Transilvania University Braov Economic Science Faculty Business Administration

Start-up a new firm SC. CosySolutions SR case study

Scientific eader! ect. dr. Constantin Sanda ect.dr. upsa Tataru "ana

'raduate! "emeter Timea

Braov# $%&%

Table of Contents

Introduction......................................................................................................................... 1 Chapter 1 Conceptual and methodological aspects............................................................2 1.1What is a feasibility study?.......................................................................................... 2 1.2The feasibility study contains:..................................................................................... 3 Chapter 2 Presentation of the company.............................................................................. 2.1 The birth of an idea ................................................................................................... 2.2. !bout the company in general................................................................................ 1" 2.3 Collaborators............................................................................................................ 12 2.# The product and ser$ice........................................................................................... 13 2.% Competition.............................................................................................................. 1& 2.& Plans for the future.................................................................................................. 1& Chapter 3 !nalysis............................................................................................................ 1 3.1 'rief description of the economic agent...................................................................1 3.2 (escribing the in$estment....................................................................................... 1) 3.3 Commercial analysis................................................................................................ 23 3.# *perational analysis................................................................................................. 3) 3.% The management of the economic agent................................................................## 3.& +inancial pro,ections and calculations......................................................................#Chapter # Conclusions and recommendations..................................................................%# .eferences........................................................................................................................ &"

List of Figures and Pictures

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Chart 3.2.1 Gant chart for investment plan A Chart 3.2.2 Gant chart for investment plan B Chart 3.3.1 Evolution of sales in the period of 12.2009 0.!2010 Chart 3.".1 #elationship of the compan$ %ith other economic a&ents Chart 3.".2 The currents or&anisation chart at 'C. Cos$'olutions '.#.( Chart 3.".3 The )r&anisation chart at 'C. Cos$'olutions '.#.( after implementin& one of the investments *icture 2.1 Cos$stone *lain *icture 2.2 Cos$tone Glass *icture 2.3 Cos$stone +irror *icture 2.! Cos$pedes *icture 3.3.1 ,eaters installation *icture 3.3.2 Cos$stone *lain *icture3.3.3 Cos$stone Glass *icture 3.3.! Cos$stone +irror *icture 3.3." Cos$pedes

List of Tables
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Table 3.2.1 Buildin& characteristics Table 3.2.2 -nvestment cost plan A Table 3.2.3 -nvestment costs plan B Table 3.3.1 ,eater si.es and po%er for the different si.ed rooms Table 3.3.2 Evolution of sales 12. 2009 0!.2010 Table 3.3.3 Calculation of demand for se&ment A Table 3.3.! Evolution of pro/ected turnover in 2010 201! for plan A Table 3.3." Evolution of demand and turnover in 2010 201! for plan B Table 3.3.0 Comparison bet%een cost of personal central heatin& s$stem and cost of heatin& panels. Table 3.3.1 *romotional e2penses of 'C. Cos$'olutions '.#.( 12.2009 0!.2010 Table 3.3.3 Comparison bet%een competition prices Table 3.!.1 *roduction forecast in case of plan A for the period 2010 201" Table 3.!.2 *roduction forecast in case of plan B for the period 2010 201" Table 3.!.3 Annual labor e2penses at 'C. Cos$'olutions '.#.( Table 3.!.! Components of the material e2penses for plan A Table 3.!." Evolution of material e2penses at 'C. Cos$'olutions '.#.( in the period of 2010 201" for investment plan A Table 3.!.0 Components of the material e2penses for plan B Table 3.!.1 Evolution of material e2penses at 'C. Cos$'olutions '.#.( in the period of 2010 201" for investment plan B Table 3.!.3 Components of the utilit$ e2penses for plan A Table 3.!.9 Evolution of e2penses %ith utilities at 'C. Cos$'olutions '.#.( in the period of 2010 201" for plan A Table 3.!.10 Components of the utilit$ e2penses for plan B Table 3.!.11 Evolution of e2penses %ith utilities at 'C. Cos$'olutions '.#.( in the period of 2010 201" for plan B Table 3.0.1 Evolution of *rofit durin& 2011 201" in case of plan A Table 3.0.2 #evenues and e2penses for plan A Table 3.0.3 4pdatin& values for plan A
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Table 3.0.! Evolution of *rofit durin& 2011 201" in case of plan B Table 3.0." #evenues and e2penses for plan B Table 3.0.0 4pdatin& values for plan B Table 3.0.1 -nvestment indicators

Introduction
As ever$bod$ 5no%s6 our countr$ is in the middle of an economical crisis. The companies are stru&&lin& to maintain there business on the mar5et6 emplo$ees lose their /ob6 bu$ers are determined to spend as less as possible6 the demand is fallin&6 bein& constant onl$ for the basic products. The reason for choosin& the topic of m$ paper is connected to the fact that in this environment6 startin& up a ne% business can be a ver$ ris5$ attempt6 because once invested it is ver$ hard to &o bac5. But this doesn7t mean that &ood business idea should &o to %aist because the unfriendl$ environment. This is %here the effectiveness of the feasibilit$ stud$ comes in6 enablin& the entrepreneurs to find out if their business idea %ould be li5el$ to %or5 or not6 &ivin& them the opportunit$ to anal$.e t is %orth to invest in the business or not. A compan$ that decided to enter this environment is 'C. Cos$'olutions '.#.(6 %ho discovered a product that %as missin& from the #omanian mar5et6 and %ould come as a ver$ &ood alternative for conventional heatin&. The products %ould be imported from abroad. - decided to anal$.e the survival6 and success potential of this product on the mar5et6 to&ether %ith stud$in& t%o alternatives of action that the compan$ could ta5e in order to e2pand and recover it7s investment in the shortest period of time6 )ne of the alternatives is to invest in an assembl$ %or5shop6 %here the heaters could be assembled6 providin& an advanta&e for the compan$6 b$ reducin& stoc5s of assembled heaters6 combined %ith buildin& an o%n %arehouse6 %here the %or5shop %ould be. The second alternative is investin& in a %or5shop6 and a printin& machine6 allo%in& the bu$er to personali.e the product accordin& to its o%n preferences. -n this case the %or5shop %ould be placed in a rented buildin&. Therefore the main ob/ective of the pro/ect is to find out if these products %ould survive and be successful on the #omanian mar5et6 to&ether %ith the best investment alternative. The data about the compan$ %as &athered from the &eneral mana&er of 'C Cos$'olutions '.#.(.

Chapter 1 Conceptual and methodological aspects

1.1 What is a feasibility study?

A Business 8easibilit$ 'tud$ can be defined as a controlled process for identif$in& problems and opportunities6 determinin& ob/ectives6 describin& situations6 definin& successful outcomes and assessin& the ran&e of costs and benefits associated %ith several alternatives for solvin& a problem.1 -n a fe% %ords a feasibilit$ stud$ is an anal$sis of the viabilit$ of an idea. -t focuses on helpin& ans%er the essential 9uestion of :should %e proceed %ith the proposed pro/ect idea;< All activities of the stud$ are directed to%ard helpin& ans%er this 9uestion. 8easibilit$ studies can be used in man$ %a$s but primaril$ focus on proposed business ventures. *eople %ith a business idea should conduct a feasibilit$ stud$ to determine the viabilit$ of their idea before proceedin& %ith the business plan6 and the development of the business. =eterminin& earl$ that a business idea %ill not %or5 saves time and mone$. A feasible business venture is one %here the business %ill &enerate ade9uate cash flo% and profits6 %ithstand the ris5s it %ill encounter6 remain viable in the lon& term and meet the &oals of the founders. The venture can be either a start up business6 the purchase of an e2istin& business6 an e2pansion of current business operations or a ne% enterprise for an e2istin& business. A feasibilit$ stud$ is usuall$ conducted after producers have discussed a series of business ideas or scenarios6 and before constructin& a business *lan. The feasibilit$ stud$ helps to :frame< some specific business scenarios so the$ can be studied in depth. process the number of business alternatives usuall$ is reduced. Than5s to the feasibilit$ stud$ one ma$ investi&ate a variet$ of %a$s of or&ani.in& the business and positionin& the product in the mar5etplace6 to&ether %ith listin& in detail all the thin&s the entrepreneur needs to do in order to ma5e the business %or56 identif$in& lo&istical and other business related problems and there solutions6 developin& mar5etin& strate&ies to =urin& this

!lan Thompson/0ntrepreneurship and 'usiness Inno$ation1 2ineyard Publishing1 3uildford1 W.! 2""%1 pg.1 &

convince a ban5 or investor that the business is %orth considerin& as an investment and servin& as a solid foundation for developin& the business plan. -t is li5e an e2plorator$ /ourne$ and one ma$ ta5e several paths before reachin& the destination. >ust because the initial anal$sis is ne&ative does not mean that the proposal does not have merit. 'ometimes limitations or fla%s in the proposal can be corrected. The conclusions of the feasibilit$ stud$ should outline in depth the various scenarios e2amined and the implications6 stren&ths and %ea5nesses of each. The pro/ect leaders need to stud$ the feasibilit$ stud$ and challen&e its underl$in& assumptions. As one accumulate information and investi&ate alternatives6 neither a positive nor ne&ative outcome ma$ emer&e. The decision of %hether to proceed is often not clear cut. +a/or stumblin& bloc5s ma$ emer&e that ne&ate the pro/ect. 'ometimes these %ea5nesses can be overcome. #arel$ does the anal$sis come out over%helmin&l$ positive. The stud$ %ill help one assess the tradeoff bet%een the ris5s and re%ards of movin& for%ard %ith the business pro/ect.2 The feasibilit$ stud$ is t$picall$ conducted b$ a hired consultant. Because the consultant isn7t a part of the cooperative6 he or she is in a better position to provide an ob/ective anal$sis of the proposed venture. The consultant should have a &ood understandin& of the industr$ as %ell as the ne% &eneration cooperative model of business. ,e or she should have previous e2perience in directl$ related %or5.3 -t is important to ma5e sure that the consultant can provide an independent evaluation of the business opportunit$. A feasibilit$ stud$ can contain several thin&s6 and its composition is determined accordin& the studied idea. -n case of the feasibilit$ stud$ for '.C. Cos$'olutions '.#.(. the feasibilit$ stud$ %as made based on the model from BC#. 1.2 The feasibility study contains 1.! "rief description of the economic agent 1.1 -dentification data of the economic a&ent 1.2 >uridical form
2 3

http:44555.e6tension.iastate.edu4agdm45holefarm4html4c%/&%.html http:44555.umanitoba.ca4afs4agric7economics48.!C4feasibility.html

1.3 The compan$7s main activit$ is? 1.! 'tructure of shareholders 1." 'hort histor$ of the compan$ This subchapter %ill contain basic information re&ardin& the compan$ and it7s activit$6 includin& re&istration number6 re&istration code6 address6 and CAE@ codes. 2.! #escribing the in$estment 2.1 Current situation 2.1.1 =escribin& the currents situation and the need for the ne% investment. 2.1.2.E2istin& propert$ 2.2 *resentin& the ne% investment 2.2.1 -nvestment pro/ect for the %arehouse %ith %or5shop 2.2.2 -nvestment pro/ect for the %or5shop %ith the printin& machine 2.3. Graph of implementin& the investment 2.3.1 The Gant chart for investment A 2.3.2 The Gant chart for investment B The investment %ill be described in both cases6 usin& the detailed description of the buildin&6 and the value of the machiner$ %ith and %ithout AAT and the information %ill be comprised in a table. The &raph of implementin& the investment %ill be made usin& the Gant chart6 %hich %ill be made in +icrosoft *ro/ect. %.! Commercial analysis 3.1 The product 3.1.1 *resentin& the products This part %ill include the products and services of the compan$6 to&ether %ith the ne% additional services that one of the investment alternatives can offer. 3.1.2 +ain characteristics of the products *resented %ith technical data6 installation &uide6 and a :room si.e heater po%er : chart6 to&ether %ith the description of each product. 3.1.3 *roduct lifec$cle 3.2 The mar5et and commerciali.in& the product The information re&ardin& the mar5et %ill be based on a mar5et research6 %hich %as conducted b$ a mar5etin& consultanc$ compan$.
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3.2.1 The evolution of the suppl$ and demand on the mar5et Bill be determined from the &eneral mana&er7s statements6 and there evolution %ill be represented usin& a &raph made in +icrosoft )ffice E2cel. 3.2.2 Anal$.in& the suppl$ and demand on the mar5et 3.2.2.1 =efinin& the tar&et mar5et The tar&et mar5et %ill be divided in 3 lar&e se&ments6 and each se&ment %ill be described individuall$. 3.2.2.2 Estimatin& the structure of demand This %ill be estimated for " $ears6 based on the mar5et research6 and the future tendencies re&ardin& heatin& technolo&ies6 to&ether %ith the price evolution tendencies of &as6 and electricit$. The information re&ardin& these tendencies %as collected from ne%spapers. 3.2.2.3 Competition6 Competitive advanta&e -nformation re&ardin& the competition %as &athered b$ usin& the internet6 and the price advanta&e6 %ill be presented usin& a comparison bet%een the compan$7s products6 and it7s main substitute product. 3.3 Commercial mana&ement 3.! *romotion and distribution of the products 3.!.1 *romotional techni9ues 3.!.2 =istribution channels 3.!.3 *romotion e2penses 3." 'ellin& price of the products -n order to be better illustrated6 the prices of the compan$ %ill be presented ne2t to the prices of the competition6 divided in cate&ories6 such as room t$pe and heater t$pes6 and all values %ill be comprised in a table. 3.0 =eterminin& the critical ris5 factors The ris5 factors %ill be determined usin& *orter7s industr$ anal$sis6 and the *E'T anal$sis. After determinin& the ris5 factors6 solutions to diminish these ris5s %ill also be provided. &.! 'perational analysis !.1 Technical production capacit$ of the economic a&ent
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!.1.1 (ocation and facilities !.1.2.*roduction technolo&$ !.1.3 *roduction pro&ram !.1.3.1 Evolution of the activit$ in the previous period !.1.3.2 Activit$ forecast Bill be determined for " $ears of activit$6 based on the demand on the mar5et6 and %ill include onl$ the number of heaters assembled b$ the compan$6 in the %or5shop. !.2 *roduction factors of the economic a&ent and there costs !.2.1 Estimatin& labor e2penses !.2.1.1 The evolution of personnel structure and forecasts !.2.1.2 Annual labor e2penses !.2.2 Estimatin& the e2penses %ith ra% materials and stoc5s !.2.2.1 #a% materials6 materials and merchandise !.2.2.2 'uppl$ sources !.2.2.3 Annual e2penses %ith ra% materials6 materials and merchandise !.2.3 Estimatin& the cost of utilities The labor e2penses6 material and utilit$ costs6 %ill be estimated6 ta5in& into consideration current prices on the mar5et6 and addin& to those an increase of ! "C percent each $ear. All this data %ill be presented usin& tables. !.2.! -mpact on the environment (.! The management of the economic agent ".1 The strate&$ of the future activit$ ".1.1 The ob/ectives of the strate&$ ".1.2 +easures that have to be made in order to reach the ob/ectives ".2 )r&ani.ational structure Bill be presented in the form of or&anisational charts6 for the current and for the future situation of the compan$6 charts made in +icrosoft )ffice Bord application. ".3 The mana&ement of the compan$ ".! The information s$stem ).! Financial pro*ections and calculations.

