Entrepreneurs SoM
Sunday, May 8, 2011
Questions for Business Model
To access the questions pertaining to the submission of business model go to the following link, set up by Sir Mannan.
https://sites.google.com/site/busn230/
All the details for project are on the link.
Wednesday, May 4, 2011
How to determine your value proposition
so here are some important tips for communicating and determining our value proposition
1. Start off with needs
2. Ask your clients -- figure out your clients and then try to sind out what they actually need
3.While marketing yourself Use language that your clients can understand, not the stupid jargon no one is interested in
4. Construct a straw man
5. Test your value proposition before actually investing money in it
if some one is interested here is the detailed article
http://www.whillsgroup.com/insights/articles/is-there-any-value-in-your-value-proposition-five-tips-for-communicating-the-real-value-of-your-services
and why all this is important: well your value proposition is what earns you customers.Many start-ups fail because they fail to add real value to the customers and just have the "me too" approach, so if we actually craft out a carefully designed value proposition and communicate it effectively in our marketing strategy, then definitely we can actually win out many loyal customers
Friday, April 1, 2011
Zahra's Cafe began in 2009. Mr. Ghulam Abbas (founder of Zahra's Cafe) has done F.A from a private college. He first joined Pepsi Co. Food International as a sales person distribution. He took advantage of this multinational company and increased his contacts and escalated his network. He then joined another multinational company Nestle Foods. He was a person who had pretty useful knowledge about beverages and food items. He worked at Nestle Foods as an important sales person. After Nestle in race of excelling he climbed up another ladder towards Dawn Foods where he worked as senior sales person. Nonetheless this was not his dream; he then decided to leave Pakistan and found an amazing opportunity for working in a multinational bakery named Algezira Bakery which was located in Dubai. But unfortunately he could not work there for long time due to politics issues. He resigned from due to leg pulling and fraud issues. Algezira Company did not pay his cash balance and salary upon resignation. He went back to Pakistan empty handed. He tried to do job in Pakistan but he was underpaid despite of his skills. He then heard from one of his friends that there is 3 days event in City School, Johar Town. There would be food stalls in that event. The thing you have to do is to rent a stall from Rs. 4,000. Again money was a big constraint for him at that time. He decided to be a risk taker rather than a risk adverse person. With projecting idea of food stall he borrowed money from his friend and rented out a stall over there. City School was located in Johar Town. He earned more than Rs. 80,000 in just 3 days by providing the students of City School with the variety of food items. After managing the stall in valuable manner he asked the management of City School to let him open a café in the school that will provide students with all variety of beverages, food items, juices, fast food products, soft drink and many more stuff which management allowed him decisively.
Now they have 2 fully functioned outlets with 30,000 daily sales. The cafe business started of just 8-9 months ago.
Questions which we asked from Mr. Ghulam Abbas
Q1: What is the need you are trying to satisfy?
Ans: We are trying to fulfill the needs of students relating every food item. There are many cafes in schools and colleges. Every school has a cafe but the thing that matters me a lot is the quality of food. He said, “Health is wealth.” He added more by saying that parents always advise their children that do not eat from outside especially at school level. They made lunch for them but most of the students do not like and eat the lunch they usually bring with them. Our efforts is to prepare tidy, healthy and pure food and beverages for them which include shwarma, smosas, fries, pizza, burgers, sandwiches, fresh juices and other things like that. He said that after fulfilling the quality issues the next big challenge for us is the variety which really differentiates us from other cafes. We try our best to provide students with the variety of food products. We actually want to provide students a platform from where they can have every type of food products. We use our contacts in food companies in which I personally worked for sometime so that our customers can get variety of products at single place.
Q2: What is your potential market size?
Ans: He said that he does not know the exact size but City School has 40 branches all over Pakistan and we could also expand our business to other schools, colleges and universities. So if we see we have really a larger potential market that can be approached.
Q3: What is your marketing/sales channel?
Ans: We usually do branding of our products that includes renovation and advertising. We asked our suppliers to provide or renovate with new infrastructure. Word of mouth is really helpful for our cafes that really projects our sales to sky touching. He further elaborated that our students in business context our customers are now our representatives. By word of mouth our cafe is getting known to other schools as well by our representatives (students). Food business has always risk involved in it if your marketing campaign is up to satisfactory level for your customers then they will market and advertise your products. He again emphasize that our success was mainly due to “word of mouth” marketing and this is our marketing and sales channel.
