1.0 Introduction
1.1 Introduces the Proposed Business Venture
Our company will be established on 10th October 2014. We are a private limited
company which specializes in producing watches in Malaysia. Our company has one
main office and one factory which consists of 80 employees. We supply the watches
to the retailers in Malaysia.
1.2 Name of the Company
Waters Star Sdn. Bhd.
1.3 Nature of Business
Waters Star Sdn. Bhd. is a private company that focuses on supplying watches for the
watch industry. We specialize in providing quality watches.
1.4 Industry Profile
Watch manufacturing is a business of making watches for customers according to
their lifestyle demands. Recently, there are not too many new watch manufacturing
companies that are set up, but existing companies made a lot of fresh investments.
The state produced mostly mid-category watches. The industry is considered part of
the micro small medium enterprises sector. In addition, time used to be all in the wrist.
But these days, thanks to smartphones, cable boxes, computer windows and other
screens, no one really needs to wear a watch. The hour is always at hand.
Nevertheless, watches are often appreciated as jewelry or as collectible works of art
rather than just as timepieces. This has created several different markets for watches,
ranging from very inexpensive but accurate watches to extremely expensive watches
that serve mainly as personal adornment or as examples of high achievement in
miniaturization.
1.5 Location of Business
Waters Star Sdn. Bhd. is located at A15-N BLR A, Jalan Selaman 2, 68000 Ampang,
Selangor Darul Ehsan. We chose this location because it is a strategic location that is
at the city centre. It is surrounded by several shopping complexes and company
buildings. This provides the ideal environment for us to do the market research and to
have the opportunity and potential of the future business.
1.6 Date of Commencement
Our company will commence operations on 10th October 2014.
1.7 Factors in Selecting the Proposed Venture
We chose to establish this business because we realized that there is no well-known
watch brand from Malaysia and we have decided to establish an outstanding brand
with high quality for watches owned by Malaysian company. Moreover, there is a
high demand for this industry as this category had become more a fashion than a need.
People are going for watches like never before. Earlier we used to see a person buying
only one watch. Now, they do not mind going for four to five watches during a
purchase. They select watches to suit their attires sometimes. Besides that, the high
quality watches in the market are usually tend to be expensive and costly that not
everyone can afford for it. Therefore, we are going to produce a watch with high
quality and launch it at a reasonable price.
1.8 Future Prospects of the Business
When there is a chance, our company plans to expand our business to produce all
kinds of watches such as clocks, diamond watches, dive watches, pilot watches and so
on. Furthermore, we hope to open our first outlet within five years and enter the
international market after ten years.
2.0 Purpose of Preparing the Business Plan
This business plan is prepared by Waters Star Sdn. Bhd. for the purpose of obtaining a
working capital loan from Public Bank Berhad for an amount of RM 900,000. This
business plan is also prepared as a guideline for managing the proposed venture.
3.0 Company Background
Name of the company : Waters Star Sdn. Bhd.
Address : A15-N BLR A, Jalan Selaman 2, 68000 Ampamg,
Selangor.
Telephone Number : +603-42220002
Form of Business Ownership: Private Limited Company
Main Business Activities : Produce and supply watches
Date of Commencement : 10th October 2014
Date of Registration : 17th September 2014
Registration Number : UCB 130501
Name of the Company’s
Bank : and Bank Account
Number
WATERS STAR SDN BHD
8888 0009 1314
4.0 Background of the Proposed Business
4.1 Physical Location
The main office of our company is located at the city centre in Ampang. It is
surrounded by several shopping complexes and company buildings. This provides the
ideal environment for us to do the market research and to have the opportunity and
potential of the future business. Our company’s factory is located at the foremost
entrance of the industrial area in Shah Alam. The land area is 41,000 square fit. The
distance between the main office and the factory is approximately 38 kilometers.
4.2 Price of Premise
We are renting two premises which are a main office and a factory. The rental of the
main office and the factory are RM 6,000 and RM 6,500 per month respectively.
4.3 Distance from the source of raw materials
We chose Shah Alam to locate our factory because of its proximity to the suppliers
around the Shah Alam area. The raw materials are made available to us within a
relatively short distance, where the cost of transportation can be at a minimum level.
4.4 Availability of manpower
Our business requires the workforces with the operational skill and knowledge in this
industry, well communication skill in multi-languages and creativity. The workers will
be provided training session regularly. Our company plans to remain the number of
the workers in the first year and hire the professional watch designers from overseas.
4.5 Transportation Facilities
Public transportation such as LRT, taxis and buses are easily accessed to our main
office.
4.6 Distance from customers
Our main office is located at the city centre which surrounded by the shopping
complexes and office buildings which have the highest potential value to our
business. This is because there are many of the watch shops in the shopping
complexes and around that area. The retailers can easy to reach our office for business
purpose by buses, taxis and LRT.
