SHANXI UNIVERSITY OF FINANCE AND ECONOMICS

ASSIGNMENT: MANAGERIAL ECONOMICS

SUBMITTED TO: JIANG YUYAN

TOPIC: BUSINESS PLAN

SUBMITTED BY: Shahzaib 李明

Tafheem Tayyab 达芙希

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1. Executive Summary:

The name of our business is “Consumer Organic Controlled Kitchen Garden” and we are
introducing a technique through which we will be able to grow all seasonal and out seasonal
fruits and vegetables in our nursery at the initial stage but after 1 year we will develop the app
and the website and perform the business activities in the houses of our customers. We will
install the proper system of production in the kitchens of our customers through which people
will get the desire fruits and vegetables.It is basically a kitchen garden with a self controlled
environment, which can be operated by consumers to grow both off and on season organic fruits
and vegetables. This technique can be adopted by our people at our nursery, by farmers and even
by organic industries who would find this beneficial for themselves and for their business
respectively. Japanese machinery and various electronic sensors shall be used for the efficient
working of this kitchen garden. The idea is self-made and as per the current health conditions,
we have come to the observation that organic food is gaining more popularity among the people.
Although a few organic food industries are able to preserve off seasonal fruits and vegetables
and sale it as canned food yet they are not able to provide fresh off seasonal fruits and
vegetables. The need to consume fresh food from all seasons at a time will be fulfilled through
this source. Here, we have build this set up to solve the issue. After expansion, the business will
upgrade the machinery; add more sensors for better growth and add new tools and equipment as
required. The business is mostly operated through professional engineers, technical experts and
sales staff team who have relative experience in electronics. Our team shall work in cooperation
with people who are interested in this development, through contract and we shall provide our
services with charges to interested consumers.

2. Business Description:
2.1 Introduction to Business
Consumer Organic Controlled Kitchen Gardenis a startup partnership between Tafheem
Tayyab and Shahzaib. It consists of a organic controlled kitchen garden which could be used by
consumers by taking our services and using the introduced technique. The business consists of

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four major departments that are Human Resource, Finance, Marketing, Production department
which will regulate all the respective activities.
This is the era of technology and every product which we see is going official. It is easy for users
to have access to different products produced by us easily. Thus, we are making it easy for the
users to utilize our method at their industries or homes without any stress. In short, company will
provide an installation facility according to the demand of customers.

This is for everyone out there thinking of expanding the profits of their company and for people
at homes who need to intake healthy organic food. Our new technology will be much more
useful for large food based organic firms. Nowadays, everyone wants to eat food they like and
also which will be healthy for them as in the current time, there are a lot of people who have
certain health conditions and who would like to eat the food of their choice that may not be
available in current season so here out method will solve the problem.

We are planning to take materials from different renowned corporations and other required
materials from others wholesalers and assemble at our manufacturing unit by hiring labor staff.

2.2 History

Organic food industry is a vast growing industry around the world. The requirement for organic
food items rose as a reaction to a move towards the utilization of engineered pesticides and
manures following the approach of industrialized horticulture in the 1900s.

The chart below demonstrates the organic farming territory worldwide from 2000 to 2015. As
indicated by the report, the worldwide organic farming region added up to around 50.9 million
hectares in 2015, up from 30.47 million hectares in 2006.
The European Parliament published a report, titled ‘Human Health Implications of Organic Food
and Organic Agriculture’, which highlighted the multiple benefits of consuming organic food.
The latest figures for organic sector show that 50.9 mn hectares of certified organic agricultural
land and the organic market is worth over US $80 bn (IFOAM, 2016).

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 2.3 Mission

The basic mission of our business “Consumer Organic Controlled Kitchen Garden” is to
achieve customer satisfaction through the provision of quality products according to the desire of
customer.

2.4 Goals and Objectives

The major goal is to attract customers towards latest technology, achieve customer satisfaction
and increase the return of investment within the specified period of time.

Organization Chart

CEO & MANAGER

Tafheem tayyab & Shahzaib

Human resource Finance Marketing Operations Customer Service

Contracted Team of plastic

Manufacturer

(YAH Plastic Industry, ISB)

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2.5 Logo

2.6 Products:

3. Market Analysis:

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Agriculture is the largest sector in the Pakistan economy. About 27 percent of Pakistan's total
land area is considered arable. Four crops dominate agricultural production namely wheat,
cotton, sugar cane and rice, and account for around 39% of total agricultural output and nearly
10% of GDP. Approximately 70% of country's foreign exchange earnings come from the sale of
agricultural products such as cotton, rice, fruits and vegetables etc. and agro-based industries,
mainly the cotton textile industry which is the largest industrial sub-sector in the country. So
Pakistan's economy remains by far a single-crop economy, based purely on cotton.

