1.0 Introduction

1.1 Introduces the Proposed Business Venture

Our company will be established on 10th October 2014. We are a private limited

company which specializes in producing watches in Malaysia. Our company has one

main office and one factory which consists of 80 employees. We supply the watches

to the retailers in Malaysia.

1.2 Name of the Company

Waters Star Sdn. Bhd.

1.3 Nature of Business

Waters Star Sdn. Bhd. is a private company that focuses on supplying watches for the

watch industry. We specialize in providing quality watches.

1.4 Industry Profile

Watch manufacturing is a business of making watches for customers according to

their lifestyle demands. Recently, there are not too many new watch manufacturing

companies that are set up, but existing companies made a lot of fresh investments.

The state produced mostly mid-category watches. The industry is considered part of

the micro small medium enterprises sector. In addition, time used to be all in the wrist.

But these days, thanks to smartphones, cable boxes, computer windows and other

screens, no one really needs to wear a watch. The hour is always at hand.

Nevertheless, watches are often appreciated as jewelry or as collectible works of art

rather than just as timepieces. This has created several different markets for watches,

ranging from very inexpensive but accurate watches to extremely expensive watches

that serve mainly as personal adornment or as examples of high achievement in

miniaturization.

1.5 Location of Business

Waters Star Sdn. Bhd. is located at A15-N BLR A, Jalan Selaman 2, 68000 Ampang,

Selangor Darul Ehsan. We chose this location because it is a strategic location that is

at the city centre. It is surrounded by several shopping complexes and company

buildings. This provides the ideal environment for us to do the market research and to

have the opportunity and potential of the future business.

1.6 Date of Commencement

Our company will commence operations on 10th October 2014.

1.7 Factors in Selecting the Proposed Venture

We chose to establish this business because we realized that there is no well-known

watch brand from Malaysia and we have decided to establish an outstanding brand

with high quality for watches owned by Malaysian company. Moreover, there is a

high demand for this industry as this category had become more a fashion than a need.

People are going for watches like never before. Earlier we used to see a person buying

only one watch. Now, they do not mind going for four to five watches during a

purchase. They select watches to suit their attires sometimes. Besides that, the high

quality watches in the market are usually tend to be expensive and costly that not

everyone can afford for it. Therefore, we are going to produce a watch with high

quality and launch it at a reasonable price.

1.8 Future Prospects of the Business

When there is a chance, our company plans to expand our business to produce all

kinds of watches such as clocks, diamond watches, dive watches, pilot watches and so

on. Furthermore, we hope to open our first outlet within five years and enter the

international market after ten years.

2.0 Purpose of Preparing the Business Plan

This business plan is prepared by Waters Star Sdn. Bhd. for the purpose of obtaining a

working capital loan from Public Bank Berhad for an amount of RM 900,000. This

business plan is also prepared as a guideline for managing the proposed venture.

3.0 Company Background

Name of the company : Waters Star Sdn. Bhd.

Address : A15-N BLR A, Jalan Selaman 2, 68000 Ampamg,

Selangor.

Telephone Number : +603-42220002

Form of Business Ownership: Private Limited Company

Main Business Activities : Produce and supply watches

Date of Commencement : 10th October 2014

Date of Registration : 17th September 2014

Registration Number : UCB 130501

Name of the Company’s

Bank : and Bank Account

Number

WATERS STAR SDN BHD

8888 0009 1314

4.0 Background of the Proposed Business

4.1 Physical Location

The main office of our company is located at the city centre in Ampang. It is

surrounded by several shopping complexes and company buildings. This provides the

ideal environment for us to do the market research and to have the opportunity and

potential of the future business. Our company’s factory is located at the foremost

entrance of the industrial area in Shah Alam. The land area is 41,000 square fit. The

distance between the main office and the factory is approximately 38 kilometers.

4.2 Price of Premise

We are renting two premises which are a main office and a factory. The rental of the

main office and the factory are RM 6,000 and RM 6,500 per month respectively.

