MBA商业计划大赛-商业计划书样本.doc

TABLE OF CONTENT 1 EXECUTIVE SUMMARY 1 2 COMPANY OVERVIEW 2 3 AN INTRODUCTION TO PRODUCT AND MARKET 2 3 1 LOW NOISE MINIATURE DEEP GROOVE BALL BEARING 2 3 2 THE MARKET POTENTIAL OF THE PRC 2 3 2 1 Key Demographic Factors 2 3 2 2 The Demand for Low Noise Bearings in the PRC 4 3 3 THE INTERNATIONAL DEMAND 4 3 4 THE DOMESTIC SUPPLY 4 3 5 THE FOREIGN SUPPLY 5 4 TECHNICAL BREAKTHROUGH 5 4 1 TECHNICAL BREAKTHROUGH 5 4 2 THE GUANGDONG BEARING RESEARCH CENTER 6 4 3 KEY INDIVIDUAL INVOLVED IN THE TECHNICAL BREAKTHROUGH 6 4 4 ENTERING THE MARKET BY FORMING JOINT VENTURE 7 4 4 1 Joint Ventures are Preferable to Wholly Owned Enterprises 7 4 4 2 Advantages for Founding Joint Venture with the Research Institution 7 5 MARKET ANALYSIS 7 5 1 ANALYSIS OF CUSTOMERS 7 5 1 1 General Information on Customers 7 5 1 2 Price Sensitivity 7 5 1 3 8 Measurement of Product Performance 8 Performance indices for the product is standardized and objective The testing procedures are not complicated Bearing users will test by sampling the products themselves 8 5 1 4 8 Leading Time 8 Customers normally review their production schedules once a quarter Therefore they typically place orders at the leading time of a quarter 8 5 1 5 8 Frequency of Ordering 8 Typically once a quarter 8 5 1 6 8 Batch Size 8 From 100 1 000 thousand 8 5 1 7 8 Multi Suppliers 8 It is a usual practice that the manufacturers deal with several suppliers to reduce the risk of over dependency on one of them and to enhance the bargain power 8 5 1 8 8 Punctual Delivery 8 5 1 9 8 Brand Loyalty 8 Brand loyalty is weak because of high price sensitivity and the objective quality indices 8 5 2 ANALYSIS TO COMPETITORS 8 5 2 1 Competitors Overview 8 5 2 2 Distribution Channels 8 5 2 3 Potential Substitutes 8 5 3 OUR POTENTIAL ADVANTAGES OVER THE FOREIGN MANUFACTURERS 9 6 DEVELOPMENT PLAN IRR will be 48 91 Note Exchange rate between USD and RMB is 0 1206 as at Jan 29 1997 2 2 Company Overview This Joint Venture enterprise is jointly formed by the proposed China partner the Guangdong Research Institute of Machinery and a foreign investor which will invest through a wholly owned Hong Kong registered company The terms of the Joint Venture will be thirty years The principle business of this enterprise is to produce low noise axle bearings with international quality at the best price A Joint Venture agreement is expected to be signed by both parties who will have the following responsibilities The Foreign investor has to Capital invest USD 3 256 200 RMB 27M cash in two phases exchange rate between USD and RMB is 0 1206 as at Jan 29 1997 Management send representatives to be the General Manager and the Business Manager The Guangdong Bearing Research Center a subsidiary of the Institute will represent the Institute to Capital invest USD 120 600 RMB 1M cash contribute the patent and the 4 000m2 land in Guangzhou as its investment capital Engineering send Mr Li as the Assistant General Manager to manage the enterprise and engineers to provide maintenance services and engineering advice Research Public Relations assist enterprise with maximum efforts to perform all sales related activities Government assist the enterprise with maximum effort to keep good relationships with related governmental departments and to handle governmental affairs upon the request of the enterprise The plant of this enterprise is expected to be set up in Guangzhou LiShui 3 An Introduction to Product and Market 3 1 Low Noise Miniature Deep Groove Ball Bearing Bearings are essential components for military and civil industries It is used in many devices such as motors automobiles air conditioners missiles etc as the conjunction of rotary and non rotary parts Bearings are so diverse that there are more than ten thousand standardized models Our business will focus on an important branch of bearings the Low Noise Miniature Deep Groove Ball Bearings which are primary used in household electrical appliances such as refrigerators and air conditioners etc Most electrical appliances are required to be quiet during operation Bearing is one of the major noise sources in these appliances Low noise bearings are critical for quiet household appliances 3 2 The Market Potential of the PRC 3 2 1 Key Demographic Factors Area The total area of the PRC is 9 6 million square kilometers ranked number 3 in the world Population 1 22 billions the largest in the world by far Foreign investor Hong Kong registered company The Guangdong