Table of content

Executive Summary....................................................................................................................iv

1 Rationale of selecting the business............................................................................................1

1.1 Business idea......................................................................................................................1

2 Company overview...................................................................................................................2

2.1 Introduction...................................................................................................................2

2.2 Legality of the company................................................................................................2

3. Feasibility study.......................................................................................................................3

3.1 Market feasibility...............................................................................................................3

3.2 Operational feasibility........................................................................................................3

3.3 Financial feasibility............................................................................................................4

3.4 Business model...................................................................................................................5

3.5 Value proposition...............................................................................................................6

4. Product and Service plan..........................................................................................................6

4.1 Description about the product selected..............................................................................6

4.2 Features of the product.....................................................................................................7

4.3 Product strategy..................................................................................................................7

4.4 Benefits of the product.......................................................................................................7

5. Environment and industry analysis..........................................................................................8

5.1 Industry Analysis................................................................................................................8

5.2 Environment analysis........................................................................................................9

5.2.1 SWOT Analysis...........................................................................................................9

5.2.2 External environment analysis..................................................................................10

6 Marketing plan........................................................................................................................12

6.1 Customer Research...........................................................................................................12

6.2 Target Customer Strategy.................................................................................................13

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 6.3 Channel Strategy..............................................................................................................13

6.4 Positioning........................................................................................................................14

6.5 Branding Strategy.............................................................................................................14

6.6 Pricing Strategy................................................................................................................15

6.7 Internet Strategy...............................................................................................................15

6.8 Communication Strategy..................................................................................................15

6.9 Promotion Campaigns......................................................................................................16

6.10 Sales Strategy.................................................................................................................16

7. Operations plan.......................................................................................................................16

7.1 Production process...........................................................................................................16

7.2 Human resource plan........................................................................................................18

7.3 Material Cost....................................................................................................................19

7.4 Other equipment...............................................................................................................20

8. Market Research.....................................................................................................................20

8.1 Research Design...............................................................................................................20

8.2 Research Method..............................................................................................................20

8.3 Data collection methods...................................................................................................20

8.4 Data Analysis Method......................................................................................................20

8.5 Market survey...................................................................................................................20

8.6 Research Ethics................................................................................................................21

9. Marketing Entry Strategy.......................................................................................................22

10. Development plan.................................................................................................................23

11.Management plan..................................................................................................................24

11.1 Team member competencies....................................................................................24

12. Competitive advantage.........................................................................................................24

13. Risk Analysis........................................................................................................................25

14.Financial plan........................................................................................................................27

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 14.1 Revenue..........................................................................................................................27

Gross profit margin................................................................................................................27

14.2 Cost Analysis..................................................................................................................28

14.3 Income statement (3-year projection).............................................................................28

14.4 Balance Sheet (3-year projection)..................................................................................32

15. Funding plan.........................................................................................................................34

15.1 Working capital funding and management....................................................................35

15.2 Sources and uses of the funds........................................................................................35

15.3 Offers for the fund’s providers.......................................................................................35

Conclusion..................................................................................................................................36

Reference....................................................................................................................................37

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Executive Summary

In the current market, different flavors of ice cream can be found. But when it comes to fruit
ice-creams, there are only a limited number of flavors. The existing flavors that can be found
are strawberry, mango, etc. The owner considers the different types of flavors which we use to
produce Ice-Cream such as Banana, Avocado, Pineapple, Bael Fruit, and Anoda. The ice
cream will be made based on two main ingredients. They are heavy whipping cream and
sweetened condensed milk. The specialty of the ingredients of our product, when compared
with other leading brands, is that we are not adding any sugars separately. Those ingredients
will form the base of the product and 100% natural and real fruits are combined to bring out
different flavors in the ice cream.
In future the owner is the plan to set up one branch in France. Before setting up the business in
France we analyzed industry, environment, and culture using several methods. We are doing
research and collect the data from the survey to identify the consumer's behaviors and choices
in the France society. France is a tropical country; therefore, we can grab a vast target market
in our business. When it comes to human resources our business is a partnership of eleven
members which will help us to come up with a better solution with different skills and
capabilities of team members rather than a sole possession. All things considered, we believe
the above factors will act as barriers for other potential competitors and will lead ice cream
industries to generate a sustainable competitive advantage.

iv
1 Rationale of selecting the business

1.1 Business idea

In the current market different flavours of ice-cream can be found. But when it comes to fruit
ice-creams, there are only a limited number of flavours. The existing flavours that can be
found are, strawberry, mango etc. Those flavours do not cover many flavours of fruits that are
available in Sri Lanka. Therefore, our idea is to introduce a range of ice-creams of different
fruit flavours that are not existing in the market.

The concern on healthy eating has been rapidly increasing over the society. Through this
context, we have gone through several product offerings which do contain artificial food
flavours. Here, we are considering on the ice cream manufacturing and its flavours. Basically,
most of the ice cream brands available in Sri Lankan market have been added artificial food
flavours rather than natural food flavours.

Therefore, our ideas have been brought forward to come up with ice cream, which contains
only real fruit flavours. So that, it is supposed to add nutritional value towards the core
product of ice cream rather than which have manufactured using artificial flavours. Moreover,
we are supposed to introduce the flavours which are not widely available in Sri Lanka, and
very essentially all of the flavours made out of real fruits. According to our market survey,
there will be demand for the identified flavoured namely Bael fruit (Bali), Banana, Pineapple
and Avocado. It is expected to record best demand for Avocado flavoured ice cream.

We differentiate our product with the existing ice cream by highlighting the nature of flavours
as to the real fruit (natural) flavours. Therefore, in a broader context, the potential market for
our product can be identified as the all who are health conscious. Even though, at the initial
stage, the target market for our product will be the university students who consume ice-
cream. Our ultimate business idea is to introduce an ice cream range, which contains real fruit
flavours.

1
2 Company overview
2.1 Introduction

“Fruitco” is a real fruit ice-cream that introduce an ice-cream range to the market in the
flavours of Bael, avocado, banana, Anoda and pineapple. The existing ice-cream brands are
full of artificial flavours and we are providing a solution for that through the introduction of
our product range “Fruitco” to the market. It is completely produced of real fruits and no
sugars which makes Fruitco a healthier option for the customers.