4.7 Basic amenities
Our premises are located at the city centre and industrial area. All facilities and
amenities such as electricity and water supplies, telephone lines, internet connection
and transportation are available here. With these basic amenities, we believe that all
the workers can coordinate and accomplish their jobs more efficiently and
productively. Besides that, other amenities such as bank, food court, public toilet and
so forth are also available.
5.0 Organization/ Administration/ Management Plan
5.1 Organization’s Mission, Vision and Objectives
Table 5.1 shows the logo used by Waters Star Sdn. Bhd. and description of the vision,
mission and objectives of the organization.
Logo
Vision To provide high quality and trend setting watches that combine performance with value pricing internationally.
Mission i. To introduce a broad range of watches and clocks to satisfy all segments of society
ii. To strengthen Waters Star Brand and create lasting impression on the customer.
iii. Establish the outlets specialized Waters Star Brand watches.
Objectives i. To develop and launch new models with contemporary styling
with value pricing.
ii. Focused approach on optimum utilization of resources.
iii. Be an outstanding watch company owned by Malaysia.
Table 5.1: Logo, vision, mission and objectives of Waters Star Sdn. Bhd.
5.2 Organizational Chart/ StructureWaters Star Sdn. Bhd. uses an organizational structure based on the functions in the
organization. The firm consists of three levels of management which are the top level
management, middle level management and lower level management. There are 12
departments under the middle level management in the organization. This structure
suits Waters Star Sdn. Bhd. as this organization emphasizes functional specialties to
perform task. The organizational structure will cover all aspects of the management as
a business entity. Figure 5.1 illustrates our proposed structure.
Figure 5.1: Organizational structure of Waters Star Sdn. Bhd.
Chairman
Chief Executive Officer
Chief Financial Officer
Finance Manager
AccountingManager
Investor RelationsManager
Chief Marketing Officer
MarketingManager
Customer Relations Manager
Chief Operating Officer
ManufacturingManager
Human Resource Manager
Quality Assurance Manager
Quantity Surveying Manager
Chief Technology Officer
Research & Development
Manager
Information Technology
Manager
Product Designing Manager
5.3 Manpower Planning
Waters Star Sdn. Bhd. has one chairman, 5 C-level executives and 12 department
managers who manage, contract and execute the operations of the business as shown
in Table 5.2.
Designation Number of PersonnelChairman 1Chief Executive Officer 1Chief Financial Officer 1Chief Marketing Officer 1Chief Operating Officer 1Chief Technology Officer 1Finance Manager 1Accounting Manager 1Investor Relations Manager 1Marketing Manager 1Customer Relations Manager 1Manufacturing Manager 1Human Resource Manager 1Quality Assurance Manager 1Quantity Surveying Manager 1Research and Development Manager 1Information Technology Manager 1Product Designing Manager 1Table 5.2: Designation and number of managing personnel in Waters Star Sdn. Bhd.
5.4 Schedule of Tasks and Responsibilities
Each position has its responsibilities to execute the operations of the business. It is
very important for every executive and manager to know his tasks and responsibilities
in the company as it will guide him in accomplishing his job. Table 5.3 describes the
tasks and responsibilities of every position. The following functions and
responsibilities have been identified and will be delegated to the respective individual
to ensure the smooth operation of the business.