Research Institute of Machinery Joint Venture enterprise 100 83 85 16 15 3 GDP The PRC has experienced high GDP growth rate as well as high inflation in 1980s and 1990s Discounted by the inflation rate the real GDP growth is around 10 Income per Capita Despite the impressive economic growth the income per capita is very low The GDP of the PRC RMB billion 0 1000 2000 3000 4000 5000 6000 7000 198519861987198819891990199119921993199419951996 4 3 2 2 The Demand for Low Noise Bearings in the PRC The PRC is one of the major household electrical appliance manufacturers as well as major consumer in the world Those electrical appliances with motors or other rotary components like refrigerators washing machines and air conditioners must use bearings Nowadays most of the demand around 85 for household electrical appliances in the PRC are satisfied by domestic manufacturers Thus the demand for low noise bearings in the PRC can be estimated reasonably by the demand or production of electrical appliances in the PRC N Ne et t I In nc co om me e P Pe er r C Ca ap pi it ta a P PR RC C 0 500 1000 1500 2000 2500 3000 3500 4000 4500 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 N Ne et t I In nc co om me e R RM MB B Rural population Household population P Po os ss se es ss si in ng g R Ra at te e o of f H Ho ou us se eh ho ol ld d E El le ec ct tr ri ic ca al l A Ap pp pl li ia an nc ce es s f fo or r R Ru ur ra al l F Fa am mi il li ie es s i in n P PR RC C 0 2 4 6 8 10 12 14 16 18 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 Washing machines Refrigerators Air conditioners In 1995 the possessing rate of washing machines refrigerators and air conditioners for rural household in the PRC are only 16 9 5 15 and 1 respectively The rural population accounts for seventy percents of the total population in the PRC This implies that the demand for household electrical appliances will be very large and will increase as the income increase in the coming years Table 1 The demand for low noise deep groove ball bearings in Guangdong and the PRC1 YearDemand Thousand Guangdongthe PRC 199335 00087 500 199660 000150 000 2002120 000300 000 3 3 The International Demand Considering the large volume and fast growth of the PRC market we will focus on it for the first several years However we may need to export a small proportion of our products so as To meet the government s requirement on proportional exportation of the products of JV To provide us with the foreign currency to import components To prepare us for penetrating the international market in the future The Guangdong Research Institute of Machinery had sent samples of the low noise bearing to a few foreign companies and some of the replies were positive One company in Europe replied that if the price did not exceed USD 1 per set they will like to order four million sets per year 3 4 The Domestic Supply However the PRC manufacturers lack the expertise to produce low noise bearings and has to spend more than USD 100 million to import these products In either the PRC or the Guangdong province only 6 10 of the demand is satisfied by domestic manufacturers 1 Source The data of 1993 Forecast for 2002 by the Chinese Electrical and Machinery Industry Daily August 25 1995 5 3 5 The Foreign Supply An investigation by the Guangdong Research Institute of Machinery revealed that foreign supplies account for 90 94 of the low noise bearings used in the Guangdong Province and the PRC 4 Technical Breakthrough 4 1 Technical Breakthrough The Guangdong Bearing Research Center has achieved technical breakthroughs that make the domestic manufacturing of low noise bearings possible The Research Center has worked on the problems of bearing noise reduction for two years They have found out more than 70 crucial elements that have impacts on bearing noise and improved five critical working procedures and the related production equipment There are six major factors affecting the noise level of bearings The ball the outer ring the inner ring the cage and the lubricant and the assembling process 1 The Balls and the Lubricant Most bearing manufacturers purchase the balls and the lubricant from suppliers It is important to ensure the performance of the balls and the lubricants Domestic manufacturers cannot test the performance of the balls and lubricants and interrelate the test results with the noise level of the bearings With the help of sophisticated testing equipment the Research Center can clarify the interrelation