Strategic Management Report

1. Executive Summary

The melamine product manufacturing sector is still in its growth stage. However, the concept of manufacturing melamine products aims to reach current target group as well as higher middle class people, corporate sector and exporting internationally. That is why the crucial task of creating the appropriate culture and educating the customers about the quality and design of our products will be the top priority of our business. We will differentiate our product by ensuring improved quality than the market is serving now but at a lower cost because of our new technology at the price that market is charging. Again, we will come with unique and attractive design and some sort of customization to grab the higher middle class people, corporate sector and exporting.

The land for establishing the factory is owned by the partners will be leased. All the other requirements like machine and others will be purchased by the business. However, political instability, local intruders, inexperienced employees and customers, unawareness about the manufacturing firm of melamine products would play a crucial role to defy the whole venture. Nevertheless, with rigorous direct selling and advertisement, a culture towards using melamine products and awareness building will be done. As a manufacturing firm, Exotica Melamine needs to create a strong, pro-active and effective human resource base.

As the long term strategy, Exotica Melamine Ware visualizes to be a global brand. As the initial setup cost is not huge in amount, so we forecasted to reach to break even within less than five years. It will be easier for the firm to reach the customer easily as we will provide distinctive products at market price. Along with this, the eventual employee experience, brand name and uniqueness of the product will help the company in gain economies of scale through experience curve. Eventually, we hope that Exotica Melamine Ware will be a distinctive manufacturing firm to provide people products with quality, unique design, affordability and reliability.

Team Profile

Team Profile

Sayba Kamal Athoi

061-479-030

Managing Director

Nibras Yaman

053-159-530

Chief Executive officer

Rehan Muhammad

053-368-030

General Manager

Mosharraf Hossain Saikat

053-141-030

Chief FinancialOfficer

Afsana Jahan

061-478-030

Head of Human Resource

M. Aminul Islam

053-413-030

3. Company Overview

Exotica Melamine Ware is going to produce different kinds of melamine products to add divergence to the customers’ dining table. It will be a partnership based company, formed by six individuals having equal share each. Each of the partners of the company will be addressing a managerial role in the organization and will be working as a team to take any sorts of decision regarding the execution and development of the company.

We as entrepreneurs see immense opportunity in this sector. Because Melamine Industry is a growing industry and it has a lot of export opportunities so we entrepreneurs are hopeful about the success of EXOTICA MELAMINE WARE.

Initially Exotica Melamine Ware will start with 5 machineries and about 50 human resources in Keraniganj near Dhaka. The company will start its operation with 25 crockery models. Our product will be the best in melamine industry in Bangladesh. Our company will achieve a tremendous success in respect of sales amount and market share within a very short time due to its product quality and competitive price.

3.1 Mission Statement

We, the new generation of melamine producers, will focus on premium quality melamine products with innovative style and design.

3.2 Vision Statement

Establishing a world wide brand Image by reintroducing Bangladeshi Melamine products in the Global Market.

3.3 Key products

3.4 Strategic goals and objectives

1. We are targeting to capture 10% market share within the first five years of our operation. 2. Our target is to increase our turnover by 15% in the second year, 20% in the third year and 25% in the fourth and fifth year.

3. We want to export our products from the second year of our operation. 4. We want to provide high quality products with a competitive price.

4. Industry Overview and Analysis

Melamine Industry is one of the many topics that did not get enough attention for research in Bangladesh. Over and over again many big news papers and analyst has pointed out the melamine in industry has huge potential in export sector. The industry overview analysis will clarify the overall environment for this business so that an informed strategy can be put into action. As our vision statement is to create a Global Brand the Bangladeshi Melamine Industries competitiveness should be critically analyzed.

Bangladesh's melamine industry has carved a niche in the international market, having started its journey only 15 years ago, alongside feeding domestic tableware market. The country went into melamine production in 1989 when Nasir Group's Bangladesh Melamine ventured into the business. The industry got major boost in the following year with Sharif Melamine coming in a big way. Inspired by rising domestic and international demand, 13 other companies joined the melamine bandwagon, creating a Tk 120 crore domestic market. Industry insiders say use of high-tech machine and quality melamine resin and adoption of latest design have given Bangladeshi melamine tableware a competitive edge on regional and international markets. (http://www.bangladesh-web.com/view.php?hidRecord=26516)

Fig: Standing of the melamine industry in Bangladesh

Melamine Industry

Total Market

The Industry Over will be done in the following four components Existing Melamine Companies:

• Sharif Melamine Industries

• Diamond Melamine Industries (PVT) Ltd. • United Melamine Industry

• Classic Melamine Industries Ltd. • Crown Melamine Industries Ltd. • Bangladesh Melamine Industry Ltd.

• G.Q. Marketing Ltd.

• Gold Star Melamine Industries (PVT) Ltd. • Nasir Group of Melamine Industry

• Sunrise Agencies

4.1 Five Forces Model:

Michael Porter's famous Five Forces of Competitive Position model provides a simple perspective for assessing and analyzing the competitive strength and position of a corporation or business organization. The following figure gives an overview of the Model.

Porter’s Five Forces of Competitive

Position

Competitive Rivalry, eg: • number and size of firms • industry size and trends • fixed v variable cost

bases • product/service ranges • differentiation, strategy Supplier Power, eg: • brand reputation • geographical coverage • product/service level quality • relationships with customers • bidding

Product and Technology Development, eg: • alternatives price/quality • market distribution Buyer Power, eg: • buyer choice • buyers size/number • change cost/frequency • product/service importance • volumes, JIT New Market Entrants, eg: • entry ease/barriers • geographical factors • incumbents resistance • new entrant strategy • routes to market

www.businessballs.com.

• New Market Entrants: As already outlined the industry has something around 13 companies that are functioning in the melamine sector. However, among them Diamond Melamine, Bangladesh Melamine, Crown Melamine, Sharif Melamine are the major players. The industry is mainly saturated with these players. The industry does not have any complicated legal restrictions of entering as a result barrier to entry is not limited. A company wishing to open up in this industry can just following legal rules of the registration as a Limited Company and start its operation. As the company does not produce any significant amount of water or air pollution so treatment plant is also not necessary. So entry to this industry will be easy. In the front line of the industry are mainly the Sharif Melamine and Diamond Melamine who differentiates their price compared to the other players by positioning superior quality. As a New entrant to this industry Exotica Melamine Ware should position themselves as high quality with unique tasteful design. This is the route we wish to take.

