This report provides a comprehensive analysis of business planning, including market segmentation, target market, marketing plan, competitor analysis, pricing strategy, and financial analysis. It also offers insights into the unique selling points of the business idea and its feasibility in the UK market.
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Business Planning1 Contents Introduction......................................................................................................................................4 Enterprise Idea.................................................................................................................................5 Management profile.........................................................................................................................6 Unique Selling Points (USP)...........................................................................................................7 Market Segmentation.......................................................................................................................8 Target Market..................................................................................................................................9 Marketing Plan and Strategy...........................................................................................................9 Marketing mix.............................................................................................................................9 Competitor’s analysis....................................................................................................................10 Porter’s Five Forces Analysis....................................................................................................10 SWOT Analysis.........................................................................................................................11 Pricing and Funding Strategy........................................................................................................12 Financial analysis...........................................................................................................................12 Break even analysis...................................................................................................................13 Sales forecasting........................................................................................................................14 Cash flow projection..................................................................................................................15 Plans for Future Growth................................................................................................................16 Applying Ansoff Matrix for the future growth of business.......................................................16 Conclusion.....................................................................................................................................18
Business Planning2 References......................................................................................................................................19 Appendix........................................................................................................................................22 Appendix 1.................................................................................................................................22 Appendix 2.................................................................................................................................22 Appendix 3.................................................................................................................................23
Business Planning3 Executive summary The report is prepared with the motive to gauge the market as well the financial viability related to the business idea that is propose in order to evaluate the benefits and drawbacks of the project that is proposed. This demonstration helps the company to commit the essential resources and to put idea into the practise. The enterprise idea is to create Catalytic Converter (NED’s Catalytic Converter) only for Diesel Cars so that they can be used on the roads of UK by manufacturing 100% fresh emissions. The innovative concept is known with the name of Catalytic engine technology PVT. The report findings include the unique selling points that attract the customers in the market. In addition, it includes the strategies of company with the support of marketing mix. The competitor’s analysis is explained with the help of porter’s five forces and SWOT analysis. The findings related to the financial analysis shows that different concepts that include Break-even analysis, Sales forecasting as well as the cash flow projections.
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Business Planning4 Introduction The rise in the number of vehicles on road leads to the concern for the reduction in the emission with the motive to have the better air quality. Catalytic converter forms the one of the most critical components that are used by automobile producer with the motive to reduce toxicity related to the emissions in the vehicle by eliminating the substances that is harmful (IBIS World, 2018). In the research, this has been found that Europe region is predicted to dominate by the catalytic converter market owing to the increasing pressure related to the automobile manufacturers that are present in the region. The increasing research and development activities with the introduction of stringent emissions norm like Euro- VI are contributing effectively in the growth of catalytic converter market in the Europe region. This has been found that the market of catalytic converter is expected to reach USD 73.1 billion by the year 2025 from USD 42.2 billion in the year 2018, at a CAGR of 8.10% (Grand View Research, 2018). (Refer Appendix 1) Thus, the report is formed with the aim to evaluate the business idea and its feasibility in the market of UK with the support of its strategies.
Business Planning5 Enterprise Idea The enterprise idea is to form the Catalytic Converter (NED’s Catalytic Converter) only for Diesel Cars, as this will help the automobile manufacturing companies to produce 100% fresh emission diesel cars. This has been found in the recent research that many diesel cars are ditched for good in UK in 2018. This is the reason due to which the people are unable to buy these vehicles. The below given is the list of banned cars in UK: - Bentley: Bentayga Fiat Chrysler Automobiles (Alfa Romeo, Fiat, Jeep, Maserati): Fiat 500X, all models by 2022 Seat: Toledo Skoda: Fabia Subaru: All new models
Business Planning6 Honda: CR-V Toyota: Avensis, RAV4, Verso Vauxhall: Corsa Kia: Rio, Venga Mitsubishi: ASX, Outlander Porsche: Macan, Panamera Peugeot - Potential future models Suzuki: Vitara, SX4 S-Cross Toyota: Avensis, RAV4, Verso Vauxhall: Corsa Volvo: All new models The idea of business not only provide the assistance to the people who bought these cars but will help the automobile manufacturing companies as they will start producing those cars over again. The idea can expand by manufacturing NED’s Catalytic Converter for petrol cars but also begging will emphasis only for diesel cars, as there is huge gap present in the market. Management profile Catalytic engine technology PVT will be a UK private company that will be owned and operated by the solo proprietor.The business idea is new for the small business due to which it has a simple organisational structure. This business will be operated with the motive to deliver the effective engine to the manufacturers.
