GARDEN CITY UNIVERSITRY COLLEGE

CASE STUDY:

BUSINESS PROPOSAL ON SHOE FACTORY

By:

NAME COURSE/PROG. INDEX No.

MAHAMA, ABDUL SALAM Bsc. Economics & Statistics 01310709

SEIDU SULEMANA Bsc. Economics & Statistics 01311109

ODURO EMMANUEL KWASI BBA MARKETING 01325709

AMOS ROSELY BBA MARKETING 01015511

May 8, 2011

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 TABLE OF CONTENTS

ITEM PAGE

Title page 1

Overview of Ghana economy/statistics 3

Executive summary 4

Our product 5

Optional location 6

Start-up and operational cost 6

Potential customers/target market 7

Competitors 8

Estimated market share 9

Marketing strategy 9

Production process and plant capacity 10

SWOT Analysis (Strengths, Weakness, Opportunities & Threats) 11

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 Overview of Ghana economy/statistics

The Republic of Ghana is a sovereign country consisting of ten regions located in West Africa.

Ghana borders Côte d'Ivoire to the west, Burkina Faso to the north, Togo to the east, and the

Gulf of Guinea to the south. It has a population of 24,233,431 with Density 101.5/km2 (103rd)

258.8/sq mi (2010 estimate) with the following macroeconomic indicators:

Gross Domestic Product (PPP) 2010 estimate  

-  Total $61.973 billion

-  Per capita $2,930

Gross Domestic Product GDP (nominal) 2010 estimate

 -  Total $31.084 billion  

-  Per capita $1,311[4] 

Human Development Index, GDI (2010 estimate)

0.467 (low) (130th)

Inflation 2011

January 2011 - 9.08%

February 2011 - 9.16%

March 2011 - 9.13%

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City Population - Accra (3,963,264) Kumasi (2,604,909) Tamale (360,579) Takoradi (360,651)

Tema (229,106) Teshie (154,513) Sekondi (153,900) Cape Coast (200,204) Obuasi (147,613)

Bolgatanga (72,000).

Executive Summary

Shoe Light Factory is a joint venture business that will sell high quality ladies shoes within

Ghana. We will offer wide variety of colours and styles and high quality materials used in the

manufacture. Shoe sizes start from size 5 to size 10 and include half sizes for example 6 1/2.

Our objectives in the near and long term:

 To become a market leader in the ladies shoe industry regarding shoe sales.

 To have developed the reputation for offering a convenient means of purchasing

our collection of shoes.

 To have a reputation for reliable delivery all over Ghana.

 To have a well known reputation for high quality and design.

 To confidently one day export our shoes all over the world.

Financial loan to support initial startup capital from our bankers, without financial assistance the

opening of the business will be delayed as certain operations cannot be performed. We will

require a finance loan to supplement the pool of our savings. The start up costs for Shoe Light

will be $25000 minimum to $50000 maximum.

In the long term we may require further financing to increase warehousing and manufacturing

when business grows. If demand exceeds our financial capabilities this will result in

inefficiencies and lost sales.

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This business plan is part of our regular business planning process. We will revise this plan semi-

annually. In the next full year we intend to upload our business website onto the World Wide

Web and begin advertising in magazines, news papers, radio and television to raise awareness

about Shoe Light Factory.

Product
 Fashionable ladies shoes.

 All types of shoes offered- from casual, to boots, to evening and formal, sexy shoes ,wedding

shoes, bridal shoes ,high heel shoes

 Wide variety of colours and styles.

 High quality materials used in the manufacture.

 Shoe sizes start from size 5 to size 10 and include half sizes. For example 6 1/2.

Range of Product:

Our business will provide a convenient, safe and trustworthy means of purchasing fashionable

ladies shoes. A wide variety of colours, sizes and designs will be available.

Forms of payment:

Shoe Light Factory will offer all forms of payment possible so that all customers have the

opportunity to purchase our shoes. Discount will be given to customers who buy in bulk

purchases.

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Returns Policy:

Refunds will not be given on change of mind purchases at this point. If there is a manufacturing

fault in design a full refund or exchange will be offered. An exchange will be offered for wrong

sizes within 30 days. Receipts must be kept for refunds and exchanges.

Replacement:

If there is a manufacturing fault a replacement pair will be given out as soon as possible.

Types of Customer Support:

An 1800 customer service number will also be available to all customers who have any queries.

Customers can also communicate with us via an e-mail address for comments or questions-

customersupport@shoeLightfactory.com

Optional location
Based on the cities population of Ghana, it is known that the capital city Accra, commands the

highest number of populace of 3,963,264 and it is proposed that the factory should be located in

Accra where we can have more customers relative to the other cities. Notwithstanding, we will

have agents in all the ten regions to distribute our products on our behave.

Start – up and operation cost

Shoe Light Factory desires to finance growth through a combination of equity/debt investment

and internally generated cash flow. Because of the cost of inventory and warehousing and

marketing costs of establishing a market presence, our business will be financed primarily a

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financial loan in the early stages and is expected to burn cash. It is expected that additional

investment will be required with in the first year, until we break even by mid to late 2012.

The start up costs for Shoe Light will be $25000 minimum to $50000 maximum.