• Supplier Power: Supplies for the industry comes mainly from Taiwan, Thailand, China and locally made raw materials. However, only Sharif and Diamond Melamine produces products with better quality than others thus they use Taiwan raw materials which obviously increases their product cost. There are also some small melamine companies that uses locally produced raw materials which make the product quality poor also durability of the product also decreases. The companies in the industry can easily switch from one supplier to the other therefore switching cost is low. Though supplier can threaten to entre the market however most of the suppliers are from outside Bangladesh so initially it won’t be a threat to us as we hope to capture local market then the

international market. Overall the suppliers bargaining power is lot as companies can switch to different supplier

• Buyer Power: The industry’s supply is divided into two segments one the corporate clients that is there are many restaurants and organization that order the Melamine company to supply their products with the name of those restaurants printed on the product. These orders are usually quite large thus the corporate buyers have bargaining power. That is since they buy in bulk so they can easily bargain for price. The segment of the industry consists of mass customer who buy the product from the retail outlet thus the buyer does not have enough bargaining power because buyers are not few. The switching cost is though low but there is certain mark up of the product below no company will sale and the price of the product is usually fixed and kept at that level. So two different segments have different level of buyer bargaining power. However, both the segment cannot threaten to enter the market because setting up cost is high enough.

• Product and Technology Development: The market has significant scope for product development as the market in Bangladesh has been there for the last 13 years the population of Bangladesh is experiencing a change in taste and design so it is high time that the design and quality of the existing melamine products can be changed and thus this can be used to capture the urban middle class. The technology used in the production can also be developed so make the products more durable, better looking, and superior to the ceramic products that is the substitute of melamine products. The designs can be significantly changed to incorporate high class look and also cookeries for children can be added. There is huge scope in this sector for product development.

Core competencies are those capabilities that are critical to a business achieving competitive advantage. The starting point for analyzing core competencies is recognizing that competition between businesses is as much a race for competence mastery as it is for market position and market power. Senior management cannot focus on all activities of a business and the competencies required undertaking them. So the goal is for management to focus attention on

competencies that really affect competitive advantage.

(http://tutor2u.net/business/strategy/core_competencies.htm)

Prahalad and Hamel suggest three factors to help identify core competencies in any business: What does the Core

Competence Achieve? Comments / Examples Provides potential access to a wide variety of markets

The key core competencies here are those that enable the creation of new products and services.

Since our product design is unique and we have a higher quality we hope to target the local urban middle class and then the international. As given in our Vision we want to create a brand that is known globally. The durability, better quality and unique design is our positioning and thus this gives us our first core competencies to capture the market.

We will use our domestic plant as a production base for exporting goods to foreign markets. Initially we will export to India and Bhutan from the second year of our production. It will minimize both risk and capital requirements. We will enter the foreign market by contracting with experienced foreign wholesalers to handle the distribution.

Makes a significant contribution to the perceived customer benefits of the end product

The fundamental customer benefit that we would provide is - Reliable and efficient delivery infrastructure (product picking, distribution, customer satisfaction handling). We will introduce products which are very unique in design, appearance and features. Our pattern designs are combined beauty, elegance, usability and durability .Our products will have the appearance of the ceramics products but with much better

features: bright color, non-toxic material, no smell, endurable of acid, not get fragile easily, can be applied for the dishwashers. We will bring in many different types of models with unique shape that are widely used by families, restaurants and hotels all over Bangladesh and abroad. Therefore we will follow a differentiation strategy.

We will try to improve our supply chain efficiency on a continuous basis. We will collaborate with our suppliers to design new products and to reduce the time it takes to get new products into the production.

We will make tight collaboration with our distribution channel partners to wring out distribution cost savings.

We will set up complaint box and suggestion box in each show rooms. A red box will be placing for taking complains and white box will be placing for taking suggestions.. All complain will go to the Six Sigma team of EMW. The problems will be sorted out as early as possible.

Difficult for competitors to imitate

A core competence should be "competitively unique": In many industries, most skills can be considered a prerequisite for participation and do not provide any significant competitor differentiation. To qualify as "core", a competence should be something that other competitors wish they had within their own business.

Core competencies that are difficult for the competition to imitate: - Minimization of working capital in the production process

- High manufacturing and distribution quality - reliable products at competitive prices

- Strong human resource base -Strong ethical code of conducts

4.3 Industries SWOT

 Strengths:

The company’s strength lies in authority product, better cost control, stiff control of management over its all activities. To ensure better quality product the company uses best quality raw materials, highly skilled work force and to motivate workers. Diamond melamine industry use performance evaluation system. There is a reward system for the out standing performer, in term of promotion and increased pay which motivates worker to be work efficient and productive. Where as the company has lowest wastage rate in the industry and high production rate per employee.

 Weakness:

The weakness faced by the company is consecutive effects from its budget constraints. Due to unavailability of funds, the company is not able to expand its current production facilities, excess to proper distribution channel, advanced technology and finally promotion to its products, which is holding the company back to achieve economies of scale and greater market share.

 Opportunities:

Better activity products, efficient management creates goodwill for the company in the market, as we mentioned earlier. The demographic and general economic of the country gives the company the opportunity to expand. Moreover the liberalization trade policy gives the company an opportunity to expand internationally. Company’s goodwill helps it to get loan facilities from the financial institution.

 Threats:

inflation, exchange rate fluctuation and lack of policy continuity from government part. The new entrains are posing serious trouble for the company both internally and externally. Most of the new entrants are using low quality raw materials from China, selling them at a much lower price and they are taking out the experienced workers by offering high wages and salaries. Hartal, strike, bribe, container jamming in port, inflation and other raise the cost of production by 20% more.

4.4 Competitive Advantage

Internal factors

External factors

Internal strength: quality product, cost control& efficient management control.