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Business Planning7 The company will conduct the manufacturing of engine with the use of catalytic converter technology. Thus, ownermakes use of skills and capabilities to track the operations to ensure that there is no loophole in operations. Moreover, the testing of engine is also undertaken so that they can offer the products with proper assurance. The single owner of company handles the deals and clients for technologyto the automobile manufacturing companies so that they can meet the expectations of the customers present in the UK market. Unique Selling Points (USP) Catalytic engine technology PVT aims is to offer a 100% free diesel emission cars to the people of UK that enhance their experience. The unique selling points of these converters is that it operate approx. 90% of the efficiency which is virtually eliminating the odor of diesel and providing the assistance with the motive to reduce the visible particulates. There is majorly two-way oxidation catalytic converter, three-way oxidation-reduction catalytic converter as well as the diesel oxidation catalyst. The company majorly offer the diesel oxidation catalyst in UK market considering the situation. The major USP is that it converts oxygen with Carbon monoxide; unburned hydrocarbons are converted to produce carbon dioxide and water. In addition to this, converter reduces the oxides of the nitrogen (NOx).
Business Planning8 Market Segmentation Market segmentation is the process of dividing a market of the potential customers into different groups or segments that is based on the different characteristics (Armstrong, Adam, Denize and Kotler, 2014). The market segments that are majorly focused by the company include automotive manufacturing companies that are present in UK market. Further, many customers are using cars without the Diesel catalytic converter who can get it fix in their cars. Thus, the customers who are present in the market are also considered as one of the market segment (Rothaermel, 2015).
Business Planning9 The image given above shows that demand for catalytic converter is increasing from the year 2014. Further, the need of the catalytic converter by the manufacturer and customers will increase in the near future. Target Market The target market include particular group of customers at which the products and services are aimed by the company (Baker, 2014). Catalytic engine technology PVT Company makes use of multi-segment targeting. This strategy means that company target more than two segments for offering the products. Company targets the automotive manufacturers of diesels cars as well as the customers who are making use of the diesel cars in the market. The manufacturing automotive brands are considered as the primary target as they are the one who can offer high revenue to company. Moreover, the manufactures are not able to maintain their sales for diesel cars due to its emissions. Marketing Plan and Strategy Marketing mix Product Catalytic engine technology PVT will make use of the differentiation product strategy due to which they offer Diesel Oxidation Catalyst, two-way Catalytic convertor and three-way Catalytic convertor and many others. In addition, this includes the material like platinum, palladium, rhodium and many others.
