Business idea:

The business idea which I have developed is about manufacturing of compressed tuff tile
because there is a niche market that demands quality product and there is a gap in market
providing quality tuff tile. The name of my company will be stone house. Stone House wants to
cater that niche market providing them quality product. We will be also providing extra services
including designing and installation of tuff tiles. Stone House want to revolutionize the tuff tile
industry by introducing customized tuff tiles and want to become trend setter of this industry by
establishing brand image of their product and make their pro Company Description

Company name:

Stone house

Business address:

The location of my plant will be at 18 km from thokar niaz baig Multan road Lahore Lahore. I
will run my operations from there.

Concept statement:

Product:

Our product is compressed tuff tile (paver tile) which is made by the hydraulic machines and we
will produce tiles of different size and shape according to the requirement of the customer. Our
product will be unique from other hand made tile because we use German paint for color and
25% chemical and 75% mixture of cement, small stones and sand. We will be providing tuff tiles
in different shape and color, designing along with installing them. We are also introducing
customized tuff tile whose color and shape will be made according to customers requirement.

Target Market:
Our target market is all the construction companies, government constructors, architects and all
those who want to construct their own house. Stone house is aiming to target all those who are
interested in installing a good quality paver tile (tuff tile) in their houses. according to our survey
we conducted randomly in DHA phase VII 80% of the people who are constructing their homes
have said they will go for quality rather than price but 19-20% people said that they give priority
to price in comparison to quality. Currently we will segmented our market on Geographical basis
in which we are focusing on DHA all Phases, model Town, Wapda Town, Bahria Town and
Gulberg. So we will promote our product more in these areas. So for this we had made 6
different teams to spread in this targeted segment and convince those who are constructing their
new home in these areas. We have also segmented the market on psychographic segmentation
and we will be targeting the luxury life style.

Why This?

Currently no one is producing compressed tuff tile in Lahore by using this technology. People are
also using handmade tuff tiles which have maximum life of 6-7 years but compressed tile which
are made by hydraulic machine have a life of more than 15 years.

Size of business:

The business would be a small size business as currently we are only operating in Lahore. We
have targeted our market and will try to fulfill them by providing superior quality products.

Special Features:

Tuff tile which are made by hand have rough top surface due to which dirt particular get stuck in
it which start fading the top surface but the tile which we will produce by hydraulic machine we
use chemical in it which create plain surface so the dirt particular dont stuck into it which
increase the life of the tile.

Industry analysis:
Now a days there is boom in the construction industry and there is also boom in construction of
houses for sale purpose or resident purpose. In construction one of the important component is
tuff tile (paver tile) which is mainly used for the area of garage and side lanes of the house.
Almost more than 80 percent of people prefer tuff tile (paver tile) to install in their garage and
side lanes. From past few years everyone is using simple handmade tuff tiles but now as time
passes thing are improving and new compressed tile by hydraulic machines have been introduced
and due to its good durability and finishing people are preferring compressed tiles in comparison
to handmade tiles.

Currently the compressed tiles are being produced in Karachi and Hatar by using fully automatic
machine due to which the cost in Lahore of compressed tiles are more than in Karachi because of
high transportation cost but still people are preferring to buy the compressed tiles at higher price
as they want good quality tuff tiles. So due to this scenario we have decided to install a hydraulic
tuff tile machine to produce that compressed tile in Lahore and cut the transportation cost and
sale the tile at lower price in comparison to the tile which is coming from Karachi and this will
be our competitive edge. Compressed tiles quality and durability is far better than the handmade
tiles. The industry of hydraulic tuff tile is unsaturated. There are very few producer of
compressed tuff tile due to which the growth rate is very high in this sector. For our plant and
machinery we are buying the machine from china with 8 shapes (die) and 150 wooden trays. We
are hiring the person for machine operation from Karachi which is already working with
hydraulic machine and have the experience of more than 2 years with this type of tile production.

Competitor analysis and market share:

Our competitor are all tuff tile makers in Lahore and the edge we have on them is that we are
producing better quality than them but on the other hand our competitors have the competitive
edge that they are offering low price and they have majority of market share. As we will be
focusing on marketing of our product to establish the brand name of our product and convey to
our target audience the quality we are providing. As we have targeted the top niche of market so
our aim will be to have majority share of this niche segment as this segment is more profitable
and willing to pay more.

Direct competitors:

The list of the direct competitors are as below:

Super tuff tile industry

Bismillah tuff tile industry

Shabbier tuff tile

Indirect competitors:

National tuff tiles pvt ltd

Master tiles pvt ltd

Five porter analysis:

Threat of substitutes:

In our case threat of substitutes is high because we are providing tuff tiles. We study that in
market substitute tiles are available so thats why threat is high.

Threat of new entrants:

In our case threat of new entrants is low because the technology which we will use is expensive
and not everyone is willing to pay for that technology. So it is one of the main factor of not
entering into this business and currently there are very few producer of compressed tuff tile in
Pakistan.

Bargaining power of buyer:

In our case bargaining power of buyer is low because currently no one is producing tuff tiles by
using this technology which we will use and no one is providing that much level of quality which
we will provide to our target audience. Other than that 80% customers are willing to pay higher
price for our product according to our survey.

Bargaining power of supplier:

Bargaining power of supplier is low because in china there is many supplier of this technology
and other raw material which we will use we can get it from here and there many suppliers of
that material.
Rivalry among existing firms:

Rivalry among firms to greater extent is intense. We have medium threat for those companies
who are providing this product because they are offering low price. When we enter into the
market it will force them to reduce their price to capture more share. We have to win this game
by our competitive edge which is quality.

Suppliers:

For raw material like sand, stone and cement I am getting supplies from sakhi cement ltd which
is a Lahore based company. I will import automatic hydraulic machine from Chinese based firm
named tallit co., ltd. For colors which we have to use in manufacturing I will get supplies from
German paints which the manufacturer and marketer of quality paints products in Pakistan as
well as the exclusive distributor of alligator paint products of Germany for Pakistan and
Afghanistan. Because my company will try to differentiate on the basis of quality thats why I
propose this list of well reputed suppliers and soon the contracts would be finalized after
evaluating certain specifications of their products.

Startup cost:

Machine = 1,800,000

Production/Office land purchase cost = 10, 00,000

Total labor = 30,000 per month

Agent =30,000 per month (5000 per agent excluding commission)

Inventory= 7, 00,000

Total startup cost= 3,560,000

Future trends of our business:

I have a unique mindset for my businesss future. After starting business in next year I will try to
get breakeven for the first two years. As, one of my indirect competitor master tiles are getting
contract from government for heritage sites, I also have a plan to get contracts from government
though it would be hard at start but I will try to break their market because it is the only company
who is getting contract from government. I hope to cover my all expenses and startup cost in first
two years then after that I have plan to expand my business in other cities of Pakistan. I will go
for expansion of my business. I will try to capture potential market of other cities like Karachi,
Islamabad. As in future more foreign companies are willing to invest in Pakistans real estate
sector so my company will start getting contract from them in order to get more market share and
to provide them with finest quality products.