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tropicfurniture.com
A BUSINESS PLAN
Presented by:
Group - 10
AGENDA
Market
Scanning
SWOT Roadmap Strategies Conclusions
•Increased internet
penetration1
•Growth in smart phone
usage2
•Growing number of urban
households3
•Willingness to indulg...
AGENDA
Market
Scanning
SWOT Roadmap Strategies Conclusions
STRENGTHS
• Brand image and market presence
• Strong distribution and retail network
• Low cost of customer acquisition
• ...
AGENDA
Market
Scanning
SWOT Roadmap Strategies Conclusions
ROADMAP
• Financials
• Technological
• Marketing
• Partner
Relationship
Management
General Assumptions:
Discount Rate (WAC...
ROADMAP
With the Web Portal
Initial Implementation Cost
 TCO
 Hardware, software
 License Fees
 Hosting Fees
 Project...
ROADMAP
Year 0 Year 1 Year 2 Year 3
Customers 1700 1751 1804 1858
Number of
transactions 1,40,000 144200 148526
Average or...
ROADMAP
Year 0 Year 1 Year 2 Year 3
Customers 1700 2081 2289.1 2518.01
Number of transactions 161000 177100 194810
Average...
ROADMAP
Payback Period
Calculation
Year 0 Year 1 Year 2 Year 3
Net Incremental
Cash Flows -500.00 818.61 1536.873 2593.492...
ROADMAP
• Financials
• Technological
• Marketing
• Partner
Relationship
Management
• Introduction of integrated
Inventory ...
ROADMAP
• Financials
• Technological
• Marketing
• Partner
Relationship
Management
• Hire Amazon Web Services for
server h...
ROADMAP
• Financials
• Technological
• Marketing
• Partner
Relationship
Management
While marketing our products online,
we...
ROADMAP
• Financials
• Technological
• Marketing
• Partner
Relationship
Management
• Introduce Design Your Own Design (DYO...
ROADMAP
• Financials
• Technological
• Marketing
• Partner
Relationship
Management
• Engage with customers through social
...
ROADMAP
• Financials
• Technological
• Marketing
• Partner
Relationship
Management
To do away with Channel Conflict
• Incr...
AGENDA
Market
Scanning
SWOT Roadmap Strategies Conclusions
STRATEGIES
• New Customer
Acquisition Strategy
• Customer Retention
Strategy
• Mobile Strategy
• Security Strategy
• Suppl...
STRATEGIES
• New Customer
Acquisition Strategy
• Customer Retention
Strategy
• Mobile Strategy
• Security Strategy
• Suppl...
STRATEGIES
• New Customer
Acquisition Strategy
• Customer
Retention Strategy
• Mobile Strategy
• Security Strategy
• Suppl...
STRATEGIES
• New Customer
Acquisition Strategy
• Customer Retention
Strategy
• Mobile Strategy
• Security Strategy
• Suppl...
STRATEGIES
• New Customer
Acquisition Strategy
• Customer Retention
Strategy
• Mobile Strategy
• Security Strategy
• Suppl...
STRATEGIES
• New Customer
Acquisition Strategy
• Customer Retention
Strategy
• Mobile Strategy
• Security Strategy
• Suppl...
STRATEGIES
• New Customer
Acquisition Strategy
• Customer Retention
Strategy
• Mobile Strategy
• Security Strategy
• Suppl...
STRATEGIES
• New Customer
Acquisition Strategy
• Customer Retention
Strategy
• Mobile Strategy
• Security Strategy
• Suppl...
STRATEGIES
• New Customer
Acquisition Strategy
• Customer Retention
Strategy
• Mobile Strategy
• Security Strategy
• Suppl...
STRATEGIES
• New Customer
Acquisition Strategy
• Customer Retention
Strategy
• Mobile Strategy
• Security Strategy
• Suppl...
AGENDA
Market
Scanning
SWOT Roadmap Strategies Conclusions
CONCLUSIONS
• Online furniture is a niche segment characterized
by high growth.
