Exotic Housing Construction Ltd: Detailed Business Plan and Analysis

This report details the business plan for Exotic Housing Construction Ltd, a new venture in the Malaysian housing construction sector, specifically targeting the Selangor area. The plan outlines the company's mission to provide quality, customized construction services to attract customers and build market share through a market penetration strategy. The report includes a comprehensive market analysis, highlighting the growth of the Malaysian construction industry, particularly in residential buildings, and the company's target market and marketing mix. A SWOT analysis and PESTLE analysis are provided to assess the competitive landscape and regulatory restrictions. The business description covers the company's services, including design, customization, and renovation, and its focus on affordable pricing. The report also includes organizational and management details, marketing and sales strategies, a funding request, financial projections, risk assessments, and milestones. The financial statements project maximized earnings, and the company aims to leverage the growth in the Malaysian construction industry to establish a strong market presence and achieve profitability. The plan emphasizes efficient manpower and the use of productive machinery to ensure timely project completion and customer satisfaction.

Entrepreneurial and Growth
Management

EXECUTIVE SUMMARY
Business starts its operations in order to attain desired objectives in a timely manner. In
present report, Exotic Housing Construction Ltd which is new business venture will be engaged
in construction sector mainly of housing in Malaysia's city Selangor. Customers would get
attracted to it because it will implement market penetration strategy so as to receive more
attention from them in order to build its market share. For accomplishing this, Mission statement
of company is as follows- “Exotic Housing Construction Ltd pledge to offer quality construction
to clients in a customised manner so that they could choose upon their best preferable option for
gaining satisfaction for their dream houses.” The highest level of services will be imparted to
clients by which market share can be accomplished. Moreover, number of employees will be
around 100 and will increase manpower for sustaining in market. Company will have good
profitability in coming years and will be successful as financial statements clarifies that earnings
will be maximised. Moreover, Malaysian construction industry of residential buildings is around
27.70 % which can be advantageous to business as it could lure clients for attaining profits. This
shows that company will effectively establish it’s firm-standing in Malaysia and will maximise
profits.

TABLE OF CONTENTS
MARKET ANALYSIS....................................................................................................................1
Industry Description and Outlook..........................................................................................1
Target Market.........................................................................................................................3
Marketing Mix........................................................................................................................3
Competitive analysis..............................................................................................................4
Regulatory restrictions............................................................................................................5
BUSINESS DESCRIPTION............................................................................................................6
ORGANISATION AND MANAGEMENT....................................................................................7
MARKETING AND SALES STRATEGIES................................................................................10
SERVICES OR PRODUCT LINE................................................................................................12
FUNDING REQUEST...................................................................................................................13
FINANCIALS................................................................................................................................16
CRITICAL RISKS.........................................................................................................................21
MILESTONES...............................................................................................................................22
REFERENCES..............................................................................................................................23