2.2 Legality of the company

Our company is a partnership of five members. The law governing partnerships in Sri Lanka
is the Partnership Act of 1890. The Sri Lankan Companies Act No.7 of 2007 limits the
maximum number of partners as twenty in a partnership. This company is consisted with five
members which is conforming with the act which means it is not necessary to register under
the Company Registrar.

Each partner invests in the company with an initial investment of Rs.5000. Therefore, it is
written as a document and signed by the members for future reference according to the
section 18 of the Prevention of Frauds Ordinance No. 7 of 1840.

Vision

To be known as the only natural ice-cream brand in Sri Lanka while serving the customer
with the ultimate ice-cream experience.

Mission

To provide a range of quality products that exceed the desires of the customers by ensuring
that all the fruits are natural and healthy for the customer.

Objectives

1. In the following two years, the company plans to expand its presence across Sri Lanka.
2. In order to better understand the company as a worldwide organization that will join
the international market over the next five years.
3. Entrance into the relevant sector as an established brand of ice-cream products in the
Sri Lankan market.

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3. Feasibility study
3.1 Market feasibility

- Current Market Analysis

Ice-cream industry is a very popular and a profit-making industry all over the world.
At present, we have some leading ice-cream producers in Sri Lanka. But they have
focused only on some flavours of ice-cream. The prevailing flavours such as mango,
strawberry and fruit and nut only cover a certain range of fruits that can be found in
Sri Lanka. Therefore, we are planning to introduce the other flavours of fruits that are
not already existing.

- Anticipated Future Market Potential

Consumers are always interested in trying out new and different products. People like
to taste different flavours from time to time. From a survey conducted by us, we found
out that out of 70 respondents 69 respondents were willing to try out the new flavours.
Therefore, we can anticipate that there will be a high demand for our product as
people are interested in trying out new flavours and also as our product contains real
fruits with a nutritious value as well.

- Potential Buyers

Our target market would be people who like to have ice-cream as a dessert or at any
other event. At the first stages our target market will be the university students who
consume ice-cream. We will be supplying the ice-creams to the university canteens
and cater to the crowd at universities. Therefore, at the initial stage we would focus on
catering to the demand arising from the university and gradually expand our focus on
wider markets by distributing them to super markets.

3.2 Operational feasibility

Sri Lanka is a country blessed with cultivable land and has an abundance of fruits throughout
the year. This ensures easy access to all the fruits we are planning to use in our product.
Except avocado all the other fruits can be found all throughout the year. And the team
members are able to do the manufacturing at this level so that can be done without the need

3
of any paid labour. As the product is a food product a food certification can be obtained to
assure the quality of the product.

3.3 Financial feasibility

This ice-cream is made out taking real fruits as a base. Therefore, to assure the quality and the
fact that real fruits are included, the cost of the product will be on par or a little higher than
the existing ice-cream products. And we would be pricing the product accordingly to make
profits out of the product. A collection is made with the contributions of the team members to
manufacture the product at the initial stage. As the demand for the product increases with
time we will be able to increase the supply at a larger scale.

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3.4 Business model

In order to understand the business model, we have used the business model canvas. This
maps out our business idea, allowing it to be understood, tested and improved.

Key partners Key activities Value Customer Customer segments

propositions relationship

-Team -Manufacturing Universities in

members (in -Healthy -Maintaining long Colombo
-Packaging
production term relationships -Undergraduates
-Real fruits
and raw -Labeling with the customer
-MBA students
-Low prices
material -Understanding the
-Distribution -Academic staff
supply) -High quality desires and needs of
the customer
-Non-academic staff
-Raw Key resources -Meeting the Channels
material customer needs
suppliers
(once the -Team members Direct marketing
demand -Location of -Word of mouth
increases) production-
-Whatsapp status
Diulapitiya
-Group chats
-Equipment
such as beater -FB and messenger
stories
and
refrigerator
Cost Revenue streams
structure
Selling price per cup-Rs. 50
-Equipment

-Wages

-Raw

5
materials

-Fruits

-Plastic cups

3.5 Value proposition

“A healthy real fruit ice-cream experience at a considerable price.”

We provide a range of real fruit ice-creams at almost the same price as of our customers. But
how we stand out from them is by including real fruits in our product without simply opting
for artificial fruit flavours.

4. Product and Service plan

4.1 Description about the product selected

Fruitco real fruit flavors ice cream is new product for Sri Lankan market. Our product is
special among the current flavored ice cream. Because we produce ice cream using real fruits.
Current ice cream flavors do not cover many flavors of fruits that are available in Sri Lanka.
Therefor we introduce a range of ice creams of different fruit flavors that are not existing in
the market. Fruitco ice cream, which contains only real fruit flavors. So that, it is supposed to
add nutrition value toward the core product of ice cream rather than which have manufactured
using artificial flavors. We planned to introduce the flavors which are not available in Sri
Lanka. We producing ice cream using real fruits natural flavors namely Bael fruit (Beli),
Pineapple, Avocado, Banana and Anoda. We are supposed to differentiate our ice cream with
the existing ice cream by highlighting the nature of flavors as to the real fruit flavors.

Current context many people consider healthy eating products. Therefore, we thinking our ice
cream product is great support to people for healthy eating. Because many existing ice creams
in Sri Lanka manufactured using artificial flavors.

6
4.2 Features of the product

Suppliers: At the initial stage we plan to take fruits from our group member’s houses.
Furthermore, increasing our business, we suppose to purchase fruits from Colombo Manin
Market. Also, milkmaid and wiping cream we plan to purchase from super markets.

Product: Fruitco ice cream is targeted all of people they interest in changes of ice cream
flavors. Current market has limited flavored ice cream and artificial flavored. Therefore, our
product is introducing Sri Lankan natural fruit flavors of ice cream.

Retail ventures: Initially we sell our product at university premises. We hope to sell our
product all faculty canteens. Next, we hope to distribute our product through juice bars,
restaurant in Colombo region.

Internet ventures: We hope to advertise our product details through WhatsApp status and
WhatsApp massages among the university students.