Q4: What is your business model?
Ans: He said that our business model totally depends upon quality and differentiation. He said that every school has a cafe and why anyone hires at his place. He said, “There is always an empty chair for a hard worker” so keeping this thing in view we first build a strong supply chain management system. We used our contacts effectively, differentiated our cafe by providing variety, tidy, healthy and pure food, these things are in our business model. We value our customer and our goal is to turn customer satisfaction into customer delight. He said that there are 4-5 things that are present in business model.
• First component of a business model is the value proposition of what is offered to the market. Value proposition means the value from the customer’s point of view that addresses the problem. In our case it is the variety of food products.
• Second thing in business model is the segment(s) of clients that are addressed by the value proposition. In our case students of schools, colleges and universities.
• The relationship established with the clients is an essential part of a business model and in our case is word of mouth.
• Our value network and our position in value network is also very important component in the business model. Value network involves suppliers, distributer, marketing intermediaries and other companies that create value for final customers. In value network contacts are always very important so my previous experiences was with the food companies and I personally have contacts with them so we always tried our best that we can make contact use in the best possible way. Similarly what your position is in value network that is always an edge over your competitor.
• Last but not the least is the competitive strategy that includes how you cope with your competitors.
Q5: What are your major show stoppers?
Ans: We have infinite numbers of competitors. Our competitors are the cafes present in schools, colleges and universities.
Q6: What do you want to accomplish in the future? In other words what is your goal?
Ans: Our goal is to open a cafe in every big schools, colleges and universities that provides students with healthy, tidy and pure food that’s all.
Group Members ; Hafiz Qamar Abbas- Ayesha Kanwal- Omer Tahir
Friday, March 25, 2011
Standard Packages!
“Standard packages” is a company owned by Wasim Ahmed. It came into being somewhere around 1989 with a primary purpose of satisfying the packaging needs of the market. Within the period of these twenty-one years it has been able to achieve a national position in the industry of packages. Wasim’s grandfather was a station master in India. This was before partition. After his migration to Pakistan he resumed his former post for a little while until he started his work to open a soap factory in Lahore. The father of Wasim Ahmed could not continue this business so the factory was closed. It was then Wasim Ahmed who with the support of his uncle started this business of “Standard packages”. Although far from a highly known position the company has been successful in attaining a good reputation of supplying a high quality work. It serves various companies by offering low priced packaging to its old customers. The company is the result of collective hard work of the owner and his uncle. Initially the business consisted of the “Soap factory” until it was after the death of Wasim Ahmed’s father that the business shifted to the “Packaging” sector. In order to know the different strategies of the business the following questions were asked from its owner:
· What are your market sales channels?
“Having a high demand for the packaging material today we work for the following:
1) Electronic market for example television (National television)
2) Iron (National Iron)
3) Medicines which include (A-Z pharmaceutical, Star laboratories, Rehan laboratories, Nawabsons laboratories)
4) Beverages (Shezan Beverages, Amrat cola)
With this our packages are also used for various household products. We do not carry out any promotional activities for the product. We follow word of mouth strategy. It is to say that our foremost objective is to provide our customers with a high quality work so that they become our major promotional hand by making others realize that “Standard Packages” is what people need! We have a belief that with a good reputation, you can develop a good relationship. We take orders and then carry out the delivery. It is simple and easy. Our customers approach us at the factory and place orders. We are not in any heavy promotional activities for primarily two reasons:
1) The product we have is not of the type to make public aware of, it’s just the services that matter.
2) The company still needs more years to achieve that position where we can divide our budget so that promotional activities are equally important for sustaining a well known name.
We have various stores working in order to carry out the packaging work for other firms including Lays, fizzy drinks e.g. big apple e-t-c.”
· What is your business model?
“The company has specific procedures of maintaining its money flow. Our raw material is mainly paper which we purchase from paper mills. We purchase paper on cash and once it is turned to cartons the orders are placed. Delivery is made to various other firms mostly on credit. The reason of carrying out the sales on credit is so that the company enjoys its profits by charging a little more price. This helps as the market for paper is getting saturated. The payment in installments is beneficial to us because it gives us an extra margin in generating profit. Not only this but it is mainly due to this strategy that we are able to maintain good customer relationship and even in this era of strong competition our sales are high and profits good. This strategy of selling the cartons or carrying out the packaging activities on credit is equally beneficial for our customers as it is for us. The reason behind it is that our customers, be it different companies or any household, generate high demand for our packages as it gives them more time to carry out the payment so that “Standard Packages” is their only option next time.”