MARKET ANALYSIS
Industry Description and Outlook
Construction industry of Malaysia is considered as one of the fastest growing sectors in
this present scenario of year 2016 – 2020. This specific industry has been expected for the
expansion of 7% close to this year. The main reason for this expected expansion is directly
supported with plan of government for improving transport network of country. Housing
shortage in country has led for growth of industry in the coming years. The review period of
2011 – 2015, the valuation of industry of construction was major supported with 10th Malaysian
plan 2011 – 2015. In this specific scenario, there was huge investment from government in
context of infrastructure, residential buildings and industrial parks. There was presence of
various policies through government for public private partnerships with specific objective for
developing infrastructure of country. Simultaneously, there was increment from 52% in total
private investment in context of projects of infrastructure through spending in year 2010 till 64%
in 2014 (Malaysia construction industry, 2017).
Residential construction has captured the largest market in construction industry of
Malaysia which had accounted 31% of total value of industry in year 2015. The CAGR of 19.7%
had been recorded by market for review period which has been raised from year 2011 to 2015.
This particular growth was supported with government plan for building houses which are
affordable. The GDP in Malaysia from construction has been raised to 14093 MYR million in
2018's first quarter from 13352 MYR. It had directly averaged to 10269.76 MYR million from
year 2010 till 2018 as it had reached at peak of 14093 MYR million and had stated low record of
6464 MYR million in the 2010's first quarter.
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Illustration 1: Malaysia GDP from construction
(Source: Malaysia GDP, 2018)
In each sub sector, it had driven growth in positive aspect which is illustrated as below:
Sub sector Share
Civil Engineering 38.90%
Special Trades 4.60%
Non-residential buildings 28.80%
Residential buildings 27.70%
Total 100.00%
Its performance has been recorded with the growth of 7.7%. The value of expansion had
driven positive growth in various sub sectors which are stated with its share. With the
contribution, sub sector of Civil Engineering had dominated performance with valuation of
construction which is performed with 38.8% and so on. The private sector had also dominated
63.3% by comparing it from public sector of 36.7% (Performance of construction sector, 2018).
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38.90%
4.60% 28.80%
27.70%
Civil Engineering
Special Trades
Non residential buildings
Residential buildings
Target Market
Market segmentation: In this specific scenario, residential buildings have gained
Malaysian market share of 28% which is rising because of shortage which is supported by
government. This is considered as the fastest growing segment as compared to special trades,
civil engineering and buildings which are non-residential.
Target: The average margin had been gained by housing segment as it is an initial start-
up so, it would lay special emphasis on marketing and appropriate services to its customers.
There is huge requirement of land, cost and scope. So, it tends to be very sensitive in its time of
completion. It would be targeting the consumers from area Selangor in Malaysia.
Positioning: It would build high end addition and houses on custom basis along with
modest home renovations. It would provide meticulous historic work along with the luxury
designs.
Marketing Mix
Market test
Product: Building products such as roofing, cabinets, windows, piping, fixtures/fittings,
electrical products, paint, windows and wall board.
Place: It would be operating in Selangor in Malaysia.
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Promotion: It would be promoting through different social media websites, Trade shows, blogs,
direct mail marketing, brochures and flyers and especially listing itself in directory.
Price: It would be using cost effective strategy as it would work on volume with affordable cost
as there was shortage in review period of housing. In simple words, it could be elaborated as
offering in low prices.
Competitive analysis
SWOT Analysis
Strength: It would be gaining expertise in building and designing in context of addition
of major house with specific alterations. It would be offering one stop solution for building new
house along with design, administration and construction till dream house of client. It would
provide services which are excellent and reliable on time. It would also justify green designs on
alternative aspect and incorporate practices which are sustainable for the basis of construction for
creating better environment.
Weakness: There is Lack of expertise especially for cement manufacturer for producing
raw material as compared its competitors which are existing. As it is a start-up company, it
would be facing different challenges, only cement is the major concern. There is lack of land
available for the purpose of residential. There is presence of environmentally critical areas.
Opportunities: There was shortage of housing so government had also supported for
residential purposes it would indirectly create housing boom which is expected. It could be
simplified through strategic alliance with projects of public sector. There is the raise of need of
growth in housing.
Threat: The rate of urbanization with rapid rate along with increment is concentration of
migration with few urban areas. There is presence of inequalities for socio economic. There is
also adverse impact on alterations in climate.
It can be summarized from above SWOT and PESTLE analysis, firm would deploy well-
structured strategies so as to meet good amount of profits with reference to Malaysian market.
Moreover, it may be able to establish its brand name in housing construction market by
satisfying customers. It will have to comply with political and legal factors as documentation is
required for permitting firm while entering business. In this manner, laws and regulations have to
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comply with organization which would carry out activities in productive and uninterrupted
manner. Hence, it would achieve goals and objectives quite effectually in the market.
Regulatory restrictions
PESTLE Analysis
Political: There are various factors which impact construction industry in Malaysia with context to
permits with documentation which are gained with different stages of construction. It also
considers various factors for accounting degree of government for alterations to influence
specific industry. In simple words, it gives legal framework as Government can adopt
stance and conducts economic policy.
Legal: It considers each legal aspect such as exports, resources, employment, quotas, etc. It
consists of both internal and external factors as well. There are various laws which might
alter external environment of particular company. There is presence of various policies
with these aspects and then it would extract strategies for considering legislations into
account.
Economic: It would include different functions of economy and its effect on operations of
organization. If there is raise in inflation of economy which might impact method of
setting price of its products. It would also be considered as alteration in model of demand
and supply as it also considers inflation rate, foreign exchange patterns, economic
growth, etc.
Technological: It is directly related to changes and innovations in technology which might give outcome
for operations of industry are favourable to market or not. It is directly linked with
awareness of technology which has been possessed by the organization. It might become
obsolete in shorter duration after launch and so, it is very important for the consideration.
Social: It helps in scrutinizing events which might impact market and community in social
aspect. The people who are residing in this specific place where is project had been set
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considers merits and demerits as well. It also consists of various dynamics of population,
