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Mckinsey and strategies

Mckinsey and strategies

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  • 1. Assignment 1. 1. These are few new and useful rules/ways to become efficient and effective in business.1. 80/20 The 80/20 rule is one of the great truths of management consulting and, by extension, ofbusiness. You will see it wherever you look: 80 percent of your sales will come from 20 percent of yoursales force: 20 percent of a secretary‘s job will take up 80 percent of her time: 20 percent of thepopulation controls 80 percent of the wealth. It doesn‘t always work (sometimes the bread falls butter-side up), but if you keep your eyes peeled for examples of 80/20 in your business, you will come up withways to improve it.I saw the 80/20 rule at work all the time at McKinsey and I‘ve always been impressed by its power as aproblem-solving rule of thumb.80/20 is all about data. What are your sales figures by product? What is your margin by product? Howdoes each member of your sales team perform in terms of sales? In terms of profits? What is the successrate of your research teams? What is the geographical distribution for your customers? Sort it in variousways. Play with the numbers. You will begin to see patterns, clumps that stand out. Those patterns willhighlight aspects of your business that you probably did not realize. They may mean problems (a bigproblem if 80 percent of your profits come from 20 percent of your product lines), but they also meanopportunities. Find the opportunities and make the most of them.2. Don’t Boil the Ocean Work smarter, not harder. There‘s a lot of data out there relating to your problems, and a lot of analyses you could do. Ignore most of them.McKinsey gathers enough facts to probe or disprove a hypothesis or support or refute an analysis – andonly enough facts. This is the flip side of fact-based analysis in a business situation. Anything more is awaste of time and effort when both are precious commodities. ―Don‘t boil the ocean‖ means don‘t try to analyze everything. Be selective; figure out the priorities ofwhat you are doing. Know when you have done enough, and then stop. Otherwise, you will spend a lotof time and effort for very little return, like boiling the ocean to get a handful of salt.3. Find the Key Drivers Many factors affect your business. Focus on the most important ones – the keydrivers. There may be 100 different factors affecting the sales of our widgets – weather, consumerconfidence, raw material prices – but the three most important ones are X, Y, and Z. We‘ll ignore therest.
  • 2. Focusing on the key drivers means drilling down to the core of the problem, rather than picking the wholeproblem apart piece by piece, layer by layer. Then, you can apply thorough, fact based analysis where itwill do the most good and avoid going down blind alleys.Syntactical foibles aside, ‗key drivers‘ is a very powerful concept. It saves you time. It saves youeffort. It keeps you from boiling the ocean.4. The Elevator Test Know your solution (or your product of business) so thoroughly that you canexplain it clearly and precisely to your client (or customer or investor) in 30 seconds. If you can do that,then you understand what you‘re doing well enough to sell your solution.Imagine it‘s time for that big, end of engagement presentation. You and your team have been up until 2A.m. putting together your report, making sure that every I has been dotted and every t has beencrossed. You‘re all wearing your best suits and trying to look on the ball. The senior executives of yourFortune 50 client, anxious to hear McKinsey‘s world of wisdom, are taking their places around theboardroom table on the top floor of the corporate skyscraper. The CEO strides into the room and says,―Sorry, folks. I can‘t stay. We have a crisis and I have to go meet with our lawyers.‖ Then he turns toyou and says< ―Why don‘t you ride down in the elevator with me and tell me what you‘ve foundout?‖ The ride will take about 30 seconds. In that time, can you sell him your solution? That‘s theelevator test. 5. Pick the Low Hanging Fruit Sometimes in the middle of the problem solving process, opportunitiesarise to get an easy win, to make immediate improvements, even before the overall problem has beensolved. Seize those opportunities! They create little victories for you and your team. They boost moraleand give you added credibility by showing anybody who may be watching that you‘re on the ball andmean business.When possible, McKinsey consultants put this doctrine into practice. Clients can get very impatient for aresult during the six months that a big McKinsey engagement can last. Giving the client somethingpractical before the end helps reduce the pressure on the team.By plucking the low hanging fruit, by resisting the temptation to hoard our information until some big endof study presentation, we made our client more enthusiastic, our jobs easier, and ourselves happier.This rule is really about satisfying your customer in a long-term relationship. Your customer could be thepurchaser of your products, or it could be a client for your services, or it could be your boss. Whoever itis, it pays to keep him happy and let him know that he is your top priority.6. Make a Chart Every Day During the problem solving process, you learn something new everyday. Put it down on paper. It will help you push your thinking. You may use it, or you may not, butonce you have crystallized it on the page, you won‘t forget it.