4.3 Product strategy

Fruito ice cream which made using natural fruits. We will be provide healthy food product.
Current context all of ice cream products are manufactured by using artificial flavors. Also
these products have few flavors. We are produce range of ice cream which have different
flavors. That flavors are not existing in the Sri Lankan ice cream industry.

Our product is healthy product and it is create a new change for customer taste. We use our
full knowledge and experience to attract customers and distribute our ice cream among the
people. Also we use our adequate knowledge and experience to manage the cost and to
improve the product and manage future risk that may arise in the market.

4.4 Benefits of the product

- Good for healthy life

Our ice cream is healthy product, because we produce ice cream using real fruits. Artificial
flavors are very harmful to human body. Therefore, our product is support to healthy body.
Real fruits add nutritional value to the ice cream.

- Customer can consume fresh products

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We don’t use preservatives to produce Fruitco ice cream. Therefore, customer can eat fresh
products.

- Range of ice cream

We produce range of ice cream which have different flavors. Existing market have few
flavors of ice cream such as Vanilla, Chocolate, Strawberry, Mango and Fruit and nut. But we
produce different fruit flavors existing Sri Lanka. Also we produce ice cream using fresh
fruit.

5. Environment and industry analysis

5.1 Industry Analysis

An industry analysis is a tool which conducted reviewing the market factors in which the
product will be developed. The Porter’s five forces model is used to understand the
competition and potential profitability of relevant industry. It helps to identify threats and
opportunities and problems facing their business. Major factors that are analyzed through the
model are suppliers and buyers, the condition of competitors and the possibility of new
market entrants.

Our business idea is related to produce ice cream in different fruits flavour. Porter’s five
forces model is used to determine position of our company relative to other substitutes
companies.

- Competitive rivalry

Within the ice cream industry there are many substitutes available for our product. Also there
are large number of ice cream shops existing in the current market place. Beside there are
well established loyal brands in the market. Such as Elephant House, Cargills Magic,
Highland, Palwatte and etc. Therefore, can be identified there is high level of competition for
our product.

- Supplier power

Supplier bargaining power usually comes through competitive force. The power of the
suppliers in this industry is very feeble. An ice cream is produced with milk and fruits. There
are huge suppliers for milk and fruits. Therefore, it will be easy to choose a supplier and it is

8
also facilitates to mover from a new supplier due to the large number of it. Therefor we can
recognize suppliers do not have power for the bargaining over the companies.

- Bargaining power of buyers

The power of the buyers can either increase or decrease a firm’s profit. According to the
product we offer, the buyers are often a demanding a lot. They want to buy the best offerings
available by paying the minimum prices as possible. This puts a pressure on our product
profitability in the long run. In this industry there are lot of alternative product. Therefore,
consumer have more power to switch to that product. Because of that can be identified power
of buyers is high within this industry.

- Threat of Substitutes

Here, the threats from substitutes are comparably high because ice cream which is easily
available anywhere in the market. and can have a threat by its substitutes. There are lot of
substitutes for ice cream as a dessert. Such as Yogurt, Fruits, Sweets (chocolate, caramel,),
Pudding, and etc. moreover Milk, Fresh drinks are also considered standard substitutes for
our product.

- Threats of new entrants

Entry into the market by small firms can be high and quick. But when a company wants to
established itself in this industry, there are lot of things to consider before doing so. In this
industry well established brand names for ice cream. As results there are many threats arise to
new comers. Therefore, they have hard time to get the customers. We are going to introduce
range of fruit flavor ice cream. Their ingredients easy to find and we use easy technology.
Therefore, new comers easy to enter into the market. We can identify threats of new entrants
is high for our product but also if we consider the giants of the industry we can also say that
smaller companies wouldn’t want to enter and face the competition.

5.2 Environment analysis

5.2.1 SWOT Analysis

Strengths

9
 ● There are different members in our groups with different backgrounds and various
types of abilities. So we can easily face the challenges by overcoming the barriers.
● According to the team members’ skills and ideas we can improve the product quality
and efficiency.
● Our product ranges have different flavours of the Ice cream.
● Availability of fruits at a low cost most of the time of the year.
● This fruits have various nutrients.
● The members have various connections and strengths that make the team resourceful.

Weaknesses

● We have fear of failure of innovation in the market.

● Team members have lack of experience on that project.
● We have to concern about more things since we prepare a food product.

Opportunities

● Ingredients of the product can be supplied easily.

● We can offer quality product to the customer with concessionary price to increase
their satisfaction.
● High customer base available in the market.
● People prefer to consume various flavours of Ice cream.
● People tend to consume more nutrients products.
● These flavours of Ice cream don’t exist in the market.

Threats

● Products can be easily imitated by rivals.

● Stronger brand names of potential competitors.
● Lack of the advance technology.
● There are high legal impacts to Ice cream because it’s directly affecting to consumer
health.
● It takes more time to change the consumer behaviour because they are already
familiar with the existing brands.

10
5.2.2 External environment analysis

- Political Environment

We plan to introduce new flavored of the ice cream it is not existing Sri Lanka.
Government is mostly concerned about the consumers’ protection. Therefore they
introduce many policies such as food certificates. Government always try to
encourage new entrepreneurs. Therefore they have a positive manipulation from the
political environment.

- Economic environment

We introduce new product to the economy. It will generate new jobs. If we start this
business in a large scale it may help in reducing unemployment level in Sri Lanka.
Before introducing a product we should consider about the ingredients prices of ice
cream, equipment prices, wages rates, substitute and complementary products in the
market.

According to the analysis of this product, ice creams that are flavored in these fruits
not available in Sri Lanka. It will be a good opportunity for us. We should be more
considerate about our ingredient quality and suppliers.

- Social Environment

This product provides a new taste to the society. Therefore, we study about the current
market situation before launching our product. Current market has few flavors of the
ice cream. We producing various fruit flavors provide a new tasty and new experience
to the consumers.

- Technological Environment

We need some technological support to our product. Technology helps to produce

quality product to the consumers.

- Environmental environment

This product producing process may less harmful activities to the environment.
Container of the ice cream is a plastic container. It is one and only harmful thing to
the environment. But that container can be reused for domestic work.

11
- Legal environment

In the current situation we mostly think about the environmental protection and
consumer protection. Therefore, we have to adhere to some legal rules and
regulations. There are many rules and regulations in the Sri Lanka for food products
Such as SLS, ISO 22000, HACCP and etc.