– Profitable to enter the market and get a...
THANK YOU
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Online Furniture Company - A business plan

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Online Furniture market is burgeoning given it lends itself very well to e-tailing space.
This is a business plan for a furniture company operating in a brick and mortar model but now wants to explore the online space to gain additional sales and improve profitability.

Published in: Internet
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Online Furniture Company - A business plan

  1. 1. tropicfurniture.com A BUSINESS PLAN Presented by: Group - 10
  2. 2. AGENDA Market Scanning SWOT Roadmap Strategies Conclusions
  3. 3. •Increased internet penetration1 •Growth in smart phone usage2 •Growing number of urban households3 •Willingness to indulge in home improvements (38%)4 What will drive such growth? 53%27% 20% Market Share (in %) Pepperfry FabFurnish Urban Ladder Furniture Market and Growth Rates Competition Indian Furniture Market = Rs. 1400 billion Plastic Molded Furniture=Rs. 240 billion Online Market = Rs. 750 crore •Growing @ 12-13 % on an average •Expected to be worth Rs. 150 billion in the next three years Supply Chain and Inventory Management Demand Forecasting Consumers still refrain from buying furniture online as they want to have a touch and feel factor Challenges Scope Profitable category in eCommerce market Average ticket size is larger (margins upto 30-40%) Leverage the reach component.
  4. 4. AGENDA Market Scanning SWOT Roadmap Strategies Conclusions
  5. 5. STRENGTHS • Brand image and market presence • Strong distribution and retail network • Low cost of customer acquisition • Good quality of employees WEAKNESSES • Dipping margins • Inventory management OPPORTUNITIES • Increase presence in tier II and III cities • Plugged in customers • Nascent segment • High growth, lower reach (98% and 2% respectively) THREATS • Intensifying Competition • Substitute products • Channel conflicts
  6. 6. AGENDA Market Scanning SWOT Roadmap Strategies Conclusions
  7. 7. ROADMAP • Financials • Technological • Marketing • Partner Relationship Management General Assumptions: Discount Rate (WACC) = 12% Tax Rate = 35% Customers in Year 0 = 1700 Transactions in Year 1 = 140,000 Average order size = Rs. 20,000 (Urban Ladder data) COGS as a % of sale = 70% Average order size growth rate = 20% (Urban Ladder data) Base Case (No web Portal) Number of transactions annual growth rate = 3% Average processing cost per order = Rs. 140 ….Contd
  8. 8. ROADMAP With the Web Portal Initial Implementation Cost  TCO  Hardware, software  License Fees  Hosting Fees  Project Management Rs. 4,00,00,000  Maintenance and Marketing  Ongoing Maintenance  Advertising  Sales Team  After Sales (Call centers, etc) Rs. 1,00,00,000  Jump in total transactions = 20,000  Number of transaction growth rate 10%  Average Processing Cost of a web Transaction Rs. 150  Average processing cost per order Rs. 60  % of total transaction through web Portal 50% • Financials • Technological • Marketing • Partner Relationship Management
  9. 9. ROADMAP Year 0 Year 1 Year 2 Year 3 Customers 1700 1751 1804 1858 Number of transactions 1,40,000 144200 148526 Average order size 20,000 24000 28800 Baseline Revenue (in Rs. Lacs) 28,000.00 34,608.00 42,775.49 COGS 19,600.00 24,225.60 29,942.84 Order Processing Cost 196 201.88 207.9364 Net Income 8,204.00 10,180.52 12,624.71 NI (after tax) 5,332.60 6,617.34 8,206.06 Base Case Scenario (No Web Portal) • Financials • Technological • Marketing • Partner Relationship Management
