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Chapter 1
Introduction
In this competitive business world, information system and technology plays the vital role for
success of any business. The way of doing business has changed due to change in technology.
The biggest challenge the business has been facing is the changing operational scenario and
highly fluctuating needs of customers. Information technology can help all kinds of businesses
improve the efficiency and effectiveness of their business processes, managerial decision
making, and workgroup collaboration, thus strengthening their competitive positions in a rapidly
changing marketplace. This changing environment in marketplace has evolved the practice of
electronic business which has now made business possible through single click
1.1 Objectives
The main objective of the Milky Way Dairy is to promote suitable measures to empower the
milk producers and farmers through methods that are equitable and also to ensure that they
receive fair market price for their milk supplies.
Our business strategy will therefore revolve around receiving milk from various suppliers and
delivering processed quality milk and milk products to our various target customers subsequently
meeting their expectations fully. For this, we have intended to hire a professional team to cater
the customers demand and fulfill their needs.
We will target our products to various market segments and do several marketing campaigns to
promote our products and establish a clear advantage in this strong competitive market. Also, we
shall position ourselves as a quality, reliable and healthy brand that is dedicated towards
customers health, taste and satisfaction.
In summary we intend to attain the following objectives:
To provide on demand dairy product to the customers. To establish Milky Way as a synonym of quality, health and taste.
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To explore the possibilities and capitalize the opportunities of online dairy business. To operate the industry making balance with the local environment. To use local employees and support domestic farmers by providing training and resources
required.
To meet the local demand of dairy products
1.2 Mission
Our mission is to evolve as one of the industry greats in Nepal and lead the market of the online
dairy product business making consumers available with the best quality and healthy products
integrating the local resources and precise information technology. Meanwhile, we will also be
focused towards the benefits and development of the local farmers and the society by providing
specialized training, knowledge and resources required to them.
1.3 Keys to Success
The keys to Milky Ways success will undeniably be effective market segmentation through
identification of several markets and implementation strategies. Our business strategies will
rotate around keeping in touch with our prime suppliers, establishing good rapport with them,
entertaining their queries and feedback and most importantly delivering the best milk and milk
products to our valuable customers to their fullest satisfaction. Hence our key success factors
will include the following:
1 Delivering the promise: We intend to offer completely qualitative, delicious and above allhealthy dairy products so as to ensure that customers are satisfied throughout the consumption of
our products and intend to stick to our products.
2 Using precise technologies: New technologies and software for the required information systemwill be employed making users able to access to our website easily, manage the transactions
effectively, order and do payment effortlessly. As a whole, it will make our business
comparatively more advanced but secured, user-friendly and functional than the others.
3 Interactive marketing with the customers: We will be continually communicating with ourvaluable and loyal customers to ensure that we are being able to meet their expectations by
answering their queries and addressing their feedback regarding our products. So, it will be a two
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way process around where customers will be encouraged to give their important feedback and we
will be focused on entertaining those issues effectively.
4 Strategic alliances: By tying up strategically and maintaining superior relationship with thelocal farmers and various stakeholders in the market, we plan to fulfill every needs and desires of
our customers as the major concern of our business is to satisfy them ultimately.
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CHAPTER 2
COMPANY SUMMARY
2.1 Company ownership
Milky Way is a partnership business comprising of four partners: Mohammad Ishak, Rajeeb Giri,
Sandesh Lamichhane and Tirtha Gurung. Each partner has equal share of 25 %. It has a start-up
capital of Rs. 20,000,000 where the owner's equity comprises of Rs. 10,000,000 (Rs. 2,500,000
of each partner.
2.2 Company location
Our company will be situated in Bhaktapur, Kathmandu. We chose Bhaktapur as a key location
for carrying out our business operations because most of the people there are still engaged in
agricultural and farming activities. So, it is one of the best places to start business like ours
where we could easily collect milks from various suppliers at once without having any kind
difficulties in collecting milks from different suppliers at different locations. However, we have
decided to move our companys location to more accessible place like Dhulikhel/Panauti in the
near future.
2.3 Product and Service Description:
Milky Way aims to buy raw milk from the farmers and supply dairy products after processing the
milk in a hygienic condition to the consumers. The prime objectives of our business are to
process milk and produce milk related products. Milky Way will trade the dairy products as
demanded by the customers for their changing needs. The following are the various products
offered by MilkyWay:
2.4 Competitive Comparison
Since our business is not a new one in the industry, there are already very competent players in
the market who have positioned themselves strongly into the customers mind but we are among
the few ones who are specialized in this particular field. There are many competitors offering
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services similar to ours and competing for the same customer base. Competitors like Sitaram,
DDC and Rahul are some of the reputed brand names in the current market who have succeeded
in establishing themselves as a strong brand. Hence, we, not only have to establish and position
ourselves tightly in the market, but also correctly differentiate ourselves from the competitors. In
the course, one key factor that will differentiate our firm from others is the employment of the
latest information technology in our business that will make our business more functional,
effective and better than others. Other companies in the industry may be potential threat to our
company but we will move ahead with our every defensive and offensive strategy to come across
these competing firms.
2.5 Sales Literature
Our business will initially begin with publishing of general brochure that includes information
regarding our company and the various sorts of products we will be offering to our prospective
buyers, advertisers and other interested parties .This will eventually help us to position ourselves
in the market and generate awareness of the company and the products it aims to deliver. Also,
because it represents the company, we also intend to have pamphlets in our sales promotion
routines that will provide other important information
2.6 Sourcing and Fulfillment
Milkyway is planning to buy unprocessed milk from the suppliers in a bulk and process it to
manufacture various other milk related products. In a sense Milkyway will be internally sourced
so as to minimize the costs. Similarly, our employees, the key value of our company will be
delivering the products and the services as promised according to the needs and requirement of
the customers. Our professional expert team will make sure that the products and services we
deliver to them are beyond the expectations of our customers.
