Creating a Business Opportunity - Essay Example

Creating a Business Opportunity 16th December Executive Summary Currently, PVC production is not that high in Indian markets where the manufacturing takes into consideration the capacity production of these chemicals for construction business of reputed companies. The study will analyse the authors plan and strategies for growth and expansion of the business in Mumbai, India. It will highlight various businesses, technical and non-technical process included in the manufacture and sale of the PVC chemical and its application in the construction business. The author of the study will show methods of marketing activities for the PCV chemical such as domestic and international marketing operation for a profitable business. Finally, the study will dig deep to analyse managerial capabilities required to manage the business in production of PVC chemical by the author of the study. Introduction The importance of the PVC product has increased with its plodding presence in the overseas market and has helped in meeting the needs of various architecture products. PVC is widely used and is one of the few products, which cannot be replaced with anything in manufacturing industry. It is widely used as refurbishment for traditional materials like, wood and metal. PVC production in India is ultimately lightweight, abrasion resistance and quite lightweight and has certain technical advantages such as biodegradability, mechanical strength and stable pipelines. It is regarded as one of the toughest material for construction purposes and its application has been popular in the manufacturing industries for its competitive pricing and enhanced properties (Butow & Taylor, 2009). Polyvinyl chloride Production & Sale PVC market has been growing at a high rate in India because of its significant demand from the industry. The capacity of PVC growth has been gradually increasing by 10 percent compared to the world average production of 4 percent. The global PVC production and the consumption pattern has been growing and been compared with the world average. As per the statistical data of Chemical Marketing Associates Inc. (CMAI) the PVC demand had been 2.08 million tones and the capacity production was estimated around 34.8 million tons. The global demand of PVC production rose from 1.63 million tons to 3.1 million per tones. The demand for PVC production has been mainly for the manufacturing, glazing of the windowpanes and the doors. PVC chemical is required for the thermal production and its durability purposes (Butow & Taylor, 2009). Business Opportunity Feasibility The manufacturing of windowpanes is required to exhibit durability of the windowpanes and doors. The popularity of the windowpanes has been growing at increase rate in the metropolitan areas. Consumption pattern of PVC chemical has almost doubled three to four times. Demand of PVC products has been increasing at a rate of 10 percent compared to the world statistics of 4 percent. The consumption pattern of PVC chemical has been increasing with a substantial capacity. Additionally, 30 to 250 kt reflects demand and supply of PVC chemical. Heavy investment in manufacturing chemicals in industries is a main factor, which drives PVC production in Indian market (Butow & Taylor, 2009). Micro-Market Analysis Feasibility Micro market describes sale of goods and services in a small market structure, thus PVC Company cannot be classified in such a market. This is because the most important elements of PVC chemical are manufactured from polymerization products, mixture of polymerization, mass polymerization and solution polymerization. Marketing for these elements require licenses the government and from leading chemical companies. Basic macro and micro market drives these industries to increase GDP and per capita income and other economic factors like, economic stability of the construction of pipeline and other industries (Kim & Mauborgne, 2005). Feasibility: Competitive Environment and Direct Competitors The basic potential and consumption pattern in the market has been growing at a high rate, which has also increase consumption pattern of the pipeline and PVC chemical. Out of entire analysis, it is observed that the government investment in a pipeline is one of crucial factors responsible for growing demand in PVC chemical. Company and products Lumina Products Maharashtra oregano metallic catalyst prvt.ltd These industries are experts in manufacturing chlorine, sulphide and other chemicals. Sank alp organics private ltd Manufactures high quality methyl, chlorine, lead and supplied R.B plasticizers private limited Manufactures high quality cord for PVC production Feasibility: Micro-Market Analysis Currently, pipeline and construction sector are largely fragmented in a quite dominated by leading industries with very little focus on the quality of production of chlorinated PVC pipelines and its emphasis focusing on targeted output. The pipeline manufacturers are investing heavily in processor technology and high output, which help in the quality production of foam core pipes and oriented pipes. Thus, marketing of the PVC chemical would require a dependence on bulk production of chlorine and solution in dispenser. Establishment of large-scale manufacturing plants would also require large deficit and assistance from the government. However, slowing down of PVC production projects would means low production of chlorine (Kim & Mauborgne, 2005). However, production of Vinyl in bulk volumes would automatically lead to production of highly chlorinated PVC and its effects would be having a positive reflection on marketing activities. Revenue forecast Revenue forecast Project per year 2013 2014 2015 2016 Production per tonne 106 116 220 225 Cost of production 56 36 78 36 Average production per tonne 1160 1620 2000 22250 Expected sale per tonne 1960 2250 200 1960 Cost basic adjustment rate 100% 100% 96% 93% Industrial growth 7.04% 7.35% 7.60% 7.70% Feasibility: Macro Market and Drivers After conducting a competitive analysis, it has been observed that leading industries like Reliance and OGC in India largely depend on import of chlorine and PVC chemical. However, it has been observed that mostly, medium sized manufacturing enterprises are largely dependent on small enterprises who manufacture chlorine and chemicals. My company would be initially distributing high-chlorinated PVC chemical (Croston, 2009).  