· What is your potential market size?
“Our major activities are in Lahore as it is where we have our major center. As told before we serve various smaller companies starting from the pharmaceuticals including other household demands too. Paper mills are our basic suppliers and once we purchase our raw material we carry out the process of turning it into cartons. Different companies then place orders for the packaging activities of their products. The packaging carried out is on high quantity goods so that the money generated is high. The statistics of the last year indicates that the company generated 8.5 crore in making its sales.”
· What are your major show stoppers?
“We work by providing high quality services so that our customers are satisfied. Once orders are placed our priority is making the delivery in time so that our work gets remembered to those we serve. As the company has no promotions to do so we do not represent ourselves to the huge masses. Thus there is no specific representation of our business it is just word of mouth. We believe in giving high quality services so that our customers recommend us. Deliveries are made to the customers by our workers. But the company also faces competition. In order to keep its work of good quality this is very important to have a sight over the competitors which include the following:
1) Paper shaper
2) Crescent
3) Rayon paper
4) Total packages
5) Packages”
Group members: Saad Leghari-Hassan Razzaq-Awais Safdar-Tehreem Fatima
Wednesday, March 23, 2011
Balmain Hair (Pakistan)
Interviewee: Atis Abbas Rehmani
Designation: Director
Story:
In 2009 after his A level exams he was paying his free time at his fathers office, he was under training in his office. His father runs a well known company in Pakistan named Keune. One day while surfing the internet he came through this new hair make up technology in hair make that said hair extensions 100% human hair. He got interested in the idea therefore he did some secondary research on it and also after some research he discussed it with his father.
It was a great opportunity because they did not have any competitors in Pakistan. He was passionate about becoming an entrepreneur as he was highly inspired by his father. Any how under his fathers guidance he started off with this idea and contacted the company in Netherland and after a long struggle he made a contract with them for sole import and marketing for Pakistan.
Now its been 1.5 years of his success full operations in Pakistan he is running the company and is also is studying at BNU as a business student.
1. What is the need they were trying to satisfy?
They are basically providing the solution and answers to the entire questions one asked to himself:
· I have no time for a difficult up do.
· My hair ends are not so fine.
· I want beautiful hair.
· On top it’s getting thin.
· My style doesn’t stay.
· No chemicals.
Solution:
Balmain is offering a wide range of hair extensions and fill in to all meet the need and wants of all these consumers. It has 24 colors, various textures and variety of specifications. So a proper guidance to all those people who are conscious about their beauty and glamour Balmain hair extensions are providing the best possible facility. Moreover, it’s a substitute for hair transplant which is painful and much more expensive for many people.
2. What is the potential market size?
a. This company targeted elite or high class society.
b. Considering being pioneer they had opportunity to grow in the market.
c. As far as competitors are concerned no tough competition till now but a company known as Sarah’s also produce extensions but they are of low quality ,so can’t give a tough competition as such.
d. According to BCG’S matrix it was a question mark because it had potential to grow and share’s the whole market individually, very soon it has a chance to shift to star.
e. The quality of a product is great because they use real human hair in manufacturing their product.
3. What is your market /sales channel?
There were many ways through which they marketed their product;
· Word of mouth.
· Endorsements with celebrities.
· They organized special ramp walk by renowned fashion divas.
· By direct marketing with highly recommended saloons i.e. madiha’s , duplex , new look etc.
· They also used awake materials like fashion magazines, trolleys, posters, billboards etc.
Through marketing intermediaries such as Al-Fateh they do effective marketing, by providing the knowledge of the product usage through specially trained staff.
4. What is your business model?
The business model that was narrated to us was a simple one to understand it had a system that flowed the products from the source to the end consumers. It had some important channels in turn to ensure the operations of the organization:
I. Importing the product from Netherland
II. To store the stock after its import
III. Division of tasks among the organization hierarchy
IV. Marketing and Selling to intermediaries
V. Buying of the consumer
Importing the product
First of all the product is imported from Netherland through a logistic company that helps the company to import the product and handle the legal affairs.