  • 3. In the midst of interviews, it is very east for the facts to blend into one another like pools of differentcolored inks on a sheet of blotting paper. Even if you take good notes at your interviews and have theminutes of your team meetings, important points could get lost.Your can avoid this by sitting down for half an hour at the end of the day and asking yourself, ―What arethe three most important thins I learned today?‖ Put them down in a chart or tow – nothingfancy. Neatness doesn‘t count. If the facts don‘t lend themselves to charting (although McKinsey-ites tryto put everything in charts), just write them down as bullet points. Put your results someplace where theywont get lost – don‘t just toss them into your in-tray. Later, when you are in analysis mode, you cancome back to your charts and notes and think about what they mean and were they fin in terms of yoursolution. 7. Hit Singles You can‘t do everything, so don‘t try. Just do what you‘re supposed to do and get itright. It‘s much better to get to first base consistently than to try to hit a home run – and strike out 9 timesout of 10.• It‘s impossible to de everything yourself all the time.• If you manage it once, you raise unrealistic expectations from those around you.• Once you fail to meet expectations, it is very difficult to regain credibility.•8. Look at the Big Picture Every now and then, take a mental step back from whatever you‘redoing. Ask yourself some basic questions: How does what you‘re doing solve the problem? How does itadvance your thinking? Is it the most important thing you could be doing right now? If it‘s not helping,why are you doing it?When you are trying to solve a difficult problem for your client or company, you can easily lose sight ofyour goal amid the million and one demands on your time. It‘s like you are hip deep n a bog, following amuddy channel that you can‘t see. Analysis B follows analysis A and seems in turn to be followedseamless by analysis C – etc.When you‘re feeling overwhelmed by it all, take a metaphorical step back and figure out what it is you‘retrying to achieve. Do this by looking at the ―big picture‖: the set of issues that make up your operatinghypothesis.9. Just Say, “I Don’t Know” The Firm pounds the concept of professional integrity into its associatesfrom their first day on the job, and rightly so. One important aspect of professional integrity is honesty –with your clients, your team members, and yourself. Honesty includes recognizing when you haven‘t gota clue. Admitting that is a lot less costly than bluffing.Skills: • Work smarter, not harder. • Focus(key drivers)
  • 4. • Precise and clear answers • Grab opportunity in the mid way • Note important things you learn everyday • Do things which you are good at • Starting saying no.2) Fact Based Problem solving begins with facts. On the first day of an engagement the team combsthrough stacks of articles and documents to gather enough facts to illuminate their piece of the problem.When you strip away a lot of the high-minded language with which McKinsey dresses up its problemsolving process, it comes down to very careful, high quality analysis of the components of the problemcombined with an aggressive attitude toward fact gathering.Why are facts so important to the way McKinsey does business? There are two reason. First, factscompensate for lack of gut instinct. Most McKinsey-ites are generalists. They know a little about a lot ofthings. Therefore they will know less about, say, inventory management practices for perishablefoodstuffs than the folks who have been running the distribution operations of Stop and Shop for the last10 years. Gut instinct might tell those folks the solution to an inventory management problem in 10seconds. Second, facts bridge the credibility gap. Credentials do not matter as much if the consultant isarmed with facts.Many business people fear facts. Perhaps they are afraid that if they look too closely at the facts, they –or someone above them – might not like what they see. Maybe they think that if they don‘t look, thenasty facts will go away – but they won‘t. Hiding from the facts is a prescription for failure – eventually,the truth will come out. Don‘t fear facts, but rather use them.Rigidly Structured - MECE – Mutually Exclusive, Collectively ExhaustiveMECE structures your thinking with maximum clarity (hence minimum confusion) and maximumcompleteness. When you think you have determined the issues, take a hard look at them. Is each one aseparate and distinct issue? If so, then your issue list is mutually exclusive. Does every aspect of theproblem come under one (and only one) of these issues – that is, have you thought of everything? If so,they your issues are collectively exhaustive.In general language, MECE can be used when developing and listing issues related to the problem at hand. First, theassociate must ensure that the list is mutually exclusive, or that every item is separate and distinct. Then, he/shemust check that it is collectively exhaustive, that it includes every issue relevant to the problem. This approachprevents overlap and confusion.A way to approach the problem:
  • 5. • Step 1: Frame the problem • Build the problem based on facts • Start with the hypothesis • Step 2: Approach to the problem • Develop an approach to your problem • Keep the approach as simple as possible • Progress steadily and use your learning Step 3 : Team Work • Assemble your team with the right mix of members • Bring it together • Interact with your client • Brainstorm Step 4: Selling your solutions • Presentations • Be crisp and clear • Maintain Confidentiality3) A management consultant thinks in different way and strategies accordingly:The problem is not always the problem, The clients own diagnosis of the problem may not in fact be correct. So,before setting about devising a solution, a consultant has to dig deeper by asking questions, getting facts, andpoking around to ensure that he is heading down the right path. If an associate feels that he is not working on thecorrect problem, he has the option to go back to the client. He should let the client know that while he was asked tofocus on problem x, he feels that the real impact will come from solving problem y. The consultant should be ableto back up this recommendation with facts. The client may or may not accept the recommendation, but either wayhe has fulfilled his obligation.Dont reinvent the wheel, Most business problems are more similar than different. This means that a large numberof questions can be answered through use of a small number of problem-solving techniques. One technique, whichhas proved especially valuable, is the Forces at Work model. In this model, the consultants identify currentsuppliers, customers, competitors, and possible substitute products. Then, they list all changes occurring in eachcategory and the effect, positive or negative, that they may have on the client. They also list any internal changeseffecting the client or industry and determine which of these changes could force adjustment to the clientsoperations. This tool allows the consultants to develop an understanding of the competitivemarket their client faces, as well as how this environment might change.Consultants need to remember that every client is unique, and thus that there are no cookie- cutter solutions.Similar problems do not necessarily have similar solutions. Although the tools used for a problem may be thesame, they must be applied to every unique situation. It is a mistake for consultants to generalize solutions.Rather, they need to test their hypothesis with facts and analysis in order to determine that the solution they havechosen is the correct one for the situation at hand.
  • 6. Dont make the facts fit your solution No matter how inspired the team or individual finds its initial hypothesis to be, it must be prepared to adjust that hypothesis if the facts do not support it. The facts are static, so it is the solution which must be flexible and dynamic in order to solve the problem. Make sure your solution fits your client. It is a consultants job to recognize the unique strengths, weaknesses and limitations of his/her client. In some cases, the best hypothetical solution may be one that the client is unable to implement for any number of reasons. In this case, the Firm has not succeeded in solving the problem for the client, even if on paper, their proposed solution was theoretically the best. Therefore, the consultant must take into account the clients unique situation and ability or lack of ability to implement any proposed solution. Sometimes you have to let the solution come to you. There will be situations in which an initial hypothesis is impossible to formulate. This could occur if the scope of the problem is large and vague, if the client has no idea what the problem is, or if the team is breaking new ground. Although this is not an ideal situation, over time business problems become conquerable with the combination of fact-based analysis and creative thinking. Some problems you just cant solve… solve them anyway No matter how good a consultants intentions are, sometimes the group will come up against a wall. This could come in the form of bad or missing data, a business doomed to failure by the time the Firm is called in, or hostile politics within the client organization. They may recognize that their solution will change the organization, and that this change will not be popular with all groups. They must take into account the different factors driving the politics, and attempt to build a consensus for the solution with these in mind. This may mean that the solution must be changed in order to gain acceptability. If this is the case, then they should change it. No good will be brought to the company unless it is able to accept what the Firm offers.Work AddictionConsultancy attracts workaholics. If you want quality of life, I would suggest not doing this job. Workorientation and full-time availability are themes that come up repeatedly in the texts of management consultants.Phrases such as ‗working night and day‘, ‗working one‘s guts out‘, ‗work around the clock‘ pepper theconsultants‘ talk. These phrases all express an individual‘s full commitment to consultancy work. By using suchexpressions, consultants construct an image of a workaholic who seldom has time for other things in life.Self-AssertionAnother recurring theme in the work and career talk of consultants, which is closely connected to workorientation and full-time availability, is the need to be ambitious and successful. The ‗ideal‘ consultantcompetes not only with other consultants but—and above all—with her/ himself. This becomes evident in theconsultants‘ career accounts in the ways in which they talk about the importance of continuous self-improvement and excelling oneself.