The world organic market is growing steadily and is expected to have a market value of $100
billion by year 2006. However, the organic agriculture is still in its infancy in Pakistan. Current
products include organic rice, organic sesame seed, organic wheat, organic Kinno fruit and juice
concentrate, and organic mango fruit and pulp. Tremendous opportunities exist in a wide range
of organic foods including fruits and vegetables, cereals and grain, beef, poultry and eggs, honey
and several other processed products. This implies that with proper guidance, support and
strategies, the Pakistani farmers should be capable to cater for the domestic demand and
penetrate the foreign organic food markets as well.

3.1 Market Size

We have identified our market size by determining the population of Rawalpindi and Islamabad.
As the population of Rawalpindi is approximately 1,743,101 and the population of Islamabad is
approximately 601,600. So the total population of both cities is 2,344,701. So, we estimate that
there are 249015 houses in Rawalpindi and there are 85943 houses in Islamabad based on the
family member’s calculation in which five to seven members are living in a house. The total
number of houses is 334958 from both cities. By the growing number of housing societies and
industries, we assume that we will get 0.3% orders from houses. It means we will get 750 orders
from Rawalpindi and 300 orders from Islamabad, so the total number of orders will be 1050
yearly. We will get approx. 63 orders from Rawalpindi and 25 orders from Islamabad per month.
Rest of the orders will be from the hardware or mobile stores located in Islamabad and
Rawalpindi.

We have also examined the population of organic industries. There are a very low percentage of
organic industries currently active in Pakistan; however there are hopes of receiving orders from

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them 0.1%. They may also contact us for taking our services by signing a contract for 1 year and
extend it later on, if they find our services to be profitable.

3.2 Market Share

The company is estimating a market share of 5-7% initially. According to SWOT analysis that is
Strength, Weakness, opportunities and Threat, the company is able to find more opportunities.
Also, according to (PEST) that is Political, Economic, Social and Technological factors, the
political stability is growing in Rawalpindi and Islamabad. The economy is assumed to be more
static, also the growing demand of service delivery at the doorstep and the need of technological
advancement in every sector, engagement of people in their work create positive opportunity for
our business.

4. Our customers/ Target Market:

Company’s target market is divided into two segments, the residential segment and commercial
segment as well once company is well established and well known in market, also company will
have budget to work more professionally by opening a office in future for customer support.
Geographically we are targeting the lower class, middle class, high class of the two cities that are
Rawalpindi and Islamabad.

The residential segment targets all the households in the targeted area that wants this service to
be installed at their homes. In this segment of the target market includes a lot of people. For
people it is sometimes difficult to go to the market and buy foodor when they want to eat the
fruits and veggies of their choice which are not available in the market. Such people can go to
their own garden and get organic food for their kitchen. Company assures and guarantees them
to provide the best quality services without any fault or difficulty.

The commercial segment of the market will be food stores who are interested in keeping such off
seasonal food items at their outlet. The company can handle any situation due to the availability
of expert and professional staff.

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5. Competition pattern:
5.1The Market and Competition
With the advancement in agricultural sector, people are now more concerned about the latest
inventions in the market. For this, conscious people select those services with more functions
comparable to others. Thus, the need to innovate and compete in order to survive in the market
has comparatively increased.

Out of thousands of locals, company’s aim is to visits every house and company in Islamabad to
aware them of the provided services with ease and experience.

5.2 Competitive Factors

Factors Strengths Competitors Weaknesses
Quality Innovative product
Expertise Expert, trained and Local expertise is
professional staff more acknowledged
Less Fatigue Fatigue to be handled Local are unaware of
by workers such product
themselves
Diverse Nature Customization Such product is not
according to customer provided locally
demand
Cost Cost is relatively Cost for the customer
different of each may rise due to
device within increase in cost of
installed functions material and laborcost

From the above data, this can be concluded that “Consumer Organic Controlled Kitchen
Garden” has competitive tag based on their diverse nature, quality and flexibility to gain trust of
people and divert them towards us; it should be on us that we must use high quality materials in
our product.

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6. The Competitive Advantage:
Organic food industry is vast and holds a great opportunity in it. Core value of the business is
adding innovation, creativity and giving the traditional concept a modern touch. This provides us
competitive advantage over other businesses. The second factor that business has a competitive
advantage over others is the quality of company’s process and expert workers. The local workers
who still follow the traditional method have monopoly in the market. However, the expert and
experience workers of company having essential knowledge of market trends makes it easier
for the company to achieve desired results. Company’s whole focus is the customer satisfaction
by fulfilling their needs through it.

