Greener Pastures
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Business Plan for Sustainable Solutions

Business Plan for Sustainable Solutions

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Greener Pastures Greener Pastures Document Transcript

  • Greener Pastures Business Plan Jennifer M. Nucci Dr. Wankel MGT 652 Final Project
  • Table of Contents 1.0 Executive Summary 1.1 Mission Statement 1.2 Objectives 2.0 Company Summary 2.1 Location 2.2 SWOT Analysis 2.3 Start-up Costs Overview 3.0 Management Summary 3.1 Ownership 3.2 Partnering Companies 3.3 Company Division 4.0 Products & Services 5.0 Market Analysis 5.1 Market Segmentation & Description 5.2 Marketing Strategies 5.3 Industry Trends 6.0 Financial Plan 7.0 Looking Forward 8.0 Appendix
  • 1.0 Executive Summary Industrialization and urbanization have resulted in a profound deterioration of India's natural resources. According to the World Health Organization, the capital city of New Delhi is one of the top ten most polluted cities in the world. Surveys indicate that in New Delhi the incidence of respiratory diseases due to air pollution is about 12 times the national average. Furthermore, it is estimated that the country’s population will increase to about 1.26 billion by the year 2016. The projected population indicates that India will be the first most populous country in the world having 18% of the world's population on only 2.4% of world's total area. This will greatly increase the pressure on its natural resources; leading to water shortages, soil exhaustion and erosion, deforestation, and air and water pollution. The challenges have become clear; India has a severe need for clean water and air, as well as an affordable and reliable delivery of energy. These needs in combination of the dwindling supply of fossil fuels and the reality of climate change can lead to unimaginable implications for future generations. The solution to this problem lies in smart/green buildings. In a smart building, systems are not managed separately, they inter-operate. Thousands of sensors can monitor everything from motion and temperature to humidity, precipitation, occupancy and light. The building does not just coexist with nature, it harnesses it. Smart buildings can reduce energy consumption and CO2 emissions by 50% to 70% and save 30% to 50% in water usage. (US Energy Information Agency, 2009) 1.1 Mission Statement To develop energy-efficient and eco friendly solutions for industry and commerce helping businesses and customers improve their processes, conserve energy, increase their competitiveness and adhere to environmental norms. 1.2 Objectives • Offer innovative Green products at a competitive cost which will establish Greener Pastures products as a nationwide leader in selling biodegradable, environmentally safe, sustainability building products and materials. • Increase the number of buildings and businesses using Greener Pastures products by 20% over the next two years. • Build a solid working relationship with all the national companies and architecture firms in India. • Form a reliable administration that is ready to serve customers, as well as identify cost effective technology solutions and target market niches. 2.0 Company Summary:
  • 2.1 Location Greener Pastures main manufacturing plant will be located in Mundra, a Special economy zone in the state of Gujarat. A Special Economic Zone (SEZ) is a geographical region that has economic laws that are more liberal than the country's typical economic laws. The category 'SEZ' covers a broad range of more specific zone types, including Free Trade Zones (FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial Estates (IE), Free Ports, Urban Enterprise Zones and others. Usually the goal of a structure is to increase foreign direct investment by foreign investors, typically an international business or a multinational corporation (MNC). (BT Associates sezinvestindia.com, 2009) Some of the reasons and benefits of opening a manufacturing plant in SEZ include: 1. SEZ is the most industrialized state if India 2. The population size = 5% of the country; the geographical area = 6% of the country, yet SEZ holds 18% of the investments in the country 3. It consists of 83 closely integrated industrial clusters with 182 industrial estates 4. Consists of flexible labor laws and easy exit policy 5. It Contains the best infrastructure among all the states in country (BT Associates sezinvestindia.com, 2009) 2.2 SWOT Analysis: Strengths: 1. Smart/Green buildings provide a potentially promising way to help address a range of challenges facing India: • The high cost of electric power. • Worsening electric grid constraints, with associated power quality and availability problems. • Water shortage and waste disposal issues. • Growing concern over the cost of global warming. • The rising incidence of allergies and asthma, especially in children. • The health and productivity of workers. • Increasing expenses of maintaining and operating state facilities over time. 2. Maximization of energy efficiency through cutting operating costs and unnecessary spending, minimizing waste while recovering valued resource. 3. Green/Smart products are renewable and cannot be depleted. (US Green Building Council, 2003)
