businness plan

Running Head: Sheetal Farm House 2014
i
Business Plan
For
Sheetal Farm House
Dhikure, Nuwakot, Nepal
Prepare by:
Sushil Aryal
Business Strategy
BBA VI semester
131 “B”
Presented to:
Mr. Nischal Thapa
Faculty Member
Business Strategy
Collage of Applied Business
Tangal, Kathmandu, Nepal
We are part of your daily life

ii
Acknowledgement
This project is assigned to us as a part of our practical examination under Business
Strategy by Tribhuvan University, aimed at giving practical knowledge of working
environment. Apart from the University Examination, this project is almost like on the
job training. So the knowledge we had gained during this fieldwork study is very
important for us.
I would like to express my gratitude and appreciation to all those who gave me the
possibility to complete this report. Special thanks go to our teacher Mr. Nischal Thapa,
whose stimulating suggestions and encouragement helped me to maintain my progress in
track and complete this report.
I would also like to acknowledge with much appreciation the crucial role of the staff of
Computer Laboratory and Library who gave the permission to use all required and the
necessary material to complete this project.
Special thanks goes to my team mate, Damodar Bassyal, Rohit Bhattarai, Saphal Subedi,
Suvash Timalsina, who help me to assemble the information and gave suggestion about
related aspects in agricultural industry for the completion of this report.
Last but not the least; I would like to appreciate the guidance and support given by my
friends as well as relatives for their valuable comment and tips for bringing the report to
this level. I owe my depth of gratitude to all people who directly and indirectly helped me
to complete this report.

iii
Executive Summary
Sheetal Farm House engages in the production of variety of vegetable items and different
species of fishes. The company is dedicated in providing the highest quality customer
service by meeting the agreed delivery dates and keeping the prices controlled in
accordance with the ongoing market prices.
This report provides the analysis of external and internal environment and finding the
opportunities & threats and strength & weakness of this farm house respectively.
Considering the SWOT analysis the appropriate strategies are formulated and their
suitability, acceptability and feasibility analysis is conducted.
Implementation is the integral part of strategic decision because without implementing
the strategies there are no use of formulating the strategies, no matter how good strategies
you make. So the above formulated strategies are put into actions. The implemented
strategies are the best alternatives among the possible alternatives.

iv
Table of Contents
Contents Page Number
Acknowledgement ...............................................................................................................ii
Executive Summary........................................................................................................... iii
List of Tables ......................................................................................................................vi
List of Figures....................................................................................................................vii
List of Abbreviation......................................................................................................... viii
CHAPTER I: INTRODUCTION TO ORGANIZATION...................................................1
1.1 Introduction of Farm House...................................................................................1
1.2 Location Selection .................................................................................................1
1.3 Products..................................................................................................................1
1.4 Target market.........................................................................................................2
1.5 Cost Estimation......................................................................................................2
1.6 Vision, Mission and Objectives .............................................................................2
1.6.1 Vision..............................................................................................................2
1.6.2 Mission............................................................................................................2
1.6.3 Objectives .......................................................................................................3
CHAPTER II: ANALYSIS OF INTERNAL ENVIRONMENT ........................................4
2.1 Introduction to internal environment .....................................................................4
2.2 Strategic Advantage Profile...................................................................................4
CHAPTER III: ANALYSIS OF EXTERNAL ENVIRONMENT......................................7
3.1 Introduction to external environment.....................................................................7
3.2 ETOP analysis........................................................................................................8
3.3 Competitive Environment Analysis (porters’ five forces Model) .......................10
CHAPTER IV: FORMULATION OF STRATEGY.........................................................12
4.1 Introduction to strategy formulation ....................................................................12
4.2 Corporate Strategies.............................................................................................13
4.2.1 Expansion strategy........................................................................................13
4.3 Business Strategies...............................................................................................13
4.3.1 Focused Differentiation ................................................................................13
4.4 Functional Strategies............................................................................................13