4.3 Distance from the source of raw materials

We chose Shah Alam to locate our factory because of its proximity to the suppliers

around the Shah Alam area. The raw materials are made available to us within a

relatively short distance, where the cost of transportation can be at a minimum level.

4.4 Availability of manpower

Our business requires the workforces with the operational skill and knowledge in this

industry, well communication skill in multi-languages and creativity. The workers will

be provided training session regularly. Our company plans to remain the number of

the workers in the first year and hire the professional watch designers from overseas.

4.5 Transportation Facilities

Public transportation such as LRT, taxis and buses are easily accessed to our main

office.

4.6 Distance from customers

Our main office is located at the city centre which surrounded by the shopping

complexes and office buildings which have the highest potential value to our

business. This is because there are many of the watch shops in the shopping

complexes and around that area. The retailers can easy to reach our office for business

purpose by buses, taxis and LRT.

4.7 Basic amenities

Our premises are located at the city centre and industrial area. All facilities and

amenities such as electricity and water supplies, telephone lines, internet connection

and transportation are available here. With these basic amenities, we believe that all

the workers can coordinate and accomplish their jobs more efficiently and

productively. Besides that, other amenities such as bank, food court, public toilet and

so forth are also available.

5.0 Organization/ Administration/ Management Plan

5.1 Organization’s Mission, Vision and Objectives

Table 5.1 shows the logo used by Waters Star Sdn. Bhd. and description of the vision,

mission and objectives of the organization.

Logo

Vision To provide high quality and trend setting watches that combine performance with value pricing internationally.

Mission i. To introduce a broad range of watches and clocks to satisfy all segments of society

ii. To strengthen Waters Star Brand and create lasting impression on the customer.

iii. Establish the outlets specialized Waters Star Brand watches.

Objectives i. To develop and launch new models with contemporary styling

with value pricing.

ii. Focused approach on optimum utilization of resources.

iii. Be an outstanding watch company owned by Malaysia.

Table 5.1: Logo, vision, mission and objectives of Waters Star Sdn. Bhd.

5.2 Organizational Chart/ StructureWaters Star Sdn. Bhd. uses an organizational structure based on the functions in the

organization. The firm consists of three levels of management which are the top level

management, middle level management and lower level management. There are 12

departments under the middle level management in the organization. This structure

suits Waters Star Sdn. Bhd. as this organization emphasizes functional specialties to

perform task. The organizational structure will cover all aspects of the management as

a business entity. Figure 5.1 illustrates our proposed structure.

Figure 5.1: Organizational structure of Waters Star Sdn. Bhd.

Chairman

Chief Executive Officer

Chief Financial Officer

Finance Manager

AccountingManager

Investor RelationsManager

Chief Marketing Officer

MarketingManager

Customer Relations Manager

Chief Operating Officer

ManufacturingManager

Human Resource Manager

Quality Assurance Manager

Quantity Surveying Manager

Chief Technology Officer

Research & Development

Manager

Information Technology

Manager

Product Designing Manager

5.3 Manpower Planning

Waters Star Sdn. Bhd. has one chairman, 5 C-level executives and 12 department

managers who manage, contract and execute the operations of the business as shown

in Table 5.2.

Designation Number of PersonnelChairman 1Chief Executive Officer 1Chief Financial Officer 1Chief Marketing Officer 1Chief Operating Officer 1Chief Technology Officer 1Finance Manager 1Accounting Manager 1Investor Relations Manager 1Marketing Manager 1Customer Relations Manager 1Manufacturing Manager 1Human Resource Manager 1Quality Assurance Manager 1Quantity Surveying Manager 1Research and Development Manager 1Information Technology Manager 1Product Designing Manager 1Table 5.2: Designation and number of managing personnel in Waters Star Sdn. Bhd.

5.4 Schedule of Tasks and Responsibilities

Each position has its responsibilities to execute the operations of the business. It is

very important for every executive and manager to know his tasks and responsibilities

in the company as it will guide him in accomplishing his job. Table 5.3 describes the

tasks and responsibilities of every position. The following functions and

responsibilities have been identified and will be delegated to the respective individual

to ensure the smooth operation of the business.

