Rajgan Spare Parts Manufacturer


Plot# 55- A, Kahuta Road, Industrial Area, Islamabad.
(051) 2272965
www.Rajganspareparts.com

Submitted to: Mr. Shuja Satti
Preston University, Islamabad
(2009)

Names and Addresses of Principals:

Raja Muhammad Nadeem
House# 485, St 16-A Jhanda chichi Rawalpindi.
0333-5733020
rajanadeem14@yahoo.com

Muhammad Bilal
House# 470-B, St. 40, Sector G-6/1-2, Islamabad.
0333-5225944
bilal_2u@hotmail.com

Abu Bakar Al-Hassan
House# 464, St 16 Jhanda chichi Rawalpindi.
0345-5119138
razamohsin16@yahoo.com

Nature of Business:
We are involved in small and medium size business of manufacturing Auto mobile spare parts and body parts. Spare parts include piston, ring, crankshaft, valve, point, plug, radiator, excel, and water body. Body parts include doors, motor guard, bumper and bonnet.

Statement of Financing needed:
The total capital allocated to the business is the amount of Rs. 60 Million. The amount will be equally contributed by each member of the business and they are held equally accountable of profit and loss of the business.

Statement of confidentiality of report:
This report is confidential and is the property of the co-owners listed above. It is intended only for use by the persons to whom it is transmitted, and any reproduction or disclosure of any of its contents without the prior written consent of the company is prohibited.


Executive summary:
Vision of the Company
The vision of Rajgan Spare Parts Manufacturing is to provide the quality products which include Auto mobile spare parts and body parts at reasonable cost in target market.

The following are a few examples of values:
excellent customer service
pioneering technology
creativity
integrity
social responsibility

Value of Product
Auto mobile spare parts and body parts are those products which have very high demand in all cities especially big cities like Islamabad, Lahore, Karachi, and Faisalabad.

Service Provided to the Customer
The services that are provided to customers are
· Placing order on a single Phone Call with 50% advance payment in any branch of Meezan Bank.
· Online Facility for placing order.
· Very easy access to our organization
· More availability of our products at market place

Why we are especially qualified to offer it
We have a vast family background in this industry and dealing in auto spare parts manufacturing for many years. These factors are very helpful to establish the desirability and credibility of entrepreneurship as a career part.


Uniqueness and Growth Potential
Our products are very similar to genuine auto spare parts, which are very healthy for all types of vehicles instead of using other auto spare parts available in market. We will lead the market in coming years by fulfilling the needs and requirements of customers.

Business Formation
Mr. R. M. Nadeem, Mr. Muhammad Bilal and Abu Bakar Al Hassan are going to start new ventures with great commitment, motivation, skills and experience.
The hierarchy of our organization is:

Chief Executive Officer (CEO)
Responsibilities of CEO
The CEO is responsible for the success or failure of the company. Operations, marketing, strategy, financing, creation of company culture, human resources, hiring, firing, compliance with safety regulations, sales, PR, etc.—it all falls on the CEO’s shoulders..

General Manager (GM)
Responsibilities of General Manager
A General Manager has broad, overall responsibility for a business or organization. Whereas a manager may be responsible for one functional area, the General Manager is responsible for all areas.

Production Manager (PM)
Industrial production managers coordinate all the people and equipment involved in the manufacturing process.
Responsibilities of Production Manager
The main role of the Production Manager is to:
1. Lead the Deployment Team.
2. Sit on the Deployment Board.
3. Report to the Deployment Board on progress and issues;
4. Ensure the formulation and implementation of procedures necessary to provide the timely deployment of a production quality grid.