v
4.4.1 Marketing Strategies:....................................................................................13
4.4.2 Financial and Accounting Strategies: ...........................................................14
4.4.3 Human Resources and Management Strategies:...........................................14
4.4.4 Production and Research & Development:...................................................14
4.5 Criteria for Strategic Choices...............................................................................14
4.5.1 Suitability......................................................................................................15
4.5.2 Feasibility......................................................................................................15
4.5.3 Acceptability.................................................................................................15
4.6 Techniques of Strategic Selection........................................................................16
4.6.1 BCG Matrix ..................................................................................................16
CHAPTER V: STRATEGY IMPLEMENTATION .........................................................17
5.1 Introduction to strategy implementation..............................................................17
5.2 McKinsey 7S Framework ....................................................................................17
CHAPTER VI: CONCLUSION........................................................................................21
Appendix I .........................................................................................................................22
Bibliography ......................................................................................................................24

vi
List of Tables
Tables Page Number
Table 1: Initial cost estimation.............................................................................................2
Table 2: SAP of Sheetal Farm House ..................................................................................4
Table 3: Strength and weakness of Sheetal Farm House.....................................................6
Table 4: ETOP for Sheetal Farm House ..............................................................................8
Table 5: Opportunity and threats of Sheetal Farm House....................................................9
Table 6: SWOT analysis of Sheetal Farm House ..............................................................12

vii
List of Figures
Figures Page Number
Figure 1: Porters’ Five Forces Model ................................................................................10
Figure 2: BCG Matrix........................................................................................................16
Figure 3: McKinsey 7S framework....................................................................................17
Figure 4: Organizational Structure of Sheetal Farm House...............................................18

viii
List of Abbreviation
BCG= Boston Consultancy Group
ETOP= Environmental Threat and Opportunity Profile
FMCG= Fast Moving Consumer Goods
HR= Human Resources
NASAA= National Association for Sustainable Agriculture, Australia
R&D= Research and Development
SAP= Strategic Advantage Profile
SWOT= Strength Weakness Opportunity and Threats

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CHAPTER I
INTRODUCTION TO ORGANIZATION
1.1 Introduction of Farm House
Sheetal Farm House is an exciting new company that meets the unfulfilled need of
customer for quality agro products. This company has the motto of serving the
people with the quality products in agriculture industry.
The company engages in the production of variety of vegetable items and different
species of fishes. The company is dedicated in providing the highest quality
customer service by meeting the agreed delivery dates and keeping the prices
controlled in accordance with the ongoing market trends.
Sheetal Farm House is basically a family owned and managed business with Mr.
Arya Tsu Cil as an executive chairman and other three members holding the position
of managing directors and executives of Marketing, Finance and Production
departments. Along with them there are five manual workers working in the farm.
1.2 Location Selection
Sheetal Farm House spreads over eight roopani of land which is situated at Dhikure,
Nuwakot, Nepal. This site is selected because of following reasons:
۩ Lower cost of land for leasing
۩ Availability of fresh water in large quantity
۩ Availability of labor force in low cost
۩ Not too far from the market place(35 km from new bus park)
Even the cost of transportation increases as the increase in distance but it is profitable
due to lower operation cost i.e. lower labor land and water supply cost and these are
elementary resources of farm houses.
1.3 Products
Products are the factor that satisfies the customer wants and needs. For satisfying the
customer needs and retaining the, Sheetal Farm House is producing these products:
۩ Different species of fishes
۩ Seasonal and unseasonal vegetable items (organic)
۩ Seasonal fruits

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Company’s main product is organic vegetable items and fishes. The water once used
in fishery can be reused in vegetable farming; this can help in reuse of the wastage.
Later in long run frits can also be expanded.
1.4 Target market
Since we are the producer, and aims at providing customers with better services with
better quality products; the products need to need to be supplied effectively to every
customer wanting the products. Initially our target market will be every hotels,
restaurants, guesthouses, schools and collages canteen. And later we will reach to all
customers by opening company owned vendors in different places considering the
movement (flow) of people and density of population.
1.5 Cost Estimation
For establishment; following costs are estimated to be incurred
Table 1: Initial cost estimation
Particulars Amount (in Rs.)
Land leasing for one year 60,000
Farm construction(including pond for fish rearing) 280,000
Cost of water supply(2500per month) 30,000
Cost of seeds, small fish, compost fertilizer, feeds and misc 51,000
Cost for equipments 42,000
Working capital 200,000
Reserve (cash in bank or in hand) 663,000
Total 1,000,000
1.6 Vision, Mission and Objectives
1.6.1 Vision
“We intend to become the best player in local as well as global market in agro
business”
1.6.2 Mission
Our mission is to ensure the consumer welfare by providing a high quality, safe,
competitive priced products that are produced in an environmentally responsible