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Business Planning10 Price The selling price of the very unit of the Catalytic converter varies from the car model and type due to which it is difficult to estimate the same. However, the installation takes about an hour on average depends on the vehicle with the total cost for parts and labor can be $300-$3,000 or more. The company will ensure to offer effective prices to attract more customers that help them in earning a good amount. For instance; In the UK market, the prices of catalytic converter with only 80-90% emission starts with $350. However, the company ensure to offer 100% free emission will be offered at $330. Promotion Catalytic engine technology PVT promotes the products with the effective use of website and social media platforms. This is considered as emerging method with the help of which company can grab the attention of potential as well as the new customers. Thus, this shows that the company make use of digital as well as low cost promotion strategy. In addition to this, the personal selling is also used by the company for promoting the products (Išoraitė, 2016). Place The place is the location from where the customers of the company can make the purchase of the Catalytic converter (Luca and Suggs, 2010). In London, UK the company will open a small office with the manufacturing unit where products are produced as well as displayed for the customers so that they can purchase them. Further, the products of the company are also available through website as the medium of online
Business Planning11 so that customers can purchase the products through online mode. The location requires company to take the license for operating the business. Competitor’s analysis Porter’s Five Forces Analysis Porter’s five forces analysis has been done to evaluate the combination of the different external factors that can influence the working of the company in the market (Chernev, 2018). The industry of automotive Catalytic converter is emerging and expected to increase in the coming years. The below given is the analysis of automotive catalytic converter industry: - Porter’s Five ForcesForces Bargaining power of customersModerate Bargaining Power of SuppliersHigh Threat of New EntrantsHigh Threat of SubstitutesLow Competitive RivalryHigh SWOT Analysis Strength
Business Planning12 The company strength is that it is directly contacting the manufacturers who can offer them a platform to increase their business activities as well as operations. Moreover, the brand provides the different products to the manufacturer in the single roof. Weakness The major weakness of the company is that it is operating the business in the small-scale industry due to which manufacturing automobile companies does not give the consideration when the other well-known brands are present in market. Opportunities The opportunities that are available in the industry that it is growing in UK and demand for the products will increase. In addition to this, currently the catalytic converters are available for the diesel cars but it has the opportunity to remain available in petrol version. Threat The threat, which is faced by the company in the market of UK, is increasing number of threats that are present in market. Pricing and Funding Strategy Pricing strategy The company make use of the competitive price strategy in which they keep the price after conducting the analysis of the competitors. Funding strategy
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Business Planning13 The funding strategy that is implemented by the company is based on the owner savings as well as the loan from the bank. The nature of business include high investment because company need to purchase equipment and machinery. The total amount of investment, which is required, is £ 126,953.00 Financial analysis It is essential for the every business to assess the financial viability of the business idea due to which the company make use of different concepts (Lovelock and Patterson, 2015). The concepts, which are used, include sales projections, break-even analysis, and cash flow statement. Break even analysis The break-even analysis is a technique that is widely used by the production management as well as the management accountants of the company. This analysis will reflects the total variable and fixed cost that are compared with the sales revenue with the motive to identify the sales volume, sales value or production at which the business neither face a loss nor a profit (Cafferky and Wentworth, 2014).
Business Planning14 1010 1020 1030 1038.4552 1040 1050 1060 1070 1080 1090 1100 1110 0 50000 100000 150000 200000 250000 300000 350000 400000 Break-Even Analysis No of units Total sales Total cost Axis Title The above given is the break-even analysis which shows that at 1038.46 units company will find the situation of no profit and no loss. This is the point where both total cost and total sales of the company are intersecting with each other. (Refer Appendix 2) This has been found that fixed costs of the company are independent from the level of activity. The fixed cost for the company is calculated which is clear from the table given below that shows the amount invested by the owners of the company. Fixed costAmount Machinery £ 15,000.00 Research and development £ 10,000.00
Business Planning15 Lease of location £ 101,953.00 Total £ 126,953.00 The table above shows the fixed cost is given according to the nature of business. Further, the variable cost of the business cannot be determined because it varies a lot. However, some of the estimation is done for estimating the break-even analysis. Sales forecasting The table given shows the sales forecasting assuming based on three scenarios which include short-term, medium-term and long-term. Sales Forecast ProductMinimum SalesAverage salesMaximum Sales Catalytic convertor103810701110 Digital Catalytic convertor750 units820 units860 units Two-way120 units50 units70 units Three-way168 units200 units180 units Price £ 330.00 £ 330.00 £ 330.00 Daily sales £ 13,180.39 £ 13,580.77 £ 14,088.46 Working Days per week6 days6 days6 days Total amount of sales monthly £ 342,690.22 £ 353,100.00 £ 366,300.00 Total amount of sales annually £ 4,112,282.59 £ 4,237,200.00 £ 4,395,600.00
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Business Planning16 Cash flow projection The above given is the cash flow statement for the 12 months that helps in assessing the financial viability of the enterprise idea. The new cash flow and outflow of the company is evaluated that shows the profit earned by the company at the end of the year. It includes for all the initial investment that is essential for the business start-up by taking into the account of all the fixed as well as operating expenditure, which include trailer/van, liability insurance, machinery, equipment, and many others. Plans for Future Growth Applying Ansoff Matrix for the future growth of business The plans of the company are explained with the help of the Ansoff matrix that include the business strategy that is adopted by the company (David, 2011).