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These indicators %ill be determined6 b$ calculatin& the volume of production6 $earl$ production e2penses6 profit6 the specific capital6 pa$off period6 output factor6 and the E9uivalent costs for both investments. After this the values %ill be updated6 usin& the updatin& techni9ue to the moment of investment6 %hich is in this case 2011. Conclusion Bill contain the decision6 of %hich investment alternative is more feasible6 and should be chosen for implementation6 to&ether %ith additional observations6 and recommendations. +eferences 1. Alan6 Thompson6 Entrepreneurship and Business -nnovation6 Aine$ard *ublishin&6 Guildford6 B.A6 200" 2. Graham6 Ben/amin6 The -ntelli&ent -nvestor6 revised edition6 ,arper business6 @D6 2003 3. (andstrom6 ,ans6 *ioneers -n Entrepreneurship6 and 'mall business #esearch6 4niversit$ of Baltimore6 200" !. +andache6 @icumescu6 'tudiu de fe.abilitate ? ca.uistica pe e2emplul unei intreprinderi producatoare de tesaturi din bumbac si tip bumbac6 A'E6 Bucuresti6 200" ". )verton6 #odne$6 Eve &ot a &reat idea6 but -Eve &ot no idea ? %hat $ou need to 5no% about turnin& $our idea into a business ? a business handboo5 for entrepreneurs6 *aradise *oint6 Fld. ? '$dne$6 2009. 0. 'teven =. 'trauss6 The business start up 5it6 Trade *ublishin&6 4'A6 2003 1. Tom +cGas5ill6 +asterclass for entrepreneurs ? creative solutions for resilience6 &ro%th and profitabilit$6 Bil5inson *ublishin&6 +elbourne 2001 Bebsites? http?HH%%%.e2tension.iastate.eduHa&dmH%holefarmHhtmlHc" 0".html http?HH%%%.umanitoba.caHafsHa&ricIeconomicsH+#ACHfeasibilit$.html

Chapter 2 Presentation of the company

Ta5in& into consideration the fact that the paper is about a feasibilit$ stud$6 the issue of the firm itself isn7t the most important aspect6 it is also important to 5no% the circumstances that influenced the entrepreneur %hen he came up %ith the business idea. 2.1 The birth of an idea The period of 1990 2009 %as characteri.ed b$ ma/or chan&es in the #omanian people7s lifest$le. -n the first part of this period6 the state sold apartments to the tenants that lived in them until that time. 'o the tenants became o%ners and the real estate business be&an to evolve. The centrali.ed utilit$ providin& s$stem Jhot %ater and heatK became increasin&l$ poor because of the follo%in& reasons? the local central heatin& s$stems %ere &ettin& to old6 and the$ lost a &reat amount of ener&$ throu&h the pipes6 so the$ became less and less efficient for the user. a part of the consumers didn7t mana&e to pa$ the consumption that %as char&ed b$ the association as shared e2penses. As a result6 conflicts appeared bet%een the people that %ere able to pa$6 and the ones that didn7t6 because the ones that pa$ed had to suffer the penalties as %ell. Based on these events and on the desire of the population to obtain more comfort6 3 ma/or transformation periods be&an in %hich the population spent lar&e sums of mone$ from there income on moderni.in& there homes. The businesspeople %ho identified the follo%in& tendencies in time and 5ne% ho% to ta5e advanta&e of them6 %ere able to develop profitable businesses. the first %as measurin& the amount of %ater used b$ installin& those %ater meters. As a result6 clients %ere happ$ because the$ %ere char&ed e2actl$ for the amount of %ater that the$ consumed6 and the companies that sold these 5ind of %ater meters reached ver$ hi&h revenues. The second %as the fad of *AC %indo%s6 %hich meant that the people replaced there old %indo%s6 %ith ne% ones6 %ith hi&hl$ isolative properties. The clients %ere happ$ because there homes %ere more silent and the heat loss decreased6 %hile the producers6 and installers of these %indo%s multiplied there revenues.

The third one %as %hen people started to disconnect themselves from central heatin& to&ether %ith installin& &as meters for each apartment. This created the perfect conditions6 for installin& personal central heatin& s$stems. 4nder these circumstances a lar&e number of people disconnected themselves from the central heatin& s$stem6 and as a conse9uence6 the ones %ho didn7t6 had to pa$ the ener&$ losses accumulated for the entire unit6 resultin& in ver$ hi&h bills. This is the case in %hich 'tefan =emeter found himself in 2001 %hen 10C of he7s nei&hbors disconnected themselves from central heatin&6 so he had to find a solution in order to avoid the hi&h bills. The option of installin& a personal central heatin& s$stem %asn7t a favorable one6 because it involved a lot of formalities and paper%or56 complicated chan&es in the house6 li5e movin& furniture6 paintin& %alls6 and so on6 and it %as time consumin& as %ell. -t %as also a ver$ bi& investment6 because both the s$stem and it7s installation %as e2pensive. 4nder these conditions he found out accidentall$ about heatin& %ith infrared heatin& panels6 that %or5 on electricit$6 but unfortunatel$ the ones that he sa% %ere both unaesthetic and e2pensive. ,e be&an searchin& the %eb to find out there advanta&es and disadvanta&es6 and after man$ searches he found the Cos$stone heaters produced b$ +armo2 E&$pt. 'o then he sent an e mail to them to find out %ho %as there ambassador for #omania and he %as directed to the dealer on European level to the compan$ (+' =r. (iet. +ar5etin& 'ervices Gmb, from Berlin6 from %here he received the price list of the products. The prices %ere acceptable6 but the cost of the transport6 from Berlin to Brasov6 had to be supported b$ him and the$ %ere ver$ hi&h6 increasin& considerabl$ the final price of the product. (uc5il$ after some time of searchin& he stumbled upon some families in the same situation6 %ho %ere interested in these heaters6 so the transportation prices could be divided amon& them6 obtainin& a reasonable price. After %hich the$ received them6 installed them in " hours in the entire house6 and since then6 in %inter time the heaters %or5 providin& a heat of 21C &rades in the %hole apartment. -n the follo%in& $ears6 a number of people %ere interested in bu$in& these heaters6 so 'tefan directed them to the distributor from Berlin. 'ome of them ordered6 but most of them &ave up6

considerin& that it7s too complicated6 because %hen orderin& one had to pa$ in advance and onl$ after ! %ee5s the$ %ere able to receive the products. ,e continued to 5eep in touch %ith the o%ner of =r. (iet. +ar5etin& 'ervices Gmb, compan$ throu&h e mail6 so he %as up to date %ith ever$thin& ne% that appeared at the compan$. )bservin& that the demand for these heaters is constantl$ &ro%in&6 'tefan had the idea that it %ould be %orth investin& in this field of activit$. But %hen comin& to the decision of investin&6 it is important to stud$ the other alternatives as %ell6 and see if there is a better option. This is %hat he did. ,e first started %ith the idea that the &as resources are limited so the price of this %ill &ro% hi&her and hi&her opposed to the price of electricit$6 therefore it %ould be cheaper to use electricit$ than &as. Considerin& the model of developed countries6 the tendenc$ of %ater and air heatin& devices %as oriented to%ards mechanisms %or5in& on electricit$. Another reason to choose mechanisms %or5in& on electricit$ %as the fact that the demand for solar panels is constantl$ increasin&6 so people %ho %ill install these panels %ill prefer to have there appliances run on electric ener&$. After anal$.in& closel$ products similar to the ones from Cos$stone he reali.ed that these ones are still the most esthetic and have the most competitive price. 'o in 2009 he decided to &ive up he7s old %or5place and to become an entrepreneur. The first step %as to contact the o%ner of (+' =r. (iet. +ar5etin& 'ervices Gmb, and to propose an official collaboration %ith him. As a result of the proposal he a&reed to collaborate and in @ovember he personall$ visited Brasov to establish the details of the collaboration. -n =ecember 2009 'tefan =emeter established the compan$ called 'C. Cos$ 'olutions '.#.(. %ith it7s main activit$ of? Bholesale of electrical household appliances6 radios and TAEs. %ith the CAE@ code? !0!3 The first order %as delivered in the same month6 and he mana&ed to sell a part of it6 and ended the $ear 2009 %ith profit.

2.2. ,bout the company in general

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-.C. Cosy -olutions -.+.L. is a compan$ %ith limited liabilit$6 #omanian capital and %as founded accordin& to the fallo%in& la%s? (a% 31H1990 on commercial companies Jamended and reissuedK (a% 3"9H200! Civil *rocedure Code Article 311 -dentification =ata #e&istration number in the Commercial #e&ister? >03H1130H10.12.2009 4ni9ue #e&istration Code? #)203300"0 The head9uarters is located in a buildin& %ith various offices and production spaces of various companies at? 'tr. " et ! )ffice To%er @o. !2" *ostal code "0061"2 Brasov 'hareholders the compan$ consists of a sin&le shareholder. 'hareholders E9uit$ 200lei (o&o

The compan$7s main activit$ is? !0!3 Bholesale of electrical household appliances6 radios and TAEs. The compan$ has the follo%in& secondar$ activit$ ob/ectives? !191 #etailin& throu&h order houses or via -nternet 1022 Activities of business and mana&ement consultanc$ 1112 En&ineerin& activities and technical consultanc$ 1311 Activities of advertisin& a&encies 1!10 'peciali.ed desi&n activities

The slogan? 'olutions for $our health and comfort. 8rom the slo&an the mission of the compan$ can be easil$ deducted6 %hich is?
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To offer

health$6 accessible and eco friendl$

heatin& and air conditionin& solutions for

ever$bod$7s home6 as an alternative to conventional heatin& s$stems. The $ision of the compan$ is to? :Become the most 5no%n brand of infrared heatin& panels from #omania.< The ob*ecti$es for the future are the follo%in&? =evelop the distribution net%or5 on national level b$ =ecember 2010 +a5in& an assembl$ or a personali.ation %or5shop for the infrared heater b$ >une 2011 'ell a total of ? 000 heaters b$ 2010 1000 heaters b$ 2011 2300 heaters b$ 2012 Because the compan$ %as founded recentl$6 the number of employees at the moment is ver$ small6 it has onl$ t%o emplo$ees. The &eneral mana&er6 and the accountant. As customers the compan$ had a research institute6 a church6 and a number of individual clients6 %ho assured the compan$7s profit in the first months of functionin&. 2.% Collaborators As presented above6 Cos$ 'olutions doesn7t have it7s o%n production facilit$ so it is in collaboration %ith t%o companies6 that provide the products. The producer compan$ is +armo2 E&$pt6 that manufactures these products. All dou&h Cos$ 'olutions is not in direct collaboration %ith this compan$6 but %ith (+' =r. (iet. +ar5etin& 'ervices Gmb,6 the dealer on Europe for the cos$ stone heaters. +armo2 E&ipt is a part of the C+B Group JChemicals for +odern Buildin&K6 is an E&$pt based compan$ %ith a multinational sales net%or5. 8or over t%o decades6 +armo2 has been servin& its customers and it7s ran5ed amon&st the leadin& manufacturers and suppliers of construction materials. The$ specialise in the production of innovative6 hi&h 9ualit$6 cost effective and user friendl$ products. There aim is to provide professional builders6 traders and the &eneral public ali5e %ith 9ualit$ products and services6 improvin& the efficienc$ and the standard of buildin& materials.
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The ran&e of products includes? -nsulation and construction board +anhole covers Air conditionin& and heatin& s$stems Composite marble table tops Composite marble stair elements and %indo% sills The compan$ received the follo%in& 2 certificates for the Cos$stone products? 1. CB test certificate %hich is the Borld%ide '$stem for Conformit$ Testin& and Certification of Electro technical E9uipment and Components 2. Certificate from Electrical *o%er and +achines (ab. 8acult$ of En&ineerin& Cairo 4niversit$.