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manner with the maximum opportunity of profitability by realizing the customers
as we are the part of daily life agro essentials.
1.6.3 Objectives
The objectives of Sheetal Farm House are as follows. They are divided into
different time phases.
Below one year (primary objectives)
۩ To make fresh product easily available in the hand of the customers
۩ Ensure the quality of products to customers with affordable prices.
۩ To establish good relationship with customers (knowing who the customers are)
۩ Timely supply of products to the customers in right quantity
One to Five years
۩ Maintain good relationship with customers and retain them
۩ Improving the quality of products by research and development
۩ Finding and going contract with hotels, guesthouses, schools and collage’s
canteens for supply of products to them
۩ Expand the business with the increase in profitability
۩ Establishing company owned retail outlets of reaching each and every customer.
۩ Developing websites for online order tracking and purchasing system
۩ Lobbying government for making favorable legal framework for the industry
Above five years
۩ Sustainable utilization of natural resources
۩ Develop it as a profitable, competitive and innovative sector
۩ Monitoring good governance framework to support for the modernization of this
sector
۩ To become a part of customers daily life essentials
۩ Positioning the brand with a unique brand name
۩ Building a good public relation by organizing different campaigns and social
programs
These are the objectives that are set for their accomplishment. Our company will
be successful.

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CHAPTER II
ANALYSIS OF INTERNAL ENVIRONMENT
2.1 Introduction to internal environment
The internal environment refers to all the factors within an organization that provides
strength and weakness of the firm. It is located within the business organization. It is
based on scanning of internal environment.
Strength is an inherent capacity which an organization can use to gain strategic
advantage e.g. core competencies, resources, assets, experiences people, knowledge,
data and capabilities etc. Weakness inherent the limitations and constraints which
create strategic disadvantage e.g. gaps in capabilities, overdependence in single
product line, inefficient human resources, loose management and control etc.
(Kazmi, 2009)
Internal environment is the process of identifying organization specific
characteristics like resources, core competencies and capabilities. It looks at
organizations current vision, mission, objectives and strategies. This helps to identify
and evaluate strength and weakness of organization.
The internal environment of Sheetal Farm House can be analyzed using Strategic
Advantage Profile (SAP) which is one of the techniques of internal environment
analysis.
2.2 Strategic Advantage Profile
Strategic advantage profile (SAP) is the profile that presents the factors of internal
environment and states their nature of impact in business organization. It is prepared
as follows:
Table 2: SAP of Sheetal Farm House
Capability Factors Nature
of
impact
Competitive strength and weakness
Financial
↑ Cost for the sources of fund is lower less debt capital and
low cost of repayment because there is privilege given by

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
co-operative institution for organic firms.
Loans from the government costs lower interest payment
but large amount of fund cannot be taken at a time
Marketing
Product
Price
Place
↑
↑
↓
Variety of products are produced which are organic.
These products are made attractive by standard packaging
system.
Comparatively lower price is charged then competitors.
This is possible because our cost of operation is
comparatively lower.
Covers only specific (niche) marketplaces so cannot
cover large market and market share is also low.
Operation
Machinery
Inbound
logistics
Outbound
logistics
Raw
material
purchase


↑

Small machinery and tools are required which do not
charge high or procurement and government too provides
some tools for agricultural sectors.
Costs are moderately high due to suppliers are located in
distance but they are not frequently purchasing goods
Costs are high because the products that are produced
need to be brought to our retail stores. This could be
reduced if marketing job was given to wholesalers and
distributors.
No huge amount of raw material is required so the costs
are moderate.
Personal ↑ No absenteeism and safe working environment because
all workers are from local place.