Designation Job Description/ Responsibilities

Chairman •Lead and organize the Board effectively•Discuss key issues with the Board in a timely

manner•Promote effective communication with

shareholders and stakeholders•Work with CEO on development, performance

and succession

Chief Executive Officer •Create and communicate organization vision and mission

•Lead the development and implementation of the organization strategy

• Identify problems and opportunities•Monitor the organization daily operations•Act as a decision maker for all the action

Chief Financial Officer •Report accurate financial information of the company from time to time

•Control cash flow position, budget and expense•Decide on investment issue• Identify company future financial operation

Chief Marketing Officer •Facilitate growth, sales and marketing strategies•Ensure the organization messages is distributed

across media•Allocate marketing budgets

Chief Operating Officer •Advise senior management team on manufacturing, policy, quality and quantity matters

•Communicate and present critical issues on manufacturing process

•Ensure team members have timely training and development

Chief Technology Officer • Identify technology trends, opportunities for innovation and assess market demand

• Integrate new technology

•Oversee the selection of research•Develop and explain future plan of product

Finance Manager •Provide financial advice• Interpret financial information•Manage budget

Accounting Manager •Ensure accurate and timely reporting of financial statement

•Maintain a thorough understanding of the financial report

Investor Relations Manager •Present investment message to the investment community on behalf of the company

•Develop company investor relations plan

Marketing Manager •Research and report external opportunities•Develop marketing strategy and plan

Customer Relations Manager

•Build and maintain customer relationship•Handle client issue

Manufacturing Manager •Manufacture and deliver products on time and in an effective manner

•Ensure maintenance and quality management system

Human Resource Manager •Recruit, select, train and develop employees•Able to build rapport with employees•Motivate and discipline employees

Quality Assurance Manager •Determine quality procedures, standards and specifications

•Specify quality requirements on raw materials•Guide the manufacturing process with acceptable

standards

Quantity Surveying Manager

•Determine required materials quantity•Study on customers’ requests•Analyze cost of materials

Research and Development Manager

•Understand customer expectations•Research, design and evaluate materials, processes

and equipment• Investigate new technology

Information Technology Manager

•Plan and evaluate information systems and electronic data processing(EDP)

•Develop computer and telecommunication software, network and information system

Product Designing Manager •Create and implement creative trend of fashion•Communicate current market trends to the team

members

Table 5.3: Schedule of tasks and responsibilities of employees

5.5 Remuneration Plan

For our company, we have chosen The Employees Provident Fund (EPF) Scheme to

be given to all employees. EPF is a compulsory savings for employees so that they

will have money to support themselves once they retire. As a general guideline,

employers are required to contribute at least 12% of an employee’s basic salary.

Waters Star Sdn. Bhd. also provides Social Security Organization (SOCSO)

contributions to ensure that employees receive compensation in situations of work-

related accidents or illness. Table 5.4 illustrates the remuneration plan for each

employee in Waters Star Sdn. Bhd.

Designation Number of Employees

Monthly Salary (RM)

EPF Contribution (12%) (RM)

SOCSO (2%)

(RM)

Total (RM)