2.7 Technology
Milkyway will make sure that it employs some of the best suited and latest computer technology
in its system so as to guarantee that the company is continuously running at its 100 percent
endeavor. The technology will continue to develop, changing what we market as well as how we
market it. Our aim is to be aware of the new technology and utilizing it in our existing
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framework. We also intend to have the latest and most efficient software to enable smooth
operations. The following are the technology that we are employing in our business.
Hardware Requirement
Different kinds of hardware is needed to run the , followings are the requirement of hardware;
S.N Descriptions Type
1. Mother Board P-4
2. CPU C2D-2.93
3. RAM 2 GB
4. HDD 500 GB
5. Keyboard 108 Keys Keyboard
6. Casing with Power Supply ATX
7. Color Monitor LCD 21"
8. Mouse A4 Tech
9. DVD RW 1000 KB
10. Speaker Set Sony
Software requirement
MilkyWay requires one of the following operating systems:
Windows XP Windows Vista Windows 7
MilkyWay can also work on the following operating systems:
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Windows 95 Windows 98 Windows ME Windows NT 4.0
MilkyWay anywhere requires an Internet connection for synchronization with the DairyLive
server
Network requirement
Routers
Switches
Network interface card
Cables
High speed internet
2.8 Future Products and Services
The primary focus of Milkyway is to offer hygienic and nutritional milk products to the
customers and satisfy them to the fullest. Currently, we have planned to provide items like milk,
curd, cheese, and paneer only as we are the immature player in the market and we want to avert
risk of introducing number of products at once. However, in the near future, Milkyway is
planning to broaden its products offering by introducing various other products that have not
been introduced yet. For this purpose, Milkyway will co-ordinate the customers entire
experience regarding the consumption of our delivered products to the expectations regarding
our products. As time progresses, we will also work towards providing variety of milk related
products that are globally recognized at a reasonable price to our customers. Hence, Milkways
entire effort will spin around on providing qualitative products to the customers and fulfil their
changing demands no matter if we have to introduce additional products under our brand name.
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Chapter 3
Market Analysis Summary
Dairy Industry is growing industry in context of Nepal where milk and milk related products are
frequently consumed. Because of Nepalese trend of consuming these products we have the high
potentiality of upward growing.
After going through a rigorous study and research of the market, we realized that somewhere
there was need for milk and milk related products. Milk and milk related products are something
that people consume on daily basis especially the ones who are highly conscious about their diets
and health. However, there are many strong established brands operating successfully in themarket but we also believe that we can give all of them a tough competition by establishing
ourselves as one of the strong brands in the market. So we have seen the potentiality of our
survival.
We are also aware of the fact that it requires establishing good rapport and strong strategic
relationship with various hotels, restaurants, supermarkets, vendor street tea shops including
individual households. Hence, we intend to provide products of the highest level of standards
that aims to satisfy those customers by having good relationships among all of these customers.
According to our research, initial market share will be 10%of the market. So, we have decided to
implement aggressive marketing strategies to penetrate the market supported by our other
strategies.
3.1 Market Segmentation
MilkyWay's target customers are the people who are health conscious and prefer consuming
dairy related products for milk contains vitamins, proteins and minerals necessary for the proper
growth of the body. Small growing children and older people are the main consumption of our
products as they are considered the major recipient of the vitamins. However, people falling in
between are equally the potential consumer of our products as people here consume dairy
products either for daily purpose or for religious purpose. As mentioned earlier, our business is
technologically enabled one; one variable of our customer segmentation will be the customers
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who have access to the internet. In this sense mostly young customer are focused who have
access to IT so that they can place their orders through our website. These customers will be
marketed thorough different communication means.
3.2 Target Market Segment Strategy
MilkyWay will target the special niche of population and price dairy products accordingly. The
niche of the population would be growing children and old age people because they are usually
high consumer of milk and milk related products and they are or can spend fair amount of money
on our products. For communication among these targeted market segments, different means will
be effective such as newspapers, magazines, advertising, personal selling and internet medium
are best to use. Similarly, we will tie up strategically with many restaurants, hotels and
supermarkets to enter into the market more rigorously and robustly. Thus, our marketing strategy
will be based entirely on making the right products available to the right target customer at the
right price.
3.2.1 Market Needs
Because of the rapid changes in need and demand of dairy products over the last few years;
many other companies have come into existence to satisfy the customers by catering various
products. So, Milky Way has decided to enter the market with different approaches. Gone are the
days when people used to walk miles to purchase a bottle of milk. Now people's lifestyle and
access to information technology has created the possibility of delivering products and service
through the click of the mouse. People want to get their product on their doorstep. Because of
this perception of consumers and easy access of information technology, the market opportunity
is created in dairy business.
3.2.2 Market trend
As the number of consumer (population) is increasing day by day, the demand for milks and
milk related products is also increasing but supply is not adequate. Since supply hasnt met the
demand, people are compelled to consume powder milk as a substitute of milk. So, market trend
shows the opportunity for dairy business in Nepal.
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According to the statistics, total demand for the milk is 400,000 litres per day and is on
increasing trend. Meanwhile, the supply is only 350,000 liters. We can see the shortage of 50,000
litres still. So there is an opportunity to grow in this dairy business.