6 Marketing plan
6.1 Customer Research
Customer Survey

Consumers are always interested in trying out new and different products. People like to taste
different flavours from time to time. From a survey conducted by us, we found out that out of
70 respondents 69 respondents were willing to try out the new flavours. Therefore, we can
anticipate that there will be a high demand for our product as people are interested in trying
out new flavours and also as our product contains real fruits with a nutritious value as well.

The results of the customer survey are drafted bellow on the customer preference for different
flavours;

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
Avacado Beal Fruit Pineapple Banana Anoda

Feedback from the potential customers

12
We were able to obtain feedback form few selected potential customers on “Fruitco”, real
fruit ice-cream. Their preferences on the different flours were in line with the results, which
obtain from the customer survey. Meantime, a suggestion has given for the new product as to
come up with a green package.

6.2 Target Customer Strategy

The customers for the “Fruitco”, real fruit ice-cream will be the ice-cream consumers, who
are expecting nutritional value rather than the core product. Customers are not thinking of
nutritional value of ice cream. But our efforts will able to highlight the importance of the
intended product. Merely, an ice cream is only satisfy the tasty requirements. The product is
go beyond the core usefulness of the product. Therefore, the customers will able to enjoy the
taste, while taking something nutritious.

Simply, the target customer strategy of Fruitco, real fruit ice-cream is to focus on the ability
of the Fruitco to add nutritional value towards the ice cream.

Our target market would be people who like to have ice-cream as a dessert or at any other
event. At the first stages our target market will be the university students who consume
icecream. We will be supplying the ice-creams to the university canteens and cater to the
crowd at universities.

Therefore, at the initial stage we would focus on catering to the demand arising from the
university and gradually expand our focus on wider markets by distributing them to super
markets. According to the survey conducted and the feedback form the potential customers, it
is expected for a positive a trend in buying decision of the Fruitco ice cream.

Meantime, the customer understanding on our product concept is at a considerably high level.
Since, 99% of the ice cream consumers are willing to purchase Fruitco ice cream and they
understood the importance of the product concept. The customer value addition from the real
fruit ice cream is greater than the floured fruit ice creams, which are available in the existing
market.

13
6.3 Channel Strategy

The following planned marketing channel strategies are supposed used for enhance the
awareness of the product and enhance the buying decision.

Social media marketing

Internal groups of Facebook, Instagram, WhatsApp and all other chat groups that are
consisting of university students can be used to promote the Fruitco ice cream. It is expected
to display WhatsApp flyers to make aware the availably of the product.

Direct marketing

Direct marketing can be one in conducting awareness stalls to make aware of the product, just
before make available the products the canteens.

Banner advertisements within university premises

It is expected to display banners of the Fruitco ice cream for the purpose of enhancing
awareness among the university students.

Promotional campaigns

For accelerate the sale, we can introduce promotional campaigns such as free issue for bulk
purchase. For an example buy 4 ads get 1 free.

6.4 Positioning

The Fruitco ice cream is able to position at the market, where healthy eating is targeting. The
concern on healthy eating has been rapidly increasing over the society. Therefore, the
growing demand for foods, which are adding nutritious value and eliminating or minimizing
the artificial ingredients usages is observed. Accordingly, Fruitco ice cream will lead for a
unique positioning in the competitive market for ice cream in near future, by highlighting the
use of real fruit flours.

6.5 Branding Strategy

None of ice cream brand in the market says as to nutritious, since those ice creams are
consisting of artificial flours. However, Fruitco ice cream is going to be a product which fully
manufactured using real fruits. The brand name, Fruitco itself send notification on the term
fruits. Moreover, the slogan of real fruit ice cream is used to create a unique brand image

14
towards Fruitco. Accordingly, the Fruitco brand leads a unique brand recognition among rest
of the ice cream brands.

The branding strategy of Fruitco ice cream is supposed to focuses on passion-based insights
to creative solutions. Further, growing concern on healthy eating can be addressed using the
branding strategy. Therefore, branding strategy of Fruitco ice cream can be considered as a
brand which creates a memorable brand experience.

The planned brand strategy is focusing on developing a brand personality for Fruitco. The
customer perception for Fruitco is expected developed with the attribute of healthy foods.

6.6 Pricing Strategy

According to the cost analysis, the selling price is set at 50 rupees for an 80ml ice cream cup.
The minimum price of the competitive brands for the same product (80ml ice cream cup) is
50 rupees. According to the customer survey, customer are willing to pay 50 rupees for an
80ml ice cream cup. Since, the value addition of the product is greater than the product,
which manufactures with artificial flours.

Ice cream Wiping Fruit Packagin Other Total

Name cream & cost per g cost per production cost per
Milkmaid unit unit overhead unit
per unit cost per
Fruit unit

Avacado 19.50 13 4.50 9 46

Beli 19.50 10 4.50 9 43
Pineapple 19.50 4 4.50 9 37
Anoda 19.50 7.50 4.50 9 40.50
Banana 19.50 5 4.50 9 38
Total 97.5 39.5 22.5 45 204.5

The pricing strategy should have to be covered the total cost of production, while maintaining
a decent profit margin.

6.7 Internet Strategy

As the internet strategies, our initially focus is only on social media campaigns such as groups
of Facebook, Instagram, WhatsApp and all other chat groups that are consisting of university
students. Because, at the first stages our target market will be the university students who
consume ice-cream and we are supposed to supply the ice-creams to the university canteens.
Therefore, social media is using as the internet strategies to promote Fruitco.

15
It is expected to develop a website with the enlargement of the business. So that, it can be
used to facilitate e-commerce using the web site.

6.8 Communication Strategy

The following communication strategy are supposed used for enhance the awareness of the
product and enhance the buying decision of potential customers. At the initial stage, our
target market will be the university students who consume ice-cream and we are supposed to
supply the ice-creams to the university canteens. Therefore, our communication strategy is
focus only on university students, and mostly limited within the university premises.