Designation Job Description/ Responsibilities
Chairman •Lead and organize the Board effectively•Discuss key issues with the Board in a timely
manner•Promote effective communication with
shareholders and stakeholders•Work with CEO on development, performance
and succession
Chief Executive Officer •Create and communicate organization vision and mission
•Lead the development and implementation of the organization strategy
• Identify problems and opportunities•Monitor the organization daily operations•Act as a decision maker for all the action
Chief Financial Officer •Report accurate financial information of the company from time to time
•Control cash flow position, budget and expense•Decide on investment issue• Identify company future financial operation
Chief Marketing Officer •Facilitate growth, sales and marketing strategies•Ensure the organization messages is distributed
across media•Allocate marketing budgets
Chief Operating Officer •Advise senior management team on manufacturing, policy, quality and quantity matters
•Communicate and present critical issues on manufacturing process
•Ensure team members have timely training and development
Chief Technology Officer • Identify technology trends, opportunities for innovation and assess market demand
• Integrate new technology
•Oversee the selection of research•Develop and explain future plan of product
Finance Manager •Provide financial advice• Interpret financial information•Manage budget
Accounting Manager •Ensure accurate and timely reporting of financial statement
•Maintain a thorough understanding of the financial report
Investor Relations Manager •Present investment message to the investment community on behalf of the company
•Develop company investor relations plan
Marketing Manager •Research and report external opportunities•Develop marketing strategy and plan
Customer Relations Manager
•Build and maintain customer relationship•Handle client issue
Manufacturing Manager •Manufacture and deliver products on time and in an effective manner
•Ensure maintenance and quality management system
Human Resource Manager •Recruit, select, train and develop employees•Able to build rapport with employees•Motivate and discipline employees
Quality Assurance Manager •Determine quality procedures, standards and specifications
•Specify quality requirements on raw materials•Guide the manufacturing process with acceptable
standards
Quantity Surveying Manager
•Determine required materials quantity•Study on customers’ requests•Analyze cost of materials
Research and Development Manager
•Understand customer expectations•Research, design and evaluate materials, processes
and equipment• Investigate new technology
Information Technology Manager
•Plan and evaluate information systems and electronic data processing(EDP)
•Develop computer and telecommunication software, network and information system
Product Designing Manager •Create and implement creative trend of fashion•Communicate current market trends to the team
members
Table 5.3: Schedule of tasks and responsibilities of employees
5.5 Remuneration Plan
For our company, we have chosen The Employees Provident Fund (EPF) Scheme to
be given to all employees. EPF is a compulsory savings for employees so that they
will have money to support themselves once they retire. As a general guideline,
employers are required to contribute at least 12% of an employee’s basic salary.
Waters Star Sdn. Bhd. also provides Social Security Organization (SOCSO)
contributions to ensure that employees receive compensation in situations of work-
related accidents or illness. Table 5.4 illustrates the remuneration plan for each
employee in Waters Star Sdn. Bhd.
Designation Number of Employees
Monthly Salary (RM)
EPF Contribution (12%) (RM)
SOCSO (2%)
(RM)
Total (RM)
Chairman 1 41,361.00 4,963.32 827.22 35,570.46Chief Executive Officer
1 30,180.00 3,621.60 603.60 25,954.80
Chief Financial Officer
1 24,984.00 2,998.08 499.68 21,486.24
Chief Marketing Officer
1 19,413.00 2,329.56 388.26 16,695.18
Chief Operating
1 23,900.00 2,868.00 478.00 20,554.00
OfficerChief Technology Officer
1 26,166.00 3,139.92 523.32 22,502.76
Finance Manager
1 7,789.00 934.68 155.78 6,698.54
Accounting Manager
1 6,864.00 823.68 137.28 5,903.04
Investor Relations Manager
1 9,370.00 1,124.40 187.40 8,058.20
Marketing Manager
1 6,516.00 781.92 130.32 5,603.76
Customer Relations Manager
1 4,183.00 501.96 83.66 3,597.38
Manufacturing Manager
1 7,623.00 871.56 152.46 6,607.98
Human Resource Manager
1 6,628.00 795.36 132.56 5,700.08
Quality Assurance Manager
1 5,860.00 703.20 117.20 5,039.60
Quantity Surveying Manager
1 3,245.00 389.40 64.90 2,790.70
Research and Development Manager
1 7,622.00 914.64 152.44 6,554.92
Information Technology Manager
1 5,775.00 693.00 115.50 4,966.50
Product Designing Manager
1 4,695.00 563.40 93.90 4,037.70
Supervisor 12 36,000.00 4,320.00 720.00 30,960.00Secretary 8 17,952.00 2,154.24 359.04 15,438.72Staff 35 77,300.00 9,276.00 1,546.00 66,478.00Store Assistant 2 2,750.00 330.00 55.00 2,365.00Lorry Driver 3 4,320.00 518.40 86.40 3,715.20Security Guard 2 2,480.00 297.60 49.60 2,132.80TOTAL 80 382,976.00 45,913.92 7,659.52 329,411.56
Table 5.4: Remuneration plan
In addition to our managing employees, our company has hired 12 supervisors for
each department which the average salary is RM 3,000 each month and will
contribute RM 360 to the Employees Provident Fund (EPF) and RM 60 for SOCSO. 8
secretaries has been hired by company and the average salary is RM 2,244 each
month and will contribute RM 269.28 and RM 44.88 to the EPF and SOCSO
respectively. Moreover, our company has hired 35 staffs to work under all
departments. The staffs will be paid RM 2,208.57 each month as basic salary and will
contribute RM 265.03 and RM 44.17 to EPF and SOCSO respectively. Besides that, 2
store assistants, 3 lorry drivers and 2 security guards have been hired by company.
The basic salary paid for each store assistant, lorry driver and security guard are RM
1,375, RM 1,440 and RM 1,240 per month. They contribute RM 165, RM 172.80,
RM148.80 and RM 27.50, RM 28.80, RM 24.80 to EPF and SOCSO respectively.
