make accommodation facility easily available to the people across the country with minimum effort and cost with maximum benefit. It provides an integrated accommodation facility across the country which can be accessed, evaluated, analyzed and booked through internet sitting anywhere in the world. In its initial stage the company will start its operation in eight metro region of India and will expand to other corporate and educational hub in coming year with a target to expand its services to at least 25 cities across the country in next 5 years. 2.1 Company Ownership This business will start out as a simple proprietorship, owned by its founder. As the operation grows, the owners will consider re-registering as a limited liability company or as a corporation, whichever will better suited the future business needs. 2.2 Start-up Summary The company founders will handle day-to-day operations of the business and will work collaboratively to ensure that this business venture is a success. We estimate that our start-up costs will be 3, 09, 00,000(including whole setups, legal costs, logo design, and six months operating expenses). The start-up costs are to be financed in equal portions by the owners' personal funds. 2.3 Mission: The Homeward is dedicated to organize the sector and provide a highly advanced and best facility across the country which can be accessed and planned from anywhere in the world. The Homeward intends to provide a serene setting for our customers to enjoy the many splendors of the beautiful environment and convenient services. Each customer will be treated with the kind of attention that is reserved for family. When our customers arrive we want them to leave their troubles at the door and step into a world of luxury and rest which help them to enjoy their life and relax from the
stressful jobs and colleges pressures. As owners we intend to see that attention to detail and service will be followed by a staff dedicated to each guest. 2.4 Objectives: 1. Generate a customer satisfaction rate above 90%. 2. Generate an average of 3Croreof sales in first year followed by 20% increment each year. 3. To expand the business to minimum 25 cities across the country in next 10 years. 2.5 Keys to Success:The keys to our success are as follows: 1. Service our clients' needs promptly and efficiently. 2. Maintain excellent working relationships with vendors.
3. Maintain a professional image at all times 4. Provide a facility that is first class with attention to detail.
5. Provide quality meals. 6. Retain our customers to ensure loyalty and referrals.
2.6 Competitive Edge With booming industries and education system across the country there is increase in number of migrants across the country towards the centralised hubs in the country. These situation creates opportunity to provide accommodation to these people across the major cities of the country, till now in India this sector is highly unorganised which creates lot of problems in finding appropriate location with budget and time. Homeward provides an organized facility to the people working and studying across the country to find, Book and analyses the accommodation facility in various cities through company websites and help lines. We will help the customers in planning and providing the accommodation within their reasonable budget and desire. The company will own various accommodating location across the country which help the people to find and get the facility of the company across the country without any extra burden.
3.1 Industry Overview: The sector in India is highly unorganised with no brand in the industry. The customers seeking accommodation facility in the market has to rely on local real estate agents and other unorganised small service providers. There is no any brand in the country which provides the integrated service of accommodation across the country which can be accessed from anywhere. The people seeking accommodation has to search by various means and they have to go physically to different location to find the best suitable establishment in the city. So a company which service can be availed and analysed from any location will be a great help for these customers adding to this the company also provides customised services for its customers. The Indian economy is growing and the government is investing huge in corporate and education sector but the development is centred to some develop metros. The people across the country come to these hubs for job and education purpose and they seeks for a place to live which provides them best environment and facilities. The expected population of India in 2013 is about 1.22 billion, Out of which 32.5% (i.e. 39, 65, 00, 000) Of population is in urban area. AGE GROUP Percentage 0f Total Population 15-19 4.9 19428500 MALE Population FEMALE Percentage Of Total Population 4.4 17446000 Population TOTAL (Urban population between age group 15 to 40) 36874500
Now assuming that approx. 50% of these urban population reside outside their home for studying and service purposes, so the total population would be: 6,82,00,000and if 30% of these population gets hostel then remaining population seeking for private accommodation are 4,77,40,000 (Target market)
In NCR, Amity Business School is one of the prestigious institute attracting students from all across the country. MBA (2010-12) Geographical distribution# State Number of Outstation/looking students Delhi Uttar Pradesh Haryana Other Total 223 200 72 281 776 for accommodation 12 120 43 252 427
Percentage of students looking for accommodation 05% 60% 60% 90% 55%
Amity has only approx. 5000 student accommodation for hostel for approx. 40000 students. So according to the above data if 55% students apply for accommodation i.e. 22000 then only 5000 gets it and rest 17000 or 42.5% of total students looks for local accommodation. 3.2 Challenges: The basic challenge for the company is the rising rate of real estate in the metro cities and the increasing cost of food items across the country.