3.2.3 Market growth:
Many people are going vegetarian these days, they demand for paneer and other milk related
products, increasing craze in ice-cream, chocolates, sweets and coffee. Also increasing consumer
demand for milk shows that market is unsaturated and tremendous growth.
3.3 Industry analysis:
According to statistics, 1.49 million tones of milk is produced every year in the country, but the
quantity is not sufficient to meet the growing demand. Demand for milk in the Corporation, the
state-owned enterprise, has been importing 50,000 liters of milk daily from India. Prime minister
during visit to India admitted to get 10000 improved breed of cow from India to meet the
demand. On the other way milk powder companies have always sought for shortage, so big
companies have been established. No companies have yet facilitated the automated supply chain
of milk and milk product to ultimate target customer. Only manual distribution with a nominal
use of information technology is used.
3.3.1 Industry participants:
For the smooth operation of our business, we need farmers and co-operatives, who will be
supplying us with required milk, and also restaurants, hotels, supermarkets for which we will be
delivering required materials.
3.3.2 Distribution pattern:
MilkyWay is automated dairy company. The company plans to distribute its products by
maintaining a relationship with its customers. In this regard, relationships mean having good
links with the hotels, lodges, restaurants, supermarkets. We will have 35 outlets in 35 wards of
Kathmandu. Milk and its related products are sold to retailers from companys owned outlets.
The orders are placed through SMS by the customers in the evening and orders are processed by
the delivery van early in the morning. For assistance, if excess products are demanded then
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customer who placed order before 8:30 in the morning are processed till 9 am and then if order
are placed after that then the ordered is placed at 2:30 pm from the subsequent outlets through
delivery van.
3.3.3 Competition and buying pattern:
There is intense competition among different companies and they have almost made oligopoly
(mutual contract). Since milk has been basic product and demand is greater than supply so
competition is to grow market share rather than to develop quality and manage appropriate price.
As report reveals that people are not very much concerned about the price. They are willing to
consume at the available market price. Peoples demand is almost consistent every day. Quality
seeker people get milk and their related products directly from farmers. There is a rush of selling
in the peak hour or on the special occasion and festivals like dashain and tihar.
3.3.4 Main competitors:
As the industry demand and profitability is booming. Different old companies are increasing
their production and newly companies are esatablished with new plans and aprocedures.
Precisely talking, our competitors are Sitaram Gokul mills Ktm ltd. Kathmandu dairy pvt ltd,
Bhagwati dairy, Pandav dairy farm, Nepal dairy, Krishna dairy etc.These competitors may be
threat for us, but we can prosper as we are doing our business differently, we have got first
mover advantage in automated supply chain of dairy products and we are going to achieve a
higher market share soon.
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Chapter 4`
Strategy and Implementation Summary
Initially MilkyWay will focus on local market of Kathmandu valley. Being relatively the new
company will mostly focus on milk and some certain kind of milk related products. The strategy
of market segment will be mostly concerned with child and old age people. Therefore the initial
strategy will be to raise awareness and confidence in our products.
4. 1 Strategy Pyramids
The Strategy Pyramid places strategy at the top, supported by tactics in the middle, and programs
at the base. Strategy means nothing without tactics and programs to make it real.
This illustration shows a basic Strategy Pyramid for marketing plans.
The Strategy Pyramid emphasizes the practical importance of building a solid marketing plan
structure. Most marketing plans are developed from the top-level strategy first.
Strategy, at the top of the pyramid, is a matter of focusing on specific markets, market needs, and
product or service offerings of MilkyWay. Tactics follow and set the marketing message and the
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way it should be transmitted. Programs, at the base of the pyramid, provide the specifics of
implementation. Programs include specific milestone dates, expense budgets, and projected sales
results.
4.2Value PropositionAlthough there are many dairy business operating their businesses in Nepal, MilkyWay Dairy
has a new idea of using IT to differentiate itself from the compititors. Customers can easily
interact with the firm via our websites and through feedback feature which makes two-way
communication more effective. The information about the customers needs, wants collected
through IT will help the business to know much more about the customer. Hence, understanding
the need of customer and deliver product and services accordingly definitely add customer value
to the business.
4.3Competitive EdgeMilkyway will have the ability to produce goods and services more effectively than competitors
do, thereby outperforming them. This means Milkyway must stay ahead in four areas: being
responsive to customers, innovation, quality, and efficiency.
4.4 Marketing Strategy
The marketing strategy will be based on generating awareness about milkyways products. The
strategy will rely on several different forms of communication. Milkyway will tie advertising
efforts into a comprehensive marketing strategy that will be carefully designed to attract
attention in the marketplace. Advertising campaign will be used as the means of marketing
strategy. The main venues for advertisements will be on TV, radio, magazines etc.
4.5 Positioning Statements
MilkyWayportrayed itself in the customers mind as an e-commerce portal which enables them
to purchase milk and related product without visiting physical marketplace. The slogan for this
product is" Healthy food; Healthy family"
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4.6 Pricing Strategy
As there are many dairy companies, operating their businesses in Nepal, we have to compete
with them in term of price.So, we have decided to charge reasonable and affordable price as
compared to our competitors so that they are not frightened by our price range and they donot
feel cheated in terms of price..Also, our price will depend on the Break Even Point (BEP)
analysis. It will be done for determining price of our products after analyzing the BEP and
Compeititors' price.