  • 7. Assignment 2 “Cross Cultural Learning plays a Crucial Role in Management Consultancy” Cross-cultural communicationCross-cultural communication (also frequently referred to as intercultural communication,which is also used in a different sense, though) is a field of study that looks at how people fromdiffering cultural backgrounds communicate, in similar and different ways among themselves,and how they Endeavour to communicate across cultures.Organizational culture is an elusive construct, even when examined within the context of a singlesociety. When one begins to examine organizational cultures across societal cultures, however,the construct can become even more elusive, and the unique threats to accurate interpretation anddefinition at this level are often well-hidden. A central goal in such cross-cultural analysis oforganizational culture seems to us to be the isolation of differences attributable to organizationalculture from differences attributable to societal culture or industrial demands. Some primarydifficulties in achieving this goal arise from confusion about levels of analysis and about theQuestions we are actually trying to answer, while others arise from the fact that manifestations ofculture dimensions at the societal level can serve to mask or accentuate related dimensions at theorganizational level.
  • 8. Understanding culture as it is manifested across societies is a difficult undertaking, as is reflected in the wealth of literature on the topic. Understanding culture as it is manifested across organizations within a single society is also a difficult undertaking, as is reflected in the wealth of literature on that topic. Understanding culture as it is manifested across organizations from different societies – cross-cultural organizational culture analysis – is an extraordinarily difficult undertaking, as is reflected by the relative lack of literature on the topic. In fact, examining organizational culture in a cross-cultural context raises the question of what precisely is organizational culture? If the differences between organizations from different countries are largely attributable to differences between the countries themselves, is this a question of organizational culture at all? Further, if the differences are attributable to differences between industries, or between regions within a country, to what extent are these issues of organizational culture? Cross culture in management consultancy As the management consultancy world becomes increasingly global, the need for effective cross cultural communication is essential. Cross cultural communication in business plays a vital role in building international customers, employee relations and business partnerships. Cross cultural communication in business requires effort, technique and the addressing of different hurdles that commonly prevent communication from being effective• Cross cultural communication is defined by Gotland University as ―a process of exchanging, negotiating, and mediating ones cultural differences through language, non-verbal gestures, and space relationships.‖ Business communication is the exchange of messages related to companies through symbols, action and verbal words. Importance / Benefits• Cross cultural communication in management consultancy plays a vital role in successfully establishing the product or service in a different area of the globe. When the communication is effective, the product or service is appropriately tailored to the cultural norms and expectations resulting in the use or purchase of the product. Ineffective communication cross culturally can
  • 9. offend, confuse or send a misunderstood message which could lead to broken relations with investors or employees. Barriers – Language• A common cross cultural barrier in management consultancy communication is the use of language. Not every management consultancy globally does business in English. Even if they do, there can be different meanings for the same English word. According to the website of business communication group Quintessential, language barriers come in the form of either the use of inappropriate language or the use of foreign languages. Barriers – Culture• Each culture has a different set of values, business ethics, languages, behavior, expected etiquette and expression. Not knowing the differences in the country that the company is doing business in can lead to communication barriers that prohibit the messages from being effective. Barriers – Company Culture• A company culture is the norms and expectations within a company. This can be the organizational structure, policies and specific procedures that create a unique culture within the company. Expanding business communication cross culturally requires the management consultancy to assess its current culture and identify any possible hindrances that the company culture may present in a different country. Considerations• According to the University of Colorado, knowledge is the key to effective cross cultural business communication. Knowledge takes a step back and observes the differences between the two cultures and makes adjustments based on the observation. One approach to ensuring the cross cultural communication is being effective is to implement active listening that uses questions to clarify the message
  • 10. Cross-Cultural TrainingThe expatriate training program is explicitly designed to support the needs of globalorganisations that use strategic expatriate movement to achieve their goals. The success of anorganisation‘s future relies on its ability to manage change in staff and culture. The complexitiesof a global organisation‘s culture are often unspoken. Therefore, organisations that seek tounderstand the multi-layered, diverse leadership of their teams are changing the future.Organisations today, are realizing the effect the emotional intelligence of their leaders has onteam productivity. Cross-cultural communication dynamics between home and host countries arethe focus of this short-term program targeted at expatriates and their leadership teams. Each dayof customized training explores a different way of looking at how to leverage diversity anddevelop effective team dynamics. This two- or three-day program is targeted at expatriates andideally includes the involvement of their teams.An Insights Profile is the Jungian-based psychometric component used and can be translated into40 languages. The Insights into Personal Effectiveness Program serves as the launch pad for anexpatriate‘s ability to improve their impact on organisational effectiveness. The ManagingEcoshock Program is designed to highlight the psycho-social challenges faced by an expatriateduring an assignment. Although experience teaches that these programs naturally complimentone another, they can also stand alone.