Internal weakness: budget

constraints, lack of advanced technology& lack of proper distribution channel. External opportunities: domestic expansion, international expansion, goodwill, access to borrowings. SO strategy: maxi-maxi

Take borrowing to expand production facility to capture the

larger market share

domestically& internationally with strict internal control for interval strength.

WO strategy : mini-maxi

To limit the budget constraints company should use borrowing as well as sources of financing, convenient to it to mature the opportunity it has.

External threats :

Competition, political instability, macro economic instability, law& order and corruption.

ST strategy: maxi-mini

By strengthening the internal strength through by continuous improvement. The company should minimize the threats poses from external environment. Overtime production, distribution at night at hartal period reducing the effect of flying cost by proper cost control.

WT strategy: mini-mini

If the company can increase its budget then it almost can reduce its internal weakness. The threats from external environment are mostly uncontrollable by the company; to be competitive it should be more efficient in its production, distribution activities. On the other hand to minimize the risk arises from economic, political, law& order etc. company should be aware of them & has to find out the way how it can best manage the situation.

A competitive advantage is an advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher prices. (http://tutor2u.net/business/strategy/competitive_advantage.htm)

In order to achieve a superior profitability we wish position our product Exotica Melamine Ware, as a symbol of quality and unique design. This can only be achieved by pursuing a Differentiation strategy. By definition Differentiation Strategy is:

This strategy involves selecting one or more criteria used by buyers in a market - and then positioning the business uniquely to meet those criteria. This strategy is usually associated with charging a premium

price for the product - often to reflect the higher production costs and extra value-added features provided

production costs, and about giving customers clear reasons to prefer the product over other, less differentiated products.

(http://tutor2u.net/business/strategy/competitive_advantage.htm)

Here our selection of criteria is unique design and high quality which will justify our premium price. No one company in the industry targets the higher income earners. Most companies like Sharif, Crown targets the middle income group which rightfully reflects the product design, quality even the marketing strategies. However we beg to differ in our product by following the BEST COST STRUCTURE. The best cost structure is the combination of low cost strategy with differentiation. We will produce competitively priced products that charge the same price as the premium quality producers existing in the market however the look of the product will be refreshing, attractive and tasteful. The core competences described above will help us to achieve this Strategy. Since we are group of new generation melamine producers we know the total quality management effectiveness in the production system. The efficiency level will rise. Greater international correspondence will help us to attract the foreign market.

5. Market Overview

5.1

Potential Customers

The nature of the industry, level of buyers, general economic conditions of Bangladesh and the nature of the product don’t give the scope to any melamine company to adopt differentiated marketing strategies. So the company will offer an undifferentiated product, but the target customer group will be the middle income group to upper income group, those who can afford it. Our geographical target area in terms of the domestic market will be the urban and sub-urban cities. Though the company is a consumer goods producer, sometimes it will supplies products to business for their specific order such as SMC (social marketing company), Hotel Radisson, and over hundreds of decorators including defense mess. Talking about the foreign markets, we think our neighboring country India has a very strong customer base for our products. So, we have planes to export our products to India through Bhutan. Exported items will be produced according to the specification of importer country. The company will also produce customized products for special orders comprising or more units. Customized product’s features will include demanded logo, design, size and other such attributes.

5.2

Size and growth of the market

Melamine is not that huge in size yet in Bangladesh, but the growth rate is quite high as the number of companies and scale of operation is increasing day by day. It replaces the traditional concept of crockery ceramics, tin, glass etc. by offering affordable, quantity, durable & nice designed products. It got popularity due to its affordable price and durable quantity. It is durable in a sense that it lasts for 10-12 years without any major damage. It gets popularity with in very short time; the growth of the industry was so high that was completely unbelievable. It is partly because it positioned itself against high priced crockery and partly against low priced crockery. As it is for middle class income people its market share increased rapidly due to socioeconomic structure of our country. Today the total number of firms in this industry is about 15 to 20; the number is not sure as no published data regarding the industry is available. Melamine industry is a new concept for the cookeries in Bangladesh since 1987. Before that cookeries means ceramics, tin made cookeries etc. The ceramic was costly in that sense. It is fragile. On the other hand tin made cookeries are not standard in good outlook. As melamine combines the feature of durability & good out look .It can captures the cookeries market rapidly. The demand of melamine product is increasing day by day. Which creates an opportunities to expand the industry further .The

demographic condition of Bangladesh comprises mainly middle class people and the GDP growth rate over the year is increasing in a positive way, which gives the industry a greater prospective market. The cheap labor cost of Bangladeshi labor gives the industry a competitive position over its international competitors. In global market more over the liberalization of trade gives the industry an opportunity to expand its market internationally.

5.3

Strategic Group Analysis

Strategic group Analysis is used to determine:

 Different competitive positions of companies in the industry  Intensity of rivalry within and between groups

 Profit potential of various groups  Implications of competitive position

Positioning Map

Data presented in the figure has been taken from the results of a survey conducted by Diamond Melamine Industry and our company is positioned based on our assumptions.

As it can be seen from the above included graph, among the five major competitors in the market, United Melamine offers the product at the cheapest possible price, but the quality of their product is also lower compared to others. Crown Melamine offers their products in a better quality, but charges a bit higher price. The current industry leader, Sharif Melamine is able to charge the highest price for their products due to their established brand name. Sharif Melamine’s closest competitor Diamond Melamine offers a little better product, but charges a little lower price and they are gaining market share quickly. Now our company is expected to offer products which are of the same quality as of Diamond Melamine’s, but we will be offering our products at a little cheaper than them in order to have a competitive edge. Moreover, our unique designs should give us an upper hand over all the established melamine companies.

6. Overall Strategy

Exotica Melamine ware aimed at producing high quality product at a moderate price by using high quality raw materials and efficient production technique. We will pursue a strategy of progress and innovation to produce good quality, value for money melamine products.

6.1 Long term and short term strategy

Short term strategy

Minimizing cost We will try to reduce our cost by building efficient scale facilities, establishing tight control of production and overhead cost, minimizing the cost of sales, products and investing in the state of the art manufacturing technologies. (Open learning world 2007).