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↑
↑
Employees are experienced in agricultural works and they
are also given timely trainings for development.
High level of organizational loyalty proves to provide
strength to organization to perform efficiently and
effectively.
(Up arrow indicates strength, down arrow indicates weakness and horizontal arrow
indicates neutral impact)
Overall strength and weakness:
Table 3: Strength and weakness of Sheetal Farm House
Strength Weakness
o Customized products with
differentiation
o Highly loyal employees with better
competencies
o Lower cost of operation as compared
to competitors
o NASAA certified company
o Cannot produce products in large
quantity
o Currently company is not able to
capture whole market where there is
high potential

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CHAPTER III
ANALYSIS OF EXTERNAL ENVIRONMENT
3.1 Introduction to external environment
Every organization exists in business environment like everything exists in physical
environment. The external environment includes all the factors outside the
organizations which provide opportunities and poses threats to the organizations.
Opportunity is the favorable condition in the organizations environment which
enables it to consolidate and strengthen its position. For e.g. economic boom,
favorable demographic shift, unfulfilled customer needs etc. Threat is an unfavorable
condition in the environment which creates a risk for or cause damage to the
organization. For e.g. new competitors, new demanding regulations, unfavorable
political situation etc. (Kazmi, 2009)
The external environmental analysis concludes with a plan on the business to
overcome or minimize its threats that are prevailing in the environment. Due to the
limited control over the external environment makes it difficult for a business house
to make changes according to it. However, once they identify the major elements of
environmental forces it will make easy to readjust their strategies, plans and
programs.
Sheetal Farm House being small and family owned business is not isolated from the
impact of external environment. Some changes in the external forces can result in
both negative and positive impacts. The factors/forces of external environment are:
o Political Environment
o Economic Environment
o Socio-cultural Environment
o Technological Environment
o Legal Environment
Analysis of external environment can be done with the help of ETOP analysis,
competitive environment analysis.

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3.2 ETOP analysis
Environmental Threats and Opportunity Profile (ETOP) is prepared for analyzing the
factors to find weather they provide threats or opportunity to the organizations. It
involves dividing the environment into different sectors and analyzing their impact
on organization. It is prepared as follows:
Table 4: ETOP for Sheetal Farm House
Environmental
Factors
Nature of
Impact
Environmental Threats and opportunities
Economic ↑
↑
Rising disposable income and living standards of people
gives rise in disposable income
Budget of fiscal year 2071/2072 has the provision where
agricultural sector is provided with greater facility and
has higher budget allocation.
Political ↓

Political instability and frequent change in government
brings problem in transportation because of bandh.
Democratic party system with mixed economic system
give importance to privatization thus has positive impact
in private business.
Market ↑
↑
Increase in number of potential customers
Our largest competitor has loosed its market share and
image too.
Socio-cultural ↓
↑
Due to people’s rigid belief; it is hard to make them
persuaded about organic (no use of insecticides or
pesticides) products.
People have changing trends towards their consumption
behavior. When the quality products are provided with
differentiation and ease to consume (purchase) there is
chance to make loyal customers.

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Technological  Farm house does not require huge and sophisticated
technology, so technology is not costly to procure. And
government also provides allowance in purchase of
machines.
Supplier ↓
↑
The suppliers are in distance place, this give rise in
inbound logistics.
There is close relationship with the supplier so no need of
sock any kind of materials. This reduces inventry cost.
Legal ↑
↑
Financing is made easy by government for small private
sectors to promote investment.
Government banned those vegetable farm house those
who use insecticides and pesticides. In which our large
competitor includes; so there is big opportunity for us to
gain image and market share.
International ↑ Organic products are getting popular in foreign countries
and demand is also increasing rapidly. Knowing two
supplier in Japan and Denmark increased the opportunity
for supply of products
(Up arrow indicates opportunity, down arrow indicates threats and horizontal arrow
indicates neutral impact)
Overall opportunity and threats
Table 5: Opportunity and threats of Sheetal Farm House
Opportunities Threats
o Increasing number of potential
customers
o Over 187 species of fishes can be
reared. So it may lead new
business to produce decorative
fishes as well
o National as well as international
o Not able to persuade customer for
the first time
o Not able to produce in large
quantity
o Unable to cover large market even
there is open opportunity