2.& The product and ser$ice All dou&h +armo2 has a lar&e variet$ of products that Cos$ 'olutions can choose from6 the mana&ement of the compan$ decided to base it7s activit$ on the infrared panels6 5no%n under the brand name of Cos$stone. Aside these panels6 the compan$ plans to e2tend it7s product ran&e to include air conditionin& s$stems as %ell. But at first the emphasis %ill be placed on the -nfrared panels. Cos$stone panels are made of heatin& %ire mat embedded in a la$er of electric insulatin& pol$meric material adherin& from both sides %ith thin pol$meric sheets. This sheets are manufactured from reinforced resin compound %ith ver$ hi&h electric insulation properties. This combination emits infra red heat throu&h the radiatin& front panel6 and this heats all the ob/ects in the room6 %hich in turn heats the air6 obtainin& as a result the same temperature in the entire room. The$ var$ accordin& to dimension and consumption accordin& to the si.e of the room that needs to be heated.

The heaters come in ! varieties? Cos$stone *lain

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Cos$stone Glass Cos$stone +irror Cos$pedes

The Cos$stone *lain are simple heatin& panels6 e2tra flat made of a composite material %ith a ceramic aspect available in various colors. J*icture 2.1K

*icture 2.1 Cos$stone *lain Cos$stone Glass are heatin& panels covered %ith &lass6 decorated %ith dra%in&s6 paintin&s6 or photos. J*icture 2.2K

The variet$ *icture 2.2 Cos$tone Glass

1#

third is

the Cos$stone +irror6 %hich are panels plated %ith mirror6 these panels %ill fit %ell in an$ bathroom or hall%a$ of the apartment. As optional accessories it contains to%el holders as %ell. J*icture 2.3K

*icture 2.3 Cos$stone +irror The last product from the list that is a bit different from the ones above is the Cos$pedes. J*icture 2.!KThis is an oval shaped heater6 %hich provides a thermal comfort for the feet. After plu&&ed in6 it heats up to 30 30 C &rades providin& a comfortable temperature for the feet in a cold environment. -t is eas$ to transport6 and can be used at home6 at the office6 or %herever there is a po%er suppl$.

*icture 2.! Cos$pedes Cos$ 'olutions6 to&ether %ith it7s variet$ of products6 provides consultin& services as %ell. The customers receives assistance in calculatin& the si.e and the po%er of the heaters that fits the area for %hich is needed6 in order to obtain optimum results. Another service provided b$ the compan$ is assistin& the client in choosin& the ade9uate model of heater6 or combination of models6 accordin& to the space in %hich it is &oin& to be installed6 to&ether %ith the installation instructions.

1%

2.( Competition The products that Cos$ 'olutions has to offer are 9uite ne% on the #omanian mar5et so the$ don7t have man$ direct competitors $et. All dou&h the$ do have some competitors6 and 2 of these companies have there head9uarters in Brasov. )ne is ,elvetic -mpe2 and the other one is =acrom tradin&. Besides these t%o there are the follo%in& competitors on national level. Ama 'ercom '.#.(. from Bucharest -nfrapanel '.#.( from Tar&u +ures Cipec from Bucharest These companies commerciali.e infrared heatin& panels6 more or less similar to the ones that Cos$ solutions has. Besides these competitors6 the compan$ has indirect competition as %ell6 %hich is represented b$ all the companies that sell personal central heatin& s$stems. This 5ind of heatin& method is most commonl$ used in #omania at the moment6 so these companies6 have the lar&est mar5et share. )ther indirect competitors are companies that sell and install floor heatin& s$stems. The products are mainl$ used in houses rarel$ in apartments or offices. The number of these companies is si&nificantl$ less then the number of companies sellin& personal central heatin& s$stems. 2.0 *lans for the future As mentioned in the compan$7s ob/ectives6 the mana&er is plannin& on ma5in& an assembl$ or a personali.ation %or5shop for the infrared heaters b$ >une 2011. =ecidin& %hich of these t%o %ould be more efficient6 and %ould return the investment in a shorter time period is the aim of this paper. -n this pro/ect - %ill also anal$.e if the idea of startin& a business %ith infrared heatin& panels is a feasible one6 if there is enou&h demand for them on the #omanian mar5et6 and if it %ill %or5 on the lon& run.

1&

+eferences 1. The data about Cos$ 'olutions are available from the founder of the compan$ 2. http?HHmarmo2.comHenH 3. http?HH%%%.cos$stone.comHenHinde2.php !. http?HHcertificates.iecee.or&HcbtestcertHcbtestcert.nsfHhome;openform ". http?HH%%%.panouri incal.ire.comH 0. http?HH%%%.infrapanel.roH 1. http?HH%%%.sun po%er.roHonlineH 3. http?HH%%%.prismainfo.roHproduse si serviciiHelectrocasniceHincal.itoare electrice

1-

Chapter % ,nalysis
%.1 "rief description of the economic agent %.1.1 Identification data of the economic agent @ame? -.C. Cosy -olutions -.+.L. #e&istration number in the Commercial #e&ister? >03H1130H10.12.2009 4ni9ue #e&istration Code? #)203300"0 Contact? Turnului 'treet @o "6 ! th floor6 )ffice @o. !2" *ostal code "0061"2 Brasov *hone @umber?013"H311091 %ebsite? %%%.cos$solutions.ro %.1.2 .uridical form Compan$ %ith limited liabilit$6 #omanian capital and %as founded accordin& to the fallo%in& la%s? (a% 31H1990 on commercial companies Jamended and reissuedK (a% 3"9H200! Civil *rocedure Code Article 311 %.1.% The company/s main acti$ity is !0!3 Bholesale of electrical household appliances6 radios and TAEs. The compan$ has the follo%in& secondar$ activit$ ob/ectives? !191 #etailin& throu&h order houses or via -nternet 1022 Activities of business and mana&ement consultanc$ 1112 En&ineerin& activities and technical consultanc$ 1311 Activities of advertisin& a&encies 1!10 'peciali.ed desi&n activities After ma5in& the investment6 to the list the follo%in& activit$ %ill be added 21"1 +anufacturin& of household appliances

%.1.& -tructure of shareholders The compan$ consists of a sin&le shareholder6 =emeter 'tefan %ho contributed %ith a 'hareholders E9uit$ of 200leiLBarehouse of 20s9m %.1.( -hort history of the company -n =ecember 2009 'tefan =emeter established the compan$ called 'C. Cos$ 'olutions '.#.(. %ith it7s main activit$ of? Bholesale of electrical household appliances6 radios and TAEs. %ith the CAE@ code? !0!3 The first order %as delivered in the same month6 and he mana&ed to sell a part of it6 and ended the $ear 2009 %ith profit. %.2 #escribing the in$estment %.2.1 Current situation %.2.1.1 #escribing the currents situation and the need for the ne0 in$estment . Cos$stone heatin& panels are made of a Cos$stone plain on %hich a &lass panels is mounted. The producer prints dra%in&s or pictures on those Glass panels. +armo2 E&$pt produces !3 decoration models for the Cos$stone Glass heaters. Based on a surve$ conducted b$ Cos$'olutions6 13 models have been selected to be imported in #omania. 'o in order to have all the models in stoc56 ta5in& into consideration the fact that a sin&le model is available in 0 si.es6 one %ould have to have a stoc5 of 103 heaters to have at least one heater of each model and each si.e. Because the compan$ is in collaboration %ith some retail stores6 it has to provide the stores %ith samples of each model6 so the stoc5 %ould have to increase 3 or ! times. This implies a value of !00000 lei invested in heaters that for the stoc5. This option doesn7t assure a &ood stoc5 rotation6 because some of the models are more demanded then others6 and those %ould &o fast6 and form a deficit6 %hile others %ould sta$ in stoc5 %ithout bein& sold. -n addition6 a stoc5 of Cos$stone *lain %ould also be necessar$. -n order to avoid over dimensionin& the stoc5 it has been a&reed %ith the producer the follo%in& option? Because Cos$stone Glass is composed of Cos$stone *lain %hite %ith a &lass panel on it6 Jin case of blac5 and %hite pictures6 a blac5 Cos$stone *lain is re9uiredK attached %ith special
1)

fasteners6 Cos$'olutions %ill order Cos$stone *lain heaters and the decorated &lass panels separatel$. The assembl$ %ould be made in #omania6 accordin& to the demand from the clients. This %a$ the compan$ %ould be able to assure the %hole variet$ havin& a smaller stoc5 of heaters6 and a lar&e variet$ of decorated &lass panels. %.2.1.2.12isting property (and "00 s9m %hich is the propert$ of the shareholder6 and %ill be added as shareholder7s e9uit$. The land has access to national road6 and has all necessar$ utilities? electricit$6 %ater6 se%era&e 20s9m %arehouse6 demountable buildin& M the propert$ of the shareholder -n the case of buildin& a %or5shop6 this %arehouse %ill be demounted. %.2.2 Presenting the ne0 in$estment %.2.2.1 In$estment pro*ect for the 0arehouse 0ith 0or3shop As presented before6 the need for a %or5shop6 it appeared the need for a place in %hich the %or5shop %ould be. An option J*lan AK %ould be to invest in buildin& a %arehouse6 instead of rentin&6 in %hich the assemblin& %ould ta5e place. =escription? Construction? (i&ht Buildin& 90 s9m? The buildin& %ill accommodate? 30 s9m stora&e for materials and components 30 s9m production studio 2! s9m finished &oods %arehouse 10 s9m BC Construction 8eatures? Bidth? 3m ,ei&ht? 3m (en&th? 12m #oof an&le? 1! N *lace of construction? 'acele
2"

Table 3.2.1 Buildin& characteristics

#oof options?
-solation J (*) thermal brid&e brea5in& barrier6 *ol$foam vapor barrier 6 board inside the inner rid&e Border B6 100 mm mineral insulation6 coated insulation "0 mm Gutter ,oo5s 5116 8)T* eaves drip6 T*( sealin& eaves spon&es6 e2ternal board6 spon&e sealin& rid&e T*' e2ternal #id&e Border6 Border &able eaves - L G # L = Border eaves6 trou&hs and do%nspoutsK -solation J-nside table insulation coated "0 mm 22 Jinterior H e2teriorK e2terior board6 ,B- corner board6 ,BD Corner Border6 BorderEs eaves6 &able eaves Border ,B-6 The drip cap (K

Ball options?

Bater s$stem? >oiner$ options Bindo% t$pe 1? =oor t$pe 1? Gate t$pe 1?