6.9 Promotion Campaigns

The company logo for the Fruits product is used in a marketing campaign to sell the product
to potential consumers. According to our company plan, the main target market for our
product is in the early stages of development. As a consequence, we plan to perform the
majority of our marketing via social media platforms such as WhatsApp groups, Viber
groups, and Facebook pages, among others. The primary aim of our social media approach is
to reach as many people as possible in our intended target market.

6.10 Sales Strategy

The concern on healthy eating has been rapidly increasing over the society. Therefore, the
growing demand for foods, which are adding nutritious value and eliminating or minimizing
the artificial ingredients usages is observed. Accordingly, Fruitco ice cream will lead for a
unique sales strategy in the competitive market for ice cream in near future, by highlighting
the use of real fruit flours. Meanwhile, the target customers are university students, who have
a right understanding on the product concern. Therefore, the sales strategy is supposed to
successful in the market.

7. Operations plan
7.1 Production process

We selected his house because they have retail and wholesale shop. They have a freezer also.
The ice-cream will be made based on three main ingredients. They are heavy whipping
cream, fresh fruits and sweet condensed milk. The specialty of the ingredients of our product
when compared with other leading brands is that we are not adding any sugars separately.

16
Those ingredients will form the base of the product and 100% natural and real fruits are
combined to bring out different flavours in the ice-cream.

Value chain and networking with external parties

Value chain elements are very important to plan the business. The value chain activites can be
divided into two types; primary activities and support activities.

● Inbound logistic is where purchased inputs such as whipping cream, fruits, sweet
condensed milk, cups etc. inbound logistics is important to keep contact with external
companies such as suppliers and delivery agent.

● Once the required materials have been collected internally, operation can convert the
inputs in to the products. The operation activities associated with transforming inputs
into the final product form.
● Outbound logistics is after the produce ice cream delivered right away or has to be
stored for a while. The outbound logistics are collecting, storing and physically
distributing to buyers. For this we are planning to start up partnership mainly targeting
the university students.

17
 ● Activities associated with marketing and sales are job of marketers and sales agent in
our organization to make sure that potential customers are aware of the FRUITCO ice
cream.
● Procurement is a support activity. It refers to the purchasing inputs used in the firm’s
value chain. Purchased inputs include raw material and as well as assets such as
machinery, equipment etc.

7.2 Human resource plan

Human resource management integrate with all of functions. Human resource is the most
crucial resource to enhance the capabilities.

According to FRUITCO’s success of the business should be depending on our team. All our
team members are undergraduates of management and finance stream. They all have sound
knowledge about good management and it is an advantage for our business.

Our tasks are dividing with them. Our main task is manufacturing Ice cream. Even though
majority is girls, the boys are supporting as much as well. We divided our members with
considering their different management skills. Main production team comprises of four
members and other seven members are handling marketing and other management activities
basically. Not only that we have well Real world business experienced members in our team
and their knowledge is very useful for planning cost cutting and quality maintaining.
FRUITCO’s marketing people have creative marketing and innovative distribution
advertising ideas. It helps us achieve our business goal of winning a larger percentage of the
available market.

And also our financing members are playing important role in the business. They are
responsible for preparing books of accounts, preparing budgets, maintaining funds. And also
they have seeking to ways to find more funds for expand the business. We discussed with the
team about different fruit flavours and come to conclusion. And also we divide financing
team, marketing team and administrative team.

Our marketing team mainly focuses promotion campaigns about our product. They are
planning good marketing plan to position our product on the customers mind. Administrative
team mainly doing admin tasks such as create documents, letters, collect details from others

18
and control the member’s tasks. At this initial stage FRUITCO’s has not any other human
resource other than team members. But in future we will plan expand the business with
recruiting people for production process. And also we have enough knowledge to training
them ourselves.

7.3 Material Cost

The fruits required to manufacture the product are, banana, pineapple, bael fruit (beli),
avocado and anoda. These fruits can be obtained from all around Sri Lanka. All the fruits
except pineapple can be sourced from the team members houses at the initial level. Bael fruit,
avocado, banana and anoda will be provided by group members as they have access to those
fruits free of charge at their home premises to satisfy the demand at this level. When the
demand increases we can consider buying those fruits as well from the market. When it
comes to banana and pineapples we are planning to buy fresh fruits from Pettah in bulks so
that we can reduce the costs up to a certain extent.

If the fruits are bought from outside the prices of them would be as follows per kilogram.
Item Unit Price

Banana I kg 120.00

Avacado I kg 130.00

Pineapple I kg 70.00

Bael Fruit I kg 200.00

Anoda I kg 150.00

Other than the fruits, the main ingredients used are, heavy whipping cream and condensed
milk.
Whipping cream and condensed milk can be easily obtained from super markets.

Whipping cream

1000ml – Rs. 976

Milkmaid

19
800ml – Rs. 450

Cups with the label

1 cup – Rs. 4.50

7.4 Other equipment

At the initial stage we used mainly beater and refrigerator. This refrigerator owned by our
team member. We planned buy this equipment after expand the business.

8. Market Research
8.1 Research Design

The market research study is use primary market research method. Primary market research
consists with the both of quantitative and qualitative method.

8.2 Research Method

The study is using the quantitative and qualitative method for the market research study. The
researcher is used open ended questionnaire to collect the data from the small groups. Due
the current situation owner selects the least number of small groups as a sample of the study.
Simple random sampling is use as a sampling technique. The study mainly use the primary
data collection method gathering information from the respondents.

8.3 Data collection methods

The market research study mainly uses the online questionnaire and one to one interview
method to collect the data from the customers. Due the current situation researchers will be
estimated to conduct the interviews over the phones.

8.4 Data Analysis Method

In order to make sense of huge amounts of data gathered from many sources, one approach is
to use data analysis. Any kind of study will need data analysis as a key component.
Information needed for the data analysis was gathered using a specially designed
questionnaire. Before beginning the study, the researcher plans to utilize the SPSS statistical
analysis program as a preliminary data analytic tool. In addition, charts for the study will be
generated using MS Excel.

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8.5 Market survey

Market survey is a tool to get feedback from the target customer. Due to this market survey,
we can understand customers’ characteristics, preferences and expectations etc. This market
survey can be categorized under the market research process. This research and development
is now become an important function. Before start a business, we did the market survey. We
ask some question from our target market. According to market survey we identified
customer preferences about our fruit flavours. Following chart is ultimate result of the market
survey.