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market
o Losing market share by largest
competitors due to government
rules
3.3 Competitive Environment Analysis (porters’ five forces Model)
Competitive environment analysis is a framework for industry analysis and business
strategy development formed by Michael E. Porter of Harvard Business School in
1979. It is also called porters’ five forces model. It is the structural analysis of
competitive environment. This model states that the competition is the composite of
five forces. They are provided below:
Figure 1: Porters’ Five Forces Model
Potential Entrants: Since entering into such farm house does not require huge
investment and also no sophisticated technology is required; so it is very easy to
enter into the industry which poses a threat for the existing firms. The extremely low
switching cost provides threat of losing the customers.
Buying Power of Buyers: As these are FMCG customer have high bargaining
power because the customer can shift from one vendor to next vendor easily next to
us if we are unable to fulfill their needs. There is large number of suppliers near of
same products. They can have substitutes to the product easily.
Threat of Substitute: There is not any other substitution of vegetables but it is
vegetable itself. But to the fishes people can have meat of other like buff chicken etc.
The threat lies at the time when customer changes vendor.
Threat of substitute
products
Bargaining power
of suppliers
Bargaining power
of buyers
Threat of entry
Potential Entrants
Substitute Products
BuyersSuppliers
Competitive
Rivalry
Other stakeholders
Trade Union,
Government etc.

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Suppliers Bargaining Power: Here in case of Vegetable the supplier has lower
bargaining power because there are large number of supplier of seeds and other
material in one places. And once we buy we can produce it for the next time
ourselves. Related to compost fertilizer supplier; we have very good relationship
with him, so no need to keep inventry and also the bargaining power is also moderate
low. Overall the lower switching cost provides advantage of bargaining power with
the suppliers.
Competitive Rivalry: There is moderate level of rivalry among the firms because
they are not located near and the target customers are not the same but similar. We
go towards the segmented customers where competitors go towards whole
customers.
These are the five forces that indicate the competitive position of the firm. Later
porter has added next force i.e. stakeholders including trade union and government.
In our industry there is no influence of trade union. And government is our like
partner; it plays the role of facilitator. We sometime lobby government to change the
rules and regulations that suit our business.

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CHAPTER IV
FORMULATION OF STRATEGY
4.1 Introduction to strategy formulation
Strategy is a broad game plan to achieve desired objectives. It provides direction and
scope to the organizations over the long-term. Strategies are prepared considering
strategic elements, SWOT analysis, strategic options and finally evaluating those
options and selecting best alternatives (R, 2012). A brief SWOT analysis is presented
in table below.
Table 6: SWOT analysis of Sheetal Farm House
Opportunities Threats
o Increasing number of potential
customers
o Over 187 species of fishes can be
reared. So it may lead new
business to produce decorative
fishes as well
o National as well as international
market
o Losing market share by largest
competitors due to government
rules
o Not able to persuade customer for
the first time
o Not able to produce in large
quantity
o Unable to cover large market even
there is open opportunity
Strength Weakness
o Customized products with
differentiation
o Highly loyal employees with better
competencies
o Lower cost of operation as
compared to competitors
o NASAA certified company
o Cannot produce products in large
quantity
o Currently company is not able to
capture whole market where there is
high potential
On the basis of above mentioned elements following strategies are prepared.

