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Venture Consulting
services
Market Entry Plan
Investor Opportunity
THE TEAM
Biswadeep Ghosh
Hazra
Investment Opportunity in
the country of Mezosin
Devark Chauhan
Our Assuptions
Assumptions
• We have considered that the given country “Mezosin” is most
similar to “Malaysia”. Our rationale behind this is due the
following facts:
• Malaysia has a population of 32.6 Million
• Median age of the population is 28.6
• Malaysia had a corruption score of 52 out of 100
• Malaysia is characterized by numerous achievements in
the field of water and sanitation
• All the financial figures used are in Mizo
Strengths
Opportunities
Weaknesses
Threats
S W
O Ti) Mezosin is a tourism driven country 
potential for increased profitability
ii) 32% of the workforce already engaged in
tourism  potential to recruit expert
employes
iii) Government’s interest to see new players
in the TNRS sector
i) Global corporations often have little to no
knowledge about the inner workings of
potential market in smaller countries
ii) Differences in language spoken by the
general populace of Mezosin  Language
barrier
i) Multiple players in the Mezosin market
 all aiming for the same pie
ii) Strict environmental laws implies the
company has to tread carefully and
analyze every decision from multiple
perspectives
iii) Cultural differences between the
company and Mezosin might hamper
the synergy
SWOTAnalysis
Swot analysis for our client’s company
i) Large cash reserve which would help in
short term investments while in Mezosin
ii) Third largest player in the TNRS sector 
experience & technological advantage
over other smaller players. Could easily
gain dominance over the other players in
Mezosin
iii) Decreasing long term debt  an added
strength of the company
iv) Company has already been acid tested in
a complex market such as Europe
PESTLE Analysis
Political Economic Technical Legal
Adopting the Floating
Exchange Rates-
This will fuel the country’s
growth as foreign currency
comes into Mezosin through
tourist spending. Demand for
Mizo rises and that improves
the country’s stand in the
currency exchange rate.
Currently 1 Mizo is valued at
0.5 Euro which is expected to
rise in the future.
Unemployment and
Underemployment-
Low skilled workers Drivers
with the Cab Aggregator
High skilled worker 
Corporate company team in
Mezosin
32% of the workforce in
tourism sector which
generates 10% of GDP
The government is
encouraging private players to
invest in Transportation
Networking and ride services
business.
i) 35 million population with
an average age of 30
implies young workforce
at disposal for the Cab
Aggregator
ii) Good health and
sanitation of the populace
implies foreign companies
will get employers and
drivers in sound health and
possibly free of diseases
iii) Education System has
failed to affect the low skilled
population of Mezosin
iv) Underemployment is a
real problem in Mezosin and
the situation needs to be
looked at, fast
Mezosin imports a
considerable amount
(50%) of its imports
(which make up 60% of
the GDP)
This suggests that-
i) Either the country has
a low technological
driver
ii) Shortage of skilled
labour supply
Social Environment
i) Government is very
serious about the
environmental
implications on the
country.
ii) Zulu, the country’s
second largest taxi
aggregator (by market
share) has been caught
up with bribing and tax
evasion charges, possibly
related to environmental
implications discussed
above.
i) Ranks (out of 100)
ii) Government Policies
(52)
iii) Institutional
Framework (62)
iv) Education (62)
v) Ranks 55 in corruption
across the globe, recent
accusations of
corporations bribing
vi) Favourable for
investment in the TNRS
network
vii) Health and sanitation
issues are carefully looked
after by the incumbent
government
viii) Public transportation
is poorly structured and
managed
Strong environmental
regulations-
i) Increased expenditure
for companies for
investing in sustainability
measures
ii) Better company
reputation
iii) Benefit of the normal
people and customers
alike
Violation in
environmental regard
attracts huge penalty
Opportunities and Risks
Risks
1. A large chunk of the economy and employment is
dependant upon tourism which is a volatile sector with
seasonalities involved
2. A weak education system implies that productivity will
increase extremely slowly. Macroeconomics tell us that the
Long Run Aggregate Supply curve which is vertical shifts
towards the right due to increase in technology, productivity
and human capital which helps increase the output (GDP)
of the country
3. Corruption, poor government policies, poor supply of skilled
labour.