Chairman 1 41,361.00 4,963.32 827.22 35,570.46Chief Executive Officer

1 30,180.00 3,621.60 603.60 25,954.80

Chief Financial Officer

1 24,984.00 2,998.08 499.68 21,486.24

Chief Marketing Officer

1 19,413.00 2,329.56 388.26 16,695.18

Chief Operating

1 23,900.00 2,868.00 478.00 20,554.00

OfficerChief Technology Officer

1 26,166.00 3,139.92 523.32 22,502.76

Finance Manager

1 7,789.00 934.68 155.78 6,698.54

Accounting Manager

1 6,864.00 823.68 137.28 5,903.04

Investor Relations Manager

1 9,370.00 1,124.40 187.40 8,058.20

Marketing Manager

1 6,516.00 781.92 130.32 5,603.76

Customer Relations Manager

1 4,183.00 501.96 83.66 3,597.38

Manufacturing Manager

1 7,623.00 871.56 152.46 6,607.98

Human Resource Manager

1 6,628.00 795.36 132.56 5,700.08

Quality Assurance Manager

1 5,860.00 703.20 117.20 5,039.60

Quantity Surveying Manager

1 3,245.00 389.40 64.90 2,790.70

Research and Development Manager

1 7,622.00 914.64 152.44 6,554.92

Information Technology Manager

1 5,775.00 693.00 115.50 4,966.50

Product Designing Manager

1 4,695.00 563.40 93.90 4,037.70

Supervisor 12 36,000.00 4,320.00 720.00 30,960.00Secretary 8 17,952.00 2,154.24 359.04 15,438.72Staff 35 77,300.00 9,276.00 1,546.00 66,478.00Store Assistant 2 2,750.00 330.00 55.00 2,365.00Lorry Driver 3 4,320.00 518.40 86.40 3,715.20Security Guard 2 2,480.00 297.60 49.60 2,132.80TOTAL 80 382,976.00 45,913.92 7,659.52 329,411.56

Table 5.4: Remuneration plan

In addition to our managing employees, our company has hired 12 supervisors for

each department which the average salary is RM 3,000 each month and will

contribute RM 360 to the Employees Provident Fund (EPF) and RM 60 for SOCSO. 8

secretaries has been hired by company and the average salary is RM 2,244 each

month and will contribute RM 269.28 and RM 44.88 to the EPF and SOCSO

respectively. Moreover, our company has hired 35 staffs to work under all

departments. The staffs will be paid RM 2,208.57 each month as basic salary and will

contribute RM 265.03 and RM 44.17 to EPF and SOCSO respectively. Besides that, 2

store assistants, 3 lorry drivers and 2 security guards have been hired by company.

The basic salary paid for each store assistant, lorry driver and security guard are RM

1,375, RM 1,440 and RM 1,240 per month. They contribute RM 165, RM 172.80,

RM148.80 and RM 27.50, RM 28.80, RM 24.80 to EPF and SOCSO respectively.

Therefore, the total monthly salary of all Waters Star Sdn. Bhd. employees is RM

329,411.56.

5.6 List of Office Equipment and Supplies

Waters Star Sdn. Bhd. has bought office furniture, fittings, watch making machineries

and equipment for both main office and factory from Machine and Equipment

Manufacturers Association and UOS Corporation Sdn. Bhd. The detail of purchasing

order will be listed out in the Table 5.5 below.

OFFICE EQUIPMENT AND FURNITURE

NO Type of Equipment and Furniture Quantity Price/Unit (RM) Total Cost(RM)1 Office furniture 8 sets 500.00 4,000.002 Personal computer 12 units 1,450.00 17,400.003 Whiteboard 5 units 217.00 1,085.004 Office desk 18 units 120.00 2,160.005 Office chair 30 units 105.00 3,150.006 Plastic chair 20 units 15.00 300.007 Booth counter 1 set 1,200.00 1,200.008 Meeting table 2 units 250.00 500.00

9 Duplicating machine 1 unit 2,300.00 2,300.0010 Fax machine 1 unit 924.00 924.0011 Laminator 1 unit 800.00 800.0012 Projector and screen 2 units 820.00 1,640.00TOTAL 35,459.00

Table 5.5: List of equipment and furniture

5.7 Administrative Budget

Aside from furniture, fittings and equipment, Waters Star Sdn. Bhd. also purchased

office supplies such as stationery and paper for the company as indicated in Table 5.6.

The administrative budget also includes rental for land to be paid every month. A

rental deposit equal to three months’ rent and utilities deposit for water, telephone and

electricity are also included.