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4.2 Corporate Strategies
They provide long-term direction and scope to the organization. It determines what
business the organization should be in. it is concerned with managing the portfolio of
business and allocating resources to them. Once they are implemented they are hard
to change. Following are corporate strategies of Sheetal Farm House.
4.2.1 Expansion strategy
On the one hand there is highly competition and challenging environment between
the firms and on the other hand there is increasing number of potential market; the
company needs to expand their business for grabbing the market and be competitive
in the industry. The company aims to expand its business in different geographic
locations and also going to acquire two companies. BCG matrix also supports for
expansion and diversification with huge investment when company has forecasted
with expansion and there is high market growth rate.
4.3 Business Strategies
Business strategies are concerned with strategic business units. Sheetal Farm House
prepared following business level strategies.
4.3.1 Focused Differentiation
Company aims differentiation on products by making them different through product
parameters like packaging, leveling etc. Brand uniqueness is also be kept in the mind
of the customers by providing quality products in comparatively lower price. Product
information will be provided with the packaging. Niche marketing will be our market
for achieving preliminary objectives. However we will be targeting broad market in
long-run with differentiation.
4.4 Functional Strategies
They are concerned with functions of the SBUs. They deal with operations of the
organizations. They aim to create higher customer value. Sheetal Farm House has
following functional strategies.
4.4.1 Marketing Strategies: Following are the marketing Strategies:
 Opening company owned retail stores in different places considering flow of
customers and density of population for supplying the product in the hand of the
customer.

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 E-commerce application will be developed to help in business activities and to
customers too.
 New potential market will be identified.
4.4.2 Financial and Accounting Strategies: Following are the strategies under financial
and accounting strategies:
 Acquisition of “Puspa Nursery” which is operating successfully and it occupies
seven roopani of land in Shankarnagar, Rupandehi.
 Computerized accounting system
 “Gorkha Fish House” will be acquired which is located in Taklung Gorkha.
 Taking eight roopani of land in lease located at Shankarnagar, Rupandehi.
 Organization maintains record of every financial transaction in a computerized
system.
The projected financial statement of Sheetal Farm House is shown in Appendix.
4.4.3 Human Resources and Management Strategies: Following are strategies related
to human resource management:
 Recruiting experienced employees and also provide training for them to be
efficient.
 Job rotation in every 6 months is done.
 Fringe benefit like stay facility, extra bonuses, company transportation facility etc.
4.4.4 Production and Research & Development: Production and Research &
Development (R&D) strategies are as follows:
 Customization of the product will be done without compromising in quality.
 Quality control is important to make sure that qualitative products are reached to
customers.
 Better inventry management.
4.5 Criteria for Strategic Choices
Choosing one action among several actions selected by the firm to respond to the
changes in the environment, in order to benefit from opportunities or to avoid
unhealthy effects from threats is strategic choice. The main intention is to achieve the
strategic fit between the organization and its environment in order to accomplish the
firm’s objectives by using its strengths to overcome its weakness. The strategic
choice should meet one of all of the following criteria.

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4.5.1 Suitability
Suitability refers to considerations as the ability of the strategy to tackle major
problems, improve competitive standing, exploit strengths, and the extent to which
it meets corporate objectives. The strategy that we have selected is suitable because
it helps to exploit the strength and grab the opportunity. By looking at ETOP
analysis and Porters’ five forces model all the strategies from corporate level to
functional level are suitable to implement in the present situation. The strategy is
congruent with the firm’s existing culture and in alignment with the broader
environmental, political, and social context.
4.5.2 Feasibility
Feasibility focuses on whether the organization has the resources to pursue the
strategic choices. Feasibility analysis is an evaluation of the internal capabilities of
the company. The performance of strategy in this case is measured in terms of
return, risk and stakeholder reactions. Numerous internal analytical models are
available to the check feasibility of strategic choice. The most common is the 6M
model, which stands for money, machinery, manpower, markets, materials, and
make-up. Sheetal Farm House is capable in all terms. We have all 6Ms to put the
strategy into action.
4.5.3 Acceptability
Acceptability focuses on two other aspects of the strategic choices: the financial
aspect and the stakeholder aspect. The financial aspect focuses on the return to risk
profile of each alternative. The stakeholder aspect focuses on the interaction
between the strategic choices and the stakeholders’ reaction to these choices. In
Sheetal Farm House the stakeholders have positive reaction towards the expansion
because we produce organic products where there is no use of any insecticides and
pesticides, which cause health problems. So government also supports for the
establishment and uplift of this business.