Flawless quality For ensuring continuous success and patronage of our clients, we, Exotica Melamine Wares, have etched the philosophy of maintaining top-notch quality in our working methodology. Keen attention is paid to major and down to the minutest of the details in every process, thereby making it possible for us to manufacture customized melamine crockery, unbreakable melamine crockery, dinner sets, serving trays, bowls, gift sets, tableware, etc. Only the best grades of raw materials are employed in the processes which are sourced from authentic vendors of the market. With its superior quality products and competitive prices, the company aims in maintaining a long-lasting relationship with its clients.

Unique products We will introduce products which are very unique in design, appearance and features. Our pattern designs are combined beauty, elegance, usability and durability .Our products will have the appearance of the ceramics products but with much better features: bright color, non-toxic material, no smell, endurable of acid, not get fragile easily, can be applied for the dishwashers. We will bring in many different types of models with unique shape that are widely used by families, restaurants and hotels all over Bangladesh and abroad. Therefore we will follow a differentiation strategy.

Internationally customers and to achieve lower cost and enhance the firm’s competitiveness. By entering the markets of foreign customers we will able to strengthen our revenue base and long term growth.(Thomson and Strickland 2003)

Export strategies We will use our domestic plant as a production base for exporting goods to foreign markets. Initially we will export to five countries. It will minimize both risk and capital requirements. We will enter the foreign market by contracting with experienced foreign wholesalers to handle the distribution.

Improving supply chain efficiency

We will try to improve our supply chain efficiency on a continuous basis. We will collaborate with our suppliers to design new products and to reduce the time it takes to get new products into the production (Thomson and Strickland 2003).

Improving distribution channel strategy

We will make tight collaboration with our distribution channel partners to wring out distribution cost savings.

Increasing customer responsiveness

We will set up complaint box and suggestion box in each show room. A red box will be placing for taking complains and white box will be placing for taking suggestions.. All complain will go to the Six Sigma team of EMW. The problems will be sorted out as early as possible.

Implementation of codes of ethics

We will strictly follow the codes of ethics and will try to incorporate ourselves with corporate philanthropies.

Best cost provider strategy:

we will provide our customers more value for the money by integrating good-to-excellent product attributes at a lower cost than our competitors (Thomson and Strickland 2003). Our target is to achieve the lowest (best) cost and best prices compared to rivals offering products with comparable upscale attributes.

TYPE OF COMPETITIVE ADVANTAGE

ADVANTAGE BEING PURSUED

Source: Adapted Michael E. Porter Competitive Strategy (New York Free Press, 1980), pp 35-40 Overall Low Cost Leadership Strategy Broad Differentiation Strategy Focused Low Cost Strategy Focused Differentiation Strategy Best – Cost Provider Strategy

Lower Cost Differentiation

A Broad Cross-Section of Buyers A Narrow buyer segme nt M a r k e t T a r g e t

By following Best Cost Provider Strategy we will able to incorporate following features for the company:

Robust Infrastructure: A strong infrastructural setup aids in meeting the rigors of production and marketing with perfect ease. Exotica Melamine Ware will have a superlative infrastructural backup by way of hi-tech manufacturing facilities, a large warehouse and well built marketing as well as research & development unit. Employing cutting edge strategies, we will successfully manufactured premium quality crockery and other items, thus, fulfilling all of our business objectives in the most comprehensive manner.

Competing Globally: We will try to become a global competitor. Although global competition does not exist to a grater extent for melamine industry but we want to capture the market opportunities wherever possible to become pioneer in delivering high quality melamine products. The reason behind competing globally is to capitalize on the core competencies and to spread the business risk across a wider market base.

Value - conscious

Buyers More value for _{the money}

Good-to- excellent attributes several-to-many upscale features depending on product type Incorporation of upscale features and attributes at low cost

Match the price of rival and provide better features Build a reputation for delivering the best value Develop unique expertise in simultaneously managing costs down

Incorporating internet technology in the supply chain and distribution channel: We will incorporate internet technology to our supple and distribution channel. It will help us to procuring raw materials from suppliers, reducing inventory requirements, expediting the design and production of new components, and engaging in mutual beneficial collaboration with suppliers. Internet technology will help the distribution proportion in two ways; (1) it will allows us to bypass retailer/wholesale dealers and sell directly to end users and (2) to build a strong collaboration with distribution channel members.

7. Company value chain analysis and operational plan:

7.1 Existing core competencies:

• Flawless quality • Unique products

• Strong customer responsiveness

7.2 Future competencies:

Even if there are possible emergences of some new melamine businesses in future, we will able to hold larger market shares because of some of our future competencies.

In Future, our company will be able to achieve superior efficiency through functional level strategies like



Economies of Scale:Economies of Scale: According to our expansion plan, we will posses the ability to serve a large number of variety customers to achieve greater division of labor and specialization. Specialization among employees will lead us to provide superior quality services to our customers.



Learning Effects:Learning Effects: Learning by doing will help us to attain a lower cost structure; and, over time, as we learn the most efficient ways to operate our business, there will be further cost saving. Also, we will be able to develop a more trained and efficient labor force in future. Thus, operating cost would decline because of increasing labor productivity.



Experience Curve:Experience Curve: If our company can pass some good years at the beginning in terms of revenue, customer number, customer satisfaction etc, we will be the holder of large market share. By expanding our business, we will be able to serve a large number of customers and to hold a larger market share, which will lead to systematic lowering of our cost structure compared to rivals.



Strategic Alliances and Expansion: opportunities with various techniques and future Strategic Alliances and Expansion: expansion plans of our camping business to different places like United States of

Qatar, Oman, Abu Dhabi,, Dubai, India, Bhutan and Australia and Some other places will give us the opportunity to differentiate our services and to charge a premium price.

7.3 Product and service overview:

Exotica melamine will produce export quality high class household crockery (dinnerware and tableware) from melamine. Products made from melamine are extra durable (practically unbreakable) and long lasting. Our products are shatterproof, dishwasher safe and also microwave safe. There is no other plastic crockery in the market that has the highest scratch-resistant than the melamine crockery. Exotica Tableware’s products combine strength and beauty with marvelous design and are the very best choice for plastic tableware that stands up to everyday use.