&utter6 pipe6 > O B pipe fittin&s and fastenin&

1"00 2 1"00 mm 2 peaces 1000 2 2100 mm 1 peace. 2100 2 2!00 mm 1 peace

Table 3.2.2 -nvestment cost plan A

'b*ect Construction of the buildin& 8oundation Barehouse &ate =oors and %indo%s Connectin& utilities Total Warehouse e6uipment Bor5bench for assemblin& the heatin& panels Toolbo2 -nstruments for measurement and control ,*T Total in$estment 3000 12000 1000 1190 900 125!&5 1011 1(2%77 3"10 1!230 Price in +'4 Bithout AAT "3300 2!000 !900 2133 20000 1111&5 Bith AAT 09912 2921! "902.! 3311.12 23300 1%22))

21

%.2.2.2 In$estment pro*ect for the 0or3shop 0ith the printing machine The second option J*lan BK %ould be to rent the %arehouse6 and instead of buildin&6 invest the mone$ in a printin& machine that prints on &lass6 and man$ other surfaces. This %ould assure an even smaller stoc56 and %ould &ive the possibilit$ to print an$ 5ind of desi&n on the heaters. Bould allo% the customers to personali.e %ith there o%n lo&o6 o%n creation6 or even there o%n picture. =escription The %or5shop %ill be arran&ed in a rented space in an industrial platform. (ease is for a period of 10 $ears6 rent " Euro H s9m H month. JTotal of "00 euroHmonthK Area rented 100s9m The %or5shop %ill aim to? Assemble Glass heatin& panels6 Glass printin&6 personali.in& heatin& panels Table 3.2.3 -nvestment costs plan B
'b*ect Warehouse e6uipment 'emi automatic printin& machine 3!!00 !0930 Bor5bench for assemblin& the heatin& panels Toolbo2 -nstruments for measurement and control ,*T Total in$estment 900 (1%!! 1190 1011 )1!&7 12000 1000 3"10 1!230 3000 'upplier? Gimoto6 prints on stone6 &lass6 leather6 metal6 plastics6 ceramics6 *AC6 acr$lic6 %ood Price in +'4 Bithout AAT -pecifications Bith AAT

3.2.3. Graph of implementin& the investment 3.2.3.1 The Gant chart for investment A

22

Chart 3.2.1 Gant chart for investment plan A The pro/ect starts on >anuar$ 3. 2011 and ends in Au&ust 13 2011. That means duration of 10! da$s. -n the Gant chart are included %ee5ends6 and national holida$s. 3.2.3.2 The Gant chart for investment B

Chart 3.2.2 Gant chart for investment plan B *ro/ect B starts on +arch t 2011 and ends on +a$ " 2011. 'o the len&th of the pro/ect is !! da$s6 considerabl$ less than in case of investment B. %.2.&.Finnancing the in$estment The investment %ill be financed6 b$ a ban5 loan %ith rate of interest of 10C -n case of investment A the ban5 loan %ill have a value of 1"2!00 lei and %ill be paid bac5 in 10 $ears. 8or investment B the ban5 loan %ill have a value of 010"0 lei and %ill be paid bac5 in a period of " $ears. %.% Commercial analysis %.%.1 The product
23

%.%.1.1 Presenting the products Cos$'olutions based its activit$ on commerciali.in& infrared heatin& panels. These are available in ! varieties? Cos$stone *lain Cos$stone Glass Cos$stone +irror Cos$pedes

Cos$ 'olutions6 to&ether %ith it7s variet$ of products6 provides consultin& services as %ell. The customers receives assistance in calculatin& the si.e and the po%er of the heaters that fits the area for %hich is needed6 in order to obtain optimum results. Another service provided b$ the compan$ is assistin& the client in choosin& the ade9uate model of heater6 or combination of models6 accordin& to the space in %hich it is &oin& to be installed6 to&ether %ith the installation instructions. -n case of bu$in& a printin& machine6 the compan$ %ould be able to offer additional services. These additional services include? *rintin& on plastic Advertisin& cassette printin& *ersonali.in& the heaters %ith o%n desi&n

These services %ill be ver$ useful for advertisin& companies6 and to companies that &ive a &reat importance to the presence of there lo&o on as man$ ob/ects of the compan$ as possible. %.%.1.2 8ain characteristics of the products Cos$stone panels are made of heatin& %ire mat embedded in a la$er of electric insulatin& pol$meric material adherin& from both sides %ith thin pol$meric sheets. This sheets are manufactured from reinforced resin compound %ith ver$ hi&h electric insulation properties. The electric circuit inside is e9uipped %ith a thermostat that 5eeps the panel surface temperature bet%een the ran&e of 30 9" N C

2#

This combination emits infra red heat throu&h the radiatin& front panel6 and this heats all the ob/ects in the room6 %hich in turn heats the air6 obtainin& as a result the same temperature in the entire room. Bithout dr$in& out the air. The panel is fitted %ith a t%o sta&e s%itch6 - and --6 thus providin& the possibilit$ of usin& it at ma2imum po%er or /ust at "0C dependin& on the %armth needed. The products received -') 9001 certification. -nstallation Each of Cos$stone heaters are supplied %ith %all mountin& clic5 hoo5 brac5ets and a holdin& board at the rear. -nstallin& is ver$ eas$6 no professional assistance is needed. 8irst the %all mounted clic5 hoo5 brac5et has to be installed6 then the heater is placed on the %all b$ &entl$ pullin& the rear metallic bars from the bac5 of the heater that are alread$ installed from the factor$6 into the clic5 hoo5 brac5ets mounted on the %all6 until the$ clic5. Then connect to the po%er suppl$.

*icture 3.3.1 ,eaters installation Available si.es The panels are manufactured in different si.es6 dependin& on the ener&$ level.

2%

Table 3.3.1 ,eater si.es and po%er for the different si.ed rooms Type #imension
JmmK
C)'D'T)@EP *lain C)'D'T)@EP *lain C)'D'T)@EP *lain C)'D'T)@EP *lain C)'D'T)@EP *lain C)'D'T)@EPM *lain C)'D'T)@EP M Glass H +irror C)'D'T)@EP M Glass H +irror C)'D'T)@EP M Glass H +irror C)'D'T)@EP M Glass H +irror C)'D'T)@EP M Glass H +irror C)'D'T)@EP M Glass H +irror 000 2 !00 1.000 2 !00 1.200 2 !00 1.300 2 !00 300 2 000 2.000 2 "00 000 2 !00 1.000 2 !00 1.200 2 !00 1.300 2 !00 300 2 000 2.000 2 "00

Weight
J5&K
0 12 13 20 13 30 11 1! 1" 2" 11 !0

+oom surface&
Js9mK
3 1" 13 23 13 !0 3 1" 13 23 13 !0

Po0er
JBattH 230AK
2"0 !"0 ""0 3"0 ""0 1.200 2"0 !"0 ""0 3"0 ""0 1.200

C)'D*E=E'

around. "00 2 000 mm

00

This si.in& is available for homes e9uipped %ith insulated %indo%s and &ood insulation. 8or rooms that don7t have a proper insulation and have e2terior %alls or for apartments that are located on &round H top floors it7s necessar$ to provide stron&er panels b$ 30 "0C compared to recommended values in the table. The ! product cate&ories are described as follo%s? The Cos$stone *lain are simple heatin& panels6 e2tra flat made of a composite material %ith a ceramic aspect available in various colors. The$ are eas$ to match %ith an$ environment6 and the$ have the lo%est price. J*icture !.1K

*icture 3.3.2 Cos$stone *lain Cos$stone Glass are heatin& panels covered %ith &lass6 decorated %ith dra%in&s6 paintin&s6 or photos. These are more sophisticated6 than the *lain collection6 and the$ %ere desi&ned to loo5 li5e a re&ular paintin&. -n case of bu$in& a printin& machine6 this ran&e could be e2tended6 and

9eated surface is calculated for a standard room 5ith the height of 2.% m

2&

the customer %ould be able to print on the heaters the lo&o of the compan$ or an$ picture the$ %ould li5e. J*icture !.2K

*icture3.3.3 Cos$stone Glass The third variet$ is the Cos$stone +irror6 %hich are panels plated %ith mirror. The$ %ere desi&ned for bathrooms or hall%a$s of the apartment. As optional accessories it contains to%el holders as *icture 2.2 Cos$tone Glass %ell6 that can be installed manuall$6 %ithout special professional assistance. J*icture !.3K

*icture 3.3.! Cos$stone +irror The last product from the list that is a bit different from the ones above is the Cos$pedes. J*icture 2.!KThis is an oval shaped heater6 %hich provides a thermal comfort for the feet. After plu&&ed in6 it heats up to 30 30 C &rades providin& a comfortable temperature for the feet in a cold environment. -t is eas$ to transport6 and can be used at home6 at the office6 or %herever there is a po%er suppl$.

*icture 3.3." Cos$pedes %.%.1.% Product lifecycle The products are at the +ar5et introduction sta&e6 and it7s estimated that it %ill be in this sta&e in the follo%in& one $ear. The Gro%th sta&e is estimated to last for 2 $ears6 and the maturit$6 " $ears.

2-

%.%.2 The mar3et and commerciali>ing the product The numbers in this chapter are based on a mar5et research conducted b$ the +ar5etin& consultanc$ compan$ %ith %hom the compan$ is in collaboration %ith. %.%.2.1 The e$olution of the supply and demand on the mar3et -nfrared heatin& s$stems are an alternative to conventional heatin& s$stems. This techni9ue is relativel$ ne% on the #omanian mar5et6 has entered the #omanian mar5et 3 $ears a&o. -n these 3 $ears it had a ver$ slo% evolution6 mostl$ because people %ere mainl$ concentratin& on the personal heatin& s$stems. As for most of the companies that supplied these 5ind of products6 the infrared heaters %eren7t the main products6 that7s %h$ the$ didn7t concentrate to much on promotin& them. Therefore the$ didn7t 9uite evolve on the mar5et. %.%.2.2 ,naly>ing the supply and demand on the mar3et -n the table belo%6 it is presented the numerical evolution of sales since the compan$ %as founded. Table 3.3.2 Evolution of sales 12. 2009 0!.2010 =ecember 2009 "300 lei
;alue of sales <lei=

>anuar$ 2010 1200 lei

8ebruar$ 2010 9300 lei

+arch 2010 12200 lei

April 2010 13!00 lei

1$olution of sales at -.C Cosy-olutions -.+.L. in the period of 12. 2!!9: !&.2!1!
20000 13000 10000 1!000 12000 10000 3000 0000 !000 2000 0 =ec 09 >an 10 8eb 10 8onths +ar 10 Apr 10

Chart 3.3.1 Evolution of sales in the period of 12.2009 0.!2010 As the table sho%s6 sales increased %ith 2!3C6 from the first month to the fifth6 %hich is a ver$ &ood evolution tal5in& into consideration that the compan$ %as on the mar5et for " months. %.%.2.2.1 #efining the target mar3et
2

The mar5et is divided into the follo%in& se&ments? A. -ndividuals? Bith lo% and medium income6 a&ed bet%een 13 30 both male and female. All dou&h there are desi&ns for children6 the$ actuall$ tar&et the parents. The plain collection is meant to satisf$ the need of customers %ho aren7t determined to pa$ much on heatin& s$stems6 and don7t pa$ to much attention to desi&n The Glass and mirror collections are desi&ned for more sophisticated clients6 %ho put emphasis on interior desi&nin& and decoration6 and are %illin& to pa$ a little e2tra for that aspect. B. Tourism operators? hotel net%or5s6 hostels6 and restaurants6 especiall$ those in areas %here &as suppl$ is poor. This is the se&ment that %ould re9uire the personali.ation options6 to print there lo&o6 or name on the heaters . Companies Mto e9uip there head9uarters6 offices6 %arehouses6 production departments6 clinics6 hospitals C. Construction companies that build the heatin& s$stems in there ne%l$ built homes %.%.2.2.2 1stimating the structure of demand 8or se&ment A the volume of demand is hi&h6 and it has the follo%in& structure? @e%l$ built apartments that are located in areas %here the access to &as is poor ,omes that are currentl$ connected to centrali.ed heatin& s$stems ,omes in %hich the current heatin& s$stem doesn7t provide enou&h heat6 and the$ %ould li5e to supplement that. Accordin& to a mar5et research conducted b$ the mar5etin& compan$ %ith %hom Cos$'olutions is in collaboration6 23C of the families that are currentl$ at CET are interested in bu$in& infrared heatin& panels in the follo%in& $ears. 'o the demand for se&ment A is calculated as follo%s? Table 3.3.3 Calculation of demand for se&ment A
@umber of ,omes in Brasov @umber of homes still connected to CET *ercenta&e of homes connected to CET 102000 33000 3263"C

2)

8amilies interested in bu$in& infrared heaters Avera&e nb. )f heatersHapartment Tar&et that Cos$'olution plans to satisf$

23C 3.3 10C

92!0 3"112 3"11

The demand for the 'e&ments B and C %ere estimated based on the offers and advertisements sent out b$ the compan$. 8or plan A the evolution of pro/ected turnover %ill increase as follo%in&? Table 3.3.! Evolution of pro/ected turnover in 2010 201! for plan A
Clients categ. pc ! :ei pc ' :ei pc C :ei pc Total :ei 2" 21#2" " %& " 600 642600 2010 %"" %3%%""% &)&1%" 2"" 21#2"" 2"" 21#2"" 1050 1124550 -#)-"" 3"" 3213"" 2%" 2&--%" 1250 1338750 "32%" 3%" 3-# %" 3"" 3213"" 1400 1499400 %& "" #"" #2 #"" 3%" 3-# %" 1550 1660050 2011 &%" 2012 -"" 2013 -%" 2014 ""

-n case of plan B there is the additional value of the heaters that are personali.ed6 %hich are more e2pensive6 and the revenues from the additional service of personali.in& other products as %ell6 that is %h$ the turnover is hi&her then in case A in case of mar5et se&ment B.