4.7 Promotion Strategy
Our promotional strategy will be entirely based on promoting our products that we will be
offering to our prospective customers by informing them about our products and making the
right information available to our target customer. Promotional schemes such as discounts and
other incentives will be provided in a bulk purchase. We are determined to leverage our presence
using quality brochures and other sales literatures. We intend to spread the word about our
business through the following.
Advertising: This shall be undertaken through trade and industry publications, which are
read by tourists, as well as the local newspapers.
Advertisement through sales literature will be mainly targeted at potential clients and
placed or made available at strategic points, such as travel agencies. With time we also
intend to utilize billboards to advertise ourselves, likewise located at strategic points.
Hence, we intend to design and put up posters communicating the services we provide
located around hotels, lodges, airports and other such areas where tourists typically pass
by.
Personal Selling: Undoubtedly customer solicitation face-to-face will be a powerfulform of promotion mainly due to the fact that its flexibility will enable us to match
the customer's needs to specific attributes of our services as well as giving concise
details of what we have to offer. Another important determinant in utilizing personal
selling is the fact that we are relatively new on the market.
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Direct Marketing: This will be used but only to a limited extent in the form oftelemarketing and informing potential customers and obtaining referrals where
possible through e-mails, telephone, fax, letters, and social networks.
Events: These are increasingly becoming important as more firms establish in thecountry and hence the need to be known. The organization aims to promote itself
through attending trade shows and expositions. Not only will these increase
awareness of our services and business name, but also enable us to interact with
potential clients who may decide to utilize our service. Trade shows that come to
mind include International Trade Fair 2012, Visit Nepal 2012 etc.
In all the above we intend to communicate our ability to deliver a good service that will satisfy
the customers needs. Hence, our messages will influence the engagement decision of
prospective customers by emphasizing our customer focus and, persuade prospective clients that
we are different from our competitors
4.8 Sales Strategy
Milkyways sales strategy will be based on the conversion of qualified sales leads into paying
customers. The key emphasis here is customer satisfaction. We recognize that customers desire
and their needs are taken care of. Additionally, Milkyway will provide a sales commission to
retailers to promote the sales of our products. Milkyway recognizes that the transactions should
not be thought of as individual sales, but as long-term relationships. This is a reasonable
assumption based on the fact that the customers consume milk ev8ery day, that they will
continually have the need for milks. And milkyway will provide quality milk for them.
4.8.1 Sales Forecast
The sales forecast indicates that growth will be slow but steady. Growth will be slow because of
the time and effort needed to develop the customers. Production is not the slowing element asMilkyway can increase the level of production as per the demand. Sales are expected to increase by
10% for the first three years. We anticipate actual sales will be much higher after the renovation,
but we want to plan for other contingencies.
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4.9 Milestones
The value of Milkyways milestones is in creating a set of measurable activities that will be
achievable goals. The achievement of the milestones will be closely monitored and the assigned
person will be held accountable for hitting the milestones.
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Chapter 5
E-commerce Plan Summary
5.1 Analysis of available delivery channel (market industry analysis)There are number of Dairy manufacturing industry in Nepal. But their delivery channels are still
operating in traditional way. The company directly delivers the product to the retailers through
the use of their logistics. The retailers ask the product as per their forecast and the company
delivers as per their order. The order is mainly done once in a day i.e. in morning and there is no
any other time for delivery of the product even when there is scarce of the product. The delivery
is mainly made through mini trucks when there is large number of demand.
5.2 Rationale of choosing the delivery channels
Since competitors are following only traditional means of delivery channels, we come with the
new idea of using technology in our delivery process. Our delivery channel can be explained
through the figure below:
In above figure, S1, S2 and S3 are the suppliers of MilkyWay. They are the collectors of milk
form the local farmers. MilkyWay will collect the milk from these suppliers and distribute to itscustomers. We have our different outlets O1, O2, O3 in different part of Kathmandu city.
Through these outlets retailers are delivered the products. Outlets are connected with main office
through intranet by the use of information technology. Server is located at the central office and
these servers are directly connected with the outlets. When there is shortage of milk in the outlets
then the system will be informed at the central server and inventories are fulfilled accordingly.
MilkyWay
O1
S2
S1
S3
O2
O3
Retailer
Retailer
Retailer
Retailer
Retailer
Retailer
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These outlets will supply the demanded milk to the retailers. As there are numbers of retailers,
products are delivered to them through the outlets established by MilkyWay.
5.3 Payment system:
The payment systems of the MilkyWay for the transaction are as follows:
1. Cash:Cash is one of the simplest payment methods in our business. Cash is paid at the point of
transaction. Real time transaction occurs while transacting via cash.
2. Bank cheques / Deposit slip:The buyers can pay through cheques or deposit slip at point of sale. The bank account of
MilkyWay is credited when cheques or deposit slips are issued.
3. Payment Gateway (e-Sewa):A payment gateway is a way to process electronic transactions. Payment gateways
provide the tools to process payments between customers, businesses, and banks.
Payment system can be described as follows:
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1. (Order Placed): Customer places order through secure connection on website,or merchant manually keys in transaction.
2. (Authorization Request): Payment Gateway receives the transaction throughthe secure internet connection, encrypts it, and submits an authorization to the
credit card issuing bank.
3. (Authorization Response): Credit card issuing bank either approves ordeclines the request and sends a response back through the payment gateway to
the website.
4. (Order Fulfilled): Once approved the merchant processes and ships thecustomer's order.
5. (Settlement Request): The Payment Gateway sends a settlement request tothe merchant account provider each day that transactions are processed.
6. (Settlement Deposited): The merchant account provider deposits the amountfor each settlement into the merchant's bank account.