set up methods and criteria for performance testing and finally select the most suitable combination of balls and lubricants for bearings 2 The outer and the inner ring The rings are supposed to be circular in shape However under the microscope they are far from circles Imperfect circles cause vibration and thus the noise To reduce the non circularity fine polishing and super fine polishing are essential However the precision of polishing machines made in the PRC are not high enough while those advanced imported machines are priced 6 to 10 times higher than the domestic ones2 Few local manufacturers can afford it However the Research Center find out that the mechanical performance of the domestic polishing machines 2 supplements not included Cross section of bearing Dust cover Outer ring Inner ring Steel balls Cage Dust cover 6 can actually meet the requirement The problem is the control unit The bearing experts and auto control specialists of the Guangdong Research Institute of Machinery work together to redesign and modify the polishing machines incorporating the micro processor controlled units to enable automatic control The cost for modification is negligible now but the inexpensive machines can perform almost as good as those priced eight times higher 3 The cage Engineers in the Research Center find that the structure and the shape of the bearing cages contribute a lot to the noise because the cages were poorly designed They redesign the cages to reduce the friction and vibration and thus the noise 1 The assembly Badly designed assembling processes can jeopardize the noise performance of the bearings For example magnetism most components of the bearing are made of steel In any of the processing procedures these components can be magnetized Magnetic fields can result in serious friction and vibration on the final products Demagnetizing the components efficiently can significantly lower the noise steel scraps are inevitable in the working process They should be screened out during the assembling process The engineers in the Research Center have washed out ways to enhance the assembly quality The Research Center had manufactured 500 sets of bearings with the new technology and tested their performance against those produced by other domestic manufacturers The noise level of bearings follows normal distribution See the chart for performance comparison The 30dB line is a benchmark for low noise bearings and the noise distribution of the new bearings satisfies the international standard 4 2 The Guangdong Bearing Research Center The Guangdong Bearing Research Center is one of the subsidiaries non legal entity of the Guangdong Research Institute of Machinery There is only one such research center in each province in the PRC This center is the strongest bearing testing and research center in the South China The technical breakthrough is achieved by the Research Center 4 3 Key Individual Involved in the Technical Breakthrough Mr Li the Director of the Research Center who is in charge of the low noise bearing research Graduated from Dalian Polytechnic University in 1957 Senior Engineer the authority on the bearing industry in the PRC The bearing technical Director of the first man made satellite of the PRC Engaged in setting up the Bearing Technical Standard for Airplanes and Tanks Engaged in bearing design for nuclear submarines nuclear reactors and intercontinental missiles Although Mr Li is the leader of the Research Center the achievement is the outcome of teamwork by all The Distribution of Bearing s Noise Level 0 0 05 0 1 0 15 0 2 0 25 0 3 21242730333639424548 Noise Level db Probability Other domestic manufacturers Samples by the Bearing Center 7 the staffs in the Research Center and the support of the Institute 4 4 Entering the Market by Forming Joint Venture We decided to enter the market by forming Joint Venture with the China partner 4 4 1 Joint Ventures are Preferable to Wholly Owned Enterprises Generally Joint Venture are preferable to wholly owned enterprise because Joint Ventures can sell their products both domestically and abroad While wholly owned enterprise must sell most if not all of their products abroad If the foreign capital of Joint Ventures is from overseas Chinese Hong Kong Macau or Taiwan the firms can enjoy some tax deduction The firms are exempted from income tax two years after a cumulative profit is recorded After that the firm can still enjoy a 50 tax deduction for three years 4 4 2 Advantages