Queensland Prefabricated - Marketing Strategies - Case Study Example

QUENNSLAND PREFABRICATED PTY. LTD. Executive summary Queensland Prefabricated PTY. LTD concrete product manufacturing company supplying the best and latest technology in concrete construction. Queensland Prefabricated company products include pre-tensioned concrete and prefabricate concrete. These products are superior to the traditional concrete mixed at the construction site because they are more durable, time saving, easily portable, and easily adaptable for whatever purpose the customer may be seeking. The range of products offered by includes roof trusses, roof trees, columns, beams, panel walls, foundations sockets, and bridge girders. The company plans to extend this range of products in the future to larger products such as beams, balconies, lintels, floor slabs or piles. The main objective of Queensland Prefabricated is to improve the way that construction work is done in terms of decreasing the resource constraints in the form of time and money. The interests of the investors will be to ensure that the product is manufactured as quick as possible, and a market realized soon after that. Once the market is realized and beachhead established, sales are to begin soon after. A team of highly competent and appropriate professionals has been put together to ensure that the company is a success. The team ranges from senior management, to the leadership below that, engineers, sales personnel, among others. Employees are selected based on a set of requirements, especially high level employees. All this ensures the quality of the products and services offered by Queensland Prefabricated. The strengths of this company are: High Productivity: Pre-tensioned and prefabricated concrete can be produced rapidly and be stored easily. High Quality: Manufacture of outcome is done in laboratory with special equipment. This means that product quality is ensured and quality control easily done. Employee skills: Having skilled employees affect quality of production. Research and Development capabilities: the company will be continually reevaluated and research continually done to ensure the company keeps developing and progressing in a positive direction. Logistic Channels and Quickness of Distribution: Efficiency in delivery helps builders and construction companies to complete their constructions faster than they have been able to do in the past. Though these products have many advantages, they have some weakness as well. These include: Cash Flow Problem: There is a cash flow problem at the production level; delays in payment of claims and orders impacts the production by causing an inability to purchase raw materials needed to continue with production. A weak Brand Name: Though the company has a firm knowledge base of the market, the product has a weak brand name, and because of this, sales of the product may not be as high as they could otherwise be or as high as the company would have liked them to be. Rival Business: the company faces rival businesses in the market place and this rivalry directly impacts the pricing of products. This therefore affects the quality of the products because it once again leads back to the cash flow problem. Queensland Prefabricated is a Queensland based company, whose mission is to provide construction companies with the best technology available needed to compete in an ever-changing and fast-paced world. By utilizing state-of-the-art equipment and providing the necessary technical expertise, Queensland Prefabricated brings a fresh perspective on concrete construction to the market and the construction industry. This is a solid and realistic business plan and will enable the company to realize the goals that it has set. The opportunity The world of civil engineering, like the world of medicine, is not likely to decline in business anytime soon. New buildings and structures are constantly coming up due to the constant and insatiable need for housing space, office space, industrial structures etc. Changing developments in the world in general have equated money to time, and have necessitated the creation of new building strategies and concepts by companies. The root causative of this has been that many building structures such as factories, bridges and dams, housing units such as apartment buildings are built in concrete. However putting up concrete structures takes quite long time to complete and causes increased construction costs, resulting in great losses in terms of time and money by companies. This situation also has a negative effect on construction firms because these firms aim at completing projects in the shortest time possible with maximum efficiency so that they are free to undertake new projects. The use of concrete in its traditional sense prevents them from realizing these goals as concrete is not efficient in this sense. Engineers have developed new construction technologies such as pre-tensioned concrete and prefabricated concrete to avoid these problems. These products are of high quality in comparison to concrete mixed at the construction site as they are manufactured in a factory assembly line setting where quality control is better managed; they are then transported to the construction site ready for use (Bruggeling & Huyghe, 1991). These products are time and cost saving, and they reduce construction site congestion. They have already been adopted in many construction projects and this growth is on the rise. There is a wide market for construction