PRN: 20
Project and Infrastructure Finance
Project Report
On
Sports Equipment Manufacturing Unit
Project Identification: Generation of Ideas
1. SWOT Analysis
Strength:
1. A New Unit – Starting from the scratch, will enable us to install the latest and the most upgraded machines, though it is a labour intensive project during the beginning period. Installing the latest machinery will drive the per-unit cost and other overhead expenses down to the minimum and will also ensure the quality as per the International Standards.
2. Labour Intensive – The firm will be labour intensive during its early stage. The requirement of skilled worker will be around 4. The rest will be helpers. 4 highly trained people ensures …show more content…
Huge Market – The sports market is dominated either by big players offering expensive and high standard sports gear and equipment or by small firms selling low quality products at a low price. There are few firms in the between. This is an opportunity to create a market in the segment.
2. Job Work Potential – Today, most of the big brands in sports like, Puma, Nike, Adidas do sell sports equipment but they donot manufacture the same. They outsource it to small manufacturing units. An opportunity of getting contracts from big units is possible.
Threat:
1. Competition: The market is occupied by many small and large units. To create a separate market of the unit will be challenging task.
2. Clear Articulation of Objectives
The Operational objectives of the firm are:
1. Reducing the per-unit cost of the product by increasing productivity, reducing wastages and achieving economies of scale and thus improve the contribution margin.
2. Initially the firm will manufacture Tennis balls but within a span of three to four years, the firm will expand its product offering by producing Cricket Bats, Tennis and Badminton Racquets, Badminton Shuttlecock etc. The firm will produce equipments that are used in more than one sport with minimum difference in the product …show more content…
This is the one for whom company does Job work.
Firm > Business
The last one is selling directly to Consumers through popular e-tailors like Flipkart, Amazon, e-bay, Snapdeal, Jaboong.
Firm > Consumers
Product Line:
Distribution Network: Company’s main effort will be to create a nation-wide distribution network. Initially the company will not need a nation-wide network but once company adds more products to its product line, the need for nation-wide distribution network will be key to increase sales and establish a market share.
2. Product and Distribution
Condition of Machinery: New
Production Capacity of Machine: 6,00,000 tennis balls per annum
Cost Structure: Cost of Producing per Ball Approximately ₹20 Contribution 25% of COP ₹05 Per Ball commission to Wholesalers’ ₹02 Per Ball commission to Retail ₹03 Maximum Retail Price after adjusting for taxes ₹ 30 to ₹35
3. Finance and Accounting:
Debt/Equity Ratio: The Capital Structure will implement a 60-40 Capital Structure. It means the owner’s contribution through equity will be 60% and the balance 40% will be financed through Bank