Exotica melamine product line: There are 48 melamine items that make up Exotica Tableware’s product line.

The following shows the different types of items will produce at Exotica Tableware’s factory:  Soup Plate  Coup Plate  Dinner Plate  Rice Bowl  Serving Bowl  Soup Bowl  Firni Bowl

 Serving Tray with Handle  Serving Tray

 Oval Tray  Cover Bowl  Tea Cup & Saucer  Glass/Cup

 Mug

 Big Rice Spoon  Curry Rice Spoon  Coup Spoon  Service Spoon  Salt Pot

7.4 Facilities:

Process Layout

Since the Exotica Melamine is following the Batch process, so that their facility layout will also fall under the process layout. They have eight departments. The layout of the plant has been designed in such a way so that all the manufacturing activity is under one roof such that the flow of material processed at one stage automatically flows to a next stage of processing thereby reducing manpower to handle the material from one place to another and avoid waiting time for the next process.

The advantages of process layout:

•The system can handle a variety of processing requirements •System are not particularly vulnerable to equipment failure •Equipment maintaining cost is lower

•Possible to use individual systems

The departments for Exotica Melamine process layout are:

• Stock Warehouse

• Glue & Heating Department

• Cutting Department

• Production Department • Grinding & Polishing

• Sreening Department

• Packing Department

Some physical layout of the departments is provided in the appendix section.

Stock Warehouse:

The raw materials the Exotica Melamine use are 1. melamine compound, 2. melamine shiner, 3. printed tracing paper. Since the first two mateials are not readily available in the markaet so Exotica Melamine has give the purchasing order in advance. it takes at least 3-4 weeks to recived the goods after Exotica melamine made the purchaing order. Therefore Exoticamelamine keeps ample amount of raw materials on hand so that if there is any sudden increse in demand they donot run out of stock.

Glue & Heating depatment:

In this department glue is added to the tracing paper and the is dried using industrial elecric oven. Cutting :

In this department the designed paper is cut into desired shaped and arranged together in such a way so that it will be easier for next department. The Cutting department and the Glue & Heating department is situated next to each other to achive efficiency.

Production Derparment:

In the production department all the compiling, compressing & heating are done to give the product its shape & size. This is largest department and takes up most of the plant space. In this department there 22 compressing machine so that multiple items can be made at a time. The raw materials are inserted from one end and the finished product comes out from the other end. The machines used in the production department are semi-automatic.

Situated next to the Production department is the Grinding & Polishing department. In this department rough edges of the finished products are smoothed out and polished. This department has two doors, one door is used to rough edges product and the other is used to sent finished product out of the department to the next department.

Screening:

In this department products will be tested so that it would meet Exotica Melamine standards. The producted will be tested using electronic weighing machine and skilled person to identify discoloration. The job in this department is time consuming, so its takes a lot of time for the product to pass through this department.

Washing:

Situated near the screening department is washing department. In this finished products are washed with soap water and left to dry. This department is also large as it needs a lot space to dry the products.

Packing:

This department has two doors, one of them is connected to the plant and the other is connected to finished goods storage. In this department, the products are packed and sent to the storage.

Raw Materials MGT 489.8 Page 31 Department 1

(Stock)

Department

2

(Glue & Heating)

Department

3

(Cutting)

Department

4

(Production Department)

Department

5

(Grinding & Polishing)

Department

6

(Screening)

Department

7

(Washing)

Department 8 Diamond Melamine Process

Value Chain Analysis: The value chain a systematic approach to examining the development of competitive advantage. In order to find out the source of competitive advantage we must do value chain analysis. The organization is split into 'primary activities' and 'support activities.

Inbound logistics: Our main Inbound logistic is raw materials and the Exotica Melamine use raw materials are

 Melamine compound,  Melamine shiner,  Printed tracing paper.

Since the first two mateials are not readily available in the markaet so Exotica Melamine has give the purchasing order in advance. it takes at least 3-4 weeks to recived the goods after Exotica melamine made the purchaing order. Therefore Exoticamelamine keeps ample amount of raw materials on hand so that if there is any sudden increse in demand they donot run out of stock.

7.5 Production

 The Process Type at Exotica Melamine

Exotica Melamine uses Batch Processing for production. The main reason for using this particular process is that, Exotica being a melamine company need some moderate variety in its production process. Example- the production of different kinds of melamine products is more or less similar (raw material remains same). Their only difference is in their design and processing time. Therefore, we may say that the key factor in process selection of Exotica Melamine is moderate variety in production. Another factor is that, a batch manufacturing facility produces intermediate volume of each good.

The advantages of batch processing are as follows: • Production flexibility is there.

• Per unit cost will be less than job shop.

• Planning and scheduling of production process will be moderate than the job shop. • Output variety can be increased but at a less cost.

• Batch processing can be performed with semi skilled workers that will reduce the labor cost.

Theoretically, moderate volume can be a disadvantage of batch processing. But, as Exotica melamine needs a few more varieties to be added, batch processing helps it to do that. For example, as Exotica melamine has to produce different varieties of similar products (exp-Dinner plates) to meet what the customer really expects from them, batch processing is an effective process with which this company can satisfy the hidden demands of its customers. Besides this, the company is able to maximize the utilization of its total capacity, which will help to compete within the industry as it did before.

The Production Process of Dinner Plates:

Exotica Melamine produces more than 48 brands of melamine products. It must be said that most of those follow a similar production process. For example-the production process of Dinner Plate is quite the same as Soup Bowl. The basic difference is in the design\shape and time required to process those inputs. Also different products require different sets of conditions for production. This means things like- temperature, amount of materials varies for different product while they are produced.

Exotica melamine first receives the raw materials from supplies and stores them at the warehouse. A sample of the raw materials is sent to the Exotica’s Quality Control Department. There intensive testing is done on the samples (of raw materials) and then they are compared to the standard required to produce the melamine. If the raw materials meet the standards then they are approved by the Exotica’s Quality Control Department and sent for processing (production). If they fail to meet the standard then they are rejected and sent back to the supplier.