  • 11. Afterwards, expatriates in emerging and global organisations can begin to design and plan their self, team and organisational strategies to complement the political and cultural complexities they face. For both expatriate and organisation, the expatriate training program specifically addresses the needs of global leadership development. Equipping participants with communication strategies, managing diversity tools and awareness of their responsibility to lead communities, this program is supplemented by growth options depending on the needs and requirements of any one individual or team. The strategic goals of these programs combined are:• To provide a thorough introduction to the communication strategies involved in optimising a culturally diverse environment.• To enable participants to, cognitively and effectively, increase their ability to recognise, understand and appreciate diversity in the workplace and leadership community.• To enhance expatriates and their teams‘ cooperative conflict management skills. Insights into Personal Effectiveness Program The Insights into Personal Effectiveness Program is a powerful interpersonal effectiveness training program. It introduces the Insights psychometric system that makes accessible the predictable difficulty in understanding the differences in personalities and the roadblocks these naturally create in working relationships. Using an experiential approach, accommodating all learning styles, participants learn a common language and framework to understand personality differences. With this awareness they are able to recognize and adapt to the needs of different kinds of people and therefore enhance their capacity to communicate and build relationships. Emphasis is placed on leading self, team and organisation with explicit instructing in conflict management skills. At the end of the program participants will:
  • 12. • Have an understanding of self and their impact upon others.• Understand the behavioural style and communication needs of others, including internal and external customers.• Understand the reasons for conflict that are rooted in personality differences.• Develop skills in ―adapting and connecting‖ to conflict response styles of self and others to better manage interpersonal interactions in different situations.• Communicate more effectively using appropriate interpersonal skills to foster teamwork and positive relations within the work environment. Managing Ecoshock Training Program The Managing Ecoshock Program is a learning tool for expatriates in how to understand the dynamics of living abroad. It highlights the psychological realities of culture shock and the international assignment cycle, providing resources and recommendations for ensuring a successful assignment. At the end of the program participants will:• Understand the different phases of the international assignment cycle.• Understand how to identify the causes and symptoms of culture shock during an expatriate assignment.• Have an opportunity to assess and reflect on their own level of culture shock susceptibility.• Have an understanding of how to successfully plan to combat culture shock. Q3: A detailed report on the creation of Consulting Proposal for going to markets, Opportunities available, Challenges faced by the marketers of the given company/industry/product. Background Information Heritage Health Foundation, Inc., as part of its mission ―to improve the capacity of the communities of the Mon River Valley,‖ sponsors the Tri Boro Development Forum (TBDF).
  • 13. TBDF is a coalition of community organizations, municipal governments, businesses, andresidents in the four boroughs of Braddock, North Braddock, Rankin, and Swissvale.The mission of the Forum is to collaborate and use the combined strengthsand individual talents of its members to improve the overall quality of life inits constituent communities. It sponsors activities in these communities andserves as a neutral facilitator bringing local groups and individuals togetherto achieve this goal.The Forum holds monthly public meetings in which members discuss issues that affect residentsof the four boroughs. These meetings are currently poorly attended, due in part to the fact thatmany residents are unaware of the organization‘s activities. Because the Forum needscommunity involvement to meet its mission, it seeks to raise its profile and better engagecommunity residents.II. Consulting TasksIn order to communicate more effectively with the community, we decided to create a website.This site would be able to convey information about the organizations to the public, as well ashold details about upcoming and past events. A requirement for this site was that it be easy toupdate and allow multiple contributors, so that the site reflects the distinct communities thatmake up the Forum.In addition to the website, we planned to create an e-newsletter that could be easily sent topeople involved with or interested in the organization. This newsletter would complement thewebsite by highlighting new content and reaching out to people (rather than waiting for them tolook for the website). To gain readership, the newsletter would be incorporated into the website,to allow people to read old issues and subscribe to future ones.III. Outcomes Analysis and RecommendationsA website for the Forum was created and can be viewed at The sitecontains information about the organization, including its mission, activities, and members. Italso has an interactive calendar, user registration, and pages for news from each borough. Eachborough page is to be maintained by a volunteer from that borough.The site was built on DotNetNuke, a content management system. This software makes theadministration of the website simple, with WYSIWYG text editors and buttons to add and deletepages. The software also has built in features that we utilized, such as user registration and thecalendar, as well as some that could be added in the future, such as a blog or message board.The major risk to the sustainability of the website is that it will require consistent maintenance onthe part of the organization. The administrator and borough volunteers will need to ensure thatthecontent on the site stays current to keep the interest of the community.In addition to the website, a procedure for creating and distributing an e-newsletter was created.The newsletter is created in Microsoft Word using a template and then converted into htmlformat.It is then sent using the bulk email feature on the website. Anybody can subscribe himself orherself to the newsletter by signing up on the website.The risk to the sustainability of the newsletter is similar to that of the website. Each issue of thenewsletter will need new content and will take time to prepare. The risk is that the motivation forcreating the newsletter will subside and that it will be neglected. To counter this risk, the processof creating and sending the newsletter has been made simple and fast. Additionally, the monthlyForum meetings serve as a motivator for sending out the newsletter.
