Bhaskara Consultancy Firm

Assignment Taken

New Production Set-up. Marketing Plans. Pricing. Give appropriate suggestions to the company on matters of operations, HR and IT.

Case Understanding

In my whole case study, I saw that there are two friends Manoj and Parth who prized a desire of improving the air quality of the atmosphere/environment. They have started a company at 50% equity stake with each of them. Manoj had develop a hybrid concept, which means the system uses a combination of Natural Plants and Machines. Here, the company have authorised capital of Rs. 2,00,000/-. Starting few months, they start to research to understand how different plants helps in absorbing bad pollutants from the atmosphere and helps in improving the atmosphere naturally. Next 9 months were spent in further improving the concept, already developed by Manoj earlier. After a lot of struggle they both reach a stage when there concept was now ready to take shape of a final hybrid product. The final product developed, consisted of 3 separate units of which two were physical units and one was software, which were all synced as one single device. The units were Air Sense (physical unit), Air Quality Management System (AQMS) (software unit) and Air Loop (physical unit). AQMS, cost of development: Rs. 1,20,00,000/-. AQMS software will attract regular updates and maintenance expenses from time to time. AQMS unit will not attract per unit production cost, like the other physical units (Air Sense / Air Loop). Other overhead expenses that the company is given in the case. PMCASPL decided to approach angel investors who would help them achieve their dream by contributing towards Capital required to set up the plant. After meeting and discussions with various investors, SAIF capital agreed to invest INR 10 Cr in their project for a stake of 5% in equity. Also, PMCASPL also visited the famous television programme for investment to share the idea of their project. The judges/host appreciated their project a lot and was ready to invest INR 10Cr. The distribution of the total amount was INR 5Cr towards capital contribution for a dilution of 5% in equity and INR 5Cr as a Term Loan for a period of 3 years carrying ROI @12% p.a. PMCASPL has allocated total budget of INR 10 Cr. for the financial year 2022-23. PMCASPL has hired my company as a consulting firm with the aim of providing valuable insightful inputs.

BCS Solution Summary

Our company Bhaskara Consultancy Firm provide solution to startup to oversee all important aspects in setting up a new production facility. We help to formulate the entire marketing plan/strategy and right pricing mix/strategy for the company. Also give appropriate suggestions to the company on matters of operations, HR and IT. Finance- PMCASPL have budgeted to spent Rs.10 crores in FY 2022-23. The product which company is making could turn out to be a revolutionary product which could yield them super profits in the short run. This project also involves a huge cost which they can recover through premium pricing. Marketing- Air Quality Solution is a high-price premium category & innovation latest technology-based product. The target segment can be tier 1 & tier 2 cities, upper middle to high-income category and health-conscious people. The other segment can be commercial like office, non-commercial like household and government & institutes like government offices, hospitals, school, colleges, etc. HR- The first and foremost suggestion would be to draw a proper structure of employee management system for the company. The company has recently finished its product and would need to work more efficiently in future as it will grow more. Employees are one of the most valuable asset of the company. So we need to have qualified , well trained, creative and innovative employees. For the recruitment of new employees, we need to start recruitment process as soon as possible. Due to the company being new, we need to hire experienced people who can help the company to grasp the market share and stabilize the working of the company. Should have minimum working experience of 3-5 years. IT- Businesses today need fast ways to work in order to be successful in the long run and improve their service. Information technology helps us store business records electronically, and IT helps us get more done in less time. Automation is the way to go if you're looking to enhance efficiency, streamline workflows, and improve your current processes. AQMS software can be automate which will reduce the cost of recruitment of new employee. Marketing can be done through digital marketing which would reduce cost.

