Spiritual and philosophy / psychology Classes – Hinduism, Buddhism.
Suitable for men and women between the age group of 40 plus.
Classical Instrument Classes – Mirudangam, Veena, Flute, Violin, Sitar, Tabal.
Suitable for boys and girls between the age group of 4 - 18.
Languages – Tamil, Hindi, Malayalam, Telugu, Sinhalese.
Suitable for boys and girls between the age group of 4 -12.
Vocal – Carnatic Classical, Semi Classical, Hindusthani Classical, Bhajans / Devotional Songs.
1, beginners – boys and girls between the age group of 4 - 16.
2, advanced – women between the age group of 25 - 35.
Dance Classes – Bharathanatyam, Kuchupudi, Oddisy.
Suitable for boys and girls between the age of 4 and 18.
Entertainment features:
Musical concerts – classical, semi classical, fusion.
For all ages.
Dance concerts
For all ages.
Stage shows – debates, discourse, dramas
For all ages.
Functional activities:
Diwali, ugadi, tamil new year,
For families and their friends.
Positioning is very important in this business plan. Jack Trout defines positioning as ‘not what you do to the product but what you do to the mind’ (Trout,J. & Rivkin,S. 1995,p.ix). Perceptual mapping can give an organisation a clear picture as to how their customers look at them compared to their competitors. This section of the marketing plan remains the same form that of the assignment one. Perceptual mapping and positioning of the product is explained with graphs in assignment one. Kindly refer to assignment on for any clarification.
EXTERNAL ENVIRONMENTAL ANALYSIS:
The overall evaluation of a company’s strengths, weaknesses, opportunities, and threats is called SWOT analysis (Kotler, 1998, p.102). Opportunity and threats are external environmental factors that can influence the organisation. Every organisation scans the environment for any new opportunity to give them the edge in the market. This part of the analysis is discussed in assignment one under SWOT analysis.
Marketing concepts and tools:
Assessing environmental opportunities and threats:
Opportunities:
- Organisation provides a more powerful source of cultural experience in Australia.
- provides much lower cost services to its customers in the future.
- organizing fairs and functions on a regular basis.
Threats:
- legislation to reduce the no of immigrants to Australia from India and srilanka.
- competitors providing the same service at a lower cost.
- major prolonged economic depression.
- higher cost incurred during the process.
The threats that are faced by organizations differ from each other. For example the SARS alert has caused aviation and tourist industries to suffer. But this does not have a great impact on the indo srilankan cultural school.
INTERNAL ENVIRONMENTAL ANALYSIS:
Strengths and weakness are internal issues that are unique to the firm conducting the analysis (Farrell et al, 1998, p.19). Strength of an organisation is the factor that gives it the edge over the competitors.
Marketing concepts and tools:
Assessing interdepartmental strengths and weaknesses.
Teaching proficiency
Strengths: skilled and qualified teachers
Weakness: over costing and availability of teachers
Quality of service
Strengths: can customizes to customers needs, very good service quality.
Weakness: lack of cost reduction programs, high cost.
Field sales
Strengths: good customer relationship.
Weakness: needs more training in direct marketing, focuses on a small market segment.
Marketing
Strengths: competent, good programs for market segment.
Weakness: has not provided long term strategy, marketing over cost on small target audience.
A FEATURE AND BENEFIT ANALYSIS
Research has shown that there is no organisation in Australia which offers features this business plan puts forth. This business plans features are an integrated activities which are available in the Australian market on a low profile. It combines the values of these activities along with the concept of ‘under the same roof’. This is explained in the first assignment. Please refer to assignment one for more information.
COMPETITION ANALYSIS
Competitors are the biggest threat when starting a new business . The five forces that determine the intrinsic long run profit attractiveness of a market or market segment are competitors, potential entrants, substitutes, buyers and suppliers. A comprehensive analysis of these five forces are discussed in assignment one. There is no new data which has been discovered through research to contradict the data in assignment one. Kindly refer to assignment one which is attached to this report.
FOUR P’S IN MARKETING
The four p’s in marketing is very important when preparing a business plan. The four ps for this business plan will be as follows:
A product or service is defined by the four P's:
Product -customer needs and wants.
Research has shown the requirement for a cultural school in Australia. The growing no of Indian or srilankan origin people in Australia have created a need for a cultural center where they can experience and cherish their cultural back ground and pass it on to their children. These statements are supported by research done through personal interviews, group focus and telephone interviews and depth interviews. The need and keen interest by the target audience is again expressed in their keen interest in the out come of the business plan.
Price - cost for the customer
Cost is another important factor. The target segment is very price sensitive. This is clearly shown in the research. They would be interested to join this new school and cultural extravaganza for the right price. The pricing at this stage, which is the introduction stage, is much lesser than the market price. Research has show market price is around 75 dollars per class per hour. The cultural school has priced its services at 50 dollars per class per hour. The cultural activities and functional activities are priced according to the current market trend.