The intensified competition in the market from the local unorganised player is also one of the major challenges faced by the company in the market. Increasing interest rate and the economic slowdown in the global market is another factor which will create a challenge for the company. Building a brand as a pioneer player in the organised sector and creating awareness about the brand is one of the biggest challenge for the company.
3.3 Competitors: Direct competition: The foremost competitors of our organization are the unorganized paying guest facilities provide by other people in the areas near colleges and offices. Rented Flats in the cities which accommodate the working bachelors and students are also a competition for the company. Indirect competition: Our other main competitors are the hostel facilities provided by the colleges themselves as many outstation candidates for school prefer being in a hostel rather than staying out as a paying guest. This is so because they feel it is more secure though costly.
Market Analysis:
4.1 Market Segmentation: Segmenting a market helps a company target its products / solutions better to its customers. It is a strategic approach midway between mass marketing and individual marketing. Segmentation is based on the concept that customers in a specific segment have similar needs, purchasing power, geographic location, etc. A. Geographic segmentation: a) Density: Urban population & rural population b) City size: i. 1st tier cities, over 2 million population (approx. 13 cities in India) ii. 2 tier city, with a population of 1 to 2 million. (approx. 22 in India) iii. 3 tier city, with population of 50,000 to 1 million iv. 4 tier city with population below 50 thousand, (semi urban areas.) B. Demographic segmentation: a) Age i. Below 15 years ii. 15 year to 24 year iii. 25 year to 40 year. iv. Above 40 years b) Gender : Male and Female c) Marital Status: Married and Single d) Socio economic status/ Income i. Lower Class: Income below 2 lakh per annum. ii. Middle class: Income 2.1 Lakh to 4 lakh per annum. iii. Upper middle class: Income 4.1 lakh to 8 lakh per annum. iv. Lower upper class: Income 8.1 lakh to 12 lakh per annum. v. Upper class: Income Above 12 lakh per annum. C. Behavioural segmentation: a) Usage: i. Non user ii. Using other/unorganised PG iii. Using Hostels
4.2 Target Market: The main target market as discussed above is the students, teenagers and the working people between the age group of 15 to 35 years who need to stay away from their family for college and service purposes. Now assuming that approx. 50% of these urban population between the age group of 15-35 reside outside their home for studying and service purposes, so the total population would be: 6,82,00,000and if 30% of these population gets hostel then remaining population seeking for private accommodation are 4,77,40,000 (Target market) Apart from this the people from rural areas also comes to metro cities for education and job purpose. These people are adding on to the target market of the company. Now adding both demands from urban and rural the approx. target customers for the organization would be 5, 00, 00,000. The company targets the middle and the higher income group people in the market. i. ii. iii. Income between 2.0-4.0 lakh p.a. Income between 4.1- 8.0 lakh p.a. Income above 8.0 lakh p.a.
The Company offers premium segment product in third category of customer having income more than 8 lakh. In young customers the company targets the students and young executives who are very much in need of a place to stay which provides them best services and environment away from their home. The Company targets I tier cities in India in its initial operation followed by its expansion in II and III tier cities. The services will be provided to both Male and Female across the cities with separate accommodation for both.
World market
Country Density
rural
India
Others urban
City size
Below 15
I -tier
2tier
3 tier
4 tier
Age
15-24
25-40
Above 40
Male
Middle class Upper middle
female
Lower upper Upper class
Accommodated in Hostels
4.3 Market Needs and Customer Profile: The typical customer of the company are the middle and higher income group working unmarried male and female as well as college and school going students, somewhere in there 20s and 30s, who lives away from their home and love to have a healthy and peaceful environment like home away home with highly customised accommodation for them and even dont mind to spent more if the service is exactly what they want.
4.4 Positioning: The company tries to position itself in the market as a brand which cares for its customers and provides value for the money across the country with its highly customised and integrated service across the cities. Everything you want we will provide in secured and environmentfriendlyatmosphere. 4.5 USP:Uniqueness of the business and the competitive advantage Our service is available in many cities with centralized information system and we will provide an organized package to the people due to which they can contact us anytime. We take care of every small need of the consumer and provide them with the necessary solutions. Best security system and friendly environment. Everything required would be provided.