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
Avacado Beal Fruit Pineapple Banana Anoda

8.6 Research Ethics

Ethical research is concerned with how well your actions are aligned with people who will be
impacted by your findings or those you study. Demographic information was gathered for the
purpose of this research in a manner that safeguarded the respondents' privacy. Identifiable
demographic information was purged from the questionnaire following a pre-test. To avoid
any unpleasant surprises, participants should know exactly what is expected of them, how
their data will be utilized, and what the repercussions might be (if any). In the questionnaire,
there is a whole section devoted to explaining the study's objective and introducing the

21
researchers. The study was explained orally by researchers, who then gave out questionnaires
to participants.

An explicit right to partly or fully withdraw from the research was provided to consumers in
the questionnaire, allowing them to choose whether or not to participate. Early on,
management gave their approval for the research to be carried out. Researchers were very
cautious when it came to participant anonymity in order to prevent and minimize ethical
problems throughout the research process. As long as participants' identities remain private or
anonymous, guarantees must go beyond safeguarding their names to ensure that self-
identifying comments and information are not used.

9. Marketing Entry Strategy

Export Strategy
Export strategy is most helps to acquire the new global market place in the international
market. It is assisted to spread the business products over the world. It is gotten chance to
introduce the local product for the international market. Before moving the export strategy
business required to identify the real market opportunity in the countries when business hope
to export. At first business required to maintain high growth of the domestics’ market.
afterwards business need to develop their product in international standards for the target
customers requirement. At first, they experiment in various countries like or dislike rate for
their product. Afterwards, peoples are most interesting Ice-cream flavours. Often the company
decides to export the product for all the countries for their target customers.

Franchising
Franchising is the technique for overseas market entrance in which a semi-independent
corporate owner pays the franchisor fees and royalties to use the mark of a firm and sell his
goods and/or services. The franchise package terms and conditions vary based on the contract
but usually include: equipment, manual and operations, training and approval. Franchising is
widely used and a very effective technique for entering across borders, but the organizations
that follow this mode must take into account both the good as well as the negative elements of
franchising. Franchising is the most common entry method into the international market.
Joint Venture
For a number of reasons, a company may choose one joint venture as its means of entry into a
foreign market, for example to share risk with others, to use their skills, etc. Two or more Joint
Undertakings must/should be jointly aimed at following: the entrance market, appropriate
risk/reward levels in association with the entering market, technology share, product
development and adherence to local government laws in order for a Joint Undertaking to
succeed. Joint enterprises are often effective when partners meet the following criteria:

22
converging goals, a small market share compared to market leaders and the capacity to learn
from each other without losing their competitive advantage or intellectual property rights.

Wholly Owned Subsidiary

Creation of a wholly owned subsidiary is the way in which an organization enters a foreign
market and retains full control of a foreign business. The two most frequent ways for
establishing wholly owned subsidiaries are via the acquisition or creation of new facilities. If a
foreign organization is bought to enter a new market, it is called an acquisition. This is the
founding in a foreign market of a completely new company and legal entity known as a
greenfield business. When it comes to joining a foreign market, many businesses choose for
the technique of acquisition since it lowers their risks while expanding their exposure. This is
because an acquisition takes advantage of the previously established brand name and customer
base.

10. Development plan

In the current market different flavours of ice-cream can be found. But when it comes to fruit
ice-creams, there are only a limited number of flavours. The existing flavours that can be
found are, strawberry, mango etc. We consider about the different type of flavours which we
use to produce Ice-Cream such as Banana, Avocado, Pineapple, Bael Fruit and Anoda.

The ice-cream will be made based on two main ingredients. They are, heavy whipping cream
and sweet condensed milk. The specialty of the ingredients of our product when compared
with other leading brands is that we are not adding any sugars separately. Those ingredients
will form the base of the product and 100% natural and real fruits are combined to bring out
different flavours in the ice-cream.

In the current situation we mostly think about the environmental protection and consumer
protection. There are many rules and regulations in the Sri Lanka for food products Such as
SLS, ISO 22000, HACCP and etc. We are plan to get the food safe certificate from The
Industrial Technology Institute in Sri Lanka in the initial stage of the product. This is mainly
affected to the marketing campaign of the project.

23
However, after developing an innovative Ice-Cream under the brand name of Fruitco our
team wanted to ensure whether our product idea was a successful one or not by measuring the
toxic level of the product. For that we have implemented several research and development
processes.

11.Management plan
With the combination of diverse expertise team members, a partnership was established for
the business concept of a variety of ice-creams of various fruit flavors that are not already
available in the market. When it comes to team members, everyone contributes equally to the
new company concept of various fruit tastes ice creams. The primary strength of a company
is its human capital, which consists of a team of highly motivated individuals with diverse
knowledge of management and business gained via university studies and participation in
different types of professional education. As a result, all team members are considered
employees of the company. With the need of the start operation of the company, Rs 30000.00
was collected as an initial contribution for the beginning of commercial operations.

11.1 Team member competencies

There are five core members in our group and according to our business idea, its success
should be depending on our team. All our team members are with the good knowledge of
business management with their past experience and education. They all have sound
knowledge about good management it is and advantage for our business.

We divided our members with considering their different management skills. Main
production team comprises of four members and others are handling finance, accounting and
marketing activities basically. Not only that we have well real-world business experienced
members in our team and their knowledge is very useful for planning cost cutting and quality
maintaining. Our marketing people have creative marketing and innovative distribution
advertising ideas.

And also, our financing members are playing significant role in the business. They are
responsible for preparing books of accounts, preparing budgets, maintaining funds. And also,
they seeking to ways to find more funds for expand the business. At this initial stage we have
not any other human resource other than team members. But in future we will plan expand

24
the business with recruiting people for production process. And also, we have enough
knowledge to training them ourselves.

12. Competitive advantage

In today every business in the world virtually are born into competition. It is well known that
competition in any kind of industry is constant and it has become growing concept. The
companies are forced to find ways to separate themselves from their near peer rivals.
Therefore, the organizations try to keep the greats resources as their workforce for creating
competitive advantages.