ADMINISTRATIVE EXPENDITURERM RM

Fixed Assets/ Capital ExpenditureFurniture and Equipment 35,459.00

35,459.00Working Capital/ Monthly ExpenditureSalaries 382,976.00Office Supplies 5,000.00Rent Expense 12,500.00Utilities Expense 1,900.00Transportation Expense 560.00

402,936.00Other ExpendituresRent Deposit 37,500.00Utilities Deposit 5,700.00

43,200.00TOTAL 481,595.00

Table 5.6: Administrative expenditure

6.0 Marketing Plan

Waters Star Sdn. Bhd. is involved in the watch industry. Our company believes that

our country’s economy which is expanding positively plays its part in the

development of Waters Star Sdn. Bhd. With the increasing demand of watches in the

community, Waters Star Sdn. Bhd. is able to take advantage of this development by

providing high quality and trend setting watches to them. By coming out with the high

quality watches, we are sure that our business will be able to compete with other

competitors in Malaysia.

6.1 Description of Products or Services

Waters Stars Sdn. Bhd. is a manufacturer and supplier of watches for the watch retail

shops in Malaysia. We supply quality and trend setting watches that combine

performance with value pricing to meet the satisfaction of the customers. We

guarantee that our watches are of good quality. If our products have failed to satisfy

and fulfil the customers’ needs, we will guarantee a full refund of the value of

purchase or a replacement of the same value. Table 6.1 describes the type of the

watches and the price that offered by Waters Star.

Product Specification Price (RM)

1. Sky–Dweller Model case: Oyster, White goldDiameter: 42 mmMaterial: White goldWater resistance: Waterproof to 100

350.00

metres.Function: Centre hour, minute and second hands, 24-hour display on off-centre disc, second time zone. Instantaneous annual calendar at 3 o’clock and rapid-setting of the date. Month display via 12 apertures around the circumference of the dial. Stop-seconds for precise time setting.

2. Everose Date Just Pearl

Master 2

Model case: Oyster, Everose gold and diamondsDiameter: 34 mmMaterial: Everose goldWater resistance: Waterproof to 100 metres.Function: Centre hour, minute and seconds hands, and instantaneous date with rapid setting, stop-seconds for precise time setting.

270.00

3. Gulf-Master Men

Watch

Model case: ResinDiameter: 51mmMaterial: ResinWater resistance: Waterproof to 200 metres.Function: Centre hour, minute and seconds hands, instantaneous date with rapid setting, 3 daily alarm countdown timer, backlight and stopwatch.

200.00

4. Marc Skeleton Ladies

Watch

Model case: ResinDiameter: 51mmMaterial: ResinWater resistance: Waterproof to 200 metres.Function: Centre hour, minute and seconds hands, instantaneous date with rapid setting, 3 daily alarm countdown timer, backlight and stopwatch.

180.00

5. Klose Waters Star

Unisex Watch

Model case: ResinDiameter: 49 mmMaterial: ResinWater resistance: Waterproof to 200 metres.The function: Centre hour, minute and

150.00

seconds hands, instantaneous date with rapid setting, 3 daily alarm countdown timer, backlight and stopwatch.

6. Shine Gold Ladies

Watch

Model case: ResinDiameter: 49mmMaterial: ResinWater resistance: Waterproof to 200 metres.The function: Centre hour, minute and seconds hands, 3 daily alarm countdown timer, backlight and stopwatch.

120.00

7. Classy Elegance Ladies

Watch

Model case: Black leather, Silver toneDiameter: 34 mmMaterial: Stainless steelWater resistance: Waterproof to 30 metres.Function: centre hour, minute and seconds hands, light.

80.00

8.Accurist Clerkenwell

Men Watch

Model case: Gold platterDiameter: 34 mmMaterial: FabricWater resistance: Waterproof to 50 metres.The Function: Centre hour, minute and seconds hands, light.

60.00

Table 6.1: List of product, specification and price offered by Waters Star Sdn. Bhd.

6.2 Target Market

All age groups are being targeted but the most potential is the age group from 18-35

that covers around 32% of total age segment. Waters Star focuses on demographic

segmentation. Waters Star provides different types of watch based on different age

groups, gender and income. The watches can be classified into the luxury watches,

inexpensive watches, ladies watches, men watches, teen watches and adult watches.