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eSewa is the payment gateway of Milkyway. While payment is made through online system
eSewa act as a medium of such payment. eSewa offers extremely high security as well as user
friendly environment. The settlement bank of Esewa is Laxmi Bank Ltd. Customer can recharge their
account of eSewa either through ESewa Recharge Cards or through partners bank e-banking system or
Counter Deposit in Partner Banks.
While charging their account by customers if customer has his/her account in Kist Bank (assume) then
following transactions will take place.
At eSewa:
eSewa at Laxmi bank Dr
To eSewa A/c Cr
At Kist Bank (Partner Bank)
Customer A/c Dr.
To Payable (eSewa) Cr.
At Laxmi Bank (Settlement Bank)
Kist Bank A/c Dr
To eSewa A/c Cr
During the payment process following transaction will take place.
Case 1: If both customer and MilkyWay have account in Laxmi Bank
Customer A/c Dr
To MilkyWay A/c Cr.
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Case 2: If customer has account in Kist bank and MilkyWay has account in Global Bank. Then
At Kist bank (Customer's bank) At Global Bank (MilkyWay)
Customer A/c Dr. Receivable A/c Dr.
To Payable Cr. To Customer A/c Cr.
At Settlement Bank
Kist bank A/c Dr
To Global Bank Cr
5.4 Detail functionality of each module of the software systems
The different kinds of software needed for online business of MilkyWay are:
Database management system (DBMS):
A DBMS is a system software package that helps the use of integrated collection of data records
and files known as databases. It allows different user application programs to easily access the
same database. DBMSs may use any of a variety of database models, such as the network models
or relational models. In large systems, a DBMS allows users and other software to store and
retrieve data in a structured way. Instead of having to write computer programs to extractinformation, user can ask simple questions in a query language. Thus, many DBMS packages
provide Fourth-generation programming language (4GLs) and other application development
features. It helps to specify the logical organization for a database and access and use the
information within a database. It provides facilities for controlling data access, enforcing data
integrity, managing concurrency, and restoring thedatabase from backups.
Customer Relationship Management (CRM) Software:
It is a cross functional e-business application that integrates and automates many customer
serving processes in sales marketing, account and order management, and customer service and
support. This company requires CRM which have following features:
Contact and Account Management
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Sales optimization tool: Cross sale and up sale Marketing and fulfillment Customer service and support Retention and loyalty Programs
Enterprise Resource Planning (ERP) Software
ERP systems are designed to tackle the problems mentioned above by integrating all of the
regular functions of business (finance/accounting, human resources, customer relationship
management, manufacturing, project management, sales, supply chain management etc.) and
providing a means to better manage the companys resources.
5.5 Development Requirements
MilkyWays's website will be initially developed with few internal technical resources. Bent Ray
Hosting will host the site and provide the technical back end. Bent Ray Hosting is a leading web
hosting and server solution company in Nepal. It has been providing the cheapest and the best
web hosting services to its clients. The clients includes government agencies, large corporate
houses, US based business houses, NGOs and INGOs etc. Webtech Nepal will produce the
graphics, logos, artwork, and flash media as they will be developing our website from scratch.
Our site will be maintained by one of the owners.
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Chapter 6
Security measures and disaster recovery plan
6.1 VeriSign:
VeriSign is an online security & SSL certification provider. Websites having authentic seal of
VeriSign are secure and protect privacy. The authentic website is indicated with VeriSign .The
process how VeriSign work is described
Browser checks the certificate to make sure that the site you are connecting to is the realsite and not someone intercepting.
Determine encryption types that the browser and web site server can both use tounderstand each other.
Browser and Server send each other unique codes to use when scrambling (or encrypting)the information that will be sent.
The browser and Server start talking using the encryption, the web browser shows theencrypting icon, and web pages are processed secured.
The website with these VeriSign sign is considered as highest secure page. Customers can make
any transaction more trustworthy and reliable when they are certified by VeriSign. .
6.2 Disaster Recovery Plan
It is not possible to run any business without information, so organization should make good
plan to preserve and reduce the risk of loss of data. Loss of data means loss of customer
information without which survival of the organization is not possible. Hence, the firm largely
depends on IT as to have a Disaster Recovery Plan (DRP). Backup and recovery is more
challenging than ever with exponential data growth, sprawling virtualized environments, ever
shrinking backup windows, and escalating storage and tape costs. The main focus of the Disaster
Recovery Plan is to restore the operability of the system that supports mission-critical and the
critical business processes. Controlling the occurring events to reduce the risk of any additional
loses is a must during the recovery phase.
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6.3 Classification of Disasters
Disaster can be classified in two broad categories:
Some of the well-known natural disasters are floods, hurricanes, tornadoes andearthquakes. While preventing a natural disaster is very difficult, measures such as good
planning which includes mitigation measures can help reduce or avoid losses.
The second category is manmade disasters. These include hazardous material spills,infrastructure failure or bioterrorism. In these instances surveillance and mitigation
planning are invaluable towards avoiding or lessening losses from these events.
6.4 Control measures in recovery plan
Control measures are steps or mechanisms that can reduce or eliminate computer security threats.
Different types of measures can be included in BCP/DRP. Disaster recovery planning is a subsetof a larger process known as business continuity planning and should include planning for
resumption of applications, data, hardware, communications (such as networking) and other IT
infrastructure. A business continuity plan (BCP) includes planning for non-IT related aspects
such as key personnel, facilities, crisis communication and reputation protection, and should
refer to the disaster recovery plan (DRP) for IT related infrastructure recovery/continuity. This
article focuses on disaster recovery planning as related to IT infrastructure. Types of measures:
1. Preventive measures - These controls are aimed at preventing an event from occurring.2. Detective measures - These controls are aimed at detecting or discovering unwanted
events.