  • Weaknesses: 1. Initial Cost: Smart/Green buildings and building products can incur higher initial costs than other buildings as a result of additional design analysis, computer energy modeling, product research, limited product availability. 2. Funding: Finding a lender or investor who offers loans for building that is non- traditional may be difficult. (Walters, 2008) 3. Location & Zoning: the location may play a large role in making green building not feasible. Areas India, such as coastal cities where pollution is at its highest, can be humid or moist which may prevent certain green building material to sustain. Local restrictions and codes may also not allow use of certain materials or building styles. (Royston, 2008) Opportunities: 1. Overall global trend of “going green” with awareness of and sensitivity to the environment has grown dramatically. Environmental concerns regularly top opinion polls as being important. 2. More and more eco-products are the result of regulatory mandates by governments at various levels encouraging the growth of green products to help both the environment and business. 3. Government action on climate change in a cap and trade system would grow green markets to be worth hundreds of billions or even trillions of dollars in the future. (Croston, 2008) Threats 1. “Greenwashing” - The skepticism of companies and products claiming to be “Green” which may lead to stricter regulations towards certify your “greenness”, and reporting on your progress. (Croston, 2008) 2. Time Frame: Since green building projects encourage the use of recycled and found materials, time may become a disadvantage. Finding the needed materials may take extra time that the builder and/or homeowner does not have for the project. 3. Cultural Tradition: India is a country set in tradition and people may be adamant about change and feel there is no sense of urgency. (Royston, 2008) 4. Lack of knowledge regarding green building and confusion regarding terminology. 2.3 Start-Up Costs Overview:
  • The start-up cost of Greener Pastures will consist primarily of equipment, inventory, staffing, IT management and shipping/distribution. Sustainable buildings can be assessed as cost-effective through the life-cycle cost method, a way of assessing total building cost over time. It consists of: • Initial costs (design and construction). • Operating costs (energy, water/sewage, waste, recycling, and other utilities). • Maintenance, repair, and replacement costs. • Other environmental or social costs/benefits (impacts on transportation, solid waste, water, energy, infrastructure, worker productivity, outdoor air emissions, etc). Greener Pastures will focus on using a Life Cycle Costing (LCC) approach to evaluate and integrate the benefits and costs associated with sustainable buildings. Life cycle costing looks at costs and benefits over the life of a particular product, technology or system. (Dick, 2008) 3.0 Management Summary: 3.1 Ownership: Greener Pastures will be owned and operated by Jennifer M. Nucci, Founder and CEO in association with partnering companies New Ventures India and IBM – Smarter Planet Division. 3.2 Partnering Companies: New Ventures India is a company that promotes sustainable growth by accelerating the transfer of capital to businesses that deliver social and environmental benefits. New Ventures India works for sustainable entrepreneurship and is specially designed to meet the needs of Indian entrepreneurs and help them overcome common business challenges to deliver environmental and social benefits in addition to economic development and growth opportunity. (Newventuresindia.com, 2009) IBM – Smarter Planet Division a uniquely positioned department of IBM focusing on how “interconnected technologies can change the way the world literally works.” This department is committed to “restarting the economy by applying high-tech intelligence to challenges in energy, transportation, food, water, even health care.” (IBM.com/Smarterplanet, 2009) 3.3 Company Divisions: Executive Board: • CEO & Founder
  • • Vice President of Operations • Vice President of Business Affairs Project Management & Operations Division: • Building Construction Specialists • Operation/Plant Managers • Specialized Project Managers • Service Technicians Environmental Research Division: • Microbiology Specialists • Environmental Engineers & Specialists • Environmental Health & Safety Inspection Managers Product Design & Development: • Structural , Mechanical, Electrical, and Chemical Engineers • Specialized Engineers o HVAC o Water Treatment o Air Filtration Sales Force: • Regional Sales Manager o District Sales Manager  Sales Representative Legal Department: • Safety Standards Managers • Accountants and Financial Analysts • General Counsel – specializing in zoning laws Office Management/Administrative: • Office Managers o Administrative Assistants HR & Recruitment: • Recruiting Manager • Training and Development Coordinator • Human Resource Consultant 4.0 Products & Services:
  • Products will be produced in coordination with an integrated design method. Project teams will develop each product with careful consideration of all building systems as an interoperating function to optimize competing demands. • Smart Grids: A software system to optimize grid performance. It utilizes sensors, meters, digital controls and analytic tools to automate, monitor and control the two- way flow of energy across operations. Useful in preventing outages, restoring outages faster and allowing consumers to manage energy usage. (Dick, 2008) • Under Floor Air Distribution Systems: Raised floor HVAC systems which focus on improved ventilation efficiency and indoor air quality. Under floor air is “an innovative technology that uses the under floor plenum below a raised floor to deliver space conditioning in offices and other commercial buildings.” This system typically cuts fan and cooling loads, substantially lowering air conditioning load. (Croston, 2008) • Urban Heat Island Reduction – “Cool Roofs”: By increasing the reflectivity of roofs and other typically dark surfaces, it is possible to lower building and urban temperatures, in turn reducing air conditioning loads and peak demand. (Dick, 2008) • High Performance Lighting: Incorporation of more efficient lights, task lighting, use of sensors to cut unnecessary lighting, use of daylight harvesting and other advanced lighting techniques and technologies. These measures can significantly reduce power demand from electric lights. In hot weather, this reduction has the added advantage of reducing cooling loads in a building, which in-turn reduces required air conditioning. (Dick, 2008) • Tank-less water heaters: A heater that works with a water flow sensor that operated from a computerized ignition system that circulates water through a heat exchanger (coil.) It provides you with continuous endless hot water in an energy efficient manner. Water is heated only when you need it. When you are at work or on vacation and no one is at home, energy is not being wasted. (Green Building Supply, 2009) • Water Saving Toilets: A .8 gallon dual flush system which operations on a “wash down flush system”, as opposed to the 1.6 gallon siphoned single flush system of conventional toilets saves roughly 67% more water. A Wash down flush system is more effective at expelling waste and keeping the bowl clean on lower volumes of water. (Green Building Supply, 2009) In addition to providing clients with industrial building materials and environmentally safe products, Greener Pastures will also provide technical expertise, engineering assistance and all types of outsourced industrial services
  • All products will be manufactured based on the measurable standards of LEED. The Leadership in Energy and Environmental Design (LEED) Green Building Rating System is a third-party certification program and the nationally accepted benchmark for the design, construction and operation of high performance green buildings. LEED promotes a whole-building approach to sustainability by recognizing performance in five-key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality. (Dick, 2008) 5.0 Marketing Plan 5.1 Market Segmentation & Description Research has shown that there are two specific target markets that primarily drive the decision to adopt green building principles. These audiences have been identified as: • Developer/Owners • Commercial Tenants “Green Developers” are people that see green building as the trend of the future and are willing to take risks to become leaders in the marketplace. They are people that have the influence to make the choice to build green and are personally driven by their values to make the decision to “Go Green. (Croston, 2008) Characteristics of each group of Green Building adopters are as follows: • Innovators • Embrace risk • Action leaders—willing to be the first to try something • Forward thinking • Value driven—personal values convert to workplace 5.2 Market Strategies Goal #1: Build a case for Greener Pastures - Create tools for developers to use in marketing green buildings Strategy: • Drive developers and owners to a centralized information portal Website – General Information o Cost Savings Projections o Testimonials & Case Studies o Listing of products o Advertise LEED Certification o Technical Assistance
  • Goal #2: Raise Awareness about Green Building & Environmental Concerns Strategy: • Outreach to Business Publications: o Pitch local business publications on the trend of green building, its rising credibility in the marketplace, and the large local developers that are embracing the trend. • Ad Campaigns: o Slice of Life Ads: - Place brand in a social situation where target can relate to ad through recognition. o Educational & Social Responsibility Ads – Educating the target in the benefits of Green building and consequences of poor environmental behavior. • Fundraising & Social Events: o Creates an avenue of exposure and opportunity to showcase products through hands-on demonstrations. Goal #3: Positioning Greener Pastures as a simple, easily understood solution Strategy: • Create a “Greener Pastures” language and terminology- easily understood across industries. • Direct Mail to local businesses and companies with general company information as well as a “Best Practice” guide to demonstrate social responsibility made easy. (US Green Building Council, 2003) 5.3 Industry Trends • According to noted green building professional and consultant Jerry Yudelson, the green building industry is expected to grow at a rate of over sixty percent (60%) in 2009 on an increasing basis. (Yudelson, 2006) • As mentioned previously, green building is being increasingly mandated by municipalities and governments globally. • Green materials and building products are becoming more popular due to the upward trend in the green construction market. Consumers are making a conscious effort to identify what building materials are healthier, more energy efficient and economically sensible. As the demand grows for green products and materials, the cost is mitigated.