products which means that these products have huge growth potential in the years to come. Vision The company has a long-term plan to be in business and to utilize the specialized business knowledge they have gained as a whole. The business relationships that have been developed include vendors, discount chain buyers and manufacturing resources. The main objective of this product is to improve the way that construction work is done in terms of decreasing the resource constraints in the form of time and money. The core concept is the use of pre-made construction materials in order to achieve this goal. Pre-tensioned concrete and prefabricated concrete are the products of choice in this venture. The reasons that the company feels that its plans are realistic are because its products are superior in terms of durability and resource-saving. This is the right company to pursue this opportunity because it has understood the product, the business and its target market (consumers). There are special market conditions that are favorable to my getting started at this time. They are the increasing need to save time and money by maximizing output while using minimum resources. Products In this section prefabricated building materials will be analyzed. In prefabrication, products include two main categories; prefabricated concrete and pre-tensioned prefabricated concrete. Prefabrication refers to the process by which components of a structure are assembled in a factory or other manufacturing site. These sub-assemblies or complete assemblies are then transported to the construction site where the main construction is located. Prefabricated concrete is concrete that is manufactured in this way; such that whole parts e.g. building foundations, are pre-constructed in the factory and then transported to the construction site. These foundations are then all assembled at the construction site. Pre-tensioned concrete is made by casting concrete around steel tendons – bars or cables- while they are under tension. The concrete then bonds to the tendons as it cures, and when the tension is released, it is transferred to the concrete. Any tension subsequently imposed on the concrete is also transferred to the tendons. Pre-tensioning requires strong and stable points for anchoring between which the tendons are to be stretched. Thus, most pre-tensioned concrete elements are prefabricated and transported to the construction site, and this may limit their size. Pre-tensioned elements can be incorporated into beams, balconies, lintels, floor slabs or piles. The product range of these two technology groups will be such products as roof trusses, roof trees, columns, beams, panel walls, foundations sockets, and bridge girders. However, columns, panel walls and foundation sockets cannot be produced as pre-tensioned products, but only as prefabricated products. Prefabricated construction materials are widely used in the world of civil engineering and they have the following benefits over traditional concrete. Construction time is reduced and buildings are completed sooner, allowing an earlier return of the capital invested; on-site congestion and construction is minimized; quality control is easier in a factory assembly line setting than a construction site setting; prefabrication can be located where skilled labor is more readily available and costs of power, labor, space, materials, and overheads are lower; time spent in hazardous environments or bad weather at the construction site is minimized; and there is much less wastage incurred. Market In this business plan, the prefabricated construction industry has been selected as target market place. There are various kinds of construction types and materials in today’s technology. This company has chosen the prefabricated construction industry because these products are strong, durable, cheaper and time saving. It can be said that the potential market (customers) for these products is composed mainly of engineers, builders and construction companies. In construction, deadlines may be hard to hit due to all the unexpected difficulties and there may be more work to do than they can safely handle. The company in this case would need to outsource some of its projects to other firms and builders. The prefabricate construction industry comes in at this point. Moreover, any industry is a target market because almost all industries undertake construction projects at some point in time. Marketing Plan The company plans to focus all initial marketing efforts on establishing a beachhead at one large concrete sales company. The sales team will be responsible for the contacts with the appropriate buyers. The complete line of products will be presented as a package including display accessories that tie into the merchandising policies of each chain. Initially the price structure will be based on a maximum markup of around 10% in order to provide a strong price incentive. The company will be depending on the combination of the products’ ‘stress free’ nature, quality and price to break into this market. Context This Company is going to be a construction and building company and therefore its activities will be in this area. Moreover, there are engineers, technical personnel, skilled workers involved as it has a wide range of professional personnel involved. The company is timely in its creation as in the world of today time and money have been equated to each other. The construction industry, like any other industry is in need of faster and more efficient ways of