3. Corrective measures - These controls are aimed at correcting or restoring the system afterdisaster or event.
These controls should be always documented and tested regularly.
6.5 Strategies for data protection
The following is a list of the most common strategies for data protection:
Backups made to disk on-site and automatically copied to off-site disk, or made directlyto off-site disk.( use of portable hard disk)
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In addition to preparing for the need to recover systems, the firm must also implement
precautionary measures with an objective of preventing a disaster in the first place. These
include the following measures:
Local mirrors of systems and/or data and use of disk protection technology such as RAID Uninterruptible power supply (UPS) and/or backup generator to keep systems going in
the event of a power failure
Fire preventionsalarms, fire extinguishers Anti-virus software and other security measures
Firewall
A firewall is a part of a computer system or network that is designed to block unauthorized
access while permitting authorized communications. It is a device or set of devices which is
configured to permit or deny computer applications based upon a set of rules and other criteria.
Firewalls can be implemented in either hardware or software, or a combination of both. Firewalls
are frequently used to prevent unauthorized Internet users from accessing private networks
connected to the Internet, especially intranets. All messages entering or leaving the intranet pass
through the firewall, which examines each message and blocks those that do not meet the
specified security criteria.
We are planning to use the following firewall as it meets our requirements and is within our
budget.
Brand name: NETGEAR Model no: FVS318 Throughput: 12.5 Mbps LAN to Wan throughput 1.2 Mbps 3DES throughput Size: 10*7.1*1.4(inches) Weight: around 1 kg.
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6.6 Websites Home Interface
6.7 Content of MikyWays website
The.com is a simple and understandable website that is newly offered to the customer. It
provides all the required information so that the customers can easily view and order the
products which they want.
The site disseminates all the information about types of milk-related products. Customer can
login as per their login id and username to view and order the products. Detail information about
our organization has also been contained in the website.
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Home
Home page of the shows the products and their details. Customers can view and order the
products by visiting the home page. The search facility is made in order to facilitate the
consumer to search the desired product quickly. User can login into account with their own user
id and password to know more about products and order them.
Register (Sign up)
Customer who wants to buy the milk-related products through our website needs to register with
all his detail information of name, address, city, country, etc. Once he/she is registered into our
website he/she will be provided with a permanent username and password so that she/he need
not to register for a new id time and again. Once a customer creates a profile into our system,
she/he gets updated about the arrival of new products. The so registered profile information will
be automatically stored in our database.
Login
The costumer, after having the id and password, can login to their account and use all the
features of the website. S/he can also send feedbacks, lodge complaints and suggest the products
to their friends and relatives who are registered members of the website
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Product directory
The page will contain all the product-related information such as names of products, the
ingredients each product contains, prices, delivery timeframe, etc.
Costumer support
This caption will contain the information such as firm's helpline, email addresses, Frequently
Asked Questions (FAQ), etc so that customers can easily order and get information of the
products they want to buy or want to know about. If customer found any problem then they can
mail to the MikyWays e-mail address and can get solution of that problem.
Feedback
If a customer feels like giving a positive or negative response to the goods and services provided
to them, the Feedback page will help them do so online by entering their user id followed by the
feedback they want to give.
About us
This page will provide all the company-related information such as its inception, location,
branches, location of the branches, business partners, company's goals and visions, etc. which
will help customers get to know about the company and make deals confidently.
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Fig: Two-way flow of information
Top level management provides guidelines to employees either by conducting meetings or by
sending message via LAN (Local Area Network)
7.2 Management Team
Milkyway will have the owners in the management as they all have the necessary skills and
qualification related to different aspect of the management like Human Resource, Sales and
Marketing, Accounting and Finance, Information technology etc.
7.3 Management Team Gaps
As all of the owner are fresh MBA graduates and they will be responsible for handling different
department according to their skills and specialization in their academic degree there will be
lacking experience among them. Hence after doing their responsible work for certain period of
Shows Information flows downward from top level management
Shows flow of feedback and suggestion from each department
CEO
(Sandesh Lc)
ProductionManager
(Manish Sharma)
Accounting &Finance Manager
(Mukunda Aryal)
MarketingManager
(IshakMohammad)
IT Manager
(Rajeeb Giri)
HR Manager
(Tirtha Gurung)
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the time, they will be able to handle each key job in efficient and effective way and they will be
assigned respective job accordingly.
7.4 Personnel Plan
HR Department will be main responsible for the personnel plan of the every employee needed
for the company. The lists of the needed personnel for the first year of the operation are as
follows:
CEO: 1
Department Manager: 5
Supervisors: 5
Outlet Employee: 70
Sales Representative: 35
Factory Worker: 50
Technician: 4
Driver: 15
Security Guard: 5
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CHAPTER 8
Financial Plan
The financial plan is to borrow RS. 10,000,000 as a long-term loan from Nabil bank at an interest
rate of 12%, to make the building along with to buy necessary plant and machinery. We will
repay this loan over 10 years. We will secure this loan with our equity in the value of the existing
property. The installation of advance technology will open up a new revenue stream for the
business, and attract new steady customers.
Capital structures
Composition Weightage Amount (Rs)
Personal Contribution (4*2,500,000) 0.5 10,000,000
Bank Loan 0.5 10,000,000
Total 1.00 20,000,000
With aggressive target marketing and the sales strategies outlined above, we will increase sales
over 5% in the first year. We expect a bigger increase in year two, with the extensive renovation
generating some free publicity and with existing customers making referrals, but the largest
expansion is planned for thought the year 5.