Therefore, the total monthly salary of all Waters Star Sdn. Bhd. employees is RM
329,411.56.
5.6 List of Office Equipment and Supplies
Waters Star Sdn. Bhd. has bought office furniture, fittings, watch making machineries
and equipment for both main office and factory from Machine and Equipment
Manufacturers Association and UOS Corporation Sdn. Bhd. The detail of purchasing
order will be listed out in the Table 5.5 below.
OFFICE EQUIPMENT AND FURNITURE
NO Type of Equipment and Furniture Quantity Price/Unit (RM) Total Cost(RM)1 Office furniture 8 sets 500.00 4,000.002 Personal computer 12 units 1,450.00 17,400.003 Whiteboard 5 units 217.00 1,085.004 Office desk 18 units 120.00 2,160.005 Office chair 30 units 105.00 3,150.006 Plastic chair 20 units 15.00 300.007 Booth counter 1 set 1,200.00 1,200.008 Meeting table 2 units 250.00 500.00
9 Duplicating machine 1 unit 2,300.00 2,300.0010 Fax machine 1 unit 924.00 924.0011 Laminator 1 unit 800.00 800.0012 Projector and screen 2 units 820.00 1,640.00TOTAL 35,459.00
Table 5.5: List of equipment and furniture
5.7 Administrative Budget
Aside from furniture, fittings and equipment, Waters Star Sdn. Bhd. also purchased
office supplies such as stationery and paper for the company as indicated in Table 5.6.
The administrative budget also includes rental for land to be paid every month. A
rental deposit equal to three months’ rent and utilities deposit for water, telephone and
electricity are also included.
ADMINISTRATIVE EXPENDITURERM RM
Fixed Assets/ Capital ExpenditureFurniture and Equipment 35,459.00
35,459.00Working Capital/ Monthly ExpenditureSalaries 382,976.00Office Supplies 5,000.00Rent Expense 12,500.00Utilities Expense 1,900.00Transportation Expense 560.00
402,936.00Other ExpendituresRent Deposit 37,500.00Utilities Deposit 5,700.00
43,200.00TOTAL 481,595.00
Table 5.6: Administrative expenditure
6.0 Marketing Plan
Waters Star Sdn. Bhd. is involved in the watch industry. Our company believes that
our country’s economy which is expanding positively plays its part in the
development of Waters Star Sdn. Bhd. With the increasing demand of watches in the
community, Waters Star Sdn. Bhd. is able to take advantage of this development by
providing high quality and trend setting watches to them. By coming out with the high
quality watches, we are sure that our business will be able to compete with other
competitors in Malaysia.
6.1 Description of Products or Services
Waters Stars Sdn. Bhd. is a manufacturer and supplier of watches for the watch retail
shops in Malaysia. We supply quality and trend setting watches that combine
performance with value pricing to meet the satisfaction of the customers. We
guarantee that our watches are of good quality. If our products have failed to satisfy
and fulfil the customers’ needs, we will guarantee a full refund of the value of
purchase or a replacement of the same value. Table 6.1 describes the type of the
watches and the price that offered by Waters Star.
Product Specification Price (RM)
1. Sky–Dweller Model case: Oyster, White goldDiameter: 42 mmMaterial: White goldWater resistance: Waterproof to 100
350.00
metres.Function: Centre hour, minute and second hands, 24-hour display on off-centre disc, second time zone. Instantaneous annual calendar at 3 o’clock and rapid-setting of the date. Month display via 12 apertures around the circumference of the dial. Stop-seconds for precise time setting.
2. Everose Date Just Pearl
Master 2
Model case: Oyster, Everose gold and diamondsDiameter: 34 mmMaterial: Everose goldWater resistance: Waterproof to 100 metres.Function: Centre hour, minute and seconds hands, and instantaneous date with rapid setting, stop-seconds for precise time setting.
270.00
3. Gulf-Master Men
Watch
Model case: ResinDiameter: 51mmMaterial: ResinWater resistance: Waterproof to 200 metres.Function: Centre hour, minute and seconds hands, instantaneous date with rapid setting, 3 daily alarm countdown timer, backlight and stopwatch.
200.00
4. Marc Skeleton Ladies
Watch
Model case: ResinDiameter: 51mmMaterial: ResinWater resistance: Waterproof to 200 metres.Function: Centre hour, minute and seconds hands, instantaneous date with rapid setting, 3 daily alarm countdown timer, backlight and stopwatch.
180.00
5. Klose Waters Star
Unisex Watch
Model case: ResinDiameter: 49 mmMaterial: ResinWater resistance: Waterproof to 200 metres.The function: Centre hour, minute and
150.00
seconds hands, instantaneous date with rapid setting, 3 daily alarm countdown timer, backlight and stopwatch.
