Its main rivals will be Toyota and Honda, who have worked to reduce their CO2 emissions in their mid-range hatchback cars, even producing hybrid engines.
Product Description:
Of the two cars Green Clovers will produce one will be a luxury car aimed at 40 to 55 year olds. The cars unique selling point and subsequent advantage over its rivals will be its environmentally friendly nature. The car however will still have the characteristics common of a luxury brand. As the car is more environmentally friendly it will forgo certain performance features such as speed and acceleration to a certain degree. The car however does surpass its rivals in terms of its C02 emissions and miles per gallon efficiency. Similar brands already in the market are Jaguar, Mercedes and Audi.
The second car will target the mass market. The car will be a 2/3 door coupe aimed at the 25 to 40 year old age bracket. The cars unique characteristics will be its relative affordability whilst maintaining its environmentally friendly credentials. It will be these features which gives Green Clovers second car an advantage over its rivals in the market. As the car is placed in such a large crowded market it is important that the car can distinguish itself from its competitors. Its environmentally friendly nature will do so. Similar brands already present in the market are Ford, Toyota and Honda.
Production Plan:
Green Clovers is going to use one factory (£650m) and employ 3500 workers, on a wage of £385.00 p/week. We plan to buy 10 automations costing £0.5m each. These automations can perform the duties of 10 workers, so theoretically we have a workforce of 3600 workers. All of the details of costs of production and unit costs are outlined in the following table.
Research and Development:
Medium cars (25-40):
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Day by day the oil price is increasing rapidly which is significantly affecting car users and buyers. In addition many people are looking for more environmentally friendly cars, due to global warming; therefore the company will develop a project to reduce and save fuel and develop the car to be a green car. The project is:
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Fuel-save stop/start: Will cost the £ 3.65m, but offers a drastic reduction in fuel consumption and CO2 emissions. It will be suitable and helpful for people who have a low to middle income as they are the highest users of the medium sized cars.
Luxury car (41-55)
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Luxury cars using a Hybrid engine means that the car will be more fuel efficient. As a company we will be trying to improve and develop the engine by research. There is a project, fuel efficient engine. This will cost £4.15m. The project will provide effective ways to improve car fuel efficiency while reducing the car fuel bill. Resulting in a decrease in polluting emissions to the environment. This will have a positive affect on car sales.
- People within the age bracket 41-55 interested in safety, will require a project reflecting this. Therefore the predictive safety systems project will cost £5.50m. The intelligent technology can warn drivers in advance, support them and intervene in an emergency to reduce the consequences of an accident.
Marketing Strategy:
We will spend £5million on market research and £5million on market perception. This will entail organising focus groups and customer feedback on certain details of the cars, including level of detail, design issues and advertising campaigns.
We are going to spend £10miliion on gathering data on our competitors through Company’s House and online sources. Also purchasing competitor’s products to closer analyze them could be useful.
For the luxury car, we will advertise in luxury magazines, in broadsheet newspapers and business class sections of airliners and trains.
For the mid-range vehicle, we will advertise more on the television, and in more mainstream magazines and newspapers, especially the Guardian, as they will respect the green credentials.
A period of credit must be set. This specifies how many days the customers have to pay for their products after being invoiced. Longer credit terms are more appealing to the customer. The period of debt specifies the time (in days) the company takes to pay bills from its suppliers. If it is made too long the suppliers may respond by raising prices by up to 5%. Credit and debt periods can range from 0 to 99 days.
Green Clovers Financial Plan:
As you can see from the above table, after taking into account all of the costs that the company will require £1,484,115,950 extra funding. We plan to finance this with a loan. However the loan will have to be paid back with 5% interest and a further 5% inflation before the interest on top.
Green Clovers Projected Profit & Loss
Luxury Take-up
Projected Break-even Points
This graph shows that taking costs and revenue into account, the company should be breaking even during the second year. However this doesn’t take into account the loan that needs to be paid back. The loan will be paid back using half of the profit made each year.
Green Clovers Projected First Year Balance Sheet
Green Clovers Growth Plan:
The strategy that the company will be taking to help develop and nurture growth is to keep the labour force happy, keep productivity as high as possible and make profit each year. Within the first three years we plan to use the one factory and same level of workforce to produce the same amount of cars assuming that all products are sold, we should make a profit each year. However we will need to increase production beyond this point which would require expansion.
This means that we will require another factory, which also means we will need a minimum of 600 more workers but more realistically around about the 2600 mark. To do this we won’t be able to rely on existing profits we will require another loan, hopefully one less than the original one planned as its going to take a while for that to be paid back.