Storing the stock imported
After the product is imported it is stored in the ware house in Lahore. The good imported is in its finished form.
Management
Management consists of a hierarchy of people who are responsible for the smooth working of the company.
Sales representatives
They are the smallest part of the management in terms of designation. They are the people who promote and introduce the product to the intermediaries like Saloons and Resellers. They actually form the frontline management that executes the company operations and make a contact point between the company and the intermediary.
Senior Managers
They are the ones who are responsible to think marketing ideas and to ensure the proper execution of company goals and targets. They oversee and control the frontline management. Their job includes operational effectiveness and efficiency.
Directorate
This segment is basically the father of the organization and holds the decision power. They are the actually people who are running the show in the organization.
Marketing and selling
The sales representatives are responsible to take the orders of the product from the intermediaries, they then report to the senior manager who makes the product available through distributor or directly from the ware house.
Marketing includes striking the different touch points through give a way’s (like wall clocks, towels), print ads in the fashion magazines and sponsorships to different fashion events. This adds good image to the company in the minds of its consumers and also makes the intermediaries happy that is important for the selling of product, the reason being such product is primarily sold on word of mouth.
Buying of the consumer
All these steps lead us to the end consumer that buys the product and generates revenue for the company.
5. What are major show stoppers?
The majors show stoppers are
· Political instability
o The political instability of Pakistan effects a lot, internationally our reputation has been damaged that leads to insecurity in the minds of our foreign partners. It becomes hard at times to justify the effectiveness of operations in Pakistan. Also this has lead to the trend of short term investment plans instead of long term investments that is important for the consistent growth of the company.
· Pakistan law and order instability
M. Ahmad Nawaz 13-01350
Ayman Malik 13-10223
Zunaira Chaudary 13-10612
Hadia Akbar 13-10329Monday, March 21, 2011
Thinkbox Communications.
Company Name
Thinkbox Communications
Ideas That Actually Work
To provide the biggest bang for our client’s buck
Our work equation:
Creative ROI (Relevance, Originality, Intelligence) = Advertising ROI (Return On Investment)
To be recognizes as a “Powerhourse of Workable Ideas”
Mrs. Irtifa Nasir
1. What is the need that you were trying to satisfy? Why did you want to start?
2. How did you start?
3. When did you start?
4. What is the nature if the business (partnership, sole propriety, etc)?
5. What was your role?6. What is the potential market size?
7. What is the marketing/sales channel for product/service X?
8. What were you major show-stoppers?
9. What did your business model look like?
How The Story Goes
Irtifa Nasir received her entire schooling at an Indian-Arab education institution in Abu Dhabi (UAE) right up to A-Levels. She joined the Lahore University of Management Sciences BSc. program aiming to major in Computer Science but eventually graduated with a major in Mathematics. Outside academia, she took active part in basketball & volleyball teams, the dramatics society, the music society and even went on a couple of trips up north with the LUMS adventure society. After receiving a Fulbright Scholarship in 2006, she left for the University of Florida in order to pursue her Masters degree in Advertising.
Her first job was at a small media selling house in 2004 followed by a short stint as Creative Manager at Time & Space; a Lahore based advertising agency. Soon she moved to Synergy Advertising in 2005 and a year later left for America. Once back in Pakistan in 2008, she rejoined Synergy, but this time switched to account management and led on a couple of high-net-worth clients. By mid 2009, she started teaching at The Lahore School of Economic as visiting faculty, while at the same time collaborating with ex-colleagues to establish a small creative hot-shop which they later named Thinkbox Communications. When she heard about the School of Management at Forman Christian College along with the fact that the crème de la crème of LUMS were leading at the front, she took no time in applying for a teaching position there.
Thinkbox Communications started off as a very small setup with only three team members; Irtifa handled creative development and strategy (her responsibility was inclusive of developing creative, copywriting, developing communication & brand strategies, organizing pitches and pitching), Hassan was responsible for business development and account management, and Bilal took the lead on graphic design and art.
They did not have a business plan in mind when they started off and none of them really had any prior business experience personally or even in the family. The team started working from home initially. A month or two later, Hassan convinced one of his family friends to rent out the upper story their office premises to them so they could give their company some semblance of a real entrepreneurial venture. They agreed, but only under the condition that they would let them invest and take the bigger chunk of the profit that was made. The team did not have a problem with that. In October 2010, Thinkbox Communications moved to the office premises. It left that office premises in January 2011.