Our product under study “Dinner Plate” has 12 sub-processing units in its production line. The manufacturing process of Dinner Plates can be described in the following manner: Adding Glue to Paper:

The printed tracing paper that Exotica melamine outsourcers from other companies, those are basic print design on the melamine product. Then synthetic glue (cyanoacrylate) is added on the opposite side of the printed-paper. Labor skill: low

Heating:

Cutting:

After the paper is dried it cut into desired shape according to the design. Labor skill: high Weighing:

The ingredients (melamine molding compound- 0.1 to 10 percent of N-methyl-2-pyrrolidone and a resin selected from the group consisting of epoxy, phenolic and silicone resins) are first weighted. For dinner plate 125g. Labor skill: low

Heating the Compound:

After weighing, the compound is heated in the furnace for 40 to 60 seconds at 120˚ Celsius. Labor skill: low

Compressing:

This process is machine intensive. The preheated compound is placed into the machine. The machine compresses the compound at 180 psi and apply heat at 150-160˚ Celsius for 30-50 seconds to form the basic shape of the plate. Labor skill: moderate

Adding the designed paper:

After forming the basic shape the worker add the designed paper on the plate, then the machine compresses again at 120 psi and apply heat at 140˚ Celsius. This process attaches the print design on the plate. Labor skill: moderate

Adding Melamine Shiner:

After adding the print design the worker add melamine shiner (Methyl Ethyl Ketoxime) on to plate. Then the machine compresses again at 80 psi and at 100˚ Celsius. This process makes the melamine to shine which would otherwise look dull and gloomy. Labor skill: moderate

After the plate has been made, the edges of the plate are grinded using a grinding machine to smooth the edges. Labor skill: moderate

Polishing:

After grinding, the plates are polished to shine even more and look nice. Labor skill: moderate Plastic Wrapping:

To prevent from dust and other harmful particles the plate are wrapped in plastic; usually three plate together. Labor skill: low

Packing:

After plastic wrapping the plate are packed into boxes; usually six plate in a single box. The boxes are made from recycle paper which the Exotica melamine outsources from other companies. Labor skill: low

At last the finished products go to inventories. The production process ends here. They fulfill the order slips provided by the marketing department. Thus they meet production schedule.

Exotica’s Quality Control Department plays a crucial role in the whole process. Their task begins from checking the raw materials (as mentioned earlier) to packing. They can check quality at any stage of production to assure the best quality.

At Exotica Melamine if the raw materials are rejected before production only then it is sent back to the suppliers. But if at any other stage of the process a fault is found the rejected items will be considered just as scrap. The production process is stopped immediately.

Analysis of the process of Exotica Melamine:

Activity Batch At Exotica Melamine

Work in process Moderate Moderate-High

Cost per unit Moderate Moderate-High

Fixed costs Low-Moderate Moderate

Variable Cost Moderate Moderate

Labor skills Moderate Moderate-low

Volume output Low Low-Moderate

Scheduling Moderate Complex Low Complex

Job Variety Moderate Moderate to High

SHAPE \* MERGEFORMAT

Outbound logistics: Our outbound logistics will be  Warehousing

 Order fulfillment  Transportation

Adding glue to the printed-paper

Heating the paper to dry

Cutting the paper into desired shaped according

to design

Weighing melamine mounding compound

Heating the compound Putting the preheated

compound in the compressing machine &

apply heat to form the basic shape

Adding the designed paper & compressing

again with heat

Adding melamine shiner & again compressing

with heat

Grinding the

edges

Polishing

Plastic wrapping

Packaging

 Distribution management

4. Marketing & Sales: Marketing and sales activities will be included following  Channel Selection  Advertising  Promotion  Selling  Pricing  Retail management Supporting activities: 1. Firm Infrastructure:

 Organizational Structure ( we will follow horizontal organizational structure)  Quality management ( We have product quality control department)

 Company culture  Public affairs

2. HRM: (Employee recruiting, hiring, training, development, and compensation)

The company follows on the job training for its production workers. To motivate employee the company pays a performance bonus, promotion. On the other hand company uses a non pay motivation technique by high lighting the best performer of the month in various sectors.

3. Technological development: (Process automation, design, redesign)

It uses world-class technology from the Long Chung Company of Taiwan. The sources of raw materials are mainly from Taiwan, Indonesia, Thailand and China. The best raw material comes from Taiwan.

4. Procurement: (Purchasing inputs such as raw materials, supplies, and equipment)

 Some office equipments: (Computers, Printers, Fax machines, Power Generator, Copier, etc.)

 Technical and Manufacturing equipments: (Semi- automated machine, High-frequency preheating machinery, etc.)

7.6 Equipment & Machineries:

Since our business will produce melamine products, there will be maximum usage and need for equipment and machineries in producing the products. However, in running the overall business we will be using different equipments. We will basically be needing equipments and machineries for two purposes. One purpose will be to carry out our day to day work in the office and other purpose will be for manufacturing the products

Some office equipments are listed below: 1. Computers

2. Printers 3. Fax machines 4. Power Generator 5. Copier

Technical and Manufacturing equipments - High-frequency preheating machinery (for melamine industry):

Function:

It is mainly used to the preheating process before moulding of thermo set materials, such as melamine. It enhances the liquidity of materials, and decreases harmful ingredient and increases the glossiness of the product surface.

Features:

1) Introduce advanced technology from Japan. World famous brands are adopted for the overall unit. Thus the performance is guaranteed.

2) Full automatic hood structure requires no air supply. Accurate switching is ensured. 3) Modification is convenient; only one press is required for the operation.

4) Safety protection -- Multi-protection measures are taken to ensure the man/machine safety

Exotica Melamine Ware Equipment Commutator Machinery

The device is mainly applied for the pre-heating processing for thermo-set resin material such as melamine, epoxy, bakelite and urea plastic, etc., including preformed project such as compressed

molding, transfer molding and extrusion molding, etc.