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4.6 Techniques of Strategic Selection
Among the various strategic options the right option need to be selected. To do this
different techniques are available. Here BCG matrix is prepared.
4.6.1 BCG Matrix
This technique was developed by Boston Consulting Group. It uses the relationship
between market share and market growth to balance the portfolio. Market share is the
share in relation to the largest competitor. Market growth is the annual market
growth rate. BCG matrix is divided into four cells as follows:
Figure 2: BCG Matrix
On the above matrix, Sheetal Farm House lays in Question Mark. It represents the
situation where the market share of the company is low and there is high market
growth. It suggests that more investment need to be done to increase the market
share otherwise we may have to quit from the industry. We have chosen growth as
our corporate strategy, so to make our strategy live we need to invest more to capture
market share.

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CHAPTER V
STRATEGY IMPLEMENTATION
5.1 Introduction to strategy implementation
Implementation refers to putting the things in action. Strategy formulation is related
to thought where strategy implementation is related to action. Strategy
implementation is the “proof of the pudding is in the eating” phase (Kazmi, 2009). A
strategy becomes meaningful only when it is implemented. Objectives can be
achieved only when strategies are in action. The effective implementation of the
strategies can be achieved by following the model known as McKinsey 7s
Framework.
5.2 McKinsey 7S Framework
The McKinsey 7S Framework is a management model developed by well-known
business consultants Robert H. Waterman, Jr, and Tom Peters in the 1980s. This was
a strategic vision for groups, to include business, business units, and teams. The 7S
are structure, strategy, systems, skills, style, staff, and shared values. It is presented
in following figure:
Figure 3: McKinsey 7S framework
Staff
Skills
Strategy
Style
Structure
System
Shared
values

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Strategy: Sheetal Farm House has the strategy of expansion. This can only be
achieved if there is favorable condition for the expansion. Favorable condition here
refers to the condition where the company is making profit from the existing business,
there is potential market after expansion, and resources are fully available for
expansion. From our business in first fiscal year we are able to identify ourselves in
the market as a branded company. And also we are able to make a profit of around
twelve million. This supports us for expansion strategy.
Structure: An organizational structure defines how activities such as task allocation,
coordination and supervision are directed towards the achievement of organizational
goals. This describes how the organization is organized and includes the information
of who is accountable to whom. The structure should also support for the
implementation of strategy. For achieving targeted objectives following
organizational structure is prepared.
Figure 4: Organizational Structure of Sheetal Farm House
Owner
Branch Head
(Dhikure)
marketing
Finance
operation
Branch Head
(shankar Nagar)
marketing
Finance
operation
Branch Head
(Gorkha)
marketing
Finance
operation

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System: Systems are the daily activities and procedures that staff members engage in
to get the job done. System defines flow of activities involved in the daily operation
of business, including its core processes and its support systems and how decisions
are made. Sheetal Farm House has a system of HR training and development,
monthly payment system (i.e. salary) is used for payment to employees along with
bonuses. There is a system of tracking the progress of the business in every month
including skills development of employees.
Style: Style represents the way the company is managed by top-level managers, how
they interact, what actions do they take and their symbolic value. In other words, it is
the management style of company’s leaders. Here in Sheetal Farm House the
decentralized decision making system is used. Branch Head is responsible for the
activities to be performed. Participative decision making and problem solving
techniques are used for motivating employees and making them feel something to the
organization.
Staff: Staff element is concerned with what type and how many employees will need
in organization and how they will be recruited, trained, motivated and rewarded.
Sheetal Farm House hires those employees who are experienced in agricultural
activities. They are provided training on the field they are lacking and also new
method and procedure are also taught timely. What every employee seek from
organization is satisfaction and fulfillment of their objectives, so we provide various
motivating factors and rewards like participative management, bonus, timely
payment of salary, job security etc.
Skills: Skills are the abilities that firm’s employees perform very well. They also
include capabilities and competences. During organizational change, the question
often arises of what skills the company will really need to reinforce its new strategy
or new structure. For implementing strategy of Expansion the new staff does not
need some extra qualification but the existing capabilities are most for performing
jobs.
Shared Values: Shared Values are at the core of McKinsey 7s model. They are the
norms and standards that guide employee behavior and company actions and thus,
are the foundation of every organization. This is a set of traits, behaviors, and