The concern on an ice cream industry is a very popular and a profit-making industry all over
the world. Therefore, we came up with idea as a introducing rang of ice cream of different
fruit flavors that are not existing in the current market. In ice cream industries generate
sustainable competitive advantages due to human, physical and financial assets we have.

When it comes to human resource our business is a partnership of eleven members which will
helps us to come up with the better solution with different skill and capabilities of team
members rather than a sole possession. Our members are specialized in Management and
Organization Studies and partly qualified in chartered accounting. Moreover, our team
members have sound knowledge and skill about leadership, communication and some of
them fluent in preparing food items.

The concern on healthy eating has been rapidly increasing over the society. Therefore, people
tend to consume more nutrients products. According that our ideas have been brought
forward to come up with ice cream which contains only real fruit flavors. So that, it is
supposed to add nutritional value towards the core product of ice cream rather than which
have manufactured using artificial flavors. And also our product brand name familiar with our
product. Those aspects will be very much useful to attract the attention of the customers.

Cost advantage of a company occur when business can manufacture a product at a lower cost.
Namely Sri Lanka is a country blessed with the cultivable land and has an abundance of fruits
throughout the year. Therefore, we can easy access to all the fruits which are planning to use
in our product. Moreover, we are able to reduce product cost by contributing our team
members to manufacture our product at this level. So that, can be done without the need of
any paid labour.

25
All things considered we believe above factors will act as barriers for other potential
competitors and will lead ice cream industries to generate a sustainable competitive
advantage.

13. Risk Analysis

Risk analysis is the more important and essential thin for any business or organization. There
is no any organization which is free from risk. Any type of business either stable or unstable,
large or small business environment should have to face risk. Therefore, our new product of
Fruitco ice-cream already attach with some sort of risk also.

- Positioning risk

Positioning risk is the major risk for any type of business. When we position our business, we
want to think more about the place and consumer convenience to reach the product. If we fail
to position our business in a compatible place it may cause a high risk for our solvency. In the
initial stage we chose the faculty canteens as our main seller. There are highly preferable
brand exists in the market already. Therefore, we have higher risk in the market when
selecting the vendors for our product. In the France the business has high risk of positioning
with the other ice -cream product.

- Market risk and business risk

Market risk is the risk that the market will not accept our product or service after we launched
it. This is a very real risk because there are so many ice cream products that consumers are
able to choose from that they tend to have a strong indifference towards new products.
According to the market risk and business risk our main risk is selected market is very small.
When considering the country as a whole this segmentation is very small. Our target market
is university student and MBA student of the France in the initial stage. Those consumers
already adapt to their own favorable taste under the various type of ice cream range.
Therefore, we have serious problem for the survivability of the business.

- Health and safety risk

Health and safety risk also directly affect for our product. Our product is a food item and it
easily can be used for eat as dessert. Therefore, we should want to ensure the health and
safety of our product. In the stage of initiation, we don’t have specialization knowledge as the
scientist. Therefore, our consumers may be getting confuse about our product safety because

26
we are new brand and new people for the market. To mitigate this risk, we get relevant food
certifications for ensure our product safety. Due the current situation of all the country, most
of peoples are vary considering their health and safety. Epecaially children and students are
must aware their health due the Covid 19 pandemic.

- Climate risk

Climate change is the major risk for our product. We use the natural fruits as our main
ingredient for our new product. Avocados, Banana, Beal, and Pineapple are the fruits that we
used for our ice cream. We have high risk about to how to found out those fruits in the off
season. Avocado and Pineapple are the fruits that we can find in some months in the year.
Therefore, climate risk is highly affected for our product.

- Compliance risk

Compliance risk also highly influence for new product. We are the new entrance to the
market place and we should want to identify and learn many legal penalties and laws
according to the business field. In the stage of initial we have minimum capital to develop our
product and face the any failure conditions. In accordance with the industry laws and
regulation we should want to follow best practices through the whole business process. There
for compliance risk is also major risk for us. To face that risk, we follow the relevant rules
and regulations for our business.

14.Financial plan
We have made a financial plan forecasting for the first three years.

14.1 Revenue

Gross profit margin

 We keep Rs. 7 from Bael fruit ice cream, Rs. 4 from Avacado ice cream, Rs. 13
from Pineapple ice cream, Rs. 12 from Banana ice cream, and Rs. 9.50 from
Anoda ice cream as gross profit.
 We can gain economies of scale from our suppliers when purchasing huge
volume of raw materials to the production.

27
  We expect to buy fruits from rural areas and from that we can reduce our cost.
 We plan to minimize material wastage from direct supervision.

14.2 Cost Analysis

Ice cream Wipin Fruit Packaging Other Total Selling Gross

Name cream & cost per cost per production cost per price per profit
Milkmaid unit unit unit per unit
per unit unit overhead
cost per
unit

Avacado 19.50 13 4.50 9 46 50 4

Beli 19.50 10 4.50 9 43 50 7

Pineapple 19.50 4 4.50 9 37 50 13

Anoda 19.50 7.50 4.50 9 40.50 50 9.50

Banana 19.50 5 4.50 9 38 50 12

14.3 Income statement (3-year projection)

2019/2020 2020/2021 2021/2022

Revenue 1,260,000 1,574,950 1,968,600

Cost of revenue (1,061,763.5) (1,327,163.5) (1,658,884.5)

Gross Profit 198,236.5 247,786.5 309,715.5

Operating expenses

Sales and Marketing (25,000) (23,000) (20,000)

28
 Administration (10,000) (12,000) (13,000)

Net Profit 163,236.5 212,786.5 276,715.5

WORKINGS

Revenue 2019/2020

Market demandto Price per Expected Sales Expected

(According unit (Units) Sales (Rs)
survey)

Avacado 32.5% 50 8,190 409,500

Beli 26.7% 50 6,727 336,350

Pineapple 10.6% 50 2,674 133,700

Anoda 12.2% 50 3,073 153,650

Banana 18.0% 50 4,536 226,800

Total 25,200 1,260,000

Revenue 2020/2021

Annual of Price per Expected Sales Expected

increment unit (Units) Sales (Rs)
sales

Avacado 25% 50 10,237 511,850

Beli 25% 50 8,409 420,450

Pineapple 25% 50 3,342 167,100

Anoda 25% 50 3,841 192050

29
 Banana 25% 50 5,670 283,500

Total 31,499 1,574,950

Revenue 2021/2022

Annual of Price per Expected Sales Expected

increment unit Sales (Rs)
(Units)
sales

Avacado 25% 50 12,796 639,800

Beli 25% 50 10,511 525,550

Pineapple 25% 50 4,177 208,850

Anoda 25% 50 4,801 240,050

Banana 25% 50 7,087 354,350

Total 39,372 1,968,600

Cost of revenue (2019/2020)