SWOT Analysis
1. Centralised
Strength
Weakness
1. New Player 2. Lack of Experience and systemized operation 3. Lack of financial resource
2. Customised Service 3. Secured Environment 4. All Shop Stop 5. 24 *7 Working 6. Value for Money
1. Improving Corporaate Sector 2. Growing Investment in Education 3. Increasing Purchasing Power 4. Increasing Demand for Secured Living 5. Development in II tier cities
Opportunities
Threats
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Service Consistency: It refers to the things which, in our organization, are same as those in other PGs. We are offering the same service as others. We provide rooms on rent for working and college going people and give them many other benefits which are offered in every PG which includes: Single/Double and Triple Sharing rooms 24 hours running water and electricity An air-conditioned or non-air-conditioned room Food Internet etc.
Service Differentiation: Our service is available in many cities with centralized information system. We give an organized package to the people due to which they can contact us anytime. We take care of every small need of the consumer and provide them with the necessary solutions. Best security system and friendly environment Transportation facility Everything required would be provided.
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6.3 People:
Human actors who play a part in service delivery and thus influence the buyers perceptions: namely, the firms personnel, the customer, and other customers in the service environment. The people of our organization will be the students from different colleges who will be made college ambassadors to spread a positive word- of- mouth. The other operational staffs will be well dressed with a uniform which create a uniformity of the brand.
6.4 Pricing:
1. Pricing Analysis As there is no any established brand in this segment so the pricing objective of the firm is to penetrate the market and capture as much as market share in that particular segment. This can be achieved through aggressive pricing and building a value for money brand in the market. 2. Pricing Objective:Penetration, Market capture The pricing objective of the firm is to generate profit and achieve breakeven as soon as possible. The profit generated through the pricing objective should be reinvested to broaden the business of the firm and in brand building 3. Pricing Method: Mark up pricing. As the facility provided by the organization varies according to the requirement of the person so the cost of the service is determined by estimating its cost plus twenty-five percent of profit margin. The normal tentative pricing would be: Triple Sharing Double Sharing Single Sharing 4000 Per Month 5500 Per Month 9000 Per Month
The average Price for one customer will be Rs. 6000 per month.
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6.5 Place/ Distribution The Accommodation Facilities will be located in Areas near to the colleges and corporate offices. In case of Noida it would be in Sector 44, 51 etc. which is close to Amity. Various locations in Greater Noida is also available Other places will include North Delhi and other places where PG are in demand. 1. Geographical Coverage As suggested in the STP analysis, the target market consist of young (15-35 years) bachelor urban customers who come from various cities across the county to the major Hubs of India for Education and Job purpose.. Hence the first stage of distribution of Homeward is likely to be in metropolitan cities. But as the company has a limited resources in initial stage so it come up with only selected cities in its first stage and later in coming year it will expand its business to other major cities in the country. Cities which are covered in First stage are: 1. National Capital Region (Delhi, Gurgaon, Noida, Greater Noida) 2. Mumbai 3. Pune 4. Kolkata 5. Hyderabad 6. Chennai 7. Bengaluru 8. Ahmedabad The business will start in these 8 cities across the country with 20 location distributed across these cities. On an average each location will have the capacity of 30 customers to accommodate. 2. Distribution Channel As the organization basic objective is to integrate the accommodation business across the country and help the customers in planning and moving freely from one cities to another with minimum effort.
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The company will provide each and every information about the services at different location across the country with actual photograph of the facility which the customers can analyse and compare to find out the suitable offering for them. The services are highly customised and this can also be done through company website. The company will provide the facility of online booking for the facility from anywhere in the globe and the facility will be available 24*7 for the customers. The company will also provide full support to the customers for enquiry and other assistance through its corporate helpline. These all facilities will be operated and controlled centrally from homeward corporate office in Delhi.