6. Shine Gold Ladies
Watch
Model case: ResinDiameter: 49mmMaterial: ResinWater resistance: Waterproof to 200 metres.The function: Centre hour, minute and seconds hands, 3 daily alarm countdown timer, backlight and stopwatch.
120.00
7. Classy Elegance Ladies
Watch
Model case: Black leather, Silver toneDiameter: 34 mmMaterial: Stainless steelWater resistance: Waterproof to 30 metres.Function: centre hour, minute and seconds hands, light.
80.00
8.Accurist Clerkenwell
Men Watch
Model case: Gold platterDiameter: 34 mmMaterial: FabricWater resistance: Waterproof to 50 metres.The Function: Centre hour, minute and seconds hands, light.
60.00
Table 6.1: List of product, specification and price offered by Waters Star Sdn. Bhd.
6.2 Target Market
All age groups are being targeted but the most potential is the age group from 18-35
that covers around 32% of total age segment. Waters Star focuses on demographic
segmentation. Waters Star provides different types of watch based on different age
groups, gender and income. The watches can be classified into the luxury watches,
inexpensive watches, ladies watches, men watches, teen watches and adult watches.
6.3 Market Size
Waters Star’s target areas are whole area in Kuala Lumpur and certain areas in
Selangor such as Puchong, Kajang, Subang, Klang and Petaling Jaya. The target size
is calculated to be 4,672,613 of population in the targeted areas. We estimated the
potential sales for month as RM 550,000. The retailers and the locations are listed in
the Table 6.2.
Retail Shop Location
Hour & Minute Sdn. BhdOne Utama Shopping Mall, The Curve Shopping
Mall, Amcorp Mall, Bangsar Village, Pavilion KL,
Leisure Mall, Plaza Lowyat, Puchong Setia Walk,
Suria KLCC, Sunway Pyramid, Empire Gallery,
Tropicana City Mall, Digital Mall, Jaya 33 Shopping
Mall, Bukit Bintang Plaza, Great Eastern Mall, The
Garden, AEON Bukit Tinggi Shopping Mall, Klang
Parade, Avenue K, Mid Valley Megamall, Paradigm
Mall, Fahrenheit 88, Mines Shopping Mall, Plaza
Thomas Sabo
J H Time Enterprise
Eiko Jewelry & Watch (M) Sdn. Bhd
Metro Kajang, Subang Parade Shopping Mall,
Berjaya Time Square, Cheras Central Shopping
Mall, Puchong IOI Mall, Publika
G-Factory
World of Watch II
Table 6.2: List of retailer and location
6.4 Competitors (Strengths and Weaknesses)
Being a new company to involve in the watch industry in Malaysia, Waters Star has to
compete with several existing competitors. Table 6.3 shows the strengths and
weaknesses among our main competitors.
Competitor
s
Strengths Weaknesses
Omega • High quality with long
warranty period.
• Official time keeper of
most sporting events like
Olympics and Golf
tournaments.
• Known for its Co-axial
technology.
• International celebrities
represent Omega as brand
ambassadors.
• Limited market share growth
due to competition
• Imitations of branded
watches hurt brand image
and sales
• The brand is dependent
highly on its brand
ambassadors for its
marketing and advertising
campaigns
Tissot • Part of the Swatch group
that has 28,000 employees
across 50 countries with
• The brand has a design
which is too simplistic which
strong presence in 160
countries
• International sports and
film celebs are the few
ambassadors that represent
Tissot brand
sometime is easily replicated
• Limited market share growth
due to competition
Swatch • Associated with sporting
competitions has
strengthened its brand
image
• Top-of-the-mind popular
brand across the world
• Excellent advertising and
brand image
• Fake imitations and replicas
affect the brand image and
sales
• Advertising/ branding
activities not impactful
Casio • Casio is been positioned as
being technology
advanced.
• High image
• Considered value for
money and excellent
quality
• Perceived more as a watch
brand than as an electronics
brand
• Design of the watches more
often than not is visually too
simple
Table 6.3: Strengths and weaknesses of the competitors
6.5 Market Share
Waters Star specializes in the watch industry. Located in the city center in Ampang,
the
Target market for this business is formed mainly by the citizens all age groups
especially
18-35 age group. The market share before and after entry is shown in the Table 6.4
below.
Competitors Before Entrance After EntrancePercentage of Amount Percentage of Amount
Market Share (%)
(RM)Market Share
(%)(RM)
Omega 15 45,000.00 14 42,000.00
Tissot 17 51,000.00 15 45,000.00
Swatch 30 90,000.00 27.5 82,500.00
Casio 20 60,000.00 18 54,000.00
Others 18 54,000.00 14.5 43,500.00
Waters Star - - 11 33,000.00
TOTAL 100 300,000.00 100 300,000.00
Table 6.4: Market share before and after entry of Waters Star Sdn. Bhd.