Table 3.3." Evolution of demand and turnover in 2010 201! for plan B
Category of clients pc ! '
%

2010 %"" %3%%"" 2""

2011 &%" &)&1%" 2""

2012 -"" -#)-"" 3""

2013 -%" "32%" 3%"

2014 "" %& "" #""

:ei pc

2alue calculated 5ith an a$erage price of 1"-1lei4heater

3"

:ei pc C :ei pc Total :ei

32#"""& " %& " 600 945180

32#""" 2"" 21#2"" 1050 1234350

# &""" 2%" 2&--%" 1250 1503450

%&-""" 3"" 3213"" 1400 1691550

&# """ 3%" 3-# %" 1550 1879650

%.%.2.2.% Competition? Competiti$e ad$antage The primar$ competitors are companies that are sellin& infrared heatin& panels6 and the$ are tar&etin& mostl$ the mar5et that Cos$'olutions is tar&etin& as %ell. These companies are? :@el$etic Impe2 -+L "raso$ Comercialises 2 cate&ories of 'un >o$ *anels infrared for heatin&6 and has a similar aspect as Cos$stone *lain -nfrared and ne&ative ions6 heatin& and air ioni.ation These heaters have to be mounted on the sceelin&. :#acrom Trading -+L "raso$ -nfratherm *anels? because of there apperance these are recomended onl$ for %arehauses or industrial buildin& #elphi 1lectric -+L MEcosun *anels 'imilar to Cos$stone *lain :,ma -ercom A-nfra *o%er *anels 'imilar to Cosustone *lain :Infrapanel -+L M-nfrapanel *anels 'imilar to Cos$stone *lain Because the hi&her threat is represented b$ the indirect competition6 the personali.ed central heatin& s$stems6 - decided that it7s more important to anal$.e that as %ell. -n order to ma5e the anal$sis - made a comparison bet%een the investment involved in installin& and purchasin& personali.ed central heatin& s$stems6 and Cos$stone heatin& panels. Table 3.3.0 Comparison bet%een cost of personal central heatin& s$stem and cost of heatin& panels.
T$pe of Apartment Cost of personal central heatin& s$stemL installation Cost of heatin& panels1 *rice ratio panelsHpersonal central heatin&

& -

2alue calculated 5ith an a$erage price of 1&2" lei4 heater The central heating system besides pro$iding 5armth1 it also pro$ides hot 5ater1 so 5hen calculating the cost for the heating panels1 5ater heating boilers 5ere also added into calculation for both the ;itchen and bathroom.

31

#on 1 room6 5itchen6 bathroom 2 room6 5itchen6 bathroom 3 room6 5itchen6 bathroom "300 0200 1000

#on 2930 39"0 !920

s$stem C "0C 03C 10C

The cost of electricit$ consumed b$ the infrared heatin& panels is close to the cost of &as consumed b$ the personal central heatin& s$stem. This %as concluded after ma5in& a comparison bet%een the 2 of them in the months? =ecember 20096 >anuar$ 2010 and 8ebruar$ 20106 usin& the price of utilities from these periods. Because it7s estimated that in the follo%in& 2 $ears the price of &as %ill rise above the price of electricit$6 this 5ind of heatin& s$stems %ill be even more e2pensive to have. 'o the above comparison sho%s that the infrared heatin& panels are a more cost efficient investment. Another aspect that these heaters have6 and the personal heatin& s$stems don7t is that the$ are eco friendl$6 &eneratin& no pollution6 and the$ are health$. Competitiveness As the comparisons sho%ed6 the products are hi&hl$ competitive on the mar5et due to the lo% price6 and the lo% value of investment. The competitive advanta&e can be represented b$ Cos$stone Glass6 a ver$ esthetic product ran&e that none of the competitors have. Bhen considerin& the indirect competition6 Cos$'olutions can compete %ell %ith them too %hen ta5in& into calculation the cost of investment6 and even the consumption on the lon& run. %.%.% Commercial management The mana&ement of the compan$ is done b$ the &eneral mana&er of the compan$. Bith the follo%in& e2perience? ! $ears retail commerce ! $ears cashOcarr$ commerce 2 $ears distribution
32

The mar5etin& and accountanc$ activities are e2ternali.ed to consultanc$6 and accountin& companies in this field6 and the$ are in direct collaboration %itrh the director. Current commercial activit$? The commercial team is composed of 0 sales representatives The storin& of the merchandise is in a rented %arehouse in 'acele (ocal deliveries are made b$ the compan$ car6 and deliveries outside the cit$ are made b$ a courier compan$ called :8an Curier< %.%.& Promotion and distribution of the products %.%.&.1 Promotional techni6ues The compan$ promoted6 and is plannin& on promotin& further b$ usin& brochures that %ere distributed on fairs and e2positions. 4sin& this method6 a &ood selection of the tar&eted population is possible. Another %a$ used6 is throu&h the internet on special sites that list companies in this field6 and trou&h the compan$7s %ebsite. -n order to promote amon& individual customers presentations at tenant associations %ere held6 to&ether %ith distributin& fl$er. Another %a$ of reachin& out to the customer is b$ personal meetin& %ith the construction companies. -n order to promote the sales6 the compan$ uses a !L1 promotional pac5a&e6 in case of Cos$stone Blac56 if someone bu$s ! heaters6 receives 1 free. -f bu$in& in bi&&er 9uantities6 to e9uip the %hole house6 discounts are also availableHpac5a&e. As instruments for the distributors6 the compan$ provides a discount of 1"C. The compan$ also &ives free consultation in order to help the customer choose the ri&ht si.e and model for there needs6 and if needed assistance %ith installation is also provided. Bi& emphasis is placed on customer satisfaction. #esults Because the advertisements %ere started in >anuar$6 the final result can7t be established $et6 but so far the interest for the heaters has increased6 and the compan$ received orders to be delivered in au&ust and 'eptember.

33

%.%.&.2 #istribution channels 'o far the compan$ sold the heatin& panels on the #omanian mar5et6 more precisel$ in Brasov6 trou&h direct distribution. But some of the products %ere placed in stores6 to be sold b$ detailers. -t is planed6 to distribute the products trou&h 30 sales a&ents all around the countr$. The products %ill be delivered usin& a contracted deliver$ a&enc$6 8an Courier. %.%.&.% Promotion e2penses The promotion e2penses of the compan$ are comprised in the table belo%? Table 3.3.1 *romotional e2penses of 'C. Cos$'olutions '.#.( 12.2009 0!.2010
!cti$ity 8ar;et research1 consultancy Plyers <design > printing= Webpage <design >e6ecution>hosting= Participation at Construct 5ee; confrence april 2"1" TOTAL 06penses <lei= """ "" 2""" 12"" 12000

%.%.( -elling price of the products The prices used b$ the compan$ and the prices used b$ the competitors are &athered in the table belo%?

Table3.3.3 Comparison bet%een competition prices

Type of panel Cosystone Plain Cosystone Class 'un >o$ infrarosii -nfratherm Ecosun -nfrapo%er -nfrapanel Bitchen:bathroom ):5s6m (59 7(7 139! 31" "99 300 00" "edroom 1&:1(s6m 7%1 11!1 10!! 1300 939 1033 1121 Li$ing room 2!:2(s6m 1!11 1(%! 11!! 1"10 1230 12"" 12!3

-n pricin& the compan$ uses 3 different strate&ies for 3 cate&ories of products. 8or the Cos$stone plain collection6 the compan$ uses the Good 9ualit$ price ratio strate&$. 8or the Cos$stone Glass collection6 the compan$ uses the ,i&h value strate&$6 and for the future collection of personali.ed heaters the hi&h value O Fualit$ strate&$ %ill be used.
3#

The prices on the mar5et depend on the Euro #on ratio6 and of the volume of imported &oods. Therefore of the volume of import increases6 it is possible for the compan$ %ould be able to decrease the prices6 but if the Euro increases6 the prices of the products %ill increase as %ell. %.%.) #etermining the critical ris3 factors -n order to determine the ris5 factors that the compan$ is facin&6 - decided to conduct a *orter7s industr$ anal$sis6 and a *E'T anal$sis. The first threat6 from *orter7s list6 the compan$ is facin& is the threat of ne% entrants. 8irst it is important to note that the concept of infrared heaters is ver$ ne%6 so not man$ companies are ta5in& this idea6 as a business opportunit$. The products are 9uite uni9ue6 havin& a uni9ue production techni9ue6 so buildin& a %hole manufacturin& facilit$ here %ould be too e2pensive6 so the capital re9uirements can be an entr$ barrier for the ne% entrants. 8or Cos$'olutions6 b$ buildin& it7s o%n assemblin& space %ould stren&then it7s position a&ainst ne% entrants. Considerin& the econom$ of scale6 it can be considered as an entr$ barrier6 because in E&$pt6 the heaters are produced in lar&e 9uantities6 assurin& that %a$ real competitive prices6 even if the$ are e2ported. All dou&h the real threat is represented b$ companies that are %illin& to enter on the mar5et the same %a$ that Cos$ 'olutions did6 b$ e2portin& from another countr$6 from another lar&e factor$. -t is also important to note that the product doesen7t en/o$ the protection of differentiation6 the acces to distribution channels is 9uite eas$6 and the Government doesenQt have an$ policies that limit the entr$ of other companies in to this industr$. 'o the threat of ne% entrants is hi&h. The ne2t ris5 factor is the #ivalr$ amon& e2istin& firms. Considerin& the number of competitors6 there are fe% direct competitors6 %hich doesn7t pa$ to much attention to each other. And the diversit$ of rivals is small. There isn7t a harsh fite of ta5in& each other7s customers a%a$. 'o an$ action ta5en b$ one compan$ doesn7t tri&&er an$ reaction from the competition. The rate of industr$ &ro%th is hi&h6 and the mar5et isn7t saturated6 so there is plent$ of place for the compan$ to &ro%. Compared to the competitors products6 cos$ solutions has products %ith ver$ &ood desi&n6 fact that
3%

differentiates them from the competitors. The amount of fo2ed costs involved in the business is small6 because at the moment it onl$ comprises the rent on the buildin&6 %here the office is6 and the salar$ of the accountant6 to&ether %ith the salar$ of the mana&er. )verall the threat of the competition isn7t ver$ hi&h $et6 because the compan$ has uni9ue products6 &ood prices6 and a &ro%in& industr$6 and the companies in this field didn7t emphasi.e too much on attac5in& the mar5et. The threat of substitute products is represented b$ the most used %a$ to heat houses6 the personal central heatin& s$stems. Another substitute products are the electric heaters6 but because of there hi&h consumption the$ can7t be considered as a real threat. Another substitute product is the floor heatin& s$stem6 but that can onl$ be utili.ed in houses6 not in re&ular apartments. The threat represented b$ the personal central heatin& s$stems is hi&h6 because those are the current mar5et leaders6 and people &ot used to them. Considerin& the bar&ainin& po%er of the bu$ers6 %hen considerin& individuals6 this po%er is 9uite insi&nificant. But %hen ta5in& into consideration lar&e companies6 construction companies for e2ample6 that bu$ in lar&e 9uantities6 this po%er increases. But because it alread$ has &ood prices compared to the competition6 hi&h 9ualit$6 and an uni9ue desi&n6 the bar&ainin& po%er of the bu$ers can7t be considered a real threat to the compan$. The bar&ainin& po%er of suppliers is small6 because the compan$ %or5s in partnership %ith it7s onl$ supplier? +armo2 E&$pt. -t is true that the dependenc$ is hi&h6 but the$ pursue common &oals6 that is to sell as man$ heaters as possible. Therefore the supplier cannot be considered as a threat. The si2th element from *orter7s model6 the relative po%er of the other 'ta5eholders is ver$ small6 because the heaters doesn7t effect an$ believes6 and the$ are health$ and eco friendl$. 'o the ris5 of an$ or&ani.ation attac5in& the compan$ or it7s products is ver$ small. The ne2t anal$sis that - decided to conduct in order to determine the ris5 factors is the *E'T anal$sis. This comprises the *olitical6 Economical6 socio cultural and Technolo&ical factors that affect the compan$.
3&