for Founding Joint Venture with the Research Institution In this project the Joint Venture has some extra advantages The technical breakthrough by the Research Center is essential to this project The Research Center are thoroughly familiar with the bearing industry and the organizational buyers It has good relationship with the local provincial government which will benefit our Joint Venture The Research Center itself is an ISO 9000 consultant It helps corporations to develop appropriate procedures and documents necessary for ISO 9000 certification Last year it helped a large bearing factory in Guangdong to successfully obtain the ISO 9001 certificate Since ISO 9000 certification is part of the strategy of our proposed venture this expertise of our partner is valuable The breakthrough in low noise bearing is not the only technical achievements of the Research Center If we want to enter other bearing markets the Research Center is a good long term partner 5 Market Analysis 5 1 Analysis of Customers 5 1 1 General Information on Customers Typical Customers Electric motor manufacturers supplying motors to household electrical appliances Manufacturers Large Customers Approximately 20 in Guangdong Typical Annual Production 2 5 Million Knowledge of the Product Customers normally have very good knowledge about the product 5 1 2 Price Sensitivity According to industry participants like the domestic manufacturers the marketing people from the foreign competitors the users and industry specialists this market is highly price sensitive A ten percent price difference can have a decisive impact on the purchase decision Household Electrical Appliances Manufacturers Electric Motor ManufacturersBearing Manufacturers 8 5 1 3Measurement of Product Performance Performance indices for the product is standardized and objective The testing procedures are not complicated Bearing users will test by sampling the products themselves 5 1 4Leading TimeCustomers normally review their production schedules once a quarter Therefore they typically place orders at the leading time of a quarter 5 1 5Frequency of OrderingTypically once a quarter 5 1 6Batch SizeFrom 100 1 000 thousand 5 1 7Multi SuppliersIt is a usual practice that the manufacturers deal with several suppliers to reduce the risk of over dependency on one of them and to enhance the bargain power 5 1 8Punctual Delivery Punctual delivery is critical 5 1 9Brand LoyaltyBrand loyalty is weak because of high price sensitivity and the objective quality indices 5 2 Analysis to Competitors 5 2 1 Competitors Overview Table 2 Competitors Overview CompaniesOriginMkt Share3FocusStrategy All domestic supplythe PRC6 10 Carry out transactions occasionally as byproducts SKFSweden6 17 Defend South PRC develop East PRC Premium pricing Professional image services NSKJapan29 30 High growth Close to the customers for better customer service and lower delivery cost Support from local government Bad debt problem is less serious if the debtor and the creditor are in the same province Table 6 Potential customers showing interest in our low noise bearings ManufacturersAnnual Production sets Heshan Motor Factory5 million Weiling Motor Factory3 million Desheng Motor Factory2 3 million The above mentioned factories have expressed their will to purchase our products as long as they can meet the quality indices and are cheaper than imported products Table 7 Large potential customers in other provinces Company Name Brand NameLocation Wuxi Washing Machine Factory Little Swan Jiangsu Chunlan Electrical Appliance GroupJiangsu Haier Electrical AppliancesShan Dong Shanghai Narcisus Shanghai 8 4 Pricing Strategy Our price will be 10 15 discounted from current market prices for imported products Higher prices will Table 5 Target Market Shares MarketsTotal DemandTarget Market Share year 20025 in mil in mil in Domestic Market300134 3 Guangdong Provinces120108 3 Other Provinces in the PRC18031 6 Foreign Market 2 13 be charged for handling small orders Quantity discounts will be given for large quantity orders on negotiation basis Given the current market condition we will keep our price constant for the first five years and actual adjustment will be subjected to the market condition at the time Products down graded will be sold at the market price of the products of equivalent grade Table 8 Price strategy Product ModelsAvg Mkt Price RMB Target Price RMB 19951996From 85 To 90 608 2Z6 006 105 195 49 6200 2Z8 807 806 637 02 6201 2Z10