Promotion – communication
Promoting this service is primarily done in Sydney and its suburbs. The main mode of communication between the school and its target audience is through flyers, hand outs and advertising in the local suburb papers. The flyers and the handouts will be given at schools, temples, cultural activities and get together. The local papers such as paramatta times and home bush times would be a good way to reach the target audience in those suburbs.
Place - convenience
Selecting the right location to start the business is very important. It should be a place which is very convenient for our target audience. This business plan has selected strathfield as the location to start the business. Research shows the concentrated population of Indians and srilankans in an around strathfield. Strathfield is a suburb which has the right infrastructure and public transport.
PRODUCT LIFE CYCLE
Kotler defines product life cycle of a product as ‘the course of a products sale and profits during its life time.’(Kotler et al, 1998. p. 400). No product can sell for ever in the market. Every product or service has its life span. It is very difficult to predict the life span but we can come to an acceptance of the concept. There are five major stages a product goes through. They are product development, introduction, growth, maturity and decline. Assignment one clearly discusses the product life cycle of indo srilankan cultural school.
PRODUCT LIFE CYCLE
The above diagram explains the product life cycle. During the losses development stage it is important to have the cash flow to continue the business. This is discussed in the financial plan which is to follow. During the growth and maturity stage the profit and loses are calculated and a projection can be made. New technology and lack of free time can cause a decline in the services. This can be handled through innovation and contingency planning. No new data has been gathered to contradict the data in assignment one. A financial plan will support this product life cycle in the later part of this report.
STRATEGY FORMULATION
Goals indicate where a company wants to go in the future. Strategy formulation leads the company on the path to get to those goals. The strategy must then be refined into specific programs that are implemented efficiently and corrected if they are failing to archive the objectives.(Philip Kotler, p.54,1991). According to porter strategy formulation is divided into three generic types.
Overall cost leadership: to succeed in a business it is important to keep production cost and distribution cost to its lowest. The organisation which archives this will have an edge over its competitors. In the cultural school we can keep service cost to a minimum level as we are cutting cost in individual establishments for every activity proposed since they are under the same roof. Distribution cost is also kept at its lowest. This a very important strategy in this business plan. (Michael E. Porter, ch.2,1980).
Differentiation: it is important create the differentiation from the other companies. Every company tries to be the leaders in technology, service, style, quality etc. this business plan for a cultural school implies the importance of quality and service. It is very difficult to pursue more than one leadership but this plan proposes quality and service as a single entity. With qualified teachers and excellent staff it is a guarantee to archive this. (Michael E. Porter, ch.2,1980).
Focus: it is important to focus on a market segment rather than the whole market itself. The cultural school has a target market on which it focuses it strategies upon. Getting the strategies to satisfy the strategic group is very important to ensure success. (Michael E. Porter, ch.2,1980).
PROGRAM FORMULATION
After the strategy formulation it is important to design programs which will help in archiving these strategies. This business plan proposes to be a leader in quality and service, for which we have to design programs which will ensure its success. Programs such has recruiting the right staff and teachers, advertising the right message to the target audience, to understand the service and educate the customers etc. (Philip Kotler, p.55,1991).
STRATEGIC PLANNING, IMPLEMENTING AND CONTROL PROCESS
IMPLEMENTATION
Even after developing a great strategy it is important to implement them properly to ensure success of the business plan. According to McKinsey company strategy formulation is not enough. It is only a part of the seven s frame work proposed by them. Strategy, structure and system are the hardware and style, skilled, staff and shared values are the software of a best managed company. In this cultural school it is important to have a common style, which means people in the school exhibit a common behaviour and thinking. Staffing is another important factor which will ensure success. It is important to hire able people, train them well to carry out their jobs and to assign their work. Since they have to be service oriented and quality oriented this is important. Skills is needed to ensure they have mastered their required skills to ensure they can archive the schools strategy of quality and service. Hiring the right teachers is very important to archive these goals. Shared values is another important factor as it shows to the customer the believes of the company and the staff. The figure below explains the 7 s of implementation. (Thomas J. Peters and Robert H. Waterman, Jr. 1982, p.9-12).
McKINSEY’S 7-S FRAME WORK
FEEDBACK AND CONTROL
The soft ware of the organisation that is the staff, shared values, style and skills can affect the operation of the company. It is important to keep a constant watch over these factors. A sudden change in the environment can also cause problems for the school. Constant performance evaluation of the staff is needed in this business. It is important to make changes and train the staff when there is a flaw in their skills or shared values. Since this business focuses on service with quality it is important to maintain standards. Feed backs from customers can improve the performance of the school. Their point of view regardingthe standards of teaching and quality of entertainment provided is very important to the school.controlling the factors that can cause a problem in the school is a must. After analysis of the feed back appropriate changes will be made to the school.