Sales units Cost per unit Total Cost of sales

Avacado 8,190 46 376,740

Beli 6,727 43 289,261

Pineapple 2,674 37 98,938

Anoda 3,073 40.50 124,456.5

Banana 4,536 38 172,368

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 Total 25,200 1,061,763.5

Cost of Revenue (2020/2021)

Sales units Cost per unit Total Cost of sales

Avacado 10,237 46 470,902

Beli 8,409 43 361,587

Pineapple 3,342 37 123,654

Anoda 3,841 40.50 155,560.5

Banana 5,670 38 215,460

Total 31,499 1,327,163.5

Cost of revenue (2021/2022)

Sales units Cost per unit Total Cost of sales

Avacado 12,796 46 588,616

Beli 10,511 43 451,973

Pineapple 4,177 37 154,549

Anoda 4,801 40.50 194,440.5

Banana 7,087 38 269,306

Total 39,372 1,658,884.5

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14.4 Balance Sheet (3-year projection)

Assets 2019/2020 2020/2021 2021/2022

Non-Current Assets

Property and equipment 115,700 108,400 101,100

Current Assets

Cash 100,000 96,023 399,738.5

Inventories 177,536.5 500,000 453,000

Total Assets 393,236.5 596,023 852,738.5

Liabilities and Shareholder’s

Equity

Equity 200,000 200,000 200,000

Retained Earnings 163,236.5 376,023 652,738.5

Long Term Liability 25,000 20,000 -

Short Term Liability 5,000 - -

Total Liabilities and Equity 393,236.5 596,023 852,738.5

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WORKINGS

Property and equipment (2019/2020)

Item Cost

Blender 15,000

Deep-Freezer 100,000

Beater 8,000

Total 123,000

Depreciation (straight line method)

Item depreciation

Blender 15,000/10 = 1,500

Deep-Freezer 100,000/20 = 5,000

Beater 8,000/10 = 800

Total 7,300

Book value of PPE (2019/2020)

Item cost

Cost(2019/2020) 123,000

Accumulative Depreciation 7,300

Total 115,700

33
Book value of PPE (2020/2021)
Item Cost

Carried forward cost(2019/2020) 123,000

Accumulative Depreciation 14,600

Total 108,400

Property and equipment (2021/2022)

Item Cost

Carried forward cost(2020/2021) 123,000

Accumulative Depreciation 21,900

Total 101,100

15. Funding plan

Developing the funding plan is a very important tool when we are supposed to start a new
business or an organization. The funding plan show how an organization raise funds from
different sources for a new business. We can understand what the sources of funding are and
who the fund providers are. It may be a easier for some of these sources to make contribution
rather than to provide money.

So, we also develop a funding plan to get some Information or an idea of our fund-raising
process. The funding plan help to resource allocation to production process of business.

When we develop a funding plan, we have to forecast future funds needs and have to find
multiple funds raise sources to match with future needs.

For our organization we forecast a budget for small time duration and raise funds for process
we undertake through this time period.

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15.1 Working capital funding and management.

Working capital is very important to carry on business day today activities in short tern other
than long term activities. If businesses unable to manage the working capital break down the
business processes therefore, we have to pay more attention on working capital management.
Working capital management is to ensure that a firm is able to continue its operations and that
it has sufficient ability to satisfy both upcoming debt and expenses.

In our ice-cream business, we have to purchase raw materials, producing ice-cream. Storing,
packaging and delivering are the daily processes cover these expenses we have to manage
good working capital funding.

15.2 Sources and uses of the funds

There are many sources for raising funds. We can organize an event, collect from team
members, grants from different providers and some sponsorships are the sources of raising
funds. In our businesses initially we put a collection from team members for start initially
stage of our business. After business will improve, we supposed to take some loans for
further activities. We think it is more sufficient to take our products to the market. Already
we request some providers to ask some funds and we think may be can collect in future and
we already discussed to implement a small event to raise funds.

We suppose to expense this our initial investment for purchase raw materials (fruits and
ingredients), Advertising, packaging and delivery. We use our own location to carry out our
business and our own vehicle to deliver our products to customers'. Therefore, we can
eliminate fixed cost and move funds for working capital.

15.3 Offers for the fund’s providers

We suppose to grant some benefits to our fund providers. We give the freedom to our all-
team members to feel the taste of our ice cream products while they are producing. And we
like to say our providers who are willing to join with us, we will give package of ice cream
for every month and we hope to provide our ice cream products to discount price. By using
all the above mentioned financial, marketing, operational, development and other plans we
hope to develop our product further and achieve our long-term vision.

35
Conclusion
Fruitco is a real fruit-flavored ice cream business that will establish a branch in Sri Lanka.
Prior to establishing the business, the owner worked in Sri Lanka as a researcher in the fields
of environmental and industrial science. Following that, the proprietor undertakes a market
research based on the primary market research model for identify the target customers
interest for the product. The owner of the business uses a range of marketing and human
resource strategies in the operation. Although our team succeeded in developing a distinctive
Ice-Cream under the brand name of Fruitco, we wanted to evaluate if our product idea was a
success or failure by assessing the product's dangerous level. It has been possible to achieve
this via the use of various research and development techniques. Following careful evaluation
of all of the factors, the owners have chosen to establish a Fruitco business in Sri Lanka.

36
Reference

Fleming, J. &. Z. K. E., 2018. Methodologies, methods and ethical considerations for
conducting research in work-integrated learning. The International Journal of Work
Integrated Learning,, pp. 205-213.

Saravanakumar, M. a. S. T., 2012. Social media marketing.. Life Science Journal..

Sekran, U., 2011. Reserch Merhod for Business:A skill building approach.. 3rd edition ed.
New York: John Wiley & Sons..

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