*olitical factors? The &overnment and the European 4nion demand more and more the use of eco friendl$ products. @e% la%s appeared6 that forbid the installation of personal central heatin& s$stems The European le&islation is in favor of usin& electricit$ opposed to other pollutin& ener&$ sources Economical factors Eliminatin& subventions for central heatin& s$stems %ill be in favor of electric s$stems The price increase of natural &asses and petrol %ill hi&hl$ accede the price increase of electricit$ 'ocio cultural factors The population isn7t familiar %ith this 5ind of heatin& techni9ue *eople are s5eptic %hen discussin& about other 5inds of heatin& s$stems then the ones that are based on &as6 because the$ thin5 that those are the onl$ ones that are able to satisf$ their needs for domestic heatin& There is a tendenc$ to use heat sources to compensate for inade9uate insulation level of there houses Technolo&ical factors -nfrared heatin& s$stems %ere used for 9uite a %hile no%6 especiall$ in more developed countries but b$ up&radin& them usin& ne% technolo&ies the$ can no% reach a $ield of 93 99.9C @e% heatin& technolo&ies appeared6 that use &eo thermal ener&$6 %hich are more efficient then the ones usin& infra red %aves. But the investment for this 5ind of heatin& is ver$ hi&h6 so it tar&ets a completel$ different se&ment then the infrared heaters. 8rom these 2 anal$sis6 - can conclude that the compan$ is faced %ith 2 ma/or ris5 factors6 that are related to each other. )ne is the threat represented b$ substitute
3-

products6 more precisel$ the personal central heatin& s$stems6 because these have currentl$ the lar&est mar5et share. To&ether %ith this6 comes the ris5 of the socio cultural factor6 %hich is represented b$ the s5epticism of people to%ards heatin& s$stems based on electricit$ not on &as. This %a$ of thin5in& e2plains the lar&e mar5et share of personal centrali.ed heatin& s$stems. As a medium si.e ris5 factors6 the threat of ne% entrants6 and the bar&ainin& po%er of the bu$ers can be mentioned. As lo%er si.e ris56 is represented b$ the competitors6 %hich is al%a$s a threat for a compan$6 but in this case Cos$'olution has this ris5 under control6 because currentl$ it has ver$ competitive prices and a uni9ue desi&n to&ether %ith a lar&e variet$ of products. Another %ea5ness for the compan$ is the lac5 of stora&e place6 because a bi&&er stora&e place %ould allo% to have more products on stoc56 and therefore satisf$ the customer7s needs much faster. -n overcomin& the one of the &reatest ris5 the compan$ is facin&6 the threat of the substitute product6 the e2ternal environment lends a helpin& hand. Than5s to the la%s that forbid the installation of private central heatin& s$stems6 and to the fact that the &as %ill increase in price6 and subventions %ill no lon&er be received6 the demand for these products %ill eventuall$ drop. Another help comes from the European le&islation that promote s$stems %or5in& on electricit$ opposed to s$stems %or5in& on &as6 and the$ also promote eco friendl$ products6 a characteristic that personal heatin& s$stems don7t have. Because of the above mentioned6 people %ill be forced to chan&e there point of vie%6 and sooner or later the$ %ill have to chan&e there mentalit$6 and this ris5 factor %ill loose in intensit$. Bhen discussin& a solution to overcome the threat of ne% entrants it is important to point out that it is eas$ for companies to enter on this mar5et6 but once the$ do6 the$ chan&e there status into competitors. And as discussed before the ris5 represented b$ the competitors is not ver$ hi&h. Another 5ind of entrant7s ris5 is represented b$ Chinese companies that %ould li5e to enter the mar5et. -n order to avoid this6 the compan$ has to develop fast6 and ma5e it7s products 5no%n for it7s 9ualit$ in order to have a stable

position in the customer7s e$es b$ the time Chinese companies %ill tr$ to enter the mar5et. To overcome the threat represented b$ the bar&ainin& po%er of the consumers6 the compan$ has to develop and maintain a ver$ &ood relationship %ith it7s customers6 and ma5e shore that the$ are constantl$ satisfied6 and &ain there trust. That %a$6 no matter %hat happens on the mar5et6 the customers %ill be %illin& to ne&otiate the prices if needed6 and the$ %on7t be tempted to s%itch or to loo5 for another compan$. %.& 'perational analysis %.&.1 Technical production capacity of the economic agent %.&.1.1 Location and facilities The investment ob/ect in case of investment option A %ill have the follo%in& placement? *lacement? 'acele +unicipum Access road? national nb.1 =@1 4tilities? Electricit$ Bater suppl$ 'e%era&e @ei&hbourin&? (u5oil &as station =e2i. %indshield repair station -n case of investment B6 %hen the compan$ is plannin& to rent the %arehouse in %hich the %or5shop %ould be placed. *lacement? -ndustrial platform Tractorul. Access road? 13 decembrie street R Turnului street 4tilities? Electricit$ Bater suppl$ 'e%era&e @ei&hbourin&? 8acult$ of constructions 'piru ,aret 8acult$6 *olice station

3)

%.&.1.2.Production technology The production technolo&$6 ta5in& into consideration6 both investments6 it7s almost the same6 because both investments involve the creation of a %or5shop for assemblin& the heaters. The technolo&$ is simple6 the ra% materials6 %hich are actuall$ the parts of the heaters6 are assembled b$ one or t%o %or5ers manuall$6 %ith the help of tools. )n the Cos$stone plain heater6 the &lass panel %ith the desired desi&n is placed6 and attached %ith the use of the fasteners. -n case of plan B the investment involves a printin& machine6 %hich has to be operated b$ one person. The &lass panel is placed on the printin& machine6 and the desi&ned print pro&rammed into the machine6 %hich prints the ima&e on the &lass panel6 that e2its at the other end of the machine. After printin&6 it is necessar$ to let the &lass cool do%n6 before installin&. %.&.1.% Production program %.&.1.%.1 1$olution of the acti$ity in the pre$ious period Currentl$ the compan$ doesn7t have an$ production activit$

%.&.1.%.2 ,cti$ity forecast The forecasted production for the follo%in& " $ears is comprised in the tables belo%? Table 3.!.1 *roduction forecast in case of plan A for the period 2010 201" ProductionDEear 2!11
lei *c Aalue (ei

2!12
lei 3"0 211""0

2!1%
lei 3"0 211""0

2!1&
lei 3"0 211""0

2!1(
lei 3"0 211""0

2!1)
lei 3"0 211""0

The value %as calculated b$ multipl$in& the number of produced heaters %ith an avera&e price6 e9ual to 193 lei. This price %as calculated as an avera&e bet%een the

#"

prices of the different si.ed heaters. This price is applied onl$ for the heaters that are obtained from the production process. Table 3.!.2 *roduction forecast in case of plan B for the period 2010 201" ProductionDEear 2!1!
lei

2!11
lei

2!12
lei

2!1%
lei

2!1&
lei

2!1(
lei

*c Aalue (ei

300 309000

300 309000

300 309000

300 309000

300 309000

-n this case the avera&e price is 10306 considerabl$ hi&her then in case of A because of the personali.ation6 that increases the price. 3.!.2 *roduction factors of the economic a&ent and there costs 3.!.2.1 Estimatin& labor e2penses 3.!.2.1.1 The evolution of personnel structure and forecasts After implementin& the pro/ect6 the structure of the personnel %ill be the follo%in&? 1 =irector 2"00 leiH month6 but increases durin& the $ears ! re&ional directors %ho %ill coordinate the a&ents 2000 leiHmonth each 2 operators of printin& machine and assembl$ 1!00 leiHmonth each 2 car&o handlers "00leiHmonth each 1 Assistant 1000leiHmonth6 but increases durin& the $ears %.&.2.1.2 ,nnual labor e2penses The labor e2penses are comprised in a table belo%. The$ are the same in case of both investments6 because the people %ho %ill assembl$ the heaters6 %ill be the same as the ones %ho operate the printin& machine. Table 3.!.3 Annual labor e2penses at 'C. Cos$'olutions '.#.(
Personnel 3eneral manager .egional 8anager *perator Cargo handlers !ssistant 2010 3"""" " " &""" " 2011 3&""" # """ 33&"" 12""" 12""" 2012 # """ # """ 33&"" 12""" 12""" 2013 # """ )&""" 3&""" 12""" 1##"" 2014 # """ )&""" 3&""" 12""" 1##"" 2015 # """ )&""" 3&""" 12""" 1##""

#1

Total

36000

129600

141600

194400

194400

194400

-n $ear 2010 the compan$ calculates at one car&o handler6 in case

of the

re&ional mana&ers6 in $ears 2011 and 2012 2 &eneral mana&ers are ta5en into consideration6 and after that their number increases to !. The e2pense fluctuations in case of the &eneral mana&er6 operators and the assistant6 are due to raises in there salaries durin& the " $ears. 'pendin& on sales a&ents are not included in the e2penses of the Compan$. The$ %ill be paid 10C of orders received from customers6 and these costs are included in the product price. %.&.2.2 1stimating the e2penses 0ith ra0 materials and stoc3s %.&.2.2.1 +a0 materials? materials and merchandise -n the %or5shop6 the follo%in& 6materials and merchandise are needed Cos$stone *lain heatin& panels6 all 0 si.es Glass panels that match the 0 si.es of heatin& panels 8asteners to attach the &lass panels to the heaters Consumables for the printin& machin %.&.2.2.2 -upply sources All the materials %ill be supplied b$ +armo2 E&$pt %.&.2.2.% ,nnual e2penses 0ith ra0 materials? materials and merchandise These e2penses var$ for the t%o investments6 because in case of investment B6 the consumables that the printin& machine %ill use6 %ill also have to be added. -n case of investment A the total cost of materials is calculated in the table belo% ? Table 3.!.! Components of the material e2penses for plan A
Counterparts *lain heater *rinted and secured &lass panel Assemblin& counterparts Total material costDheater Price <lei= !!0 101 11.2 ()&.2

These counterparts %ill be ordered from +armo2 E&$pt6 and the prices are copied from there price list. The Total e2penses %ill be calculated b$ multipl$in& the costHheater %ith the total number of heaters that %ill be produced6 in this case %ith 3"0.

#2

Table 3.!." Evolution of material e2penses at 'C. Cos$'olutions '.#.( in the period of 2010 201" for investment plan A Eears Cost of 2!1! 2!11 191"00 2!12 191"00 2!1% 191"00 2!1& 191"00 2!1( 191"00

materialsJleiK 8or investment B the material costs are obviousl$ lar&er due to the materials used b$ the printin& machine. And the$ are calculated and comprised in the table belo%? Table 3.!.0 Components of the material e2penses for plan B
Counterparts *lain heater *rinted and secured &lass panel Assemblin& counterparts *rintin& machine consumables Total material costDheater Price <lei= !!0 3! 11.2 199 7&).2

The total e2penses %ill be determined b$ multipl$in& the costHunit %ith the total number of heaters that are meant to be produced and that is 300 heaters. The result is comprised in the table belo%.

Table 3.!.1 Evolution of material e2penses at 'C. Cos$'olutions '.#.( in the period of 2010 201" for investment plan B Eears Cost of materials JleiK 2!1! 2!11 22"000 2!12 22"000 2!1% 22"000 2!1& 22"000 2!1( 22"000

%.&.2.% 1stimating the cost of utilities The costs of the utilities is calculated in both cases. The prices that %ere used in the calculations %ere ta5en from the prices of supplier :Electrica< and :#A Apa< Brasov. The Cost of utilities6 has the follo%in& structure in case of investment A? Table 3.!.3 Components of the utilit$ e2penses for plan A
4nitar$ *rice 3.02 lei 0.!33lei 0.!33lei +onthl$ consumption !09m 01"5% 1305% Dearl$ consumption ""29m 13305% 39005% Aalue lei 1993.2! 319"."! 1033.10 )552.&5 =etails (i&htin& L e9uipment 260 5% ,eatin& 2625%

BaterL se%era&e Electricit$ Electricit$ for heatin& Total

#3

-n case of the cost of heatin& the $earl$ consumption %as calculated for " moths6 in both investment variants6 instead of 126 because durin& the %arm period6 there is no heatin& re9uired. Table 3.!.9 Evolution of e2penses %ith utilities at 'C. Cos$'olutions '.#.( in the period of 2010 201" for plan A Eears Cost of utilities JleiK 2!1! 2!11 0333 2!12 0333 2!1% 0333 2!1& 0333 2!1( 0333

The structure of utilities in case of investment B is comprised in the table belo%? Table 3.!.10 Components of the utilit$ e2penses for plan B
4nitar$ *rice BaterL se%era&e Electricit$ Electricit$ for heatin& Total 3.02 lei 0.!33 lei 0.!33 lei +onthl$ consumption !0 9m 30" 5% 130 5% Dearl$ consumption ""2 9m 9000 5% 3900 5% Aalue lei 1993.2! !132.13 1033.10 1309.12 (i&htin& L e9uipment 260 5% ,eatin& 2625% =etails

'o the $earl$ consumption for the follo%in& " $ears is Table 3.!.11 Evolution of e2penses %ith utilities at 'C. Cos$'olutions '.#.( in the period of 2010 201" for plan B Eears Cost of utilities JleiK 2!1! 2!11 1310 2!12 1310 2!1% 1310 2!1& 1310 2!1( 1310

%.&.2.& Impact on the en$ironment The activit$ of the compan$ has no harmful effect on the environment %.( The management of the economic agent %.(.1 The strategy of the future acti$ity %.(.1.1 The ob*ecti$es of the strategy The short term ob/ectives of the compan$6 that comprises a period of one $ear are the follo%in&? =evelop a sales net%or5 *romote cos$tone haetin& panels in Brasov and Covasna
##

Establish a credit s$stem for the customers The ob/ectives on a medium term6 " $ears are the follo%in&? Constructuctin& an o%n %arehouse in Brasov )%n assembl$ and personali.ation %or5shop +a5in& the Cos$stone brand 5no%n on national level %.(.1.2 8easures that ha$e to be made in order to reach the ob*ecti$es )n short term6 in order to develop the sales net%or56 20 commercial a&ents have to be hired6 %ith %hom the compan$ %ould %or5 usin& a 10C commision s$stem. This hould be donne b$ Au&ust 2010. -n order to establish the credit s$stem the compan$ %hant7s to esstablish a collaboration %ith companies that &rand creditst. Companies li5e TB-6 Credisson6 or *rovident. This s$stem %ill ma5e obtaini&n a credit much easier6 and &ain clients %hi mo&ht be more 5een on bu$in& if the$ could pa$ in installmets. This should be donne b$ >ul$ 2010. To promote the produts6 the compan$ is plannin& to finalise itQs o%n %ebpa&e6 displa$ the products on Bi.oo.roQ Clubafaceri.ro and in the Casa si biroul ma&a.ine. )n medium term in order to reach the ob/ectives6 the compan$ %ant7s to reach a number of "0 a&ents6 and " re&ional directors %ho %ould coordonate them. To ma5e them 5no% on national level6 the compan$ has to ma5e radio and televission advertisments b$ september 2011. %.(.2 'rgani>ational structure The relations of the compan$ %ith other economic a&ents is ilustrated in the chart belo%.

