Executive Summary
ABC considers itself to be in the retail gift market, although some consumers purchase the product for themselves.
This trade show is where suppliers of silk flowers and other silk products and buyers meet to establish business relationships and strike a deal.
For the following year, the company plans to expand to direct mail catalogue sales, with a similar target market when the branches have been set up.
Maintaining an average gross margin of 25 percent is very realistic. The projected rate of annual growth in sales is 25 percent.
The new venture
Access to manufactures and distribution channels
Controlling fixed and variable costs during the first two years
Company Summary
Company Owership
Several members of the board of directors also hold minority stock positions
Star-up Summary
These primarily consist of product costs and expenses associated with establishing a marketing program and ABC’s first three distribution centers in the United States, Japan, and Europe.
ABC company will also have a factory and a retail store in Suzhou, Jiangsu Province, which will serve as both an outlet and test market.
Products
Competitive Comparison
The product features beautiful embroidery on its edge, which would cost much more if it were to be produced in the United States.
Sourcing
The branch offices are responsible for marketing efforts.
Market Analysis Summary
The gift industry is also growing, as households headed by 45-to 54-year-olds are the biggest gift purchasers.
Floral collectors-same target as above, but with higher standards of quality.
Strategies and Implementation Summary
Marketing Strategy
ABC company is targeting sales reps that distribute to exclusive gift retail stores and mail-order catalogue companies.
ABC will also send some samples to some catalogue stores, who take mail orders for silk flowers and other silk accessories. The purpose is to reach more customers while doing only minimal research.
Pricing Strategy
These prices are not expected to experience significant change over the next three years, because they are much lower than those of the competitors.
Sales Strategy
Products will be distributed through retail stores and contracted wholesalers.
Management Summary
Organizational Structure
ABC, Inc. will be a joint venture under the supervision of the Board of Directors.
Financial Analysis
Key Financial Indicators
Constant gross margins
Sales on credit
Net worth
Return on equity
Break-even Analysis
ABC’s break –even analysis indicates that the firm has a strong balance of costs and sales. The break-even point is at just over 1,200 units and close to $21,000.
Projected Profit and Loss
ABC, Inc. projects profits for every month of 2003 and into both 2004 and 2005, in addition to positive growth margins for the same time periods.