8.1Costing of System
As we are planning to automate our dairy business we need to have heavy investment in the
installation of the system along with the plant and machinery needed to operate the business in
best possible way.
8.2 Important Assumptions
This business plan was developed for Milkyway, assuming the following:
For the initial implementation of plans adequate loan will be taken from the bank. Competition and buying patterns remain similar to those used for forecasting. Long-term interest rate will be no more than 12%.
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New customers will be gained through direct sales and advertising. Sales will increase 5% in second year of operation. All the financial statements are assumed under the use of e-commerce platform.
If Milkyway will not use the e-commerce platform for doing the business, the initial investment
needed will be lower than the mentioned below. Although the installment of the system cost high
at the initial phase it will reduce the operating expenses, which will definitely help to achieve
higher profit along with providing platform to communicate directly with the customer.
8.3 Break-even Analysis
Break-even is based on fixed costs of approximately Rs. 1,200,000 including loan repayment,
insurance, maintenance and labor. Additionally, controllable such as service labor, taxes,
advertising and legal/professional fees are included. Margins are harder to assume. Our FY 2005
gross margin is forecasted at 69.98%. In the following years our gross margin will continue to
grow beyond our starting point because of the continued growth in total product sales.
Break-even Analysis
Monthly Revenue Break-even in Rupees Rs.2, 000,000
Assumptions:
Average Percent Variable Cost 40%
Estimated Monthly Fixed Cost 1,200,000
8.4 Projected Profit and Loss
Cost of sales reflects our cost to manufacture the feed and purchase all other non-manufactured
products. Gross margin will continue to rise at a steady pace throughout the years forecasted.
Advertising and marketing expenses (news ads, magazine ads, etc.) are projected to increase as
net profits increase and positive results are accomplished as a direct result of the same marketing
and advertising.
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Depreciation forecasted includes normal wear and mechanical tune-ups on plant and machinery,
trucks and all equipment in the factory. Fuel and electricity costs are projected to grow as the
amount of sales made that require delivery increase. This projected expense includes electricity,
fuel for the vehicles etc.
Projected income statement (using e-commerce)
Particulars
Amt (Year
1)
Amt (Year
2)
sales revenue 62,000,000 68200000
Total revenue 62,000,000 68200000
Less: Variable cost
Service Charge to eSewa 1,798,000 1,977,800
Direct Material Cost 11,000,000 12,100,000
Rent expenses 1,500,000 1,650,000
Advertising and promotion 3,000,000 3,300,000
Insurance expenses 1,300,000 1,430,000
Water and electricity 1,700,000 1,870,000
Telephone expenses 850,000 935,000
Stationary expenses 250,000 275,000
Fuel expenses 1,750,000 1,925,000
Maintenance expenses 950,000 1,045,000
Total Variable Cost 24,098,000 26,507,800
Less: Fixed Cost
Salaries and wages 8,500,000 8500000
Domain Name Registration 1,000 1,000
Website hosting 96,000 96,000Rent 1,800,000 1,800,000
Depreciation 1,750,000 1,750,000
Total Fixed Cost 12,147,000 12,147,000
Total Cost (Fixed + Variable) 36,245,000 38,654,800
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EBIT (Earnings before Interest and Tax) 25,755,000 29,545,200
Less: Interest 1,200,000 1,200,000
EBT (Earnings before Tax) 24,555,000 28,345,200
Less: Tax @ 40% 9,822,000 11,338,080
Net Profit 14,733,000 17,007,120
If e-commerce platform is not used than some of the expenses will not incurred such as service
charge to eSewa, domain name registration, website hosting etc. But while operating the business
it will reduce the operating cost of the business. If e-commerce platform is used for doing
business, it will be easy to process the order, it will reduce the human resource needed etc. The
income statement without using e-commerce platform will be as follows.
Projected income statement (without e-commerce)
Particulars
Amt (Year
1)
Amt (Year
2)
sales revenue 58,000,000 63,800,000
Total revenue 58,000,000 63,800,000
Less: Variable cost
Sales Commission 2,500,000 2,500,000
Direct Material Cost 11,000,000 12,100,000
Rent expenses 1,500,000 1,650,000
Advertising and promotion 3,000,000 3,300,000
Insurance expenses 1,300,000 1,430,000
Water and electricity 1,700,000 1,870,000
Telephone expenses 850,000 935,000
Stationary expenses 250,000 275,000
Fuel expenses 1,750,000 1,925,000
Maintenance expenses 950,000 1,045,000
Total Variable Cost 24,800,000 27,030,000
Less: Fixed Cost
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Salaries and wages 8,500,000 8,500,000
Rent 1,800,000 1,800,000
Depreciation 1,750,000 1,750,000
Total Fixed Cost 12,050,000 12,050,000
Total Cost (Fixed + Variable) 36,850,000 39,080,000
EBIT (Earnings before interest and Tax) 21,150,000 24,720,000
Less: Interest 1,200,000 1,200,000
EBT (Earnings before Tax) 19,950,000 23,520,000
Less: Tax @ 40% 7,980,000 9,408,000
Net Profit 11,970,000 14,112,000
Net income using e-commerce is higher than without using it because of the operating cost
reduction due to e-commerce platform.
