Sample Business Plan Paper on DRUMI (Portable Washer)

DRUMI (Portable Washer)

Problem

In developing countries that lack electricity or the funds to buy expensive machines, taking care of laundry the old-fashioned way requires an enormous amount of time and effort. Numerous studies in Africa and South America have shown that there is a growing need for regional tailor made solutions.

Solution

In order to aid in the laundry obligations in some of the poorest developing nations, there is a need to develop a washer that firstly uses a minimal amount of water and detergent in cleaning. Secondly, the device need not be dependent on electric power. This product is the Drumi (Portable Washer) a device that is a combination washer and spin-dryer that is powered by a foot pedal.

 

 

Business Model.

Drumi is expected to be sold to most poor households in Peru through a loan basis financial process. In other words, each unit sold will have a premium down payment of 20$ which is half of the devices price. Late the household owners will have to pay the remaining amount in two installments of 10$ done in 2 months. The reason for this is based on the fact that households in Peru may not have 40$ to give at once for laundry gadget.

Underlying Magic.

Drumi, unlike other portable washers, is independent of any electrical input therefore well suited for the target market. Drumi is specifically designed to avoid back pains as well as wrists strain related to laundry washing by hand. The gadget allows the washing of wash a large amount of water while using a small amount of water. The drying mechanism within the portable washer aids in the retention of used water that can be disposed of well enough not to house health issues tot eh sounding. Drumi may also be used to aid in generating income through the provision of laundry services, rentals, as well as direct sales.

Target Country for First Entry/Why

More than half of Peru’s population live in poverty; additionally, 19% of this population lives in absolute poverty suggesting that they live on less than 1US$ per day (Das, 2016). The gap between the rich and poor has for the last two decades been increasing at an exponential rate as indicated through the country’s capital of Lima. According to Cotlear (2016), appreciably 60% of the population at Lima lives in Shantytowns, which lack proper water and power sources. This are the kinds of societies that are in need of 21st century solutions.

 

What Type of Strategy?

Drumi will base its strategy on the BCG Matrix where it aims to form a high partnership with community-based organizations that are connected to the poor households of Lima as well as Peru in general (Int’L, 2015). Through this partnership, the product will gain a genuine global expansion platform that would aid in increasing sales. In the maturity stage, the BCG strategy used offers wider options to license as well as form partnerships that guarantee high sales.

 

Competition.

Drumi is not a one of a kind product in the sense considering pedal washing machines have been used in other regions; however, in Peru, if does not have a direct rival. However, out of market research, it is clear that due to low income most of the targeted population it is expected that not many of the targeted will be financially capable to get the gadget (Lymbersky, 2008).

Competitive Advantage.

As indicated Drumi is a low-cost gadget with numerous efficiency as well as health contributions to the society. This in itself is a step forward to the available alternatives. Additionally, the gadget is financed on a loan basis that gives the potential clients with the chance to pay at their convenience. Nevertheless, the accusation with community-based organizations allows the future clients to have subsidized prices coming their way as considering the contribution of a variety of authorities including the government.

Marketing and Sales in Target Country

Drumi is going to market by local hired staff members from the poor regions that need the gadget. On the other hand, the partnerships that are aimed to be developed by the community-based organizations is also depended on in creating an effective marketing strategy. Sales are targeted to be maximized in the Shantytowns of Lima.

Management Team / HR.

The management team responsible for the sale, marketing as well as distribution will be sourced from Lima considering the factor of language.

 

Entry Mode.

Due to the requirements of manufacturing and distribution of the product, Drumi will be set to be licensed in order for manufactures may help in producing more of the gadget.

Operations.

Drumi will be manufactured locally in Lima where two primary manufacturers namely, Amcor Rigid Plastics Del Peru and Dispwecol SAC. The two aforementioned companies will be responsible for the assembly of the gadget. Antarki Models will be obligated to distribute the gadgets to various parts of the country.

Key Metrics (Projections).

From the market analysis conducted in the region, it is expected that the anticipated sales of units will be 20,000 pieces in the first 6 months. This duration will represent the introduction phase of the product lifecycle. During the growth stage, the expected sales will range between 50,000 to 100,000 pieces. This stage is expected to last for a single year. The maturity phase is expected to have sales ranging from 60,000 pieces per year. From the forecasted sales, the expected revenue in the introduction phase will be approximately 400,000$. It should be noted that this is the minimum sales figure that is only presented using the 20$ initial down payment. On the other hand, the growth stage will be expected to have a minimum revenue earning of 2,000,000, which is based on the lowest sales mark of 50,000 units while 4,000,000 is set on the maximum sales unit of 100,000 units. For the remainder of the years during maturity stage, the expected earnings are anticipated in the rage of 2,400,000 USD per year.

Financials (Projection) / Hedging.

During Drumi’s lifecycle, the financial status will be expected to be aided by the profits generated through sales. Loans from financial institutes are expected to aid in the growth phase of the product. The loans will be paid in a duration of 3 years after borrowing.

Risk Assessment.

The biggest setting up Drumi is the lack of positive response by the expected market. From the data presented about the target market, it is clear that poverty or a lack of finances to buy the gadget remains the biggest obstacle to profitability. This is the reason why the market entry strategy is a hybrid system that involves licensing and partnerships. This strategy spreads the risks two the players in the market. However, does not mean a lack of risk.

Current Status.

The images displayed in this presentation are from a working prototype. The current status is that the gadget works as indicated and there is need to go to the next phase of mass production. The required finances for the next phase require the production of 25,000 pieces each costing 12$ as manufacturing cost. This comes to a cost of distribution, marketing as well as attaining legal documentation is expected at 500,000 $

Timeline.

 

The graph above is a representation of the production and sales of the Drumi portable washer. The X axis represents the timeline as presented through a variety of stages. The introduction stage is expected to stage a maximum of 6 months. This stage will be critical in determining the future sales and success of the entire program. The second stage is growth phase, which will take up approximately 18 months. This stage will be placed to market and distribute the Drumi portable washer to various regions in Peru. The third stage indicated as the maturity stage is expected to have the highest sales as the product will have a considerable market share.

 

 

 

 

References

Cotlear, D. (2016). A new social contract for Peru: An agenda for improving education, health care, and the social safety net. Washington, D.C: World Bank.

Das, R. (2016). Poverty and hunger: Causes and consequences. New Delhi: Sarup & Sons.

Int’L, B. P. U. (2015). South american countries mineral industry handbook: Strategic information and regulations. Place of publication not identified: Intl Business Pubns Usa.

Lymbersky, C. (2008). Market entry strategies: Text, cases and readings in market entry management. Hamburg: Management Laboratory Press