The Thinkbox Communications team did not have anything to invest in this setup anyway; other than old desks, their laptops, skills and time. Money was never their primary concern. Here we see that Irtifa, Hassan and Bilal are what we call life-style entreprenurs (those who go into business for a reason other than the financial rewards of owning a business) with visionary and idealist qualities. It was the feeling of being their own masters and making all those creative advertisement which they could never work on at their respective jobs. However, they would soon discover that the day they get an investor for their idea, the investor would become master for all practical purposes.
A couple of months later, the investor (with no idea of what advertising is) started demanding returns, and the team had none because they were still pitching & trying to develop business; the meager they earned were used up to pay utility bills and the small amounts of salary they withdrew for their services. In three months’ time, the investor decided he would not be making any profits from this setup and the team decided to part ways; without being sure what legal implications this had; Hassan was always the sole proprietor and Iritfa was always a profit-sharing member of this venture with no financial stake in it; too risky for someone like her.
Basically, Thinkbox Communications was never part of Irtifa’s personal to-do list at least not when Hassan proposed the idea to her in August 2010. At that time, the three of them (Hassan, Bilal and Irtifa) had already left their regular agency jobs for different reasons. In case of Irtifa, she had taken a break from the 9am to 9pm work schedule for six days a week and taken up university level teaching for a change. Meanwhile, she was also freelancing as a creative writer/communication strategist for a few smaller clients to stay in touch with the industry. So when Hassan proposed the idea of the three of us collaborating (given his skills in getting business and Bilal’s in design), we thought “why not?”. It would be easier getting clients (and more lucrative) if we could provide the complete bundle of creative services instead of just design or just copy or planning. Hassan had good relations with a client from his previous agency job and so we started off (from our respective homes – without an office setup) as a team in September 2010.
Thinkbox Communications is a sole proprietorship. Initially in a colleague’s name, and then transferred to the second investor (who now runs the company with a new team). As far as the market need was concerned, the original plan was to be an agency offering creative services with the interests and needs of the advertiser as opposed to their own self-interest (trying to sell print/TV advertising to all sorts of clients with the hopes of making money with media releases like most advertising agencies do). Objectively speaking, they were just another creative hot-shop and if they could differentiate themselves at all, it would be on the basis of good creative, design, competitive rates and better levels of service.
The ‘potential market’ for advertising is huge. Everyone advertises at some level or the other. There is a lot of money to be made if you manage to get the right kind of clients on-board. However, the industry is extremely competitive and in order to survive, one needs more than just good ideas. You need excellent Public Relations, enough investment to sustain you for a good 8-12 months before you can expect decent returns, and a highly dependable team of people who will stick around especially in the first few months of extreme hard work and uncertainty.
As a team, they were more interested in providing the right solutions to clients and not sell them what they did not actually need. In this scenario, they went with the best option which was to enter into retainer-ship agreements with clients (fixed monthly fee) instead of charging them for individual jobs or services. In this was, made independent cells for their various clients (dedicated teams for bigger clients) and cater to their needs in the best possible way without being tempted to milk them by proposing unnecessary ideas. Additionally, they also offered the conventional charging on tariff options for smaller clients/jobs that came their way every now and then. Also, like all agencies, they also had a coordination commission component for outsourced jobs (printing, photography, recordings, etc).
As far as advertising agencies are concerned (more specifically creative services), most business development is done through personal contacts, referrals and sometimes (although proven to be pretty ineffective) the traditional means of cold-calling. Online bidding for projects is becoming popular with some freelancers but they did not really tap into that source of business (while she was part of the setup). But generally, once they find a client and make a creative pitch, and if it works out then they would work out the financials with them.
Major show stoppers for them included lack of investment on their part, investment from people whose vision clashed with their own, unrealistic financial projections due to lack of experience of running a business and foolishly expecting local clients to pay on time.
As of December 2010, Irtifa parted ways with Thinkbox Communications which is now being run by a team of different employees under one investor.
Group Members; Anmol Joy John, Zoia Michelle Parvez, Umer Shuja ud din, Taseer Raza Hassan
Friday, March 18, 2011
Kausar Ghee Mills
Group Members: Idrees Mehdi, Hamood Ilyas, Nabeel yousaf, M. Ammar Sharif.