carrying out their businesses. The prefabricate construction industry meets constructions at their point of need; pre-tensioned concrete and prefabricated concrete materials are time saving and more durable than other concrete materials that are currently in the industry. Organization and management team In this business plan the organization and the management team is as it is shown below. The brain of the business is the board of directors. Professionals from this section are responsible for establishing the business and creating new business ideas. They decide what direction the company takes and make all the major leadership decisions. They can also be referred to as the heads of the company. Below this section, three managers follow the head office. They include; the sales manager, the technical manager, and the purchase manager. The sales manager deals with the sales of the product to companies within the target market. The technical manager’s job is to act like a coordinator; they control the team and report to the head office. The purchase manager does the purchasing of the materials needed for producing of the products whenever they are required. The static engineer does the scaling of the products and buildings as well as checking of the ground survey. The manufacture engineer deals with the planning of the producing and is also responsible for the construction site. The control engineer does all the controls and checks of the project, and also checks the conformity and appropriateness of the product to/ for the project. The sales, technical and purchase managers in this business plan report to the board of directors while the static, manufacture, and control engineers report to the technical manager. Board of Directions Sales Manager Technical Manager Purchase Manager Static Engineer Manufacture Engineer Control Engineer Team Leaders Team Leaders Team Leaders Include 5 technical Include 5 Technical Include 5 technical Employees Employees Employees Financial plan Requirements for start-up capital are as follows: This is a list of expenses for which the company will require either start-up capital or financing. These items include buying raw materials, getting factory space, equipment and fixtures, tooling, transport expenses and start-up overhead expenses. These expenses will be included in a monthly cash flow projection to indicate the ongoing requirements for cash. Financing sources for starting the business are as follows. While we will not be depending on banks for financing, there will be other resources available to us such as leasing of equipment and fixtures, credit from suppliers, mortgage financing, etc. Referrals include the following helpful contacts to lending institutions: my accountant, the Small Business Administration, other professionals within the construction industry etc. The company is also prepared to make presentations to potential lenders. The presentation kit includes this business plan, the company’s financial statement and tax returns. The company will be prepared to be specific in its needs for financing, the payback program and the sources of repayment. The company will furnish potential lenders a cash flow projection showing sources of repayments and will be conservative in the forecasts. A portfolio of referrals will be prepared for the finance package. The company has made some base-line assumptions that investors will buy into the idea, inject their investment (whether capital or otherwise) as soon as possible so that production begins as soon as possible. Profits are estimated to be in the range of $500,000- $1,000,000 by the end of the second year of business, and the company expects to have broken even by the end of the first year. Entrepreneurial team The company has a team of highly talented and passionate entrepreneurs. These include management, sales personnel, engineers, and leaders. The team is highly capable of and highly committed to delivering on the company’s vision and promises to investors in terms of product quality and financial returns. This team will be constantly analyzed by appropriate human resource professionals who are well acquainted with the company and the industry as a whole. Required resources The company will require various resources to start up and be able to conduct business. Among these resources will be; physical resources- in terms of factory space, raw materials etc.; human resources as the right mix and balance of people working together in a company can launch the company well and enable it to go the extra mile within this industry; and most importantly, financial resources will be required as this determines when productions will begin and subsequently how soon and how high sales and profits will be. Regarding human resources, the company will look for the following characteristics in marketing employees to achieve its goals. People who: Like what they do, are quick learners, project a pleasant and positive image, like people and relate well to them, are helpful to customers and fellow associates, are ambitious and seek to grow in responsibilities. The company will also follow a checklist in hiring marketing associates: have a hiring policy in place including written salary structure, commission compensation and perks; create job descriptions for everyone; conduct ongoing marketing meetings; have written policies and procedures on handling customer complaints. Due Diligence Procedures for Acquisitions The company may have opportunities to acquire businesses in the future. In order