6.6 Sales Forecast
The sale forecast of Waters Star for three consecutive years is shown in Table 6.5
below.
MonthSales Forecast For 3 Consecutive Years (RM)
First Year Second Year Third Year Total Sales
January 362,000.00 749,500.00 800,000.00 1,911,500.00
February 462,000.00 759,500.00 800,000.00 2,021,500.00
March 462,000.00 749,500.00 800,000.00 2,011,500.00
April 500,000.00 749,500.00 800,000.00 2,049,500.00
May 550,000.00 749,500.00 812,000.00 2,111,500.00
June 550,000.00 749,500.00 812,000.00 2,111,500.00
July 599,600.00 749,500.00 812,000.00 2,161,100.00
August 599,600.00 749,500.00 812,000.00 2,161,100.00
September 749,500.00 800,000.00 812,000.00 2,361,500.00
October 749,500.00 800,000.00 812,000.00 2,361,500.00
November 769,500.00 800,000.00 850,000.00 2,419,500.00
December 769,500.00 820,080.00 859,500.00 2,448,500.00
Total 7,123,200.00 9,226,080.00 9,781,500.00 26,130,200.00
Table 6.5: Sales forecast for three consecutive years of Waters Star Sdn. Bhd.
6.7 Marketing Strategy
Criteria Description
Product Strategy
Branding As a manufacturing company, we produce watches with our own brand name, sign, symbol and design. In order to build a strong brand name, we ensure that the watches produced are of high quality.
Quality Waters Star ensures that the watches meet the customers’ demands and satisfaction in terms of design, features, quality level, quality consistency and product safety.
Labelling All the information about watches in terms of manufacturer, sizes and warranty cards are labelled with tie-on tag.
Packaging Company ensures that the wrappers consist of protection, visible and environmental friendly function. We use the three packaging levels in protecting the products.
Pricing Value-based Waters Star ensures the watches are offered in
Strategy Pricing reasonable prices as they remain affordable to consumers.
Place The location of our business is very strategic as it is at the city centre. It is surrounded by several shopping complexes and company buildings. Our company supplies our products to the watch retail shops which are located in the Kuala Lumpur and certain areas in Selangor.
Promotion Strategy
Advertising Waters Star uses advertising in promoting the business. There will be printed advertisements in brochures, magazines and newspapers soon.
Direct Marketing
Waters Star has sent mail to the watch retailer and visited the watch retail shops to introduce our products in order to attract them to our firm.
Rebate Marketing
A special discount will be given to the retailer for the purchases of large quantities.
Table 6.6: Marketing strategy
7.0 Operational Plan
The operational plan is one of the most important factors to consider in a business.
Like other companies, our target is to ensure that our products are the best in quality
and able to satisfy our customers’ needs and wants. Hence, a systematic operational
plan is formed so that our business runs smoothly and achieves its objectives.
7.1 Operational Process
To date, we have completed our market research and lease has been secured at the
selected location in Ampang and Shah Alam Industrial Area. Equipment and furniture
purchases have been pre-negotiated. Marketing materials have also been drafted. The
next steps in the operational plan are as follow:
7.1.1 Sign office and factory leases within 30 days.
7.1.2 Sign equipment and office furniture purchase order.
7.1.3 Accept delivery of equipment and office furniture.
7.1.4 Receive equipment training and set up.
7.1.5 Provide employees training.
7.1.6 Print marketing material.
7.1.7 Start business.
7.1.8 Launch advertising and promotional plan.
7.2 Process Flow Chart
Figure 7.1 shows a flow chart that summarizes the operational process described in
section 7.1.
Order the raw materials from suppliers.
Settle shipping and delivering of raw materials.
Produce watches.
Quality assurance staffs check the quality and quantity of the watches.
Figure 7.1: Process flow chart for Waters Star Sdn. Bhd.
7.3 Production Schedule
No. Product Time of ProductionQuantity of
Production (unit)1. Sky–Dweller Monthly Production 350
2.Everose Date Just Pearl Master 2
Monthly Production 350
3.Gulf-Master Men Watch
Monthly Production 500
4.Marc Skeleton Ladies Watch
Monthly Production 500
5.Klose Waters Star Unisex Watch
Monthly Production 750
6.Shine Gold Ladies Watch
Monthly Production 750
7.Classy Elegance Ladies Watch
Monthly Production 1,000
8.Accurist Clerkenwell Men Watch
Monthly Production 1,000
TOTAL 5,200Table 7.1: Production schedule
Take sample of watches and display in the factory and main office.
Supply the watches to the retailers.
Issue invoices and receive payment.