  • 14. In the future, I recommend that the organization create and implement a maintenance plan. Thisplan encompasses maintaining both the content and the software of the website. Policies forcontent update should be created and followed to ensure that the content stays up to date.Additionally, upgrades to the DotNetNuke core software and modules should be monitored andinstalled when available.recommend that new features be added to the website over time. The site usage should bemonitored to gauge interest in the website before adding new features. In addition, care shouldbe taken in adding features that will require a lot of upkeep, such as a blog.Improve CommunicationsA web portal site was created and can be viewed at Screenshots of thewebsite can be found in Appendix A. The site was developed using DotNetNuke, which makes iteasy for the members of the Forum to update. The website contains information on TBDF itself,community resources, and the four boroughs. It also has the following features:• Events calendar• User registration• Subscription to newsletter• Search functionalityRegistered users are automatically subscribed to the newsletter. They also have the ability to addevents to the calendar and register for events.Prior to the creation of the website, there was very little information about TBDF accessible tothe public. Brochures with obsolete information were available at the HHFI building, but theywere not in distribution. The only method of spreading information was by word of mouth fromactive participants in the Forum and occasional flyers for events. Now, TBDF has a webpresence that informs the community of its purpose, accomplishments, and current initiatives.The site invites readers to get involved in the community by attending the many events,including the monthly Forum meetings. Furthermore, the site can be easily updated by the CP, sothe information will stay current. The website serves the mission of the Forum by increasing theawareness of the organization within the community. By knowing about the Forum, it is likelythat more residents will want toparticipate and attend the monthly meetings. Increasing the number of people involved in theorganization directly serves the mission of ―bringing… individuals together.‖ The eventscalendar on the website also helps to increase the capacity of the organization, as it allows morepeople to learn of, and therefore attend, the activities that TBDF sponsors.The sustainability of the website is dependent upon the motivation of the CP and the members ofthe Forum. Four people, one per borough, will be in charge of maintaining the borough sectionsof the website. Two of these editors have been identified, while two still need to be found. Thesevolunteers will be trained at the next borough meeting (May 15) in maintaining the website inDotNetNuke, specifically in adding/deleting pages, creating and configuring modules, and
  • 15. adding calendar events. To sustain the knowledge gained in the training session, I recommendthat the organization purchase a book or two about DNN and bookmark DNN websites. Bytraining multiple people in the website maintenance, the knowledge is more likely to besustained and passed on than if only one person was trained.The CP is in charge of the administration of the website. He will maintain the user accounts andpermissions, decide when upgrades are needed, and maintain the non-borough pagesHis training has occurred throughout the development process: he helped configure the website,so is well versed in creating pages and adding modules. He has not only added events to thecalendar, but has changed the calendar settings and added event options. He has created userroles, modified their permissions, and adjusted user account settings.The website has been online as of April 18th, and has not yet had many visitors. Only threepeople have registered with the website, and they work at HHFI announced the launch of thewebsite, which will hopefully help bring in new visitors, who will register for the site.The biggest risk to the sustainability of the website is that the editors and administrators willneglect their maintenance duties. Because the editors are volunteers, it will be important tomotivate them to update the website. The monthly e-newsletter will serve as a deadline forwebsite updates, and policies for borough editors have been developed The newsletter deadlinewill require news and events to be added to the website before the newsletter is sent out.Other risks to the sustainability of the website are of a technical nature. Web sites are always atrisk of being compromised due to security vulnerabilities, which can result in the site beingdisabled or having unauthorized content added. One way to mitigate this risk is to keep thesoftware on the site up to date. For this reason, I am recommending as part of a maintenance planthat the CP periodically check for DotNetNuke updates. If the website is compromised, the sitecan be restored to its previous state. CrystalTech creates daily backups of the database and filesystem, which can be restored for a small fee. Jay Volk should be contacted to request a siterestoration. The website has allowed members of the forum to see the potential for technology intheir group. When introducing the website and describing what features it would have during themonthly meeting, some members thought of new uses for the website, such as putting up theminutes from the borough council meetings. They realized that the website will allow them toinvolve the community in many ways. Also, by using a portal website that will allow users tocontribute content, the website has the potential to be an online version of the forum – byallowing users to comment on ideas, they can have input from members of the community thatare not able to attend meetings.Task 2. Develop e-NewsletterAn e-newsletter has been developed in order to expand upon the communication opportunitiesoffered by a website. The newsletter is able to communicate the most recent happenings at TBDFto residents in a timely manner. This will allow citizens to know what is happening in theorganization and community, even if they are unable to attend the meetings.A process for creating the e-newsletter and distributing it has been developed by the CP and theconsultant. The CP has a template in Word (see Appendix C) that he uses as a basis for eachnewsletter. The CP is well versed in using Word, so no new software needed to be learned inorder to create the newsletter. After the newsletter has been created, the Word document is saved
  • 16. as an html webpage. The e-newsletter is sent out via the newsletter functionality of theDotNetNuke system. It automatically sends the newsletter to all subscribers of the site and anyadditional addresses specified. The html code created by Word is copied over to a text box on thewebsite, where it can be previewed and edited before being sent out. In addition to sending outthe enewsletter,it will also be archived on the website and distributed in paper form for thosewithout computers. The CP has sent out several test newsletters during training sessions with theconsultant. He also created and sent out the first e-newsletter using the website service on May 4th. Thisnewsletter was sent to a list of e-mail addresses that the CP already had, and it contained anannouncement for launch of the website.The e-newsletter increases the capacity of the organization in the same ways that the websitedoes: it informs the community and encourages involvement in the organization and its activities.The enewsletter allows TBDF to reach out to people to tell them what is happening, rather thanwaiting for people to look at the website. Because it will be sent out on a monthly basis, it willkeep people current with Forum happenings.The e-newsletter can be sustained by making it easy to create and send