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Chart 3.".1 #elationship of the compan$ %ith other economic a&ents The or&anisational charts are made in t%o versions6 one that sho%s the current or&anisational chart6 and the one that sho%s the chart after implementin& the investment. The chart is the same no matter %hich investment is chosen.

Chart 3.".2 The currents or&anisation chart at 'C. Cos$'olutions '.#.(

#&

Chart 3.".3 The )r&anisation chart at 'C. Cos$'olutions '.#.( after implementin& one of the investments

%.(.% The management of the company The mana&ement of the compan$ is donne b$ the &eneral mana&er6 %ho is also the onl$ shareholder of the compan$. %.(.& The information system The compan$ doesen7t have a sophisticated information s$stem6 but itQs enou&h to mana&e the compan$7s business. The orders are placed from the computer6 b$ e mail.'oft%ares used are +icrosof E2cel and +icrosoft Bord. The offers6presentations6 and invoices are printed usin& a ,* color printer. %.) Financial pro*ections and calculations. -n order to determine ho% profitable each of the t%o investments are6 - decided to include in a table the incomes and e2penses6 in order to determine the profit6 and also to establish from %hich $ear %ill each investment alternative brin& a profit to the compan$. -n this table %ill not be included revenues that come from sellin& cos$stone plain heaters6 that do not re9uire an$ production activit$6 because the revenues from sellin& them is irrelevant for our comparison bet%een plan A and B. #e&ardin& the cost of emplo$ees onl$ the salaries of people %or5in& in the production facilit$ %ill be included. %.).1 Plan , -n order to determine the indicators of the investment6 the -ncomes6 the buildin& depreciation6 machine depreciation6 interest rate the utilit$ e2penses6 the e2penses %ith personnel and materiel e2penses has to be calculated. %.).1.1 Incomes
#-

The incomes of the investment are calculated usin& the annual production capacit$ that %as determined at point 3.!.1.3.2. of the pro/ect in table 3.!.1

%.).1.2 "uilding depreciation The total cost of the construction of the buildin& is 1111!3 lei6 %ithout AAT %hich is depreciated in 20 $ears6 usin& the linear depreciation. %.).1.% 8achines depreciation The machines depreciate in " $ears6 usin& the same linear depreciation. -n this case that is 10900 at the depreciation period of " $ears %.).1.& Interest Because the compan$ didn7t have it7s o%n funds6 it had to ma5e a loan from a ban5. The loan has a value of 1"2313 lei %ith AAT and %as made for 10 $ears %ith an annual interest rate of 10C. That &ives as an annual interest e2pense of 3331. %.).1.( Ftility and 8aterial e2penses This data %as introduced from the tables calculated at point 3.!.2.2 and 3.!.2.3 from tables 3.!." and 3.!.9 %.).1.) 12penses 0ith personnel Bere imported from part 3.!.2.1.2 from table 3.!.3 %.).1.7 Profit from the production acti$ity Table 3.0.1 Evolution of *rofit durin& 2011 201" in case of plan A Eear 2!1!
lei

2!11
lei

2!12
lei

2!1%
lei

2!1&
lei

2!1(
lei

-ncomes Buildin& depreciation +achines depreciation -nterest

211""0 """1 3330 3331

#

211""0 """1 3330 3331

211""0 """1 3330 3331

211""0 """1 3330 3331

211""0 """1 3330 3331

4tilit$ e2penses E2penses %ith the personnel +aterial e2penses Profit from the production acti$ity

0333 33000 191"00 222&&

0333 33000 191"00 222&&

0333 30000 191"00 195&&

0333 30000 191"00 195&&

0333 30000 191"00 195&&

%.).1.5 +e$enues and e2penses Based on the above table6 the revenues and e2penses table %as created. Table 3.0.2 #evenues and e2penses for plan A
Dear -ncomes Aariable costs 8i2ed costs Total costs -nvestment Profit 0 1 211""0 191"00 "1300 2""300 125!&5 222&& 222&& 195&& 195&& 195&& 2 211""0 191"00 "1300 2""300 3 211""0 191"00 00200 2"1100 ! 211""0 191"00 00200 2"1100 " 211""0 191"00 00200 2"1100

%.).1.9 Fpdating the $alues The first step is calculatin& the Present $alue factor6 accordin& to the follo%in& formula? x =
1 Bhere n in the number of $ear and a is the updatin& ratio. -n this (1 + a ) n

case aS1"C. The updated $alue of profit each $ear and the investment %ill be calculated b$ multipl$in& the $earl$ profit Hinvestment %ith the present value factor.
p The o$erall profit %ill be updated usin& the formula? Pupd = Pr

(1 + a ) D 1 a (1 + a ) D

-n case of updatin& the in$estment/s economic efficiency6 - used the formula?

Rupd =
P Pupd P I upd

1
p lg Pr lg(Pr a I upd )

To update the reco$ery period the formula? Tupd =

lg(1 + a )

Table 3.0.3 4pdatin& values for plan A

Eear ! 1 2 % & ( Total

#)

Present $alue factor Fpdated $alue of profit Fpdated $alue of in$estment Fpdating o$erall profit In$estment/s economic efficiency Fpdated recovery period

1 1230!3 1113!0 130119 0.109 13.03

0.3090 193!3

0.1"01 10320

0.0"1" 130!3

0."113 113!0

0.!912 9300

01!92

%.).2 Plan " The same indicators that %ere used in case of plan A are used in this case as %ell6 %ich more or less modifications. %.).2.1 Incomes The incomes incase of plan B are comin& from 2 sources. )ne is the revenue from the production activit$6 and the other is the revenue from the printin& activit$. The printin& activit$ refers to printin& advertisin& material for other companies6 such as printin& on plastic6 and printin& on advertisin& cassettes. %.).2.2 "uilding depreciation There is no buildin& in this case %.).2.% 8achines depreciation The machines depreciate in " $ears6 usin& the linear depreciation method. -n this case that is "1300 at the depreciation period of " $ears. %.).2.& Interest The loan made in order to purchase the machines has a value of 010!" lei %ith AAT and has to be paid bac5 in " $ears6 %ith an annual interest rate of 10C. That &ives as an annual interest e2pense of 1331. 3.0.2." 4tilit$ and +aterial e2penses This data %as introduced from the tables calculated at point 3.!.2.2 and 3.!.2.3 from tables 3.!.1 and 3.!.11

%"

%.).2.) 12penses 0ith personnel Bere imported from part 3.!.2.1.2 from table 3.!.3 %.).2.7 Profit from the production acti$ity Table 3.0.! Evolution of *rofit durin& 2011 201" in case of plan B Eear 2!1! lei -ncomes from production -ncomes from other printin& services +achines depreciation -nterest #ent 4tilit$ e2penses E2penses %ith the personnel +aterial e2penses Profit from the production acti$ity %.).2.5 +e$enues and e2penses Table 3.0." #evenues and e2penses for plan B
Dear -ncomes Aariable costs 8i2ed costs Total costs -nvestment *rofit 0 1 321000 2 322200 3 323!00 ! 32!000 " 32!000

2!11 lei 309000 12000 10200 1331 2"200 1310 33000 22"000 11239

2!12 lei 309000 13200 10200 1331 2"200 1310 33000 22"000 13!39

2!1% lei 309000 1!!00 10200 1331 2"200 1310 30000 22"000 11239

2!1& lei 309000 1"000 10200 1331 2"200 1310 30000 22"000 13!39

2!1( lei 309000 1"000 10200 1331 2"200 1310 30000 22"000 13!39

22"00 0
13101 303101 (1%!! 11239

22"000
13101 303101 13!39

22"000
31101 300101 11239

22"00 0
31101 300101 13!39

22"000
31101 300101 13!39

%.).2.9 Fpdating the $alues To calculate the updated values6 the formulas mentioned6 and detailed at point 1.1.9 %ere used. Table 3.0.0 4pdatin& values for plan B
Eear Present $alue factor ! 1 1 0.310 2 0.1"0 % 0.0"3 & 0."12 ( 0.!91 Total

%1

Fpdated $alue of profit Fpdated $alue of in$estment Fpdating o$erall profit In$estment/s economic efficiency Fpdated recovery period

"1300 !!009 119!!1 1.013 2.30

1!990

139!3

1133"

10"!3

9101

3013

%.).% In$estment indicators calculation and comparison -n order to ma5e a relevant comparison bet%een the t%o investments6 the *roduction volume6 Annual *roduction e2penses6 Annual *rofit6 'pecific investment6 -nvestment recover$ period6 )utput factor6 E9uivalent e2penses %ill be calculated6 usin& avera&e values in case of data that fluctuates durin& the $ears. The -pecific in$estment %as calculated usin& the formula? si = Ii Qi (CAi ) -n order to determine the time in %hich the investment %ill be recovers the in$estment I Ti = i reco$ery period %as calculated %ith the follo%in& formula? Pi To determine the annual profit obtained for each investment unit the output factor %as Pi determined usin& the formula ei = Ii Bith calculatin& the e6ui$alent e2pense - %ill be able to determine the total costs %ith the investment and operatin& costs durin& the standard pa$off period6 b$ usin& the formula? K i = I i + Ci Tn Table 3.0.1 -nvestment indicators
Indicators Aalue of investment *roduction capacit$ 9 *roduction costsHunit c *riceHunit p -pecific in$estment s *eriod of implementation d Time of efficient functionin& = Production $olume ,nnual Production e2penses ,nnual Profit In$estment reco$ery period 'utput factor 16ui$alent e2penses Fnits (ei pcH$ear leiHpc leiHpc leiHpc $ears $ears lei lei lei $ears lei in$ , 1230!3 3"0 13! 193 300 0 !0 211""0 2()9!! 200"0 0.20 0.101 11210"2 In$ " "1300 300 1011 10113 1&7 0 10 %7)9(! 3""9"0 21!!! 2.&& !.&!9 92!5%( Indicator 3ind

min

ma2 min ma2 min ma2 min

In the rice it 5as added the price of printing acti$ity1 and calculated the a$erage of these t5o

%2

Accordin& to the indicators6 the production volume is hi&her in case of investment B %hich is a favorable thin& for the compan$. All dou&h the number of &oods produced is smaller then in case of investment A due to the difference in price6 overall B has a hi&her production volume. The production e2penses are indicated to be as small as possible6 and ta5in& into consideration this criterion plan A is a better choice then plan B. =ue to the consumables re9uired for the printin& machine6 the e2penses of investment B increase above A. The follo%in& indicator is the annual profit %hich is one of the most important ones6 and should be as hi&h as possible. 8rom the t%o plans6 the annual profit is hi&her in case B. All dou&h the e2penses %ere hi&her6 then in case of A the revenues from the t%o sources have there importance and increases the profit above the profit received in case of investment plan A. -t is important to recover the investment as fast as possible6 and in this case investment B is recovered faster6 in 2 and a half $ears more e2actl$ opposed to 0 $ears in case of investment A. The output factor should be as hi&h as possible6 fact characteri.in& investment plan B. Ta5in& into consideration the total costs %ith the investment and operatin& costs durin& the standard pa$off period6 investment plan B is more recommended6 it7s cost bein& considerabl$ smaller then the costs involved in plan A. )verall investment B satisfied 0 criteria out of 16 the e2ception bein& the annual production e2penses6 fact %ell e2plained b$ the e2penses involved %ith the printin& machine. After calculatin& the investment indicators6 and comparin& the results6 it is clear that investment plan B should be the one chosen for implementation b$ 'C.Cos$'olutions '.#.(. +eferences 1. Constantin 'anda @ote curs 2. +andache6 @icumescu6 'tudiu de fe.abilitate ? ca.uistica pe e2emplul unei intreprinderi producatoare de tesaturi din bumbac si tip bumbac6 A'E6 Bucuresti6 200"
%3

Bebsites? http?HH%%%.electrica.roHfilesH)#=103I2009.pdf http?HH%%%.apabrasov.roHinde2.php;mS0Osubpa&S"!Ttarife http?HH%%%.conso.roHrate doban.i credi