6.1 Competitors

 At present this business have a few competitors in our country and worldwide.
 The Pakistan Agricultural Research Council (Parc) has set up more than 300 clubs in the
twin cities under a kitchen and rooftop gardening program introduced to promote organic
agriculture. Members of the clubs include college students, military officials and the
public, for whom the program has the potential to address food and health in urban and
peri-urban areas.
 Official sources said personnel from 600 NGOs have been facilitated to promote organic
farming and kitchen gardening in Islamabad, Khyber Pakhtunkhwa and Azad Kashmir.
 Global organic food market is projected to grow at a CAGR of 16.15%, in value terms,
during 2017-2022. Growing awareness regarding health benefits of organic food
consumption, rising per capita spending on organic food products and increasing health
concerns due to growing number of chemical poisoning cases are expected to drive
global organic food market in the coming years. In addition, continuing product
innovations and aggressive marketing strategies adopted by major players and online
retailers would positively influence the global organic food market during forecast
period.
6.2 Threat

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  Local vendors that have already build their trust and get huge contracts serves as threats
that might sabotage company’s business.
 The cost might increase in case of increase in the prices of material from the back end.

7. Sales Strategy;
For sales strategy and its implementation, the company will focus on greater service through
better scheduling, communications with customer and also keeping in mind the worker
satisfaction from the business. The company is seeking to utilize the most up-to-date strategies
whether communication strategies or sales strategies to reach out to the customers effectively.
However, the company’s immediate goal will be to generate enough profits to pay for the initial
expenses and breakeven. The sales strategy includes 4P’s which are as follows:

o Price Strategy: Prices are set relatively equals which a customer easily pays and slightly
high due to best quality.
o Place Strategy: The place for Promotion selected initially is Social Media. Social Media
Marketing is one of the best ways to reach out to the maximum number of customers in
this age. In near future after establishment of the business, billboards will be placed in
most residential areas and where new housing societies are under development to target
the commercial segment of the market.
o Promotion Strategy: Initially we are starting business with Facebook marketing. Authors
will post ads on company’s Facebook page and the ad will be publicly available to
approx. 400-500 people. The cost will be $2 per day, it means $30 per month. As dollar
rate is Rs150 so the cost will be Rs 108,000 per year.

To reach out to the commercial segment of the market, pamphlets and brochures will be printed
and distributed among people.

8. Product/Service Strategy:

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“Consumer Organic Controlled Kitchen Garden” is a mixture of agriculture and manufacturing
business which provides a device to its customer which will fulfill their needs. We provide our
best to keep in mind the customer demands.

9. Financial Requirement:

The start-up cost is affordable just because of the nature of this business. The company is acting
as providing a service to its customers with the help of the staff team.

The investment for the company will beRs.2,000,000.This cost would be financed by the
founders of the company. In first few months, the company will not be able to generate as such
profits because it’s a new strategy but after that company will get promoted or will successfully
launch, it will make excess profit.

Start Up Cost
Expenses
Legal 10000

Nursery Rent 250000

Insurance 55000
Organic Fertilizer 500000
Seeds 275000
Marketing Expenses 150000
Pesticides 115000
Others 75000
Total 1430000

Assets
Bike 45000
Furniture 80000
Dispenser 15000
Heater 45000
Servo Motor 65000
Light Sensor 55000

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 Soil Sensor 55000
Temperature Sensor 55000
Water Motor 85000
Total 500000

10. Hurdles in operation and their measures:

Lack of Awareness

 Use of bio-fertilizers and bio pesticides requires awareness and willingness on the part of
the farming community. Knowledge about the availability and usefulness of
supplementary nutrients to enrich the soil is also vital to increase productivity. Attention
on the application of composts/organic manure is also lacking.

Measures

 In the start it will be necessary to give some training sessions to the employs to handle
with all the fertilizers and pesticides.  To promote organic farming, government should
make policies and plan training and educational modules for farmers.

High Input Costs:

 The small and marginal farmers in India have been practicing a sort of organic farming in
the form of the traditional farming system. They use local or own farm renewable
resources and carry on the agricultural practices in an ecologically friendly environment.
However, now the costs of the organic inputs are higher than those of industrially
produced chemical fertilizers and pesticides including other inputs used in the
conventional farming system.

Measures

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  To reduce cost of organic farming I think livestock sector should be improved
simultaneously with crop sector. Because livestock contributes towards organic farming.
Thirdly, if the market system in agriculture will developed, improvement in agro
processing units etc. will enhance income which will attract youngsters in the field of
agriculture. Fourthly, if the above mentioned condition fulfill then it will enhance food
security
Marketing Problems of Organic Inputs:
 Bio-fertilizers and bio-pesticides are yet to become popular in the country. There is a lack
of marketing and distribution network for them because the retailers are not interested to
deal in these products, as the demand is low. The erratic supplies and the low level of
awareness of the cultivators also add to the problem.

Measures

 Sustainable development must encompass food production alongside conservation of

finite resources and protection of the natural environment so that the needs of people
living today can be met without compromising the ability of future generations to meet
their own needs

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