career altitudes, cultural expectations and global warming, etc. All these factors help in
consideration for social environment which are prevalent in specific market for
identifying the determinants like population analytics, cultural trends, etc.
Environment:
 It consists of influences which are identified by surroundings of environment. Generally,
it considers environment in context of business that how it has been carried out. It
includes climate, global alterations, weather and environmental offsets but it is not
restricted.
BUSINESS DESCRIPTION
Business runs to attain profits by garnering customer's base. This is essentially required
as organisation aims to accomplish desired revenue by satisfying customers in the best possible
manner. In present scenario, Exotic Housing Construction Ltd will be starting its business
operations in the market particularly focusing on housing construction. This will provide good
quantum of revenue as Malaysian construction sector has generated nearly 19.7 % of growth in
GDP (Gross Domestic Product) alone in the country which marks that Malaysian construction
sector is highly suitable for the company in attaining the profits and business would flourish in
the coming years up to a high extent. This clarifies why construction sector has been chosen by
company as good quantum of income will be generated and organisation will be able to attain
market share quite effectually. In this manner, residential construction is being chosen for
attaining profits and start business venture (Clough and et.al., 2015).
Exotic Housing Construction Ltd will focus on residential homes as it will be able to earn
profits in that manner by which company would be able to accomplish gain in market. The
services that will be offered by organisation consist of design work, customised home,
remodelling and alterations or renovation. These activities will be provided by business and in
that way, goals would be achieved in a better way. Contracts regarding residential will be
attained by which it may be able to position its products and services in the market quite
effectually. Furthermore, primary aim of proposed venture is to establish itself in market by
which more of customers would get attracted to company leading to have enough of profits. In
this manner, Selangor area will be targeted by company in order to lure customers for
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customising their homes in a better way. Hence, firm would garner profits by taking into
considerations which will be fruitful for it and try to establish in Malaysian market quite
effectually. Moreover, business would offer services and products at affordable prices which will
be helpful in achieving desired profits with ease.
Moreover, it would be helpful for company in attaining goals as Malaysian construction
industry has been performing well signifying that Exotic Housing Construction Ltd will also
attain desired profits in its start-up phase and definitely will establish its position in the market in
effective manner. Business will employ efficient manpower which is main requirement in
construction of houses as with their efforts, company will attain desired production in quick
manner. This is vital as with productive machineries and equipment, labour force is required
which will enhance its profits in the best possible manner. Moreover, it would grant company
with sufficient income and timely completion of construction project will be accomplished quite
effectually. The target area of Exotic Housing Construction Ltd is Selangor and customers will
be satisfied with affordable prices to build their houses in comparison to competitors.
Competitive advantage can be gained at this specific location and firm will be benefited up to a
high extent because highly affordable prices would be established leading to maximisation of
profits and minimisation of costs (Rosati and Conti, 2016). Outstanding personnel is prerequisite
as with better management, company will attain good profitability position.
ORGANISATION AND MANAGEMENT
Management is key concern of company so as to handle internal issues in the best
possible manner and that too in a manner beneficial for entire organisation. Since, shareholders
are in more number, Board of Directors are usually appointed which takes into account all
considerations of company and as a result, firm is able to earn profits as output is produced in a
better way. Management must perform tasks in that way by which each and every department
performs in effective manner. This leads to evolution of organisation chart which is required as
organisation divides and allocates the work to different departments leading to productive work
and thus, duplication of work is avoided in a better way. This will help company in achieving
work in that manner by which contracts would be completed by deploying duties and
responsibilities to individual departments which will have clarity of doing work in the best
possible manner (Clinton and Whisnant, 2019).
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Organisation chart is necessary which would be helpful in making clarity about the work
in the best possible way. It is essentially required that Exotic Housing Construction Ltd will have
effective managerial personnel’s which will handle various tasks in effective way and then
produce desired results with ease. In relation to this, who will be doing which work in company,
organisation chart is prepared below outlining activities to be performed by units as governed by
Board of Directors of organisation. It is produced as under-
Illustration 2: Organisational chart
It can be identified from the above organisation chart that firm will have management
units in a way which would deploy the activities in effective manner. There will be six
departments handled by each of personnel’s such as Purchasing Manager, Engineer Director, HR
Director, Financial Director and Marketing Director. In this manner, roles and responsibilities of
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various departments are discussed below which will be helpful for business venture in attaining
clarity.
Purchasing department
This department is under charge to purchase raw materials such as stone, sand, cement
and many others materials. Supplies are also used in projects and meeting daily requirements of
organisation. Purchasing unit is entitled not only to buy necessary materials but also to compare
different suppliers and exploring out qualities of materials with relevant prices whether they are
affordable or not and hence, correct price is paid for every purchase (Eastman, 2018).
HR department
HR department will have responsibilities to hire productive staff and training them for
increased productivity. Keeping records of employees, insurance, relationship with them,
compensation and inculcating habit of persuading teamwork.
Engineering department
This unit is purely responsible for proper planning of construction projects undertaken by
Exotic Housing Construction Ltd in a better way. Conducting surveys, making research,
assessment of results, planning project and also supporting technical problems during project.
Project department
As the name suggests, project department will be able to attain completion of project in
accordance to scheduling activities for each of project. Project Manager is in-charge in this
scenario in forming out budget, assigning work to employees and allocating respective
responsibilities for timely project completion. He seeks also for occupational health and safety at
workplace.
Financial department
The purchasing unit will be engaged in developing strategies to maintain cash inflows
and initiating control over cash outflows so that cash balance may be maintained quite
effectually. This will have flow of funds in a proper way as business will be able to purchase raw
materials needed for construction and related machineries. Moreover, cash position will be
strengthened so as to make daily payments by having sufficient funds (Ross and Byrd, 2015).
Marketing department-
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