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The core strategy of attracting consumers is going to be based on a pull strategy, by generating interest amongst consumers through advertisement in electronic, print media and word of mouth etc. The promotion of the company will be divided into three: I. II. III. April to July (High Intensity Advertisement with High frequency) August to November (Low Intensity Advertisement with Low frequency) December to March (Moderate Intensity Advertisement with Moderate frequency)
2. Promotional Mix
A. Word- of mouth/ direct selling: Students from different colleges will be made college ambassadors to spread a positive word- of- mouth for the promotion of the organization and business development. Develop a corporate brochure: A Proper corporate brochure will be developed to distribute among the potential customers across the target market and its electronic form will be sent to them through electronic promotion.
B. Electronic Promotion: Keyword Marketing is done on Google. The company also put flash advertisement. The company is also promoted through its own website which must be interactive. Viral marketing through e-mails. Social marketing on face book, twitter Video on you-tube and other websites.
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C. Sponsorship and coupons: Brand awareness and business development could be done through sponsoring various events at colleges and demonstrating the services and advantage to the students. Discounts coupons for accommodation could also be given to increase awareness and customer base in the market. D. Merchandising: In an attempt to brand the company in the Indian Market, we will also merchandize the brand by providing t-shirts to our customers and during sales promotion through various competitions. E. Advertising This is the basic means of promotion used by the company to achieve its promotional goal. The company uses various means of advertisement like Newspaper Radio/FM advertisement Billboards/ hoarding. Promotion could be done through FM radio in metro cities basically during commuting hours time slot, as that is the only likely time the target market is to tune in to the radio. Small kiosk should be established in malls. Kiosk should have complete information about the company and services offered. It could be in the form of brochure. Advertisements at multiplexes during the interval of movies could be another best way to reach target audience.
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Telemarketing would be done through SMS to the target customers informing about the brands and services.The company focuses to send SMS and MMS to their target audience to communicate about the brand and its offering as well as the promotional scheme to boost the sale and create brand awareness. Leading Newspapers will be used to promote and create awareness across the target segments. The company basically uses the concept of ROAD BLOCK advertisement in the leading newspaper in India. The basic concept behind the road block advertisement is to create brand recognition as well as brand recall to some extent as the brand is totally new to the market. The newspaper add is placed on the front page of the newspaper on the day of launch and then continuously for three days on front or the last page of newspaper, DT or HT city. The add comes thrice in a month for the first Four month (April-July) followed by twice in a month for next four month (August-November) of launch and then the further strategies will be decided by evaluating the effect of the advertisement.
Leading Business and Education Magazines will be used to promote and create awareness across the target segments. The other means of advertisement for the company is Billboards/ hoarding. The company places its hoarding mainly near universities and corporate offices and malls as the main target audience of the company is the young students as well as the young executives.
F. The company also needs to tie-up with big organizations (especially corporate): this will be done to provide accommodation to the outsider employees of the company around their corporate offices. G. A properfeedbacksystem is also implemented which is directly controlled by the company corporate office and this will be conducted on a regular basis to analyse the operational efficiency of different location and measure customer satisfaction level.
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Maintaining customer base and adding new customers Nothing is more exciting to most businesses then attracting customers, however we must value the loyal customers, because they are the most profitable since they do not consider value of service. They are also a tremendous source of information, thereby expanding our customer base.
3. Promotional Budget
Year 1 1 2 3 4 Electronic Promotion Direct Marketing Sponsorship & Coupons Advertising
Radio Kiosk Video Ads Telemarketing Print Media Hoardings
Merchandising TOTAL
500000 15000000
500000 15000000
500000 10000000
500000 10000000
500000 5000000
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Website
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Management Summary
Industry Hospitality Country of Origin: India Headquarters Delhi, India Founded 2013 Number of Employee: 50-100 Contact: Corporate Office: 011-234567880 011-234567881 Mobile: +91-98765432100 +91-98765432200 E- Mail: foryou@homeward.com Website: www.homeward.com
President : Marketing
President : Operation
IT Executive
CRM Executive
Operation Head
NCR
Operation Head
MUMBAI & PUNE
Operation Head
BANGLORE
Operation Head
KOLKATA
Operation Head
HYDERABAD
Operation Head
CHENNAI
Operation Head
AHMEDABAD
Security Staffs
Cooking Staffs
Caretaking Staffs
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Operation Head
As Operation Head, one will drive a range of business initiatives by leveraging sound business judgment with their razor-sharp management, problem-solving, communication and analytical skills. These initiatives can include developing and executing market-entry and expansion plans for respective regions, managing day to day activities and implementing regional saleschannel strategies.