Opportunities
1. Young Population
2. Booming Tourism Industry
3. Tourist locations – more use of transport
4. Government Inviting private players for entry
5. 27% Void in the current industry
6. Market Potential – 75 Healthy Score
7. Recreational and public water transport- Future Business Model
8. Pickup and drop especially for the office going population.
9. Airport Pick up drop
10. Tourists will book a cab on designated routes covering popular
tourist destinations. The Cab Aggregator will tie up with local well-
known restaurants that will enable tourists to taste local cuisines
at a discounted rate
There are a number of opportunities as well as risks associated with the country as a whole-
Strategy
• We are Expanding into a new market with existing
product offering. This is Market Development Strategy.
• Horizontal Integration
• Acquiring Globe Services is a way to grow
Inorganically by horizontal Integration.
• This is provide multifold benefits:
• Economies of scale can be achieved as the
company grows, Our Client being the 3rd largest
Player in world will have effective systems and
processes in place which combined with
already existing market share of globe services
will provide synergy to our business offering.
• Costs will come done due to integration.
• Future Diversification prospects:
• Being an island Country Mezosin provides us
opportunities to explore on demand waterways
travel services. This later on can be rolled out
on a global scale with Mezosin serving as an
effective test market.
Market Entry Strategy
Greenfield
Investment
• Costly because of initial
investment
• Chances to not understand the
market environment properly
like culture and people etc.
• Risk of pricing error, high exit
barrier
• Government permits will be a
issue
• Will have more control over
the operations of the firm
• Option to customize more
Joint Venture
with Fuzu
• Will be high stake game as
they already have 33%
market share
• Will have to share our
competitive advantage with
them which can be dangerous
in long term
• It can prove to be fatal like
happened in case of Hero-
Honda
• We will have a strong entry
base
• Existing knowledge about the
customers
Joint Venture with
the government
of Mezosin.
• We will have to restructure
the whole public sector
which will also pose a threat
to us
• We will have to be confined
in the domain of transport
• Government might not want
to seek help from a foreign
entity
• Good way as we won’t face
any legal and policy issues
Acquisition
of Globe
Services
• Maybe Clash of cultures
with the workforce
• We may over estimate the
cost due to Hubris
hypothesis
• Only 8% market share so
won’t be that expensive to
acquire them
• Get direct access to 8% of
the market
• We will have the early
access to customer
preferences
Our Venture consulting firm has analyzed various market entry strategies for the client.
Market Size
We have used the three step approach of
• TAM – Total Addressable Market
• SAM – Serviceable Available Market
• SOM – Serviceable Obtainable MarketA B C
1) Total Addressable Market
• The Total Addressable Market (TAM), also referred to as total available
market, is the overall revenue opportunity that is available to a product or
service if 100% market share was achieved.
• The global ride-hailing service market is valued at 65728 Million Mizo.
This will be the total market that will be owned by our client if they were
the only player in the world with worldwide accessibility.
2) SAM – Serviceable Available Market
• Your serviceable available market refers to the segment of your TAM which
you can reach.
• Here our limited geography is currently the island country of Mezosin.
• The total population is 30 million.
• Using Malaysia as a reference point. According to Statista, Revenue in the
Ride Hailing segment amounts to US$558m (Using 1 US dollar = 0.9 Euro)
in 2019 in Malaysia. This converts to 1007 million Mizo.
• Hence our SAM is Valued at 1007 million Mizo. This represents the full
market potential of Transportation Networking and Ride sharing Business of
Mezosin.
3) SOM – Serviceable Obtainable Market
• This is how much of the market in your location you can realistically
reach.
• We know that Zulu had a market share of 27% which has created a
vacancy.
• Assuming this has created a supply shortage and our Client will have this
market to capture first.
• Our SAM was valued at 1007 Million Mizo. Taking 27% of that value our
service obtainable market is valued at 271 Million Mizo.