  10. 10. ROADMAP Year 0 Year 1 Year 2 Year 3 Customers 1700 2081 2289.1 2518.01 Number of transactions 161000 177100 194810 Average order size 20000 24000 28800 Baseline Revenue (in Rs. Lacs) 32200 42504 56105.28 COGS (70%) 22540 29752.8 39273.696 Order Processing Cost 60.375 66.4125 73.05375 Gross Profit 9599.625 12684.788 16758.53025 Costs of Web Portal Initiative Upfront Cost 400 Ongoing Maintenance & Marketing 100 100 100 Net Income -400 9499.625 12584.788 16658.53025 NI (after tax) 6174.75625 8180.1119 10828.04466 Incremental Cash Flows Year 0 Year 1 Year 2 Year 3 Net Incremental Cash Flows -500 842.16 1,562.772,621.98 NPV 3,364.03 With Web Portal • Financials • Technological • Marketing • Partner Relationship Management
  11. 11. ROADMAP Payback Period Calculation Year 0 Year 1 Year 2 Year 3 Net Incremental Cash Flows -500.00 818.61 1536.873 2593.4922 Cumulative Cash Flows 318.61 2355.483 3892.356 Payback Period 2 years 1.21 months ANALYSIS : • Positive NPV • Payback period = 2 years 1.21 months (25 months) • Financials • Technological • Marketing • Partner Relationship Management
  12. 12. ROADMAP • Financials • Technological • Marketing • Partner Relationship Management • Introduction of integrated Inventory management systems.(Salesforce.com) • Including every partner in to the system from suppliers to retailers . • Providing them with applications which support most platforms. • Synchronization of GIS with inventory and order processing systems for faster processing
  13. 13. ROADMAP • Financials • Technological • Marketing • Partner Relationship Management • Hire Amazon Web Services for server hosting • Google inc. for back up on cloud, in addition to cloud space provided by Salesforce.com • Zepo.com can be hire for hosting website payment terminal.
  14. 14. ROADMAP • Financials • Technological • Marketing • Partner Relationship Management While marketing our products online, we would like to address a few issues, the Marketing Objectives: 1. Trust and Safety 2. Demystifying Products 3. Value Proposition 4. Added Convenience
  15. 15. ROADMAP • Financials • Technological • Marketing • Partner Relationship Management • Introduce Design Your Own Design (DYOD) DYOD benefits: 1. Increases number of conversions 2. Engage with more number of people 3. Compliment our offline channel 4. It creates a buzz around the brand which is required to make people familiar to our online channel 5. Leverage Market intelligence
  16. 16. ROADMAP • Financials • Technological • Marketing • Partner Relationship Management • Engage with customers through social media • Locate the nearest store online to compensate for the “Touch ‘n Feel” aspect • Provide coupons and gift vouchers for online channel against offline sales. • Plan to go mobile to tap m-commerce market
  17. 17. ROADMAP • Financials • Technological • Marketing • Partner Relationship Management To do away with Channel Conflict • Increase Margin of our offline retailers • Keep a minimum level of margin beyond which we would refrain from providing discounts on our online channel
  18. 18. AGENDA Market Scanning SWOT Roadmap Strategies Conclusions
  19. 19. STRATEGIES • New Customer Acquisition Strategy • Customer Retention Strategy • Mobile Strategy • Security Strategy • Supply Chain Strategy • Payment Strategy • Social Media Strategy •Gamization is one of the “must do” trends in internet & apps market – add a “social gaming UI” to entice users to use your app, entertain them as you address them. •This would help us to get data about the people who could be our new customers. From this data we could give send personalized mails to people who have never bought anything from our website offering them discount coupons.
  20. 20. STRATEGIES • New Customer Acquisition Strategy • Customer Retention Strategy • Mobile Strategy • Security Strategy • Supply Chain Strategy • Payment Strategy • Social Media Strategy • Discount coupons offered would be on the product which that customer might have searched on our website but didn’t make a purchase so that our discount coupons are relevant to that customer. • We would try and keep few exclusive products which are not available on any of our other competitor .This would help to attract new customers.