The H. F. Preheating process is widely applied for Thermo-set plastic molding such as for electric components, mechanical parts, bakelite products, urea products, melamine table wares, and packaging of IC, commutator, transistors and other micro-electronic components. The device can be used to improve the surface glossiness of (imitating ceramic) products, prevent water-like wrinkle and strengthen the fluidness of powder resin. It can pre-heat and soften the powder resin (caking) prior to the plastic packaging for the electronic components and semi-conductor IC, so as to improve the grade and performance for the products.

7.7 Research and development

R&D department will have a research team comprising engineers, psychologist technicians to find new information on consumer behavior and competitors. Exotica’s R & D department can use other researches as a secondary source of data. However, there is very limited amount of research & development in this sector. Almost all the manufacturers in the country still depend on research & development done in the other countries.

7.8 Quality Assurance:

Exotica’s Quality Control Department plays a crucial role in the whole process to maintain the product quality. Exotica melamine first receives the raw materials from supplies and stores them at the warehouse. A sample of the raw materials is sent to the Exotica’s Quality Control Department. There intensive testing is done on the samples (of raw materials) and then they are compared to the standard required to produce the melamine. If the raw materials meet the standards then they are approved by the Exotica’s Quality Control Department and sent for processing (production). If they fail to meet the standard then they are rejected and sent back to the supplier. Moreover, we are careful to assure the best quality of each factors related to the product manufacturing.

8.1 Brand Elements

Company Name: Exotica Melamine Ware

Mission: We, the new generation of melamine producers, will focus on premium quality melamine products with innovative style and design.

Vision: Establishing a worldwide brand Image by reintroducing Bangladeshi Melamine products in the Global Market.

Brand Slogan: Creating a divergence in your tableware

8.2 Product, Place, Pricing & Promotion strategies of the company (4P’s):-

 Products: -

Our Melamine Industry produces crockery at the cheaper possible price with high quality and unique design. Our main differentiation from the competitors will be achieved through this unique design of product, which will serve as the unique selling proposition of our products. In its product assortment it will include various sizes and designs of Mug, glass, Plates, Bowl, Tray, Spoon, Salt pot & Tea cup. As crockery melamine endures longer than that of ceramics, glass, and tin made products, we expect to capture market share of our product quickly. Where as it will use best quality food graded raw materials, which is hygienic and approved by BSTI (Bangladesh standard and testing institute). Quality product, attractive designs and standard packaging and distribution system will gain the confidence of customers, distributors and retailers. This ultimately turns the product as a highly accepted brand among its customers.

(distribution):-The company follows dual distribution system to distribute its products. It uses 3 distribution vehicles to transport its product straight to the door of retailers and distributors. More over the company has two authorized agents through which it tries to cover its distribution needs. The company’s markets sphere extends beyond the domestic market. After functioning fully in the domestic market, the company will also start to export its products into India through Bhutan. Our marketing research indicates that we have a huge sales potential in India. Since exporting any product from Bangladesh to India is restricted, we have decided to open an agency in Bhutan. This will not be like a foreign direct investment, but we will give dealership to a local company in Bhutan to act as our buying house to import our products. Then we will export our products from Bhutan to India. This how our overall cost will be lower and we will be able to capture the Indian market.

The domestic Market- (initially)

Pricing:-To be competitive in the market, the company will adopt target-pricing strategies. Actually success in target pricing completely depends on how well a company can control its cost. To provide better quality products at an affordable price normally less than other branded products of same quality. To reduce cost, by keeping the quality intact, the company reduces its wastage of raw materials, other resources, and better-trained human resources management. The wastage level of the company is 50% lower than its competitors. More over the Management of the company will ensure to reduce wastage level further more. By being effective & efficient in using raw materials, human resource and machineries, the company will achieve lowest possible cost for its products than its competitors. Through standard setting for workers the company increases its production to the highest level at the industry, which reduces cost in turns.

 Promotion (Advertising):-

The company will maintain the best quality for its products and use selected advertisement medias like radio, television and print media. For radio commercial- the company shall use attractive music tune and voice of a housewife to grab listeners attention. Advertisement in T.V will be given between prime Dramas and different cooking shows. The company will specially advertise on ATN Bangla. In terms of advertising, the company will use attractive models as housewives using the products. As mentioned earlier, the company will also use print media. Colorful ads will be given in different newspapers and different cooking/ household related magazines. Moreover, the company will distribute free calendar, T-shirts for its distributors, sellers & buyers. It will also participate in DITF (Dhaka International Trade Fair) as a form of advertisement to enhance its brand image, at the same time generate sales.

This is how we have allocated our

budget-1. TV commercial- The advertisement will be shown only on ATN Bangla, every weekend at once a day for the whole month. Emphasize will be during the night soap opera and cooking shows. Moreover, special emphasize will be given in showing the ad on Friday evening during Bengali movie (this is the most important ad to reach the rural people.

2. Radio commercial- The radio commercial will be broadcasted only at ‘Radio Today’ every alternate weekend at once a day for a month.

Cost of Commercial: 4*1*Tk.1000*10s=Tk.40, 000

3. Print Media- The print advertisements will be put only at ‘Prothom Alo’ on friday (5 col.inchs) Cost of Commercial: 4*5*Tk.2, 500=Tk.50,000

 Total Cost= Tk. 170,000 (per month)  Total cost= Tk. 2,040,000 (1st _year)

Summery-Promotion Type Media Frequency Est. Cost-yr1 TV Commercial ATN Bangla Every weekend, once a

day

960000

Radio Commercial Radio Today Every alternate weekend, once a day

480000

Print Media Prothom Alo Every Friday, 5 column inch

600000

Total Yearly Expense 2,040,000

8.3 Segmentation, Targeting and positioning strategies of the company:-

o Segmentation: -

The company will mainly use mass marketing strategy through out the country. Due to the limitation of resources the company will first operate in some selected districts. In future the company has its vision to expand its market area all over the country. Though the company is a consumer goods producer, sometimes it will supplies products to business for their specific order such as SMC (social marketing company), Hotel Radisson, and over hundreds of decorators including defense mess. Exported items will be produced according to the specification of importer country. The company will also produce customized products for special orders comprising or more units. Customized product’s features will include demanded logo, design, size and other such attributes. The company will follows a micro marketing practice with inclination to build a strong bond of customer relationship with its customers.