6.3 Market Size

Waters Star’s target areas are whole area in Kuala Lumpur and certain areas in

Selangor such as Puchong, Kajang, Subang, Klang and Petaling Jaya. The target size

is calculated to be 4,672,613 of population in the targeted areas. We estimated the

potential sales for month as RM 550,000. The retailers and the locations are listed in

the Table 6.2.

Retail Shop Location

Hour & Minute Sdn. BhdOne Utama Shopping Mall, The Curve Shopping

Mall, Amcorp Mall, Bangsar Village, Pavilion KL,

Leisure Mall, Plaza Lowyat, Puchong Setia Walk,

Suria KLCC, Sunway Pyramid, Empire Gallery,

Tropicana City Mall, Digital Mall, Jaya 33 Shopping

Mall, Bukit Bintang Plaza, Great Eastern Mall, The

Garden, AEON Bukit Tinggi Shopping Mall, Klang

Parade, Avenue K, Mid Valley Megamall, Paradigm

Mall, Fahrenheit 88, Mines Shopping Mall, Plaza

Thomas Sabo

J H Time Enterprise

Eiko Jewelry & Watch (M) Sdn. Bhd

Metro Kajang, Subang Parade Shopping Mall,

Berjaya Time Square, Cheras Central Shopping

Mall, Puchong IOI Mall, Publika

G-Factory

World of Watch II

Table 6.2: List of retailer and location

6.4 Competitors (Strengths and Weaknesses)

Being a new company to involve in the watch industry in Malaysia, Waters Star has to

compete with several existing competitors. Table 6.3 shows the strengths and

weaknesses among our main competitors.

Competitor

s

Strengths Weaknesses

Omega • High quality with long

warranty period.

• Official time keeper of

most sporting events like

Olympics and Golf

tournaments.

• Known for its Co-axial

technology.

• International celebrities

represent Omega as brand

ambassadors.

• Limited market share growth

due to competition

• Imitations of branded

watches hurt brand image

and sales

• The brand is dependent

highly on its brand

ambassadors for its

marketing and advertising

campaigns

Tissot • Part of the Swatch group

that has 28,000 employees

across 50 countries with

• The brand has a design

which is too simplistic which

strong presence in 160

countries

• International sports and

film celebs are the few

ambassadors that represent

Tissot brand

sometime is easily replicated

• Limited market share growth

due to competition

Swatch • Associated with sporting

competitions has

strengthened its brand

image

• Top-of-the-mind popular

brand across the world

• Excellent advertising and

brand image

• Fake imitations and replicas

affect the brand image and

sales

• Advertising/ branding

activities not impactful

Casio • Casio is been positioned as

being technology

advanced.

• High image

• Considered value for

money and excellent

quality

• Perceived more as a watch

brand than as an electronics

brand

• Design of the watches more

often than not is visually too

simple

Table 6.3: Strengths and weaknesses of the competitors

6.5 Market Share

Waters Star specializes in the watch industry. Located in the city center in Ampang,

the

Target market for this business is formed mainly by the citizens all age groups

especially

18-35 age group. The market share before and after entry is shown in the Table 6.4

below.

Competitors Before Entrance After EntrancePercentage of Amount Percentage of Amount

Market Share (%)

(RM)Market Share

(%)(RM)

Omega 15 45,000.00 14 42,000.00

Tissot 17 51,000.00 15 45,000.00

Swatch 30 90,000.00 27.5 82,500.00

Casio 20 60,000.00 18 54,000.00

Others 18 54,000.00 14.5 43,500.00

Waters Star - - 11 33,000.00

TOTAL 100 300,000.00 100 300,000.00

Table 6.4: Market share before and after entry of Waters Star Sdn. Bhd.

6.6 Sales Forecast

The sale forecast of Waters Star for three consecutive years is shown in Table 6.5

below.