IT Executive
To handle information at the scale of the web requires ideas from just about every area of computer science, including information retrieval, artificial intelligence, large-scale system design, networking, security, data compression, user interface design, etc.
CRM Executive
He will be responsible to manage and operate the customers queries and demands from the centralised corporate office and manage all centralised activities through Internet and Telephone.
Security
Responsible for the security of the premises and the customers accommodating in the facility
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7.3 Employee Compensation: (Per month) Position President IT Executive CRM Executive Operation Head Security Staff Cooking Staffs Chef Care Takers TOTAL 8000 6000* 20 20 71 20*8000 20*6000 160000 120000 6,46,000 Salary INR 50000 10000 10000 18,000 6000* No. of people 2 1 1 7 20 Detail 2*50000 1*10000 1*10000 7*18000 20*6000 Total INR 100000 10000 10000 126000 120000
Note: Each employee gets 25 days of leave each year. The salary paid is inclusive of all allowances. There is no increment of salary for first 2 year after that the salary will increase by 5% for all employees except Presidents. In 4th year therewill be a revision of the salary and the new salary would be: POSITION President IT Executive CRM Executive Operation Head Security Staff Cooking Staffs Chef Care Takers TOTAL 9000 7000* 25 25 89 25*9000 25*7000 225000 175000 10,25,000 SALARY INR 100000 15000 15000 22,000 7000* No. of people 2 1 1 10 25 DETAIL 2*100000 1*15000 1*15000 10*22000 25*7000 TOTAL INR 200000 15000 15000 220000 175000
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Financial Analysis
8.1 Initial Investment & Sources of Fund
Particulars
Electronic Items Furnitures Cooking Materials Rent in Advance (1 month)
Amount
3480000 2510000 500000 1300000
7790000
60000 23050000
Total
3,09,00,000
The estimated start-up costs will be Rs 3, 09, 00,000 (including whole setups, legal costs, logo design, and six months operating expenses). The start-up costs are to be financed in equal portions by the owners' personal funds. Initially the business will require only Rs. 78, 50,000 only which will be shared by its owner and the remaining Rs. 2, 30,50,000 is the operation cost for next six month which will be a kind of reserve since the business will start generating revenues just after star up.
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Particulars
Initial Investment REVENUES Sales Total Revenues COSTS Salaries (Including PF) Rent Wi FI Lighting Electricity Other expenses Materials Marketing Miscellaneous Expenses Total Cost EBIDT (Revenue - Total Cost) Depreciation EBIT (EBIDT - Depreciation) Tax (@ 35% of EBIT) Net Profit (EBIT - Tax) Amount Appropriated to partners Amount Retained in Business
1 Year
3,76,90,000
2 Year
3 Year
4 Year
1716000
5 Year
36000000 36000000
43200000 43200000
50400000 50400000
64800000 64800000
75600000 75600000
7752000 15600000 600000 12000 1920000 100000 4800000 15000000 31000 45815000 -9815000 285000 -10100000 0 -10100000
7752000 15600000 600000 12000 1920000 100000 6000000 15000000 31000 47015000 -3815000 285000 -4100000 0 -4100000
8079600 16380000 600000 12000 2016000 100000 8400000 10000000 31000 45618600 4781400 285000 4496400 1468740 3027660
12300000 22500000 750000 12000 2400000 100000 11220000 10000000 31000 59313000 5487000 285000 5202000 1785700 3416300
12645000 23635000 750000 12000 2400000 100000 15120000 5000000 31000 59693000 15907000 285000 15622000 5432700 10189300
-10200000
-4200000
2727660
3416300
10089300
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Appendices:
9.1 Fixed Assets Purchased Initially: Product
TV Refrigerator GEYSER Water Purifier AC Printer & Photocopy Desktop Computer Bed Table Chair Cooking Kit Kitchen Utensils Kit Inverter
Total Cost
1200000 400000 200000 240000 900000 140000 240000 1750000 480000 280000 160000 100000 400000
TOTAL
6490000
1716000
Number ofUnit
20 20 20 400
Rate
65000 8000 2500 1000
TOTAL
1910000
30
Number ofUnit
25 25 25 850
Rate
75000 8000 2500 1100
TOTAL
3072500
36870000
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