• Taxi market is expected to register a CAGR of 9.22%, during the forecast
period, 2019-2024 according to Mordor Intelligence.
• Hence this proves to be a really lucrative opportunity for our client.
Worldwide Market
Potential :
65728 Million Mizo
Mezosin Market
Potential :
1007 Million Mizo
Current Accessible
Market Potential :
271 Million Mizo
Profitability
8% 30M 27% 6662 Mizo 9.22%
Existing Market
Share of Globe
Services
Population Void Created by
Zulu
Initial Outlay Cumulative annual
growth rate for
business.
SUCCESS
Based on our analysis we have decided to go ahead with Acquisition of Globe Services.
Our ratio calculation shows favorable outcomes.
REQUIRED INITIAL INVESTMENT
Acquisition of Globe
Services
2,277 Mizo – 34 %
This is the Net worth of
Globe Services.
Starting Current Bank
2180 Mizo 33%
Premium for Acquisition
457 Mizo – 7%
Paying 20% Premium
over Equity
Registration, Insurance,
Setup and Miscellaneous
Costs
1748 Mizo - 26%
Initial Costs have been taken on the
basis of actually starting a business
venture in Malaysia. Cost have been
converted Mizo.
Total Initial Cost 6662 Mizo
BUSINESS RATIOS AND CONDENSED BALANCE
SHEET (GLOBE SERVICES)
Financial
Ratios
2018 2019
Working Capital 1867 872
Current Ratio 3.67 1.60
Debt to Equity
Ratio
0.310 0.653
Assets
Current Assets 2018 2019
Cash Only 1,106 519
Short-Term Investments 1,285 1,520
Other Current Assets 173 281
Total CA 2564 2320
Non Current Assets
Total Investments and Advances 434 1,051
Intangible Assets 4 270
Net Goodwill - 152
Tangible Other Assets 1 9
Total NCA 439 1482
Total Assets 3003 3802
Liabilities
Accounts Payable 67 32
Other Current Liabilities 630 1,416
Other Liabilities 15 30
Accumulated Depreciation 3 12
Total Liabilities 715 1490
Equity
Preferred Stock 4,284 5,152
Additional Paid-In Capital/Capital Surplus 56 74
Retained Earnings -2,034 -2,945
Total Equity 2,306 2,281
THANK YOU!

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Market Entry Plan for Ride Sharing Company (Biswadeep Ghosh Hazra) - [Venture Consulting Services] {IIM Amritsar}

  • 1. Venture Consulting services Market Entry Plan Investor Opportunity
  • 2. THE TEAM Biswadeep Ghosh Hazra Investment Opportunity in the country of Mezosin Devark Chauhan
  • 3. Our Assuptions Assumptions • We have considered that the given country “Mezosin” is most similar to “Malaysia”. Our rationale behind this is due the following facts: • Malaysia has a population of 32.6 Million • Median age of the population is 28.6 • Malaysia had a corruption score of 52 out of 100 • Malaysia is characterized by numerous achievements in the field of water and sanitation • All the financial figures used are in Mizo
  • 4. Strengths Opportunities Weaknesses Threats S W O Ti) Mezosin is a tourism driven country  potential for increased profitability ii) 32% of the workforce already engaged in tourism  potential to recruit expert employes iii) Government’s interest to see new players in the TNRS sector i) Global corporations often have little to no knowledge about the inner workings of potential market in smaller countries ii) Differences in language spoken by the general populace of Mezosin  Language barrier i) Multiple players in the Mezosin market  all aiming for the same pie ii) Strict environmental laws implies the company has to tread carefully and analyze every decision from multiple perspectives iii) Cultural differences between the company and Mezosin might hamper the synergy SWOTAnalysis Swot analysis for our client’s company i) Large cash reserve which would help in short term investments while in Mezosin ii) Third largest player in the TNRS sector  experience & technological advantage over other smaller players. Could easily gain dominance over the other players in Mezosin iii) Decreasing long term debt  an added strength of the company iv) Company has already been acid tested in a complex market such as Europe
  • 5. PESTLE Analysis Political Economic Technical Legal Adopting the Floating Exchange Rates- This will fuel the country’s growth as foreign currency comes into Mezosin through tourist spending. Demand for Mizo rises and that improves the country’s stand in the currency exchange rate. Currently 1 Mizo is valued at 0.5 Euro which is expected to rise in the future. Unemployment and Underemployment- Low skilled workers Drivers with the Cab Aggregator High skilled worker  Corporate company team in Mezosin 32% of the workforce in tourism sector which generates 10% of GDP The government is encouraging private players to invest in Transportation Networking and ride services business. i) 35 million population with an average age of 30 implies young workforce at disposal for the Cab Aggregator ii) Good health and sanitation of the populace implies foreign companies will get employers and