Finance Manager (FM)
Responsibilities of Finance Manager
The responsibility of the finance manager is the preparation of financial reports, direct investment activities, and implement cash management strategies. He also forecast the organization's financial position, such as income statements, balance sheets, and analyses of future earnings or expenses.
The following are the skills of finance manager:
· Being strategic, understand customer's needs
· Good product knowledge, passionate about business/industry/company
· Honesty and integrity
· Friendly, good networker
· Persuasive

Marketing Manager (MM)
Responsibilities of Marketing Manger
Marketing managers are often responsible for influencing the level, timing, and composition of customer demand accepted definition of the term. In part, this is because the role of a marketing manager can vary significantly based on a business' size, corporate culture, and industry context.
Marketing managers creates awareness of our products among customers in the market. He is responsible for advertisement, plans to meet corporate objectives, creating sales forecasts and setting performance goals, to broaden and expand market share.


Environment and industry analysis:
Economy:
Although World Group has been involved in the diversified lines of business such as textiles, food-stuff, construction, commodities, but core business has always been automobile. Since at least the 1960 s, macroeconomics has been characterized by further integration as to micro-based modeling of sectors, including rationality of players, efficient use of market information, and imperfect competition. This has addressed a long-standing concern about inconsistent developments of the same subject. Macroeconomic analysis also considers factors affecting the long-term level and growth of national income. Such factors include capital accumulation, technological change and labor force growth.
Culture:
Culture that values an individual who successfully create a new business will spawn more venture formation then one does not so. Cultural changes account for people's core beliefs or values. How people view themselves, others, organizations, society, nature, and the universe all play a part in shaping one's culture. Companies need to take these principles into consideration when working in the market place
We will established our new venture in business area (Islamabad/Rawalpindi) where most of the people tend to have their own vehicle. In this culture we having more job opportunities, high value, and high rate of success and raising money. These factors are very helpful to develop a strong entrepreneurship.
Technology:
Being in a market that is rapidly changing due to the technologic development will require us to make carefully short term marketing decisions as well as to be prepared with contingency plan given any new technologic developments that may affect our product.
Legal:
In Pakistan there are many important legal issues in starting new business. We should be preparing for future legislation that may affect our product, channel of distribution, price and promotion strategy. Deregulation of prices, high rate of taxes and interest, restriction of media advertisement and safety regulation affecting the product or the example of legal restriction that can affect our business program.

Specific industry environment:
Future outlook:
Through indigenous technical resources and technical tie-ups with well-known global companies, the auto parts industry has by and large developed into a well-organized sector of the country. There will be a huge demand for automobile industry in coming years, which will boost up the auto spare parts industry as well.

Trend of industry:
Industry analysis begins with the broadest basis assessment of environmental industry trends. It proceeds to more local market environmental and industry trends including competition. We will need to complete industry analysis process of business plan for preparation of marketing plan. Currently, the auto parts manufacturing industry is not able to cater the increasing demand of automobiles in the country. For the 10% of the companies in the auto parts industry (organized sector only) who are currently engaged in exports because their products comply with international standards, it is possible to see potential for a further increase in their exports.

Growth Rate:
The automotive sector has posted a phenomenal growth during 2003-04 and 2004-05 in the wake of sharp increase in the demand of automobiles. It was noted that OEMs (original equipment manufacturing) and Vendors have made heavy investment during the last three years, which have helped them enhance their production

Government policies:
We should determine the government policies (Tax rates, utilities, trademarks, copyrights etc). An entrepreneur must aware of all the rules and regulations that are imposed by the government.
Government also supports the small and medium scale business by providing financial assistance to help them out to enhance the business capacity.
Competitor analysis:
We generally face potential threat from larger corporation; we must be prepare for these threads and should be aware of who the competitor is and what are their strength and weakness, so that an effective marketing plan can be implemented. We can be easily identified our competitor from experience, trade general articles, advertisements, websites and even the yellow page.
Market Segment of Venture Basis and Identification of Target Market:
A regular car industry started in the country in 1983, when Suzuki commenced production eyeing the small and LCV (light commercial vehicle) car segment of 800cc-1000cc range, and introduced Suzuki car which targeted the middle-income group (constituting the larger segment of the market) by providing an affordable car. Then there was a long gap until the early 90’s when Indus Motor Company was established to manufacture Toyota vehicles in Pakistan. Soon after Honda Atlas came with the Civic and Gandhara Nissan entered the market with Sunny. Some years later Dewan Motors set up a plant to manufacture Hyundai and Kia vehicles in Pakistan. Since then the market has changed all together, it also covers the high profile community in Pakistan, who have a high purchasing power to buy luxury vehicles.