out. Because it can bemade in Word, the newsletter does not take long to create. The template reduces the time neededto format the document. By using the website newsletter capability, the CP can easily send thenewsletter to everyone who has subscribed themselves, so he won‘t need to maintain a separateemail list. Heritage Health Foundation, TBDF‘s parent organization, already sends out a monthlypaper newsletter (Snapshots), so it has demonstrated the ability to sustain a monthly newsletter.The staff members who put together Snapshots can serve as a resource for the CP in formattingthe newsletter for printing.Recommendation 1. Create and implement a maintenance planA well-maintained website means having current content and software. These two concerns arelikely to generate interest among visitors and keep them coming back. Current content ensuresthat visitors will have a reason to return, while current software will make the experience ofvisiting the site more pleasing. Keeping the software up-to-date allows better features to beimplemented and reduces security risks. To ensure that the content of the website stays current, apolicy for updating it should be developed.By keeping the content up to date, visitors will be more likely to return repeatedly: few peoplewill return to a site that never changes. However, this will require diligence on the part of thewebsite administrator and borough editors. Content should be updated on a monthly basis, atminimum.To ensure that the software for the website is up-to-date, the website administrator should checkfor updates every three months. Updates to the DotNetNuke modules can be performed by theadministrator, while updates to the DotNetNuke core should be installed by the technical webconsultant. Approach The policy for updating content should include statements such as thefollowing:
  • 17. • The monthly TBDF meetings generate ideas and issues that should be shared on the website.Prior to the meetings, the agenda should be added to the website. If visitors can see what willbe discussed, they may attend to voice their opinions. This could bring new members into theForum. After meetings, the minutes should be added to the website within a few days. Thiswill allow people who were unable to attend to stay current with the issues discussed.• Large initiatives taken on by TBDF, such as the Carrie Furnace redevelopment planning,should have their own web page on the site. This page can then be updated when progress ismade on the project.• Community events should be added to the calendar as soon as their details have been finalized.Additionally, posting digital versions of event flyers or creating event web pages will allow fordetailed descriptions. Posting pdf‘s has the benefit of allowing others to print and distributecopies of the flyers.• After events, photos should be added to the web site gallery within a few days.• Recurring calendar events should be checked periodically (every 2-3 months) to make sure theinformation is current. Also, the end date for ongoing periodic events should be kept at leastthree months into the future.The following procedures describe how to check for and install updates to DotNetNuke.• To check for module updates, log in to the Host account on the website. In the administratortoolbox at the top of the page, click on the ―Install New Features‖ link. This will open the―Module Definitions‖ page, which lists the current module versions. A green check marklocated next to the module name indicates that an update is available.• To install a module update, download the install version of the selected module from theDownloads section on the DotNetNuke website ( and save it to yourcomputer. After that, follow the procedure in the previous item to get to the ModuleDefinitions page. At the bottom of this page, click on the ―Install New Module‖ link. This willbring you to a File Upload page, where you will add the zip file you just downloaded from thewebsite. After locating the file, press ―Add,‖ and then ―Save File.‖ A log of the installation
  • 18. process will appear, and it should end with ―Installation Successful.‖ Click on the return link.An error page may appear at this point, don‘t be alarmed. It is a bug in DotNetNuke; reload thepage and it will load normally.• To check for updates to the DotNetNuke portal software, look at the Downloads section of theDotNetNuke website. Determine the most recent version of DotNetNuke in the 3.x branch.(4.x versions require ASP.NET 2.0, which is not supported on the current web hosting plan).To check for the installed version, log in to the Host account. Go to the Portals page, located inthe Host menu. This page shows the current version of the DNN core software (3.3.7 as of thiswriting).• Jay Volk should be contacted to assist with updating the DNN core software. The process willinvolve manually backing up the database and files, which only Jay has the ability to do.Introduce new featuresIn order for the website to reach its full potential as an interactive online version of the Forum,new features should be added. These should be rolled out as interest in the site grows, rather thanimplemented suddenly. If too many features are added before the site has a solid user base, theyrun the risk of laying dormant. Possible features include an online forum, blog, and surveys. Inaddition to these features, the possibility of local sponsors should be explored. Approach Beforeadding new features, monitor the site usage. This can be done in from the Site Log page in theAdmin menu. A variety of report options are available. A detailed site log contains informationon each visitor, including name, browser used, referring link, and pages visited. A pagepopularity report details the number of times each page has been requested. The Page Views bytime_unit report will show how many pages were viewed on each hour, day, or month during thespecified time period. Lastly, the Site Referrals report states each link that referred visitors to thesite (and how many times). These reports will give a good indication of how much the site isbeing used and which pages are the most popular.Adding new features that are already included as modules in DotNetNuke is fairlystraightforward.Create a new page and add the module to the content pane. I recommend keeping the visibility ofthe new page to the administrator only during the setup. This will prevent people from seeing thepage before the module is configured. In addition to those modules included with DotNetNuke,many independently developed modules are available for sale on Whenconsidering new features, look for information on how to make them successful. For instance,―The ABC of building a successful forum‖ has several good tips on how to manage an onlineforum [2]. One such tip is to not start out ―with too many sub forums… youll get much moreactivity and participation if you have five interesting threads next to each other in one forum,rather than five threads in five different forums.‖ For a blog, the key is to post updates