Business Planning17 Source [(Wilson and Gilligan, 2012)] Market development: - Company will apply development strategy in which they expand the business in different market across the world (Kotler, 2015). Market penetration: - Company will make use of market penetration for promoting the services in the market with the motive to acquire the market share (Hollensen, 2015). Product development: - In the near future, the company can apply the product development by applying the catalytic converter for the petrol cars.
Business Planning18 Conclusion In the present era, the automotive transportation is considered as the largest single source for the air pollution and lead to the global concern that proves the need of the catalytic converter. The location of UK is considered as ideal place for attracting the different target markets and it offers a unique as well as original product through an effective customer service. The report will include the competitor’s analysis as well as discussion on the strategies of the company. In the end, the financial projection of the company is done which shows that company is feasible enough in financial perspective.
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Business Planning19 References Armstrong, G., Adam, S., Denize, S. and Kotler, P. (2014)Principles of marketing. 6th edition. Welbourne: Pearson Australia. Baker, M. J. (2014).Marketing strategy and management. London: Palgrave Macmillan. Cafferky, M.E., and Wentworth, J. (2014)Breakeven Analysis: The Definitive Guide to Cost-Volume-Profit Analysis2nded. U.S: Business Expert Press. Chernev, A. (2018)Strategic marketing management. Chicago:Cerebellum Press. David, F.R. (2011)Strategic management: Concepts and cases. India: Pearson/Prentice Hall. Grand View Research (2018)Industry Insight[Online]. Available from: https://www.grandviewresearch.com/industry-analysis/automotive-catalytic-converter- market[Accessed on 15thMarch 2019] Hollensen, S. (2015)Marketing management: A relationship approach. India: Pearson Education Limited. IBIS World (2018)Catalytic Converter Manufacturing Industry in the US[online]. Available fromhttps://www.ibisworld.com/industry-trends/specialized-market-research- reports/industrial-machinery-gas-chemicals/vehicle-component-manufacturing/catalytic- converter-manufacturing.html[accessed 15 March 2019] Išoraitė, M. (2016) Marketing Mix Theoretical Aspects.International Journal Of Research – Granthaalayah,4(6), 25-37.
Business Planning20 Kotler, P. (2015)Framework for marketing management. India: Pearson Education. Lovelock, C. and Patterson, P. (2015).Services marketing. Australia: Pearson. Luca, N.R. and Suggs, L.S. (2010) Strategies for the social marketing mix: A systematic review.Social Marketing Quarterly, 16(4), pp.122-149. PR News Wire (2018)Automotive Catalytic Converter Market Size to be Valued Close to $270 Billion By 2024 | Million Insights[online]. Available from https://www.prnewswire.com/news-releases/automotive-catalytic-converter-market-size- to-be-valued-close-to-270-billion-by-2024--million-insights-680095993.html[accessed 15 March 2019] Rothaermel, F.T. (2015)Strategic management. UK: McGraw-Hill Education. Wilson, R.M. and Gilligan, C. (2012)Strategic marketing management. New York: Routledge.
Business Planning21 Appendix Appendix 1 Appendix 2 No of unitsTotal sales Variable costFixed costTotal costProfit 1010333,300209,392126,953336,345(3,045) 1020336,600211,486126,953338,439(1,839) 1030339,900213,601126,953340,554(654) 1038.46342,690215,737126,953342,6900 1040343,200215,737126,953342,690510 1050346,500217,895126,953344,8481,652 1060349,800220,073126,953347,0262,774 1070353,100222,274126,953349,2273,873 1080356,400224,497126,953351,4504,950
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