Chapter & Conclusions and recommendations

A feasibilit$ stud$ has the role of determinin& if a business idea is %orth puttin& into action or not. -n other cases it7s not /ust an idea6 it7s more li5e a number of ideas and plans from %hich the potential6 or actual entrepreneur has to choose one6 naturall$ the one that proves to be the most profitable and promisin&6 that %ill be invested in6 and made all possible to brin& benefits. This 5ind of feasibilit$ stud$ is conducted at 'C. Cos$'olutions '.#.(. %hich has t%o business plans in mind6 that %ould e2tend the compan$7s activit$. )ne of the investment plans JAK is buildin& a %arehouse6 in %hich an assemblin& %or5shop %ould be established6 %hile the other plan JBK is based on rentin& a space in an e2istin& buildin&6 %here the %or5shop %ould be placed6 and instead of buildin& a %arehouse6 to bu$ a printin& machine6 that prints on stone6 &lass6 leather6 metal6 plastics6 ceramics6 *AC6 acr$lic and %ood6 allo%in& the compan$ to personali.e it7s products6 and offer an additional service to the clients. This additional service includes advertisin& cassette printin&6 and printin& on plastic6 and other surfaces the machine can print on. 'C Cos$'olutions '.#.(. is a compan$ founded in =ecember of 2009 entirel$ %ith #omanian capital6 and b$ one shareholder. it7s main activit$ of? Bholesale of electrical household appliances6 radios and TAEs. %ith the CAE@ code? !0!3. +ore precisel$ it sells infrared heatin& panels that %or5 on electricit$. These heatin& panels are imported from E&$pt and are manufactured b$ the compan$ called +armo2 E&$pt. The necessit$ of e2pandin& came from the problem represented b$ the lar&e variet$ of heaters6 both si.es and models6 that re9uires a lar&e amount of mone$ to be invested in stoc5s6 in order to satisf$ the client as much6 and as fast as possible. Than5s to the assembl$ module6 Cos$'olutions can brin& the heaters in the countr$ b$ its counterparts6 and assemble them in a %or5shop accordin& to the customers7 needs.
%#

Because the shareholder has in it7s propert$ a land of "00s9m that is suitable for buildin&6 the idea of the %arehouse arise. Bhile the idea of bu$in& a printin& machine came from the desire of the customers to have uni9ue products6 that fit perfectl$ there tastes and st$les. Bhen anal$.in& the t%o values of investments6 it is clear that investment A is more e2pensive6 more precisel$ 1"2311 compared to 010!1 in case of investment B so obtainin& the mone$ and accomplishin& investment A represents a lar&er effort for the compan$. Considerin& the time of implementin& the investments6 the moment of implementation %ould be 2011 in both cases6 but the len&th of accomplishin& it is 10! da$s in case of investment A %hile onl$ !! da$s for investment B. 'o considerabl$ less in the second case6 %hich means a smaller period of preoccup$in& %ith the implementation6 and more time for the actual activit$ of the compan$6 therefore it %ould brin& revenues earlier. 8inancin& the investment %ould be made from a ban5 loan6 each for the value of the investment6 but because investment B re9uires less mone$6 and is paid bac5 faster6 the chances of obtainin& it are hi&her. To&ether %ith the advanta&e of a smaller amount of overall interest rate6 that accumulates durin& " $ears opposed to 10 in case of investment A. The products of the compan$ are available in ! varieties6Jplain6 &lass6 mirror6 cos$pedesK and 0 si.es. 'o the client has a %ide offer to choose from6 and it is ver$ li5el$ that it %ill fit there needs. =ue to the free consultin& services and the additional installation assistance that the compan$ offers %hen sellin& the heaters customer satisfaction is hi&h. B$ addin& the personali.in& service in case of plan B this consumer satisfaction %ill increase more6 especiall$ in case of the hotels6 and companies6 that li5e to advertise and present there lo&o ever$%here. Considerin& the characteristics of the products the$ offer an advanta&e opposed to conventional heaters that consist in hatin& the room uniforml$6 b$ the infrared %aves that heat first the surfaces %hich transmit the heat to the air6 %ithout dr$in& it. Another &ood thin& about it is the installation %hich is ver$ eas$ and doesn7t re9uire additional e2penses6 compared to personal central heatin& s$stems.

%%

The product lifec$cle sho%s that the products are planned to be on the mar5et for at least 3 $ears to come6 and because $et the$ are in the mar5et introduction sta&e6 the revenues6 and there success %ill follo%6 so it has a promisin& future. Anal$.in& the current and past suppl$ and demand6 it is clear that this is a ne% product on the mar5et6 that %asn7t 5no%n6 and the suppl$ %asn7t ver$ %ide6 and that the suppl$in& companies sold it as a secondar$ product6 &ivin& a &reat opportunit$ to Cos$'olutions to enter the mar5et6 and &ain customers. The demand %as small because people %eren7t a%are of it6 so a &ood advertisin& %ill be necessar$. But accordin& to the increase in sales of the compan$ there is clearl$ an interest to%ards the product so it has a &ood potential. The tar&et mar5et is divided in 3 se&mentsQ individuals6 operators and construction companies6 allo%in& the compan$ to focus it7s attention better on the needs of these &roups6 %hile assurin& a mar5et bi& enou&h that permits the compan$7s survival. Accordin& to the estimation of demand on all 3 se&ments the compan$ has a &ood potential to survive6 and &ro% in the future. And the idea of e2pansion is also supported. Considerin& the direct competition6 Cos$'olution has a solid advanta&e that is represented b$ the price and desi&n. @ot to mention that there are a small number of competitors on the mar5et6 so re&ardin& this aspect6 the compan$ is in a &ood position. A hi&her problem is represented b$ the indirect competition6 the personal central heatin& s$stem6 %hich are ver$ %ell 5no%n b$ the population. 'o after anal$.in& the t%o ta5in& into consideration the consumption6 cost of heater and installation the findin&s underlined that the heatin& panels are indeed more cost efficient then the central heatin& s$stems6 so the$ are able to face the competition represented b$ them as %ell. #e&ardin& the promotion6 so far the compan$ used %ell the promotions trou&h the internet6 brochures6 price cuts6 e2hibitions6 trade fairs6 and special offers. But bein& in the introductor$ sta&e6 the compan$ and the products need a ver$ &ood promotional plan. The compan$ did a &od /ob so far6 but in order to inform the population advertisin& on television and on radio %ould be needed6 all dou&h it involves hi&h e2penditure. The distribution channel %as thou&ht out in a %a$ that the distributors are also motivated to sell the products6 %hile the compan$ spends a relativel$ small amount of mone$ on distribution. 'o it is a %ell thou&ht and %ell functionin& distribution plan.
%&

The prices are considerabl$ lo%er than the prices of the competitors6 so as mentioned before this is a &reat advanta&e. But it is 5ept in mind that it provides a &ood profit mar&in for the compan$. 8or the different varieties of products6 different price strate&ies are applied6 assurin& an efficient tar&etin&. #e&ardin& the ma/or ris5 factors threatenin& the compan$ is the threat of substitute products the personal central heatin& s$stems to&ether %ith the s5epticism of people to%ards heatin& s$stems based on electricit$ not on &as. These ris5s can be partiall$ overcome an 5ept under control %ith the help of the la%s that start to forbid the installation of personal heatin& s$stems6 to&ether %ith the mentalit$ promoted b$ the E4 in favor of household items %or5in& on electricit$ opposed to &as. Considerin& the locations %here the t%o investment plans are to be implemented6 both locations are 9uite &ood6 for plan A on national rode nb 16 and plan B on in Tractorul industrial platform6 none of them has an$ advanta&es nor disadvanta&es compared to each other. The production technolo&$ is ver$ similar6 and 9uote simple6 in both cases an additional activit$ in the production technolo&$ is re9uired in case B6 the one of printin& on the &lass in case of personali.in&. The forecasted activit$ differs in both cases6 case A producin& 3"0 heatersH$ear6 %hile in plan B has onl$ 300 because the additional %or5 re9uired b$ the printin&. All dou&h the overall revenues are hi&her6 211""0 vs. 3090006 in case B because of the personali.ation6 that increases the price. The t%o investments from the point of vie% of the labor e2penses are the same6 because the people %ho %ill %or5 %ith the assemblin& %ill also operate the printin& machine in case B so this aspect doesn7t reall$ ma5e an$ difference in decidin& the investment variant. The materials re9uired for the assemblin& are provided b$ the supplier of the heater6 +armo2 E&$pt6 and in case B there are additional costs represented b$ the consumables for the printin& machine so the material e2penses are hi&her6 "0! opposed to 1!0 in case of investment B. The presence of the printin& machine also increases the utilit$ cost %ith 931 leiH$ear for plan B over plan A.

%-

The %hole or&ani.ation of the compan$ is built in accordance to the planned e2pansion so that after the e2pansion the compan$ %ill easil$ accommodate its current chart to the ne% one6 the most important element that %ill complete the chart is the production department. The other departments %ould appear re&ardless the e2pansionQ the$ are connected to the &ro%th of the compan$. Accordin& to the investment indicators that %ere calculated6 the production volume is hi&her in case of investment B %hich is a favorable thin& for the compan$. The production e2penses should be as small as possible6 and ta5in& into consideration this criterion plan A tops plan B6 but overall the annual profit %hich is one of the most important ones6 is hi&her for plan B. -n case of recoverin& the investment as fast as possible6 plan A recovers the investment in 0 $ears %hile investment B recovers it in /ust 2 and a half $ears6 offerin& an advanta&e and a lon&er profitable period. *lan B provides more advanta&e in case of the total costs %ith the investment and operatin& costs durin& the standard pa$off period6 more e2actl$6 this value is 1.3 times smaller than in case of investment A. )verall - can conclude that the compan$ as a %hole has a promisin& future and the idea of sellin& infrared heaters is a feasible one6 fact sustained b$ the lar&e variet$ of products that assures customer satisfaction6 the sta&e in the product lifec$cle6 the interest to%ards the products6 the &ood se&mentation6 %ith the satisf$in& si.e of the se&ments6 the lac5 of attention from the direct competitors6 to&ether %ith the opportunit$ arisin& from this6 the &ood competitive status the compan$ has6 the %ell thou&ht distribution channels6 the competitive prices that offer a &ood profit mar&in6 to&ether %ith the %ell established price strate&ies and the &ood mana&ement of the compan$ and %ell desi&n or&ani.ational structure. #e&ardin& the t%o investment alternatives A provides more advanta&e %hen considerin& the "00'9m land that is the propert$ of the o%ner6 the material and the utilit$ costs. Bhile alternative B is better %hen focusin& on the smaller value of investment that means less ris56 the shorter implementation period6 the more li5elihood of obtainin& financin&6 and the investment indicators %here investment B satisfied 0 criteria out of 1.

But also considerin& the fact that the compan$ is at the be&innin& and it is ver$ important to e2tend in such %a$s that offers more services6 and covers lar&er se&ments the result of the feasibilit$ stud$ is that -nvestment alternative B6 that involves rentin& a place for the %or5shop to&ether %ith bu$in& a printin& machine6 is the one in %hich the compan$ should implement. All dou&h investment A didn7t have bad results either6 and on lon& run it is also a profitable one6 at the moment the compan$ is in a situation %hen it should focus on stabili.in& and assumin& smaller ris5s6 to&ether %ith obtainin& a lar&er mar5et share. And for these alternative B is more favorable. After reachin& a stable position6 on the mar5et6 and obtainin& a &ood mar5et share6 it %ill be a &ood idea to invest in buildin& the %arehouse and transferrin& the %or5shop in it. -n the future it %ould also be recommended to tr$ accessin& non refundable structural funds to facilitate the buildin& pro/ect.

%)

+eferences
1. Alan6 Thompson6 Entrepreneurship and Business -nnovation6 Aine$ard *ublishin&6 Guildford6 B.A6 200" 2. Constantin 'anda @ote curs 3. Graham6 Ben/amin6 The -ntelli&ent -nvestor6 revised edition6 ,arper business6 @D6 2003 !. (andstrom6 ,ans6 *ioneers -n Entrepreneurship6 and 'mall business #esearch6 4niversit$ of Baltimore6 200" ". +andache6 @icumescu6 'tudiu de fe.abilitate ? ca.uistica pe e2emplul unei intreprinderi producatoare de tesaturi din bumbac si tip bumbac6 A'E6 Bucuresti6 200" 0. )verton6 #odne$6 Eve &ot a &reat idea6 but -Eve &ot no idea ? %hat $ou need to 5no% about turnin& $our idea into a business ? a business handboo5 for entrepreneurs6 *aradise *oint6 Fld. ? '$dne$6 2009. 1. 'teven =. 'trauss6 The business start up 5it6 Trade *ublishin&6 4'A6 2003 3. Tom +cGas5ill6 +asterclass for entrepreneurs ? creative solutions for resilience6 &ro%th and profitabilit$6 Bil5inson *ublishin&6 +elbourne 2001 9. Bheelen T6 ,un&er =6 'trate&ic +ana&ement and Business *olic$6 *earson ,all6 20096T%elfth edition Bebsites?
http?HH%%%.e2tension.iastate.eduHa&dmH%holefarmHhtmlHc" 0".html http?HH%%%.umanitoba.caHafsHa&ricIeconomicsH+#ACHfeasibilit$.html http?HHmarmo2.comHenH http?HH%%%.cos$stone.comHenHinde2.php http?HHcertificates.iecee.or&HcbtestcertHcbtestcert.nsfHhome;openform

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http?HH%%%.panouri incal.ire.comH http?HH%%%.infrapanel.roH http?HH%%%.sun po%er.roHonlineH http?HH%%%.prismainfo.roHproduse si serviciiHelectrocasniceHincal.itoare electrice http?HH%%%.electrica.roHfilesH)#=103I2009.pdf http?HH%%%.apabrasov.roHinde2.php;mS0Osubpa&S"!Ttarife http?HH%%%.conso.roHrate doban.i credite

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