drivers in sound health and possibly free of diseases iii) Education System has failed to affect the low skilled population of Mezosin iv) Underemployment is a real problem in Mezosin and the situation needs to be looked at, fast Mezosin imports a considerable amount (50%) of its imports (which make up 60% of the GDP) This suggests that- i) Either the country has a low technological driver ii) Shortage of skilled labour supply Social Environment i) Government is very serious about the environmental implications on the country. ii) Zulu, the country’s second largest taxi aggregator (by market share) has been caught up with bribing and tax evasion charges, possibly related to environmental implications discussed above. i) Ranks (out of 100) ii) Government Policies (52) iii) Institutional Framework (62) iv) Education (62) v) Ranks 55 in corruption across the globe, recent accusations of corporations bribing vi) Favourable for investment in the TNRS network vii) Health and sanitation issues are carefully looked after by the incumbent government viii) Public transportation is poorly structured and managed Strong environmental regulations- i) Increased expenditure for companies for investing in sustainability measures ii) Better company reputation iii) Benefit of the normal people and customers alike Violation in environmental regard attracts huge penalty
  • 6. Opportunities and Risks Risks 1. A large chunk of the economy and employment is dependant upon tourism which is a volatile sector with seasonalities involved 2. A weak education system implies that productivity will increase extremely slowly. Macroeconomics tell us that the Long Run Aggregate Supply curve which is vertical shifts towards the right due to increase in technology, productivity and human capital which helps increase the output (GDP) of the country 3. Corruption, poor government policies, poor supply of skilled labour. Opportunities 1. Young Population 2. Booming Tourism Industry 3. Tourist locations – more use of transport 4. Government Inviting private players for entry 5. 27% Void in the current industry 6. Market Potential – 75 Healthy Score 7. Recreational and public water transport- Future Business Model 8. Pickup and drop especially for the office going population. 9. Airport Pick up drop 10. Tourists will book a cab on designated routes covering popular tourist destinations. The Cab Aggregator will tie up with local well- known restaurants that will enable tourists to taste local cuisines at a discounted rate There are a number of opportunities as well as risks associated with the country as a whole-
  • 7. Strategy • We are Expanding into a new market with existing product offering. This is Market Development Strategy. • Horizontal Integration • Acquiring Globe Services is a way to grow Inorganically by horizontal Integration. • This is provide multifold benefits: • Economies of scale can be achieved as the company grows, Our Client being the 3rd largest Player in world will have effective systems and processes in place which combined with already existing market share of globe services will provide synergy to our business offering. • Costs will come done due to integration. • Future Diversification prospects: • Being an island Country Mezosin provides us opportunities to explore on demand waterways travel services. This later on can be rolled out on a global scale with Mezosin serving as an effective test market.
  • 8. Market Entry Strategy Greenfield Investment • Costly because of initial investment • Chances to not understand the market environment properly like culture and people etc. • Risk of pricing error, high exit barrier • Government permits will be a issue • Will have more control over the operations of the firm • Option to customize more Joint Venture with Fuzu • Will be high stake game as they already have 33% market share • Will have to share our competitive advantage with them which can be dangerous in long term • It can prove to be fatal like happened in case of Hero- Honda • We will have a strong entry base • Existing knowledge about the customers Joint Venture with the government of Mezosin. • We will have to restructure the whole public sector which will also pose a threat to us • We will have to be confined in the domain of transport • Government might not want to seek help from a foreign entity • Good way as we won’t face any legal and policy issues Acquisition of Globe Services • Maybe Clash of cultures with the workforce • We may over estimate the cost due to Hubris hypothesis • Only 8% market share so won’t be that expensive to acquire them • Get direct access to 8% of the market • We will have the early access to customer preferences Our Venture consulting firm has analyzed various market entry strategies for the client.