8.5 Projected Cash Flow
The cash flow projection for Milkyway shows that provisions for ongoing expenses are adequate
to meet the needs of the company, as the business generates sufficient cash flow to support
operations and future expansions. Cash flow projections are critical to our success. The monthly
cash flows for the first year are shown as follows:
Particulars Year 1 Year 2
1. Cash-flow from operating activities
Net Income 14,733,000 17,007,120
Adjustment of non-cash expenses:
Depreciation 1,750,000 1,750,000
Adjustment of change in working capital
Increase in inventory (2,400,000) (240,000)
Increase in accounts receivable (2,000,000) (200,000)
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Increase in accounts payable 1,560,000 156,000
Increase in Accruals 1,440,000 144,000
Net cash from operating activities 15,083,000 18,617,120
2. Cash-flow from investing activities
Purchase of Furniture (1,200,000)
purchase of vehicle (5,500,000) -
purchase of plant and machinery (6,420,000) (5,637,120)
Purchase of office supplies (800,000) (800,000)
Net cash from investing activities (13,920,000) (6,437,120)
3. Cash-flow from financing activities - -
Net change in cash 1,163,000 12,180,000
Add: Cash and bank at the beginning of the year 4,637,000 5,800,000
Cash and bank at the end of the year 5,800,000 6,380,000
8.6 Projected Balance Sheet
The Balance Sheet shows healthy growth of net worth, and strong financial position. It is a
summary of the financial balances of the company. Milkyway is strong enough to meet the any
obligation at required time.
There are two different balance sheets presented below, one is balance sheet if doing business
using e-commerce and another one is without e-commerce.
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Projected Balance sheet (using e-commerce)
Assets Year 1 Year 2 Lib. and Equity Year 1 Year 2
1. Current Assets
1. Current
liability
Cash 2,700,000 2,970,000 Account payable 1,560,000 1716000
Bank 3,100,000 3,410,000 Accruals 1,440,000 1584000
Inventory 2,400,000 2,640,000
Total current
liability 3,000,000 3300000
Account Receivable 2,000,000 2,200,000 2. Equity
Total current assets 10,200,000 11,220,000 Equity 10,000,000 10,000,000
2. Fixed Assets loan @ 12% 10,000,000 10,000,000
Furniture 1,200,000 1,200,000 Retained earning 4,950,000 5,670,000
Vehicles 5,500,000 5,500,000 Total equity 24,950,000 25,670,000
Accumulated dep. -550,000 -550,000
Office supplies 800,000 800,000
Equipment 12,000,000 12,000,000
Accumulated dep. -1,200,000 -1,200,000
Total fixed assets 17,750,000 17,750,000
Total Assets 27,950,000 28,970,000
Total liability &
equity 27,950,000 28,970,000
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Projected Balance Sheet (Without e-commerce)
Assets Year 1 Year 2 Lib. and Equi Year 1 Year 2
1. Current Assets 1. Cur liability
Cash 2,700,000 2,970,000 Account/P 1,560,000 1716000
Bank 3,100,000 3,410,000 Accruals 1,440,000 1584000
Inventory 2,400,000 2,640,000
Total current
liability 3,000,000 3300000
Account Receivable 2,000,000 2,200,000 2. Equity
Total current assets 10,200,000 11,220,000 Equity 10,000,000 10,000,000
2. Fixed Assets loan @ 12% 10,000,000 10,000,000
Furniture 1,200,000 1,200,000 R/E 1,950,000 2,670,000Vehicles 5,500,000 5,500,000 Total equity 21,950,000 22,670,000
Accumulated dep. -550,000 -550,000
Office supplies 800,000 800,000
Equipment 9,000,000 9,000,000
Accumulated dep. -1,200,000 -1,200,000
Total fixed assets 14,750,000 14,750,000
Total Assets 24,950,000 25,970,000
Total liability
& equity 24,950,000 25,970,000
8.7 Business Ratios
Milkyways projected business ratios areas bellows.
Current Ratio = Current assets / Current Liabilities
Year 1: 10,200,000/3,000,000 = 3.4 times
Year 2: 11,220,000/3,300,000 = 3.4 times
Quick Ratio = Quick Assets / Current Liabilities
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Year 1: 7,800,000 / 3,000,000 = 2.6 times
Year 2: 8,580,000/ 3,300,000 = 2.6 times
Debt to assets ratio = Total debt / Total asset
Year 1: 10,000,000 / 27,950,000 = 0.3578
Year2: 10,000,000 /28,970,000 = 0.3452
Net profit margin = Net Income/ Total Sales
Year 1: 14,733,000/62,000,000= 23.7629%
Year 2: 17,007,120/68200000 = 24.9371%
Percent of Total Assets
Year 1 Year 2
Inventory 7.16% 9.11%
Other Current Assets 27.91% 29.62%
Total Current Assets 36.49% 38.73%
Long-term Assets 63.51% 61.27%
Total Assets 100.00% 100.00%
8.8 Long-term Plan
Milkyway, is expected to grow at a steady pace. As we expand our customer base, offer more
products and bring more demand in the existing market, we will be positioning Milkyway
amongst the elite Dairy factory in the nation. We will continuously review our business plan as
we implement changes. By doing so, we will ensure accuracy and stability. Our goal is to take
over this great business, protect it, nurture it, and provide for it. Doing these things will enable usto grow and expand the business in a professional atmosphere.
Milkway is planning to increase the sales volume by 15% in the year 3 and thereafter. Having
advance technology and doing business in e-commerce platform will help milkyway to grab the
large number of customer in the future too. Although the installation of the system costs high at
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first it will provide the competitive advantage for the company and reduce the cost also
accordingly in the following year.