Conduct marketing activities such as promotion and discounts of purchases.
7.4 Material Requirement
Our company calculates the materials requirement based on our sales per month. The
company’s sale is approximately 5,200 watches per month. The raw materials needed
to produce watches are plastic, alloy metals, stainless steel, silicon, gallium arsenide,
gallium phosphide, liquid crystal, circuit boards, batteries and gold plated. The
quantity and the total cost of raw materials per month is RM 12,031.66 as shown in
the Table 7.2.
Material Requirement
No Item QuantityPrice per
Unit (RM)Total (RM)
1. Plastic raw materials 500kg 0.03 15.002. Alloy metals 500kg 0.38 190.00
3.Stainless steel raw materials
500kg 0.76 380.00
4. Silicon 60kg 1.05 63.005. Gallium arsenide 1kg 7,600.00 7,600.006. Gallium phosphide 1kg 988.00 988.007. Liquid crystal 3kg 760.00 2,280.00
8. Circuit boards111 boxes (1 box=50
pieces)3.80 421.80
9. Batteries7 boxes (1 box=1000
pieces)0.38 2.66
10. Gold plated12 boxes (1 box=500
pieces)7.60 91.20
TOTAL 12,031.66Table 7.2: Monthly material requirement for Waters Star Sdn. Bhd.
7.5 Machine and Equipment
We obtain the machine and equipment from various suppliers as the prices offered
were different. The machine and equipment are used to manufacture watches and
control qualities. The list of machine and equipment along with the suppliers and
costs are show in Table 7.3.
MACHINE AND EQUIPMENT
No.
ParticularsQuantity
(unit)Supplier
Price Per Unit (RM)
Total Amount (RM)
1. Hauser Jig-borer 2Iklim Hardware & Machinery Sdn. Bhd.
3,075.00 6,150.00
2.6" Baldor Model 532 Carbide Tool Grinder
2 Eng Tool Sdn. Bhd. 950.00 1,900.00
3.Rusnok Vertical Horizontal Milling Machine model 70
2 Knight Auto Sdn. Bhd. 3,610.00 7,220.00
4. Habegger Swiss Lathe 1 Knight Auto Sdn. Bhd. 4,936.20 4,936.20
5. 4-axis CNC-mill 1Iklim Hardware & Machinery Sdn. Bhd
4,328.20 4,328.20
6. Scaublin Lathe Model 102
1Iklim Hardware & Machinery Sdn. Bhd
5,700.00 5,700.00
7. Optical Comparator ST 1Iklim Hardware & Machinery Sdn. Bhd
8,763.20 8,736.20
8.40X-2500X LED Lab Binocular Compound Microscope
2Excel Precision Sdn. Bhd.
600.40 1,200.80
9. Shredder Machine 1
Machine and Equipment Manufacturers Association
1,290.00 1,290.00
10. Duplicating Machine 1
Machine and Equipment Manufacturers Association
2,300.00 2,300.00
11. Fax Machine 1
Machine and Equipment Manufacturers Association
924.00 924.00
TOTAL 44,685.40
Table 7.3: Machine and equipment used by Waters Star Sdn. Bhd.
7.6 Operational Budget
Table 7.4 shows the operational expenditure of Waters Star Sdn. Bhd.
OPERATIONAL EXPENDITURE
RM RM
Fixed Assets/ Capital Expenditure
Hauser Jig-borer 6150.00
6" Baldor Model 532 Carbide Tool Grinder 1,900.00
Rusnok Vertical Horizontal Milling Machine model 70 7,220.00
Habegger Swiss Lathe 4,936.20
4-axis CNC-mill 4,328.20
Scaublin Lathe Model 102 5,700.00
Optical Comparator ST 8,736.20
40X-2500X LED Lab Binocular Compound Microscope 1,200.80
Shredder Machine 1,290.00
Duplicating Machine 2,300.00
Fax Machine 924.00
Lorry 200,000.00
244,685.40
Working Capital/ Monthly Expenditure
Plastic raw materials 15.00
Alloy metals 190.00
Stainless steel raw materials 380.00
Silicon 63.00
Gallium arsenide 7,600.00
Gallium phosphide 988.00
Liquid crystal 2,280.00
Circuit boards 421.80
Batteries 2.66
Gold plated 91.20
Lorry Driver Salary 4,380.00
Store Assistant Salary 2,750.00
Security Guard Salary 2,480.00
Utilities Expense 1,900.00
Transportation Expense 560.00
Rent Expense 6,500.00
30,601.66
TOTAL 275,287.06
Table 7.4: Operational expenditure of Waters Star Sdn. Bhd.
8.0 Financial Plan
8.1 Project Implementation Cost Schedule
Table 8.1 indicates the project implementation cost of Waters Star.