  21. 21. STRATEGIES • New Customer Acquisition Strategy • Customer Retention Strategy • Mobile Strategy • Security Strategy • Supply Chain Strategy • Payment Strategy • Social Media Strategy • We will be using a Sales Force Automation(SFA) CRM so as to move closer to our customers. This CRM would help us to analyze the buying behavior of our customer and based on which we could formulate strategies to build even a stronger bond with our customers. • Based on the products bought recently by our customers we would be sending them mail and offering complimentary products • Besides this we can have a loyalty system where a customer gets a point based on the purchase he made and the customer can redeem those points and discount on his next purchase.
  22. 22. STRATEGIES • New Customer Acquisition Strategy • Customer Retention Strategy • Mobile Strategy • Security Strategy • Supply Chain Strategy • Payment Strategy • Social Media Strategy • We will use a Mobile CRM as it is an integral part of a well-thought out ecommerce customer relationship management system. • For android and other operating system we would develop an application which would be same as our website .Many companies create their application which are somewhat different in user interface and thus confuses the customers
  23. 23. STRATEGIES • New Customer Acquisition Strategy • Customer Retention Strategy • Mobile Strategy • Security Strategy • Supply Chain Strategy • Payment Strategy • Social Media Strategy • Maximum Security to be deployed in the first and second year. • Secure form of http i.e. https used for the website. • Firewalls and anti-virus to be installed. • The mobile app to be developed for different platforms and payment gateway for direct purchases. • Different levels of data view for different levels of employee. • 128 bits of encryption for payment gateway. • An SMS sent to the registered mobile number whenever a login is made at the client side.
  24. 24. STRATEGIES • New Customer Acquisition Strategy • Customer Retention Strategy • Mobile Strategy • Security Strategy • Supply Chain Strategy • Payment Strategy • Social Media Strategy • Build-to-Stock (Push) and Build-to-Order (Pull). • Just in Time to maintain minimum inventory. • Demand Forecasting . • Package tracking for regular update on the location of the item. • Use of 3PL for downstream supply chain.
  25. 25. STRATEGIES • New Customer Acquisition Strategy • Customer Retention Strategy • Mobile Strategy • Security Strategy • Supply Chain Strategy • Payment Strategy • Social Media Strategy Supplier Supplier Supplier Our Comapny Customer
  26. 26. STRATEGIES • New Customer Acquisition Strategy • Customer Retention Strategy • Mobile Strategy • Security Strategy • Supply Chain Strategy • Payment Strategy • Social Media Strategy • Flexibility of payment:  Cash on Delivery  Net banking  Credit Card • Creation of a free business Paypal account for payments as it ensures security against fraud. • An optional minimum payment of 10% through online coins to ensure long term association. Special discounts on the same.
  27. 27. STRATEGIES • New Customer Acquisition Strategy • Customer Retention Strategy • Mobile Strategy • Security Strategy • Supply Chain Strategy • Payment Strategy • Social Media Strategy Association with e- newspapers Pay-per-click (PPC) Banners on related ecommerce websites and blogs Social networking websites like Facebook, twitter etc. Almost 90% of our sales come through Facebook: Urban Ladder’s COO Rajiv Srivatsa
  28. 28. STRATEGIES • New Customer Acquisition Strategy • Customer Retention Strategy • Mobile Strategy • Security Strategy • Supply Chain Strategy • Payment Strategy • Social Media Strategy Facebook business page to accept orders. URLs on existing business cards and pamphlets. Information to existing customers through emails, messages etc. Addition of website to Google places and other online directories. Availability through search engine optimization
  29. 29. AGENDA Market Scanning SWOT Roadmap Strategies Conclusions
  30. 30. CONCLUSIONS • Online furniture is a niche segment characterized by high growth. – Profitable to enter the market and get additional sales. • Channel conflicts to be handled by maintaining the discounts offered to offline and online partners and cross channel collaboration. • High reliance on social media to tap the full potential of the market.
  31. 31. THANK YOU

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