  • 19. frequently. Sharon Housley [3] warns ―that blogging requires time and effort, dont createunrealistic expectations and be unable to deliver.‖ She also recommends including the blogcontent in an RSS feed to increase readership.An additional feature to pursue would be to get local businesses to sponsor the website. Havinginformation about the number of site visitors and page views will help when approachingbusinesses. A simple text/html module containing a logo, link, and/or blurb about the sponsorcan be added globally to the side panel of every page. Local sponsors will help defray the hostingcost of the website, as well as encourage the economic development of the area by promotinglocal businesses. Q4: Develop a model by providing a feasibility report for setting up a consultancy dealingin particular product line.PURPOSE OF THE DOCUMENTPre-feasibility studies are developed primarily to facilitate potential entrepreneurs in projectidentification for investment. Pre-feasibility Studies may form the basis on which animportant investment decision maybe made. The document covers various aspects of thebusiness venture from project concept development to, financing and businessmanagement.3 PROJECT PROFILEThe project is about starting a cut flower farm near pattokiPre-feasibility-study Cut Flower Farm (Roses)3.1 Project BriefCut flowers growth is not a new phenomenon in floricultural sector of Pakistan; however itis an infant industry as far as its growth is concerned. The resource rich local soil providesideal agronomic conditions for the production of cut flowers. Despite lack of knowledgeon modern floricultural production techniques, difficulty in obtaining the latest varietiesand the lack of infrastructure, the industry is continuously attracting new entrants.This pre-feasibility is being prepared by SMEDA and is intended to provide generalinformation on the opportunity for an investor in the floricultural sector to develop cutflowersfarm of roses for supply in local market. Roses are the most traded of all cut flowervarieties around the world. The trend in Pakistan is no different.3.2 Project RationaleGrowing cut flowers, especially roses, is a very profitable business if done properly oncommercial basis. Demand for cut flowers, especially roses, is growing tremendously asmore and more people are becoming aware of the beauty of flowers as decorative items.Weddings, birthday parties, seminars, and other such social gathering events areincomplete without floral decorations. Besides earning money one also helps keep theenvironment clean and beautiful.Though it is a capital-intensive project, the high returns as compared to any otheragricultural venture makes it economically viable. Low cost of labor combined with veryreasonable land lease rates and helpful climatic conditions for most part of the year serveas the basis for making this project attractive. Rose plants are easily available and are verycheap.4 PROCESS FLOW CHART
  • 20. 5 VIABLE ECONOMIC SIZEA small farm of 5 acres would be economically viable considering the amount of effort andmoney required and returns expected. Besides rose growing fields of 5 acres, another 2kanal of land is required to perform post-harvesting functions and other related chores.6 CURRENT INDUSTRY STRUCTUREImpulse serves as the center for floricultural activity in Delhi. Though sarita viharandSheikhupura districts have also developed some expertise in this field, yet Pattoki stillserves as the hub market for all floricultural trade. Patto ‗mandi‘ is the major forum forbuying and selling of fresh cut flowers, especially roses. From Pattoki, flowers aredistributed to all parts of the country including Karachi, Peshawar, Lahore, and Islamabad.Overall, this sector is still in infancy, still going through birth pains. This is not a goodsign considering the years this sector has been around. The major reason for this slowdevelopment process has been the lack of interest on part of progressive farmers to enterthis field. The credit goes to small and poor farmers who have kept on going withoutmuch technical and/or financial support over the years. Whatever pre-harvest and postharvesthandling techniques are being used is the direct result of their personal ingenuity,however primitive they may be.There are only few major players in this industry. Majority of the industry is unorganized.Therefore, there is great potential for anyone who comes into this field and does farmingon progressive basis.SALES & MARKETING ISSUESLocal market of cut flowers, especially for different varieties and colors in roses, is stillgrowing. Pattoki area is the major supplier to fulfill this demand. There are two basicmarket segments for flowers:a) Retail sales to consumersb) Wholesale sales to corporate and institutional customersIn every major city of the country there are numerous retail outlets selling all kinds offlowers to consumers. These outlets could be anything from a roadside corner kiosk to aproper retail outlet shop in some high-end urban locality. These shops are either feddirectly from farms or through a middleman or distributor. Some shops buy directly from‗mandi‘ as well. Buying directly from the farms give bigger shops access to better qualityflowers as flowers do not go through too many different hands and there is less wear andtear. Another important aspect of buying directly from farms is better profit margins forboth farm owners as well as shopkeepers. This they achieve by eliminating themiddleman. But this setup is quite rare. Nine out of ten times it‘s the distributor who isthe supplier to most of small shops in the city. A major advantage of buying fromdistributors is the availability of credit facility.Besides retail outlets the major buyers are corporate and institutional customers. Theseinclude hotels, offices and most importantly party decorators and marriage halls. All theseinstitutional as well as corporate customers are fed by wholesale dealers and distributors.They buy in bulk quantities. For party decorators high quality is not an issue as they usethe flowers only once. Once the party is over the flowers go to the bin. As far as hotelsand offices are concerned, quality is an important issue. But again as flowers are changedeveryday, they don‘t need long life product.
  • 21. Some small traders have developed another sale channel. They buy from Pattoki ‗mandi‘in the morning and bring their product to Begumkot (Sheikhupura District) ‗mandi‘ andresell it for profit. From Begumkot ‗mandi‘ either the shopkeepers or wholesalePre-feasibility-study Cut Flower Farm (Roses)distributors and traders buy this stuff and sell in cities like Lahore, Faisalabad, Gujranwala,etc.FARM INPUTSFollowing inputs are required:LandLand requirement is 5 acres for growing flowers and 2 kanals as area for sorting, washing,drying, packing and other related facilities. Land is to be obtained on lease. At present,lease rate in Pattoki area is Rs 15000 per acre per year.Description Area(in acres) Cost / Rate Amount / OtherLand price / acre 700,000Land lease cost /acre / year 15,000Room 0.002Shed 0.037Field 5.000Total Land Requirement 5.04Land purchase price 3,527,319Land lease cost 75,585Flower PlantsRoughly 11,000 plants would be planted in each acre, approximately 4-ft2 area for eachrose plant. These plants would be brought from a commercial nursery. New plants aregrafted in July by the nurseries and are ready to be transferred to the field in January.Starting from January, these six months old plants at the farm are to be taken care of tillOctober. During this period, the fields are to be looked after as if they are in production.Water, pesticide spray, fertilizer, and labor requirements remain the same as for acommercially running farm. Rose flowers produced during this development stage are notcut along with stem from the plant. Only the flower is picked but not sold commerciallybecause it is not yet fit for commercial sale. From November you start to take commercialproduction from the farm. In all 54,450 plants of rose would be required. Each six-monthold plant costs Rs 10 on average when bought from nursery.An important point is that the average life of a rose flower plant is 5 years. After 5 yearsall the plants would have to be replaced with new ones.Pre-feasibility-study Cut Flower Farm (Roses)WaterWater is a regular requirement of flower plants, as is for any living thing. If fresh canalwater were available, this would be the ideal situation. Firstly, the quality of water is goodand it is very useful for plants. Secondly, if canal water were available it would cut out theexpenses of installation of a tube well and the electricity or diesel cost of running that tubewell. In Pattoki area, canal water is available for irrigation. But to be on the safe sidewater-pump should also be installed at the farm. It would cost about Rs 50,000 to install areasonable capacity and quality pump. The average cost of water and upkeep of waterchannels costs about Rs 1,500 per acre per year. During April, May and June, fields are