  • 9. Market Size We have used the three step approach of • TAM – Total Addressable Market • SAM – Serviceable Available Market • SOM – Serviceable Obtainable MarketA B C 1) Total Addressable Market • The Total Addressable Market (TAM), also referred to as total available market, is the overall revenue opportunity that is available to a product or service if 100% market share was achieved. • The global ride-hailing service market is valued at 65728 Million Mizo. This will be the total market that will be owned by our client if they were the only player in the world with worldwide accessibility. 2) SAM – Serviceable Available Market • Your serviceable available market refers to the segment of your TAM which you can reach. • Here our limited geography is currently the island country of Mezosin. • The total population is 30 million. • Using Malaysia as a reference point. According to Statista, Revenue in the Ride Hailing segment amounts to US$558m (Using 1 US dollar = 0.9 Euro) in 2019 in Malaysia. This converts to 1007 million Mizo. • Hence our SAM is Valued at 1007 million Mizo. This represents the full market potential of Transportation Networking and Ride sharing Business of Mezosin. 3) SOM – Serviceable Obtainable Market • This is how much of the market in your location you can realistically reach. • We know that Zulu had a market share of 27% which has created a vacancy. • Assuming this has created a supply shortage and our Client will have this market to capture first. • Our SAM was valued at 1007 Million Mizo. Taking 27% of that value our service obtainable market is valued at 271 Million Mizo. • Taxi market is expected to register a CAGR of 9.22%, during the forecast period, 2019-2024 according to Mordor Intelligence. • Hence this proves to be a really lucrative opportunity for our client. Worldwide Market Potential : 65728 Million Mizo Mezosin Market Potential : 1007 Million Mizo Current Accessible Market Potential : 271 Million Mizo
  • 10. Profitability 8% 30M 27% 6662 Mizo 9.22% Existing Market Share of Globe Services Population Void Created by Zulu Initial Outlay Cumulative annual growth rate for business. SUCCESS Based on our analysis we have decided to go ahead with Acquisition of Globe Services. Our ratio calculation shows favorable outcomes.
  • 11. REQUIRED INITIAL INVESTMENT Acquisition of Globe Services 2,277 Mizo – 34 % This is the Net worth of Globe Services. Starting Current Bank 2180 Mizo 33% Premium for Acquisition 457 Mizo – 7% Paying 20% Premium over Equity Registration, Insurance, Setup and Miscellaneous Costs 1748 Mizo - 26% Initial Costs have been taken on the basis of actually starting a business venture in Malaysia. Cost have been converted Mizo. Total Initial Cost 6662 Mizo
  • 12. BUSINESS RATIOS AND CONDENSED BALANCE SHEET (GLOBE SERVICES) Financial Ratios 2018 2019 Working Capital 1867 872 Current Ratio 3.67 1.60 Debt to Equity Ratio 0.310 0.653 Assets Current Assets 2018 2019 Cash Only 1,106 519 Short-Term Investments 1,285 1,520 Other Current Assets 173 281 Total CA 2564 2320 Non Current Assets Total Investments and Advances 434 1,051 Intangible Assets 4 270 Net Goodwill - 152 Tangible Other Assets 1 9 Total NCA 439 1482 Total Assets 3003 3802 Liabilities Accounts Payable 67 32 Other Current Liabilities 630 1,416 Other Liabilities 15 30 Accumulated Depreciation 3 12 Total Liabilities 715 1490 Equity Preferred Stock 4,284 5,152 Additional Paid-In Capital/Capital Surplus 56 74 Retained Earnings -2,034 -2,945 Total Equity 2,306 2,281