Target Market
We should have good idea of who the customers are target market will be? We can determine the appropriate marketing action strategy by the knowledge of target market that will effectively meets its needs.
The main targets of Auto Parts Development activities for three to four years down the road are as follows:
· Development of long term vision, mission, regulatory policy and set clear direction for development of auto parts industry in the next 5 years
· Creating awareness regarding importance of forming networks
· Capacity building of entrepreneurs and trade associations
· Skilled labor development
· Regional and global market expansion
· Product standardization and quality improvement
· Technology up-gradation in the field of auto spare parts.

Description of Venture
Mission Statement:
Rajgan Spare Parts Manufacturing is manufacturing auto spare parts. These spare parts are provided to whole sale dealers. In this way, these parts will spread in the market and through whole sale dealers these parts will reach the retailer. We will manufacture auto spare parts up to the ISO standards and ISO certified products have a great demand in the market.

History of Venture:
The automobile sector has been registering high growth for the last four or five years due to the country's business friendly policies along with lower tariff rates, persistent growth in GDP, and per capita income.

The level of motorization has also been gradually rising over the years. In 1998-99, it was three cars per 1000 persons, which has significantly increased to 11 cars per 1000 persons in 2005-06.

Location and Size of Business:
Location:
Plot# 55- A, Kahuta Road, Industrial Area, Islamabad.
Size
The building covered area for our business is 9066.667 square yards.


Product Details:
Rajgan Spare Parts Manufacturing is manufacturing the following products.
1) Spare parts include
· Piston
· Ring
· Crankshaft
· Valve
· Point
· Plug
· Radiator
· Excel
· Water Body
2) Body parts include
· Doors
· Motor Guard
· Bumper
· Bonnet

Service(S):
Office Equipment and Personnel:
Name
Number
Chairs
30
Tables
15
Cupboard
10
Computer
5
Printer
1
Photocopier
1
Notice Board
1
Air Conditioners
5
File Folders
12
Sofa Set
1 (7 Seated)

Personnel
30 to 40 people will work in different units of the organization.

Background of Entrepreneurs:
We have a vast family background in this industry and dealing in auto spare parts manufacturing for many years. These factors are very helpful to start new venture.


Production Plan:
We are responsible for all manufacturing operation carry out in our organization.
Complete Manufacturing Process:
We will install five multipurpose machines to manufacture different types of spare parts. One of the machines is producing Piston, Ring, and Crankshaft.
Physical Plant Layout:
We will distribute our covered area into different portions for the following purposes:
1. Raw material
2. Production
3. Store
4. Offices
Where Production Hall will cover 4000 sq. yards where all machines are deployed for manufacturing.


Machinery and equipment
Bi-Matic Edgebander
GRIT GX Series Grinder
Techno Wrap Vacuume Presses
MADISON Pressbrake
Casadei Edugebanders
REO Bar Cutters



Detail of suppliers of raw materials

1. People Steel Mills
Plot No. 59, Khuda Bakhsh Road, Industrial area, Lahore

2. Faisal Steel Mills
Plot No. 14, Street No. 10, near I-9 Police Station, Industrial Area, Islamabad.

Operational Plan
Raw Material
Production
Ware House
Whole SaleDescription of company’s operation


In the above mentioned flow chart we depict all units from inventory to retailer

Order placement by customers and fulfillment
At first we receive orders from customers who intend to buy our products. Initially they will pay 50% of the full payment and remaining amount will be cleared at the time of maturity of agreed time period.

Storage and inventory control
Mr. Shahid will be responsible to control all the inventory, raw material and storage product. We allocated area for raw material and finished goods.

