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Business Plan Assignment: Porter’s Analysis
Business Plan Assignment:Value Process Analysis
This Business Plan Assignment discusses Porter’s value process analysis, which defines how the value is created into the overall functioning of the business. It examines the whole process starting from the procurement of raw material to after sales services to customers (Porter, 1998). Mainly it has two processes or activities which are:
1.Primary Activity: Activity which is closely related to the day to day functioning of the business and these are the source of value creation in business.
a) Inbound logistics: The raw material for the production of cars would be procured from big suppliers in order to ensure the long term supply of raw material. So the company needs to build strategic alliance with these suppliers. Also company need to maintain multiple suppliers for each part in order to reduce the dependence on particular supplier.
b) Operations: Company needs to maintain multiple vehicle operation plants, powertrain, stamping and component plant. These plants should be responsive to the customer demands so that the excess inventory can be saved further.
c) Outbound logistics operations: For outbound logistics, company needs to situate the plants at central location so that transportation cost can be reduced by doing so.
d) Marketing and sales: Marketing can be done in order to aware the customers about our product offerings. Sales can be done on personal sales and by utilising other sales channel like internet media vehicles.
e) Services: Services are one of the most important parts of the automobile company. Our company aims to provide best after sales services to its customers by making it company’s USP.
2.Support activities: These activities support the primary activities into the business these activities includes firm infrastructure, HRD, Technology development and Procurement process.MIS and planning and control system will be implemented in order to increase the productivity of employees (Mckeever, 2008). Human resource management would emphasis on recruitment of employee for longer term commitment. Many technological facilities like dynaudio soundtrack, Bluetooth tyre operation, touch screen DVD and system to monitor the pressure would be implemented in order to ensure customer safety.
The core competency of the company would be to produce technologically sound vehicles in all 3 segments i.e. small, medium and large by leveraging on its good R&D facilities which can add to customer safety and convience. The production system will be highly responsive to complete the process within 3 weeks (production cycle). In support process core competency would be exclusive services provided by the company which will add value to the customers and will provide company a cutting edge over other companies in the market.
Business Plan Assignment:Manufacturing Plan
Our company has implemented the quality check after every process which is a part of overall system. The company is into its nascent stage so the supply chain has to be responsive and we need to maintain minimum inventory possible as inventory management will be easy and will save the cost (Kleiner, 2003). The factory policy of the company enhances the healthy work culture into the company and company tries to implement Six Sigma into it so as to reduce the number of defects and save cost and make the system more efficient. Inventory will be maintained as low as possible and 5 weeks of inventory would be stored by company. Efforts would be made to meet the stock-out problem. Double quality checks would be made in order to ensure the quality and technology part of the cars.
Business Plan Assignment:R& D
Success in automotive industry is attributed to the new product development hence our company pays special attention to R&D efforts to develop new products. A portfolio of small, medium and large cars would be maintained in order to cater to different customer segments. Product leadership would be gained by using fuel economy. Improved and qualified technology would be used in every car so that better performance can be achieved. Investment into R&D would be done in two phases, in first phase small facility of R&D lab would be developed and innovation process can be started and in second phase when company would be going through its expansion phase another investment can be made. The strategic priority for the company would be to produce the fuel efficient vehicles which can help the customers economically but the high technology would always be there to support the every product to provide convience to the customers. The designing of the product would be done be well qualified and experienced design experts which are the key human resource of the company.
The capital requirement for the overall business plan would be $2 billion. Out of this total amount of $2 billion, $1 billion would be spent as the fixed cost for developing the plant, machinery and R&D labs. A working capital of $500 million would be required for meeting day to day expenses of the company. Start up cost of $1.5 billion would be required now to start the business; the rest part can be employed after one year of business (Thomas, 2008). The Break even quantity for the business would be 2000 units so as to meet the variable cost in case of no profit no loss. The Payback period in which whole investment would be repaid by business is 5 years. Out of total $2 billion amount, $1 billion would be taken from market through IPO to market.
The growth into the business would be done by developing the strong network dealers which will the pillar strength of the company and the unique selling proposition of the company would be to become the product leader into market by leveraging on the strong R&D capabilities of the company. The main resource for growth would be product innovation and better technology and key human resource which will be another major strength of the company and will help the company to grow faster (Ford, 2007). There would be certain changes required into infrastructure for growth of the company as initially the plant size we have can accommodate 250 cars each plant. Since we are into nascent stage so we can’t built a very huge plant looking at the cost aspect of it. Also more and more technically sound R&D labs would be required to keep the innovation into the product.
- Michael E Porter, 1998, “Competitive advantage”, pp42-98
- Mike Mckeever, 2008, “How to write business plan”, pp 14-79
- Eugene Kleiner, 2003, “The Successful business plan”, pp33-77
- Arthur De Thomas, 2008, “Writing a convincing business plan”, pp14-98
- Brian R Ford, 2007, “Ernst and young business plan guide”, pp73-134