  • • With regard to India, a major Industry trend includes the use of “Green IT”. “Greener business, healthier bottomline” was the theme for 2007, first ever green IT event organized by Dataquest. The event was hosted in the three cities of Mumbai, Delhi and Bangalore. Dataquest conducted the first-ever comprehensive study on the level of green IT within Indian enterprises. The result was fairly encouraging with close to 69% of the respondents admitting that they were aware of green IT. (Dataquest, 2009) 6.0 Financial Plan 1. Real estate value 15,000 square feet $25 per square foot = $375,000. = approximately 1, 50, 00,000 rupees 2. Build up land cost – 1,000 square feet of 15,000 square feet. Includes building cost of manufacturing unit Comprises of making one manufacturing facility divided into 5 sections • Manufacturing • Production • Store houses • Packaging • Quality control and quality assurance Total approximate investment = $1.2 million US = approximately 5, 00, 00,000 rupees 3. Initial financial investments 3 sub-units • Raw materials cost • Manufacturing cost (Labor cost and utilities) • Transportation cost
  • Approximately $800,000 per sub-unit = 4, 00, 00,000 rupees Approximately Total Financial Investment = $2.4 million US 4. Breakeven Analysis Initial Investment = $2.4 million Average Sales per month = $75,000 Average Annual Sales = $1.1 million Breakeven point = 2.2 years In millions Breakeven Analysis $4.0 $3.0 $3.1 $2.0 $2.0 $1.0 $0.9 $0.0 -$0.2 -$1.0 -$2.0 -$2.4 -$3.0 2010 2011 2012 2013 2014 Year 7.0 Looking Forward India is currently receiving about 5% less sunlight than it did twenty years ago, according to a study by Padma Kumari and colleagues at the Indian Institute of Tropical Meteorology in Pune. India is losing out on sunshine because a cloud of tiny air-borne
  • particles emitted from the nations immense factory production, literally blocking light from reaching the Earth. Problems such as air pollution in the example above are one of the many problems India is facing as a result from years of a lack of environmental concern. Greener Pastures offers the technology and innovation needed to counteract years of neglect and look towards a future of more sunshine. The opportunity is now and Greener Pastures provides the way. India now represents the fourth most recent market for green buildings in the world. Back in 2003 there were only 6000 sq m of green building space, by the end of 2008 there was 304,000 sq m, a reported 5000 % increase. India, a country suffering from the most prevalent pollution problems is now focusing on energy in environmentally friendly building materials. The Indian Green Building Council is estimating that this Indian market will reach $4 billion per year by 2010. (Brahic, 2007) 8.0 Appendix Appendix A:
  • NO2 emissions over India (Indian Institute of Tropical Meteorology) NO2 is a pulmonary irritant affecting primarily the upper respiratory system – NO2 is one of the main forms of air pollution caused by vehicle emissions. Appendix B Risk Management Benefits of Smart/Green Buildings Worker Health & Safety.
  • • Various benefits, including lower workmen’s compensation costs, arise from improved indoor environmental quality, reduced likelihood of moisture damage, and other factors enhancing workplace safety Property Loss Prevention. • A range of green building technologies reduce the likelihood of physical damages and losses in facilities Liability Loss Prevention. • Business interruption risks can be reduced by facilities that derive their energy from on-site resources and/or have energy-efficiency features. This includes risks resulting from unplanned power outages Natural Disaster Preparedness and Recovery. • A subset of energy efficient and renewable energy technologies make facilities less vulnerable to natural disasters, especially heat catastrophes References: 2009 Green Building Supply. Retrieved on July 8, 2009. http://www.greenbuildingsupply.com
  • Brahic, Catherine. Pollution is diming India’s sunshine. Newsscientist.com. Nov. 2007. Retrieved on July 8, 2009. http://www.newscientist.com/article/dn12919-pollution-is-dimming-indias-sunshine.html BT Associates. SezIndiaInvest.com Retrieved on July 9, 2009. http://www.sezindiainvest.com Croston, Glenn. Trends Creating Green Business Opportunities. Fast Company Expert Bloggers. Sep 18, 2008. http://www.fastcompany.com/blog/glenn-croston/starting-and-growing-green Dataquest. How Green is India, Inc?. Presenting the results of the first ever survey of companies across India to map the levels of green awareness and implementation. Jan. 2009. Retrieved on July 8, 2009 Dick, Gregory. Green Building. California Integrated Waste Management Board. Last updated on January 15, 2008. Retrieved on July 8, 2009 http://www.ciwmb.ca.gov/GreenBuilding New Ventures India. Retrieved on July 8, 2009 http://www.newventuresindia.org/nvi/newdesign/index.jsp Royston, Nikki. Surge of Green Buldings in India. AllBusiness.com. Retrieved on July 8, 2009 http://www.allbusiness.com/environment-natural-resources/environmentalism Smarter Planet. IBM.com Retrieved on July 7, 2009. http://www.ibm.com/us/en/smarteplanet US Energy Information Agency. Air Pollution in India. Corrosion-doctors http://corrosion-doctors.org/AtmCorros/mapIndia.htm. Retrieved on July 7, 2009 US Green Building Council. City of Seattle. Green Building Communications Plan. Nov. 2003 http://www.buildgreennw.com/resource/BGNW_Plan_v3.pdf Walters, Tamara. Disadvantages of Green Building. eHow.com. Retrieved on July 7, 2009 http://www.ehow.com/facts_4926075_disadvantages-green-building.html Yudelson, Jerry. Marketing green buildings: guide for engineering, construction and architecture. 2006