  • 22. irrigated every week. Otherwise the normal practice is irrigating every 20-25 days.LaborGeneral formula is 1 person per acre excluding the foreman and farm manager. ThisLaborer would cost Rs 4,000/month/acre. In all 5 laborers would be required. Theselaborers would also act as pickers, cleaners, sorters, packers, etc. There would be 1foreman to keep the work moving and one farm manager cum accountant to manage thefarm overall. During peak season, temporary pickers can be hired on daily wages. Butthat cost is negligible. Foreman could be hired for Rs 6000/- month, whereas the managercum accountant would be hired for Rs 8,000/month.Table 6- 8-1 Required Manpower in the Year 1 of the Operation.Post # of personnel Salary/month 1st year costManager/Accountant 1 8,000 96,000Foreman 1 6,000 72,000Semi-Skilled Workers 5 4,000 240,000Total 7 150,000Pesticide SpraysBetween April and November, one spray of pesticides is required every fortnight. FromDecember till March only one pesticide spray is required per month as prevention againstfungus. One pesticide spray costs Rs 5000 resulting in total cost of sprays per acre per yearis Rs 25,000.Material RequiredMaterial Cost/Acre(Bag) Acres/Bags AmountPesticide Sprays 5,000 5 25,000Pre-feasibility-study Cut Flower Farm (Roses)PREF-27/December 2006 /Rev2FertilizersFlower plants require DAP, potash, and ammonium nitrate fertilizers for proper yield.Sometimes one or two bags of urea are also required. 4 bags of DAP are required everyquarter at Rs 1000/bag. 3 bags of potash are required every quarter at Rs 700/bag, and 4bags of ammonium nitrate are required every quarter at Rs 350/bag.But for this feasibilitywe are using the combination of NPK which cost 500/bag and 2 bags per month per acreare required.Fertilizers RequiredMaterial Cost/Acre(Bag) Acres/Bags AmountNPK 500 24 60,000Building & ShedThis project does not require any major building structure. Only a small room for storagepurpose is required. A maximum of 10‘x10‘ room is enough. Besides storage room, oneproper shed is required. This is an important requirement. The shed should be 40‘x40‘covered area with open sides for air passage. This area is to be used for washing, sorting,packing, and other post harvest activities. The construction rate is Rs 100 per square feet.This construction rate is based on the fact that the room and the shed would be made up ofsemi-baked bricks using local masonry skills. The idea is to cut the initial capitalinvestment.Farm Fixtures & ToolsBasic farm tools and fixtures would include tools for pruning the plants, picking the
  • 23. flowers, and removing leaves, etc. Besides these tools, other fixtures are requiredincluding clean water hand pump, tables, tubs, wooden crates and fans. Total capitalrequirement for all these items is Rs 40,000. All items would be Pakistan made and areeasily available.PackingRose flowers are either packed in specially designed wooden crates or else in cardboardcartons. Each wooden crate can carry about 25-30 Kg flowers (one-Kg flowers is roughly60 individual stems). For long distance transportation, an 8-10 Kg ice block is also placedalong with flowers to keep their temperature down. Cardboard cartons are usually used forshort distance transportation. If they are to be used for long distance transportation, ice,packed in plastic bag, is also placed in each box for cooling effect. Usual gross weight forcardboard cartons is 15-20 Kg. Wooden crates are reusable over longer periods of time.About 100 boxes are enough to keep a cycle of rotation going. Each wooden crate wouldcost Rs 160. Cardboard carton usually cost Rs 35/box.Pre-feasibility-study Cut Flower Farm (Roses)TransportationFlowers packed in wooden crates and cardboard cartons are transported to big cities fromPattoki via train. To take these crates and/or cartons from farm to railway station amotorcycle cart is used which can be hired on rent at very nominal rates.OUTPUTProduction of rose flowers has different seasonal variations. Between November andMarch, maximum yield is obtained, assessed to be about 70% of total production in a year.From mid April till mid June, there is no flower for commercial sale. From mid June tillOctober, the situation gets better steadily and slowly. On an average, one plant of roseflower has an average yield of 50 flowers per year. Out of these 50, about 20 flowers arenot up to the required standard and are destroyed either by man handling or by somedisease. These are sold as petals. Therefore, only 30 flowers per plant per year areavailable for commercial sales. Sale price also depends on season, quality and size offlowers. It varies from Rs 35 for hundred stems to Rs 550 per hundred stems. But if weaverage out the price over the period of 12 months, one rose stem sells minimum for Rs 1Sale is against credit and usual credit period is 15 days.The complete produce of the farm would be sold in open market and to wholesalers, ondaily basis. Direct supply to flower shops is possible if the offer is attractive.OVERALL PICTUREThe over-all picture would go something like this that once you have planted six-monthold rose plants in the fields in January, from there on till October, you have to look afterthe farm in all respects, including fertilizers, pesticides, etc. but without any yield. Flowerswould bloom but they would not be used for commercial sale as their stem would still besmaller and if cut at that time it would destroy the plant and/or reduce its life. FromNovember onwards the farm would be ready for production. In the first year, ending inDecember, only two months of production would be available for commercial sales. Nextyear approximately 80% capacity would be reached and in the third year farm would beoperating on full capacity.Pre-feasibility-study Cut Flower Farm (Roses)GENERAL FACTS & FIGURES*Farm at 100% capacity
  • 24. Total Area 5 acresTotal no. of rose flower plants 54,450Average no. of saleable flowers /plant / year 30Total available saleable flowers/year 1,633,500FINANCIAL ANALYSIS12.1 Capital InvestmentCapital Investment Rs.Building/Infrastructure 153,000Land tillage and saplings 594,000Machinery & Equipment 50,000Pre-operating costs 21,701Total Capital Costs 818,701Working CapitalWorking Capital Rs.Raw material inventory 98,058Upfront land lease rental 75,585Cash 250,000Total Working Capital 423,64412.3 Initial FinancingInitial Financing Rs.Debt 621,173Equity 621,173Total Investment 1,242,345Pre-feasibility-study Cut Flower Farm (Roses)PREF-27/December 2006 /Rev213Table 12-1 Project ReturnsProject IRR 59%NPV 1,838,888Payback Period 2.25REGULATIONThere is no government regulation, which affects this business.KEY SUCCESS FACTORSThe proposed project would have a number of competitive advantages:1) Low cost of labor2) Lower rent rate of available land3) Growing local market4) Country profile suites this project.THREATSFlowers are perishable products with a limited life span. Without any life enhancingtreatment, its shelf life is three days to four days maximum. Therefore, flowers should betransported from the field as soon as possible in order to take advantage of its short life.There are certain diseases that can affect flowers detrimentally, but timely pesticide spraysact as a defense against such threats.ASSUMPTIONSThe proposed project is based on following assumptions:
  • 25. 1) Only rose flowers would be grown2) Approximately 11,000 plants are planted per acre3) Farm is based in Delhi area4) Already grafted plants would be bought from a nursery5) Canal & Pump water would be used for irrigation