Technology utilization in operations
We will import machineries from Italy and China and these machineries will be used in manufacturing unit for production of auto spare parts and body parts. These machineries will have the capacity to produce quality product of ISO level.


Marketing Plan
Product
We will manufacture the product according to the effective quality of ISO standards. Our effective quality product meets the needs of the consumers.
Our auto spare parts meet the quality of genuine spare part companies like (Suzuki, Toyota.
Our product brand name is R & G.
Packing of the product will be handled manually. Labor will be hired for packing of the different spare parts.

Pricing
Pricing of Suzuki Mehran
Names
Price
Discount %
Discount
Sales Price
Piston
2,200.00
2
44.00
2,156.00
Ing
1,000.00
1.5
15.00
985.00
Crankshaft
6,000.00
3
180.00
5,820.00
Valve
1,450.00
2
29.00
1,421.00
Point
400.00
1
4.00
396.00
Plug
500.00
1
5.00
495.00
Rediator
3,375.00
3.5
118.13
3,256.88
Excel
3,800.00
3
114.00
3,686.00
Doors
6,500.00
5
325.00
6,175.00
Motor Guard
2,500.00
6
150.00
2,350.00
Bumper
1,500.00
4
60.00
1,440.00
Bonnet
4,380.00
4.5
197.10
4,182.90







Pricing of Suzuki Cultus
Names
Price
Discount %
Discount
Sales Price
Piston
3200
1.5
48.00
3,152.00
Ring
1400
1
14.00
1,386.00
Crankshaft
7200
3
216.00
6,984.00
Valve
1800
2
36.00
1,764.00
Point
600
1
6.00
594.00
Plug
725
1
7.25
717.75
Rediator
4600
3
138.00
4,462.00
Excel
4500
2.5
112.50
4,387.50
Doors
7400
5
370.00
7,030.00
Motor Guard
3000
5
150.00
2,850.00
Bumper
1950
4
78.00
1,872.00
Bonnet
6300
4
252.00
6,048.00





Pricing of Toyota Crole (list price, discounts)
Names
Price
Discount %
Discount
Sales Price
Piston
5000
2
100.00
4,900.00
Ring
2000
1
20.00
1,980.00
Crankshaft
9000
3
270.00
8,730.00
Valve
3500
2
70.00
3,430.00
Point
1150
1
11.50
1,138.50
Plug
975
1
9.75
965.25
Rediator
7350
3
220.50
7,129.50
Excel
6250
2
125.00
6,125.00
Doors
9800
5
490.00
9,310.00
Motor Guard
7500
5
375.00
7,125.00
Bumper
3200
4
128.00
3,072.00
Bonnet
8350
4
334.00
8,016.00

Allowance for Middleman and Credit Term
Allowance to be given to middleman at the rate of 1 % on per order.
We giving benefit to middlemen that the can purchase our product on credit within 30 days.
Distribution
Promotion
We promote our products through advertisement using print and electronic media like newspaper, bill boards, cable network, magazine and broacher.
We will make a display center for personal selling and also sell products on personal relations.
Budget will also be allocated of Rs. 400,000/- for marketing purpose of products.

Controls
Average target sales forecast is Rs. 0.5 Million per annum.
Our marketing objective is to create awareness among people


Organizational plan
An Organizational Plan is basically a “to do” list for an organization. It lists out the plan of work, programs, and organizational growth over a period of time - six months, a year or five.

Form of ownership
We will form a business based on proprietorship.

Identification of partners or principal shareholders and their respective authorities
Mr. R. M. Nadeem will be the Chief Executive Officer (CEO) of the organization.

Middle level management-term (job description and job descriptions of managerial staff)
Mr. Abu Bakar Al-Hassan will have the responsibilities of General Manager (GM).
Mr. Muhammad Bilal will have the responsibilities of Finance Manager (FM) and Production Manger (PM).
The organization will employ a person as Marketing Manger (MM) later.