Solution

Our company Bhaskara Consultancy Firm provide solution to startup to oversee all important aspects in setting up a new production facility. We help to formulate the entire marketing plan/strategy and right pricing mix/strategy for the company. Also, provide appropriate suggestions to the company on matters of operations, HR and IT. Strategy for PM Clean Air Solutions Private Limited (PMCASPL) are -

Financial Plan

Considering the budget Of Rs. 10 crores for the financial year 2022-23, the overall budget allocation is as follows:

                                            Assuming 3500 pieces each of air sense and air loop      

 

Costs	Calculation	Total (in lacs)
Air sense	Rs.10500*3500 units	367.5 lacs
Air loop	Rs.4400*3500 units	154.00 lacs
AQMS (software)	-	120.00 lacs
Salary and other expenses	Calculated above	84.60 lacs
Consultancy expense	Rs.500000*12 months	60.00 lacs
Interest cost (term loan)	Rs.5crores*12%	60.00 lacs
Marketing expenses		75.00 lacs
Additional field executives(new)	Rs.32500*12*12 executives	46.80 lacs
Regular updates & maintenance in AQMS (assuming 10 lacs p.a.)		10.00 lacs
Contingency reserve in case of price variations		22.1 lacs
	Total amount (in lacs)	1000 lacs/Rs.10 crores

Marketing Plan

Air Quality Solution is a high-price premium category & innovation latest technology-based product. Thus, segmentation to identify the target market is done on the basis of the value proposition that company is offering through its product.

Target Segment –

1. Geographic - Tier 1 & Tier 2 cities with the highest pollution rates – Delhi, Noida, Faridabad, Mumbai, Kolkata, Bangalore etc.

2. Demographics - Upper Middle to High-income category and Tech Savvy & evolved users.

3. Psychographics - Health-consciousus people and Early adopters & technology inquisitive people

The segmentations can be further bifurcated into-

1. Commercial Segments – Manufacturing & Production based companies – For office installation to capture the CO2 & other harmful gases.

2. Government & Institutions – Government offices, Hospitals, Schools, Nurseries, Colleges.

3. Non-Commercial – Households with income level above 15 lakh/annum (affordability) & also for patients with Asthma & other Lung disease.

The 4 P’s of Marketing:

Product - This includes proper testing of the 2 prototypes in the priority market segment of Delhi & understanding the areas of improvement & feasibility. Based on the feedback & VOC, the final product can be designed for launching in the market.

Price- The final price of the product has to include

1. The product manufacturing & shipping cost
2. Margins to be given to distributor & retailer
3. Company’s expected profit margins

Place-  Company can use D2C (direct to customer), distribution channel and online channel(E-commerce)

Promotion - Through billboards & banners, advertisements, digital marketing and product demonstration stalls can be put on Malls & company seminars for awareness.

HR strategies

The first and foremost suggestion would be to draw a proper structure of employee management system for the company. The company has recently finished its product and would need to work more efficiently in future as it will grow more. Employees are one of the most valuable asset of the company. So we need to have qualified , well trained, creative and innovative employees.

 For the recruitment of new employees, we need to start recruitment process as soon as possible. Due to the company being new, we need to hire experienced people who can help the company to grasp the market share and stabilize the working of the company. Should have minimum working experience of 3-5 years. After Recruiting the required candidates, we need to provide them with ample training so they can integrate themselves with the company as soon as possible.

 The company should have a clear rewards and punishment system for its employees. Ample growth opportunities should be provided. So that an employee and grow along with the company. It would not only motivate the employees it will also increase their competitiveness. It would also help in retain the employees. Growth of the company is directly related to its employees.

IT strategies

Businesses today need fast ways to work in order to be successful in the long run and improve their service. Digital marketing is a tool the company can use to promote its many products. It primarily deals with advertising delivered through social media, mobile applications, websites and search engines. It will help to reduces the marketing cost and spread awareness about the product fast as compared to other method.

Automation is the way to go if you're looking to enhance efficiency, streamline workflows, and improve your current processes. Automation of AQMS software will improve the efficiency and effectiveness of the work . One of the most significant benefits that any automation provides is free time. A task that once took five to ten hours a week can easily be condensed into one that needs only minor input, leaving staff free to take on new jobs, responsibilities, and workplace requirements.

Conclusion

Hence, we conclude that they have a pretty good idea, and this product could well turn out to be a revolutionary product which could yield them super profits in the short run until it could be imitated by competitors. They can charge a premium for their product compared to other competitors. This project also involves a huge cost which they can recover through premium pricing. Also, the company has come with a very good idea in order to deal with the huge problem the environment is facing today.

Attached File Details

Video

https://youtu.be/ZcK7F3nlpTk