FINANCE PLAN
The Financial Plan is probably the most difficult part of the overall business plan. While undergoing this stage, we should not overestimate the income or underestimate the costs and every numbers and figures that are used must have a verbal explanation. For any new business there are various type of financing options like, Debt Vs Equity, equity financing, debt financing and government programs. The basic requirements under this finance plan contain the following:
ESTIMATION
Working capital: Working capital is the excess of current assets (cash, accounts receivable, and inventory) over current liabilities (short term loans and accounts payable). Working capital represents the funds available to pay for the business's current requirements (one-year or less) and a margin of protection for a company's short term creditors. Working capital is essential for a company to meet the continuous operational needs of doing business.
Cash Flow (Cost of running the business): The Cash Flow analysis depends on the maturity of the business. As our business stands at “Start up” cash flow should be considered with more uncertainties and cash must be made available for at least first 180 days of the initial set up to maintain and operate the business. The Cash Flow Budget Worksheet is used to project your business's cash inflows and outflows over a six-month period of time. It has many important uses and can predict the ability of your business to create the cash necessary for expansion or to support you.
Calculation of profit or loss:
Using the formula (Total profit (Z) = Revenue – Cost)
Z= total profit
P= list price
K= allowance per unit
c= production and distribution cost
Q= no of units sold
F= fixed cost
M= discretionary marketing cost
Z= R – C ------------------------------- equ 1
R= p1Q ------------------------------ equ2
Where p1 is the products net price
P1= P – k -------------------------------- equ3
C = cQ + F + M -------------------------equ4
Putting equ 2, 3, 4 in equ 1 we get
Z = [ (p – k) – c]Q – F – M
Break even point: When will income meet expenses? This is the stage where a company should achieve within a year of its establishment in the market. This company has a basic idea of “Plan the work” and “work the plan”! To attain break even point in its business is possible by following its principles and implementing the business plan effectively.
Estimating the cost of a “startup” Indo – Srilnkan cultural school.
Because the costs of starting a business are often underestimated, this company has considered completing, at a minimum; a few basic pro forma financial statements are made to estimate the recurring cost of the business. The following estimates for initial setup and projected monthly costs.
Capital investment: The capital investment is estimated approximately around Au $150,000 at the initial stage plus working capital must be in reserve for the first six months of the business. The working capital is estimated around Au $ 33,000 / month.
Brief outline of the business fixed set up costs:
Purchase of the Musical instruments:
Item Quantity Price / quantity Total cost
Veena 10 $1000 $10000
Tabala 10 $500 $5000
Mridangam 4 $500 $2000
Thambura 4 $300 $1200
Guitar 20 $200 $4000
Violin 20 $200 $4000
Key board 10 $1000 $10000
78 $12,700 $36,200
License and permit : $ 5000
Lease agreement : $ 25000
Furniture : $ 20000
Stationary and Office : $ 15000
Advertising and marketing : $ 5000
Infrastructure facility : $ 10000
Sales promotional expense : $ 5000
Miscellaneous expenses : $10000
Cash in reserve : $ 18800
Capital investment - $150000
Monthly operating cost - $ 198000
33000 x 6 months
Total initial set up cost - 221
Note: The amounts or figures used in the chart are approximate as they are assumption made on the basis of current market.
Hiring professionals: Teachers are paid on hourly basis and pay is depending on the number of students per class are admitted.
For example: $ 100 an hr for a vocal class as the students for vocal are expected in large number
Instruments: $ 75 / hr
Expected student for each class
Number of students per class
Number of classes per day or week or month
This can be forecasted for the first quarter of the business. According to the surveys, no. of admissions and response from the customers, forecasting for the following period would make the job easy
Revenue calculation – breakeven point and further growth in the business horizon with additional projects (audio album release, concerts or stage shows, tour, etc) .
CONCLUSION
Indo Srilankan cultural school is about giving a cultural experience to its customers. It proposes to delight and enrich its customer’s satifaction. There are a few schools in Australia which offer a few of the activities that this cultural school offers. But they offer only one of these activities and not a combination of activities. This business plan gives the advantages of offering various activities under the same roof. By doing so we can allow the customers to choose form a variety of activities. Children learning a particular activity will be exposed to other cultural activities which will create a better knowledge of Indian and Srilankan culture. It also provides a family experience in an Indian and Srilankan cultural environment. Active participation by the customers in an activity can create a better understanding of the culture. It also provides entertainments which can be enjoyed by the whole family. Matured customers can devote much time in philosophical and religious classes and workshops. This will relax their mind and body and elevate them to more spiritual heights. This business plan will be a success as it has many features and it is one of its kinds. Research has clearly shown that the target markets wants and needs. This business plan promises to deliver services to this market segment.
Tharumakulasingam Uthayashankar