Expected Annual Sales and Profit for the next 3 Years:

Year 2012:

 Sales- $50,000

 Expenses- $45,000

 Profits- $5,000

Year 2013:

 Sales- $70,000

 Expenses- $35,000

 Profits- $35,000

Year 2014:

 Sales- $90,000

 Expenses- $40,000

 Profits- $50,000

Potential customers/target market

Shoe for many people are a necessity but for many women shoes are an obsession. Women’s

shoes are a community of interest which is constant for many women who enjoy buying

fashionable shoes. Our target market is to manufacture highly fashionable and stylish shoes

available for ladies, due to the idea that women love fashionable products especially when it

comes to what they will put their feet in. Many stores don’t have a large selection of truly stylish

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shoes that these women want. Also many of these women work very hard long hours and don’t

always have the time and energy to leisurely search around stores. Our market will constantly

have new collections for our potential customers.

Our target market is not highly price sensitive; many women enjoy buying fashionable shoes.

Our collections of shoes are of high quality, and latest design. Our customers are shoe obsessed.

Many of them earn quite high salaries and purchase shoes as a leisure pursuit. Price isn’t a key

issue especially when purchasing sexy shoes, wedding shoes, bridal shoes, high heel shoes,

evening/formal shoes or wide variety of colours and styles.

After out-market research we found that women spend on average between $70 and $200 on a

good quality pair of women’s shoes.

Competitors
Our Immediate Competitors are: Topman Shoes shop is based in Kumasi that offers a wide

selection of men’s, and women’s shoes and belts for purchase. They import their products from

Europe. Adwo Yeboah shoes is also based in Accra that offers men’s, women’s shoes and bags

to be purchased. These are the closest competitors currently doing business. Very small number

of local Small – Medium Enterprise (SME’s) manufacture and sell foot wears in Ghana. The rest are

individual boutiques that sell cloths and shoes . There isn’t any shoe manufacturing company

presently in Ghana that specialise only in women’s shoes. Shoe Light Factory will deal simply

with all kind of women’s shoes.

Our company’s competitive advantage:

 High quality, wide variety of colours and styles.

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  A full refund or exchange will be offered if there is a manufacturing fault

 An exchange will be offered for wrong sizes within 30 days. Receipts must be kept for

refunds and exchanges.

 Replacement: If there is a manufacturing fault a replacement pair will be given out as

soon as possible.

Estimated market share

The shoe market is an international market, but shoe Light Factory for the time being will only

focus on national customers. The majority of the market in Ghana only import from Europe and

America. The shoe industry is a considerable one in itself, especially for many women and there

are growing opportunities in the Ghanaian market.

Our target market is the female populace in Ghana and our estimated market share will be (to

find the percentage of female population from the 2010 population estimate).

Marketing strategy
Shoe Light Factory will begin advertising in popular selected women’s magazines. We have chosen

women magazines because it is a high quality print media which suits are intended audience. These

magazines are targeted to an audience that we would like to capture. Their target audience are

women who are smart, sophisticated, like to be updated in the latest fashion and beauty trends,

educated, enjoy reading articles involving issues relating to women, middle to high income who can

afford to buy the pricey magazine every month and enjoy celebrity gossip. As our business increases

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in popularity we will be able to afford to advertise and explore other Medias such as radio, television

and on the internet.

Production process and plant capacity

Summary of the requirements for the following resources:

 Personnel: we will require an adequate number of staff to perform our business functions

including packaging of the products, security, distributors/agents and customer service

number. As our business grows we will hire more staff as needed on a part-time and

casual basis.

 Technology: we will require a reliable system that will organize orders and safe payment.

Mobile phones and a land line for staff to communicate with other staff, delivery

services, business services that we require, customers etc. Also up to date internet

equipment, computers, laptops and service provider.

 Plant capacity: we will acquire the art-of-the –arch technology equipment and machinery

necessary for manufacturing our products. The plant capacity will meet our level and

quantum of production per day.

 Finances: we will require a finance loan to supplement the pool of our savings. The start

up costs for Shoe Light will be $25000 minimum to $50000 maximum.

 Distribution: we will need a reputable delivery business to assist us in gaining a

reputation in reputable delivery. We will be working with our established distributors or

agents in all the ten regions of Ghana.

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 SWOT Analysis (Strengths, Weakness, Opportunities &

Threats)
Our strengths:

 High quality, wide variety of colours and styles.

 A full refund or exchange will be offered if there is a manufacturing fault.

 An exchange will be offered for wrong sizes within 30 days. Receipts must be kept for

refunds and exchanges.

 Replacement: If there is a manufacturing fault a replacement pair will be given out as

soon as possible.

 Each one of us is computer literate, fluent in English and posse’s first degrees.

 We will have agents in all the ten regions in Ghana to reach our customers

Our weakness:

 Limited finance

 Morale, commitment, leadership

 Own known vulnerabilities

Our opportunities:

 Market developments

 Technology development and innovation.

 Local market influences.

Threats:

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 Future political effects

 Legislative effects

 Environmental effects

 Competitor intentions

 Increase market demand

 Sustaining internal capabilities

 Unforeseen future obstacles

 Insurmountable weaknesses

 Loss of key staff

 Sustainable financial backing

 Seasonality, weather effects

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