Page | 20
characteristics that the organization believes in and the assumptions that shape how
an organization behaves. This would include the organization’s mission and vision.
Sheetal Farm House seeks positive attitude and mindset of each and every members
of the organization. The shared values are the factors that help to shape the
organizational image so it must be maintained in a coordinated manner.
This is how we implement strategies. Sometimes in strategy literature, we often
come across statements like ‘it’s much more difficult to implement a strategy than to
formulate it’. It is indeed true that doing is more difficult than thinking about doing.
Strategies often fail not because they were not formulated well, but for the reason
that they were not implemented effectively. There is considerable gap between the
time a strategy is formulated and when it is implemented. The process of
implementation is itself time-consuming. During this interval, there is possibility that
the assumption made while formulating the strategy do not remain same or valid or
no longer be relevant. So evaluation and control are required for ensuring that the
expected performances are matched with the actual performance. (Kazmi, 2009)
The control can be done by following these steps.
Step1: Identify what is to be controlled
Step2: Setting standards of performance
Step3: Measuring actual performance
Step4: Analyzing variances and
Step5: Taking corrective actions.

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CHAPTER VI
CONCLUSION
Sheetal Farm House is one of the private businesses that have become a leading company
in short period of time. The business got success in short period because of effective
management and better implementation of the strategy formulated. However there are
some weakness and threats in the environment, the company is able to minimize some ot
then to become competitive in the industry.
The main disadvantage in this industry is that it is easy to enter in the industry which
poses threat to other firms and it is hard to sustain. For becoming success in any kind of
business the manager must be capable of managing everything.

Page | 22
Appendix I
Projected Income Statement of Sheetal Farm House
Year
2071 2072 2073
Particulars Amount(Rs) Amount(Rs) Amount(Rs)
Sales Revenue:
sales of vegetable items 10800000 11340000 11907000
sales of fishery items 6480000 7452000 8569800
Total Sales Revenue 17280000 18792000 20476800
Less: Purchases and related Expenses 8400000 8820000 9261000
Gross Margin 8880000 9972000 11215800
Less: Operating Expenditure
salary 4656000 4795680 4891593.6
wages 780000 803400 819468
electricity and charges 72000 74160 75643.2
house and rent 864000 889920 907718.4
stationary 25000 28750 33062.5
6% bank loan 12000 12600 13200
communication and
transportation 35000 36050 36771
Total Operating Expenses 6444000 6640560 6777456.7
Earnings Before Tax (EBT) 2436000 3331440 4438343.3
Less: Tax (15%) 365400 499716 665751.495
Net Profit/ Earning After Tax (EAT) 2070600 2831724 3772591.805

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Projected Balance Sheet of Sheetal Farm House
Year
2071 2072 2073
Liabilities Amount(Rs) Amount(Rs) Amount(Rs)
Current Liabilities
Account Payable 21000 26000 31000
Wages Payable 12000 18000 24000
Creditors 175000 185000 195000
Income tax
provision 365400 499716 665751.495
Total Current Liabilities 573400 728716 915751.495
Long Term Liabilities
Bank Loan 200000 210000 220000
Total Long Term Liabilities 200000 210000 220000
Total Liabilities 773400 938716 1135751.495
Reserve and Surplus 2070600 2831724 3772591.805
Total Liabilities and Equity 2844000 3770440 4908343.3
Assets
Current Assets
Cash in Hand 240000 250000 290000
Cash at Bank 130000 145000 160000
Debtors 40000 52000 59000
Account Receivable 89000 96000 125000
Total Current Assets 499000 543000 634000
Fixed Assets
Lease Hold 316000 316000 316000
Equipments 95000 105000 125000
Furniture and
Fixtures 25000 30000 45000
Total Fixed Assets 436000 451000 486000
Investments 1909000 2776440 3788343.3
Total Assets 2844000 3770440 4908343.3

Page | 24
Bibliography
Kazmi, A. (2009). Strategic Management and Business Policy. New Delhi: Tata
McGraw-Hill Publishing Company Limited.
R, A. G. (2012). Business Strategy and Strategic Management in Nepal. Kathmandu: Raj
Offset Press.

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