Pestle Analysis Political Factors The corporate tax rate of India is presently 33.399 percent (KPMG, 2013) which indicates that companies aiming to go for further expansion would require penetrating with consideration. PVC producing companies would incur losses if they enter into the Indian markets (Croston, 2009). Economic Factors As mentioned before the PVC chemical producers are highly dependent on chlorine production, infrastructure and petrochemical industries. Increase in prices of chemicals and oil in India, has been observed to have a better future prospect. These industries have better future prospects within 2013 and it will help in acceleration growth in Indian PVC industry. Social Economic Factors The increase in income level of the Indian consumers has increased buying of expensive residential complex buildings thus, increasing prosperity of PVC chemical and chlorine industry. The Indian construction industry is expected to prosper within the five years. Technological Factors Production of PVC chemical depends on technology advancement of a particular nation. This is because the processing that involves mixing requires advanced machinery, which can make it easily soluble (Croston, 2009). Legal As per the legal requirements of Indian government, the manufacturer needs to get product approved by a certified chemical laboratory. This is a mandatory process as it ensures customers high quality chemical products in the long end. Environmental Although, PVC manufacturing companies cannot curb down the side effects of chemical, it is mandatory for the companies to chlorinate the product for the safety of employees in production process. Moreover, highly chlorinated PVC chemical ensures safety conducive working environment. Sustainability The main target of any business is to deliver high quality chlorinated PVC chemical and distribute it for a popular construction and petrochemical companies of Mumbai. Financials An estimated revenue and expense forecast of upcoming five years are based on market expectations and for the near future. Business enterprise plans to develop a detailed financial strategy that includes, estimated revenue forecast and expense forecast, which helps the company to keep its strategy feasible and accurate. Feasibility: Managerial Capabilities A marketing strategy is supported by financial calculations of expense and budget allocation. The calculation is done by taking into account all monthly expenses that are required in providing childcare services (Croston, 2009). The above chart shows that production per ton increases with increased cost of production per ton. There are two types of revenue generation production per volume basis in this case. Production per ton of PVC chemical takes into consideration machinery costs and other expenses with the average revenue production per ton (Harvard Business School, 2007).  Contribution Margin/Breakeven Point The main task of Building Block’s day care centre is to generate excess revenue. This can be achieved if the variable costs and fixed costs are carefully evaluated. The overall contribution in production per ton of PVC chemical is $650 on weekly bases. This proves that breakeven point will reach in 43rd week of the year. The capital of an enterprise is taken as 6.3 percent interest rate. The estimated total expenses per week are $76.9, $78.8 and $61.5 in the year 2013, 2014 and 2015 respectively (Harvard Business School, 2007). Estimated revenue per week is $4519, $4807 and $6250 in the year 2012, 2013 and 2014 respectively. Estimate revenue increases because interest and corporate rate become lower. These factors are taken as assumptions. Conclusion Managerial process can only involve thoughtful consideration, as it requires a planned process to decide upon the managerial capabilities to be undertaken by different managers. Two departments would be heading and guiding the team members at the manufacturing layouts and at the branch office. The managers at the manufacturing layout would look after the production process and quality management. Production process would involve looking after bulk production of the chemical in large volumes and up gradation of machinery production of these high quality goods. Production of volumes goods would require assistance and approval from the managers from the head offices. Apart from approval, the directors would require monitoring the process and check internal quality control and procedures largely (Harvard Business School, 2007).  References Butow, E., & Taylor, K. (2009). How to succeed in business using LinkedIn making connections and capturing opportunities on the webs #1 business networking site. New York, AMACOM. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=236170. Croston, G. E. (2009). Starting green: from business plan to profits: an ecopreneurs toolkit for starting a green business from business. [Irvine, Calif.], Entrepreneur Press. Harvard Business School. (2007). creating a business plan: expert solutions to everyday challenges. Boston, Mass, Harvard Business School Pub. Kim, W. C., & Mauborgne, R. (2005). Blue ocean strategy how to create uncontested market space and make the competition irrelevant. Boston, Mass, Harvard Business School Press. http://www.lib.sfu.ca/cgi-bin/validate/books24x7.cgi?bookid=11368. Read More