o Targeting:

-Market targeting refers to the selection of one or more market segments to which a company can serve with its resources after considering the alternatives and the potentials of the market. The nature of the industry, level of buyers, general economic conditions of Bangladesh and the nature of the product don’t give the scope to any melamine company to adopt differentiated marketing strategies. So the company will offer an undifferentiated product, but the target customer group will be the middle income group to upper income group, those who can afford it. Our geographical target area in terms of the domestic market will be the urban and sub-urban cities. Through out its production, distribution, pricing and promotional activities there is no differentiation, either for customers or for any geographical segment in the country. To capture the export market for melamine products, the company will provides better quality of products, packaging at a lower price in comparison to the domestic market. Company will reduce its price from the exported products to the extent it gets tax rebate from tax authority. This gives the company a competitive advantage in the export market compared to the domestic market and also over the foreign competitors.

o Positioning:

-The primary target of our company is to re-introduce melamine to both domestic and foreign markets. Positioning is the combination of marketing strategies which aims at occupying a certain position in the

buyers’ minds. A company might obtain the position in the buyers’ mind through better product attributes, price or quality, offering the product in a different way than the competitors and so on. Our company will offer improved quality of products in the industry at a lower price even than the market leader, which ultimately helps to position the product in the buyers’ minds as the best quality product. The market share of the company is expected to grow at a steady pace. The brand 1 melamine, Sharif melamine is an old and reputed company in the market. It has an establish brand loyalty, good customer base for which it is less emphasizing less on quality and charging more price comparative to its quality. Where as our company will be a new company and still trying to make a strong customer base and brand loyalty in the market, for this reason it is more emphasizing on quality and charging more reasonable price to its quality.

Positioning Map

Exotica Melamine Ware

Data presented in the figure has been taken from the results of a survey conducted by Diamond Melamine Industry and our company is positioned based on our assumptions.

As it can be seen from the above included graph, among the five major competitors in the market, United Melamine offers the product at the cheapest possible price, but the quality of their product is also lower compared to others. Crown Melamine offers their products in a better quality, but charges a bit higher price. The current industry leader, Sharif Melamine is able to charge the highest price for their products due to their established brand name. Sharif Melamine’s closest competitor Diamond Melamine offers a little better product, but charges a little lower price and they are gaining market share quickly. Now our company is expected to offer products which are of the same quality as of Diamond Melamine’s, but we will be offering our products at a little cheaper than them in order to have a competitive edge. Moreover, our unique designs should give us an upper hand over all the established melamine companies.

It is very important for any company to have a well-defined and apparent HR policy to run the firm smoothly. It starts from recruitment and continues to turn off. All aspects are included here. In one word, a company is nothing without an excellent HR. The EXOTICA MELAMINE WARE also has an HR Policy; but, before that there the some basic principles and commitments which the company has to maintain; they

are-And the commitments towards the workforce are as

follows-Basic Principles of the HR Policy

Prohibition of Child Labor

Prohibition of any form of Discriminations (Gender, Age, Sex, Race, Religion, Status)

Equality

Freedom of Association and the Right to Collective Bargaining

No Harassment

Maintaining all Possible Legality

Compliance of Occupational Safety & Health Provisions

Prohibition of Forced Labor

Compliance of Environmental & Safety Provisions Affirmative Action

The HR Policy of the EXOTICA MELAMINE WARE starts following- Recruitment Process

Recruitment is an important job for any organization. To recruit there are some steps that the EXOTICA MELAMINE WARE will go through.

Lowest Wage &

Salary Overtime _Payments No Child _Labor

Proper Environme nt Discipline & Rules Training Programs Social Complianc es Compensa tions & Benefits Legality& No Discrimina tion Factory Culture

Job Analysis

The main analysis should be conducted by the supervisors. There are certain reasons to assign them to

analyze-• They can understand the posts needs as they observe closely • They can easily figure out the problems with the existing systems • They would have direct communications with the workers

They needs to figure out or define the following

things-• Job Content- what are the responsibilities and the duties the workers need to perform. How to work or perform the tasks.

• Requirements- they should figure out what types of skills and capabilities are needed in the people. What qualifications are required? It is to be done based on the qualitative approach.

• Relationship & Environment- they should figure out how the worker should behave, to whom and how they will be liable, what conditions they would work what type of work environments are there and so on.

After they do the analysis they would hand over their findings to the upper level management. After their analysis the management would again give the supervisors for the manpower analysis.

Job Analysis Manpower Analysis

of Number

Selecting Internal or External Recruitment

Manpower Analysis

Manpower planning at the EXOTICA MELAMINE WARE would be divided into two parts; which

are- Manpower Plan for workers  Manpower Plan for management

Manpower Plan for workers

As it is a manufacturing company its success mostly depends upon the productivity of the workers. Therefore, to make a good manpower plan for the workers is very important for them. To plan accordingly the supervisor & the HR department goes through the following three

steps- Calculation of Manpower Required  Permission from Higher Authority Manpower Plan for management

 Calculation of Positions Required

 Approval from Higher Authority

Selecting Internal or External External Recruitment

Whenever there would be any empty entry-level post, or lack of internal supply, or new employees needed then the company should look for the external recruitments. By many sources and by many methods it can be done. Besides, the market of the labor should be considered; whether it is tight or loose labor market or not. Normally most of the time there is good supply of workers; therefore recruiting right person would be difficult due to large number of supply; whereas, in the management level yet now people do not prefer the Garment industry as a lucrative place to join. Thus, EXOTICA MELAMINE WARE should do something to make it lucrative place to join. EXOTICA MELAMINE WARE can brand as an attractive recruiter. Based on these the management should decide whether to go for internal or external recruitment.

Recruitment

There are some principles which the EXOTICA MELAMINE WARE would follow while recruiting. These

are-At first recruitment notice would be given or published. Then recruitment would be done. For this following recruitment channels or the methods can be

used-Direct

Applications-• Advertise through Newspapers • Electronics Media

• Posting

Principles While Recruiting

Prohibition of Child Labor

Prohibition of Forced Labor

Equality (EEO)

No Discrimination

Employment Contract