to position itself to investigate acquisitions intelligently, the following “due diligence” process will be adhered to. The company will use a team of experts to give specific advice on the various components of the acquisition including: attorney(s), accountant(s), banker(s), broker(s), equipment supplier(s), and other business owners within the industry. The following information will be provided: sellers’ records and verification of revenues; current financial statements; cash deposit records; supplier bills; financial comparisons of similar businesses; and anything else that will be necessary. Valuation analysis will include also be done toward this end. Uncertainties and risks Although, this product has some advantages it has got some weakness too. These weaknesses bring with them some uncertainties which means that there are risks involved with the company. The risks include; Cash Flow Problem: There is a cash flow problem at the production level; delays in payment of claims and orders impacts the production by causing an inability to purchase raw materials needed to continue with production. A weak Brand Name: Though the company has a firm knowledge base of the market, the product has a weak brand name, and because of this, sales of the product may not be as high as they could otherwise be or as high as the company would have liked them to be. Rival Business: the company faces rival businesses in the market place and this rivalry directly impacts the pricing of products. This therefore affects the quality of the products because it once again leads back to the cash flow problem. Change in consumer needs: When a product is no longer needed by the consumer, this results in reduction of production which may eventually might lead to ending the business. New regulations: New regulation in the market forces the companies the change their systems of function and their methods of production which causes the company to incur extra, unplanned for costs. Financial Return Once the products take root in the market, there will be positive returns as the product will be preferred by consumers due to their superiority and higher quality. As mentioned before, the company expects to have broken even by the end of the first business year, and to have hit profits in the range of $500,000- $1,000,000 after the end of the second business year. The expectation is that, business will bring more business in the sense that the business will grow and sell itself as the products speak for themselves. The company expects a return on its investment by the end of the first year (break even) if business goes as forecasted. Harvest The investors and entrepreneurs should expect to recoup their financial investments by the end of the second year of business. Expansion Plans Once business has been established, the company plans to implement the following growth strategy. We anticipate it will take approximately 3 years to gain sufficient experience and level of profits before any expansion plans are implemented. The company’s growth strategy will be guided by the following: it will not set an inflexible timetable for expansion but will wait until a sound basis of experience, earnings and cash flow is achieved. The company intends to expand into producing larger products compared to those being done before expansion; because this will increase income. Accounting and cash flow controls will be in place with profit and loss statements prepared for individual expansion units on a quarterly basis. Internal controls for accounting, money handling and inventory will be in place. Attorneys will review all documentation regarding expansion. This will include leases, employment and incentive agreements, licensing and franchise agreements, important commitments with vendors and customers, etc. Hiring and training policies will be in place. Fringe benefit plans will be in place. The intention will be to delegate authority and responsibility to expansion management personnel with the following conditions in place: 1. Managers will be motivated by a profit incentive plan that will be tied to manager’s individual success. This plan will be in writing, simply stated and will call for frequent periods of accountability. 2. The company intends to maintain an ongoing study of its competitors. Their successes and failures will help the company form guidelines on what to do and not to do. The company plans to develop profitable pilot operations before undertaking full-scale production. Analysis will be made of sources of financing, cash flow, accounting systems, incentive compensation plans for managers, and economics of scale. References American Society of Civil Engineers (2008). Civil Engineering Body of Knowledge for the 21st Century. Virginia: ASCE Publications Bruggeling, A. S. G. & Huyghe, G.F. (1991) “Prefabrication with Concrete.” Balkema, Rotterdam. pp. 380-410. 9. Hansen K. & Zenobia K. (2011). Civil Engineer's Handbook of Professional Practice. Canada. John Wiley&Sons Inc. Imperial college business school (2009). How to write a business plan [PDF]. Retrieved from https://workspace.imperial.ac.uk/innovationstudies/public/Teaching%20note%20-%20How%20to%20write%20a%20business%20plan.pdf Krishna R. N. (2006). Prestressed Concrete, 4th Edition. India: Executive Publishers. My Own Business (n.d.). How to finance a business. Retrieved from http://www.myownbusiness.org/s8/ Neville A.M. (2006). Concrete: Neville's insights and issues. London. Thomas Telfrod Publishing. Rotterdam. Balkema Publishers Read More