PROJECT IMPLEMENTATION COST
Requirements COSTRM RM
FIXED ASSETMachinery and Equipment 41,461.40Lorry 200,000.00Office Equipment 35,459.00Deposit 43,200.00Contingency Cost (10%) 78,486.31
SUB TOTAL 398,606.71
WORKING CAPITAL
Raw materials 12,031.66Salary 382,976.00
Utilities Expense 1,900.00Transportation Expense 560.00Rent Expense 12,500.00Office Supplies 1,900.00
SUB TOTAL 411,867.66
MARKETINGPromotion 9,600.00
SUB TOTAL9,600.00
OTHER EXPENDITURE
Registration 75.00
Rent Deposit 37,500.00Utilities Deposit 5,700.00SUB TOTAL
43,275.00
GRAND TOTAL 863,349.37
Table 8.1: Project implementation cost schedule
8.2 Sources of Finance
The breakdown of financing sources is as shown in Table 8.2. Total financing sources
required will be obtained from our own capital amounting to RM100, 000.00, whereas
the balance of RM900, 000.00 will be obtained through financing from Public Bank
Berhad. The company issues RM400, 000.00 of common shares to its shareholders.
SCHEDULE OF FINANCIAL SOURCES AS AT YEAR 2014SOURCES AMOUNT (RM)
EQUITY/OWN CONTRIBUTIONSCash 100,000.00EXTERNAL SOURCESBank Loan (Public Bank Berhad) 900,000.00OTHERSShareholders 400,000
GRAND TOTAL 1,400,000.00
Table 8.2: Schedule of financial sources
8.3 Loan
Table 8.3 indicates the loan amortization schedule of Waters Star Sdn. Bhd.
WATERS STAR SDN. BHD.LOAN REPAYMENT SCHEDULE
Loan Amount (RM): 900,000.00 Interest Rate: 4.85%
Loan Period (Year): 10 Method: Reducing Balance
Year Principal Interest Total Payment Principal
- - - 900,000.00
1 90,000.00 43,650.00 133,650.00 810,000.00
2 90,000.00 39,285.00 129,285.00 720,000.00
3 90,000.00 34,920.00 124,920.00 630,000.00
4 90,000.00 30,555.00 120,555.00 540,000.00
5 90,000.00 26,190.00 116,190.00 450,000.00
6 90,000.00 21,825.00 111,825.00 360,000.00
7 90,000.00 17,460.00 107,460.00 270,000.00
8 90,000.00 13,095.00 103,095.00 180,000.00
9 90,000.00 8,730.00 98,730.00 90,000.00
10 90,000.00 4,365.00 94,365.00 0
Table 8.3: Loan amortization schedule
9.0 Summary
As a summary, Waters Star Sdn. Bhd. wants to make it in the watch industry. The
company can work side by side with other companies in the watch industry as well.
Furthermore, Waters Star Sdn. Bhd. has increased its effort in varying innovative
activities in terms of technological research and design in order to produce high
quality and trend setting watches. This approach is important to capture the local
market.
In connection with that, we aim to supply watches according to the customers’
desires and demands. Waters Star will continuously strive and cooperate closely with
various government agencies and private sectors to be a successful and outstanding
company in Malaysia.
References
Malaysia Machinery, Malaysia Machinery Manufacturers and Suppliers.
Retrieved from : www.alibaba.com
Malaysia Machinery, Malaysia Machinery Manufacturers and Suppliers.
Retrieved from : www.ebay.com
Malaysia Machinery, Malaysia Machinery Manufacturers and Suppliers.
Retrieved from : http://www.madehow.com/Volume-1/Watch.html
Malaysia Machinery, Malaysia Machinery Manufacturers and Suppliers.
Retrieved from : http://www.historictimekeepers.com/tools_of_the_trade.htm
Sarimah Hanim Aman Shah, Cecilia Soon Teik Lan (2013). Entrepreneurship
Third Edition.
SWOT analysis of competitors, CASIO. Retrieved from:
www.mbaskool.com/brandguide/lifestyle-and-retail/3268-casio.html
SWOT analysis of competitors, OMEGA. Retrieved from:
www.mbaskool.com/brandguide/lifestyle-and-retail/2817-omega.html
SWOT analysis of competitors, SWATCH. Retrieved from:
www.mbaskool.com/brandguide/lifestyle-and-retail/2820-swatch.html
SWOT analysis of competitors, TISSOT. Retrieved from:
http://www.mbaskool.com/brandguide/lifestyle-and-retail/2819-tissot.html
Yusniza Kmarulzaman, Nor Khalidah Abu (2013). Principles of Marketing
Second Edition: Product, Price, Place, 127-216.
Appendices