MonthSales Forecast For 3 Consecutive Years (RM)

First Year Second Year Third Year Total Sales

January 362,000.00 749,500.00 800,000.00 1,911,500.00

February 462,000.00 759,500.00 800,000.00 2,021,500.00

March 462,000.00 749,500.00 800,000.00 2,011,500.00

April 500,000.00 749,500.00 800,000.00 2,049,500.00

May 550,000.00 749,500.00 812,000.00 2,111,500.00

June 550,000.00 749,500.00 812,000.00 2,111,500.00

July 599,600.00 749,500.00 812,000.00 2,161,100.00

August 599,600.00 749,500.00 812,000.00 2,161,100.00

September 749,500.00 800,000.00 812,000.00 2,361,500.00

October 749,500.00 800,000.00 812,000.00 2,361,500.00

November 769,500.00 800,000.00 850,000.00 2,419,500.00

December 769,500.00 820,080.00 859,500.00 2,448,500.00

Total 7,123,200.00 9,226,080.00 9,781,500.00 26,130,200.00

Table 6.5: Sales forecast for three consecutive years of Waters Star Sdn. Bhd.

6.7 Marketing Strategy

Criteria Description

Product Strategy

Branding As a manufacturing company, we produce watches with our own brand name, sign, symbol and design. In order to build a strong brand name, we ensure that the watches produced are of high quality.

Quality Waters Star ensures that the watches meet the customers’ demands and satisfaction in terms of design, features, quality level, quality consistency and product safety.

Labelling All the information about watches in terms of manufacturer, sizes and warranty cards are labelled with tie-on tag.

Packaging Company ensures that the wrappers consist of protection, visible and environmental friendly function. We use the three packaging levels in protecting the products.

Pricing Value-based Waters Star ensures the watches are offered in

Strategy Pricing reasonable prices as they remain affordable to consumers.

Place The location of our business is very strategic as it is at the city centre. It is surrounded by several shopping complexes and company buildings. Our company supplies our products to the watch retail shops which are located in the Kuala Lumpur and certain areas in Selangor.

Promotion Strategy

Advertising Waters Star uses advertising in promoting the business. There will be printed advertisements in brochures, magazines and newspapers soon.

Direct Marketing

Waters Star has sent mail to the watch retailer and visited the watch retail shops to introduce our products in order to attract them to our firm.

Rebate Marketing

A special discount will be given to the retailer for the purchases of large quantities.

Table 6.6: Marketing strategy

7.0 Operational Plan

The operational plan is one of the most important factors to consider in a business.

Like other companies, our target is to ensure that our products are the best in quality

and able to satisfy our customers’ needs and wants. Hence, a systematic operational

plan is formed so that our business runs smoothly and achieves its objectives.

7.1 Operational Process

To date, we have completed our market research and lease has been secured at the

selected location in Ampang and Shah Alam Industrial Area. Equipment and furniture

purchases have been pre-negotiated. Marketing materials have also been drafted. The

next steps in the operational plan are as follow:

7.1.1 Sign office and factory leases within 30 days.

7.1.2 Sign equipment and office furniture purchase order.

7.1.3 Accept delivery of equipment and office furniture.

7.1.4 Receive equipment training and set up.

7.1.5 Provide employees training.

7.1.6 Print marketing material.

7.1.7 Start business.

7.1.8 Launch advertising and promotional plan.

7.2 Process Flow Chart

Figure 7.1 shows a flow chart that summarizes the operational process described in

section 7.1.

Order the raw materials from suppliers.

Settle shipping and delivering of raw materials.

Produce watches.

Quality assurance staffs check the quality and quantity of the watches.

Figure 7.1: Process flow chart for Waters Star Sdn. Bhd.

7.3 Production Schedule

No. Product Time of ProductionQuantity of

Production (unit)1. Sky–Dweller Monthly Production 350

2.Everose Date Just Pearl Master 2

Monthly Production 350

3.Gulf-Master Men Watch

Monthly Production 500

4.Marc Skeleton Ladies Watch

Monthly Production 500

5.Klose Waters Star Unisex Watch

Monthly Production 750

6.Shine Gold Ladies Watch

Monthly Production 750

7.Classy Elegance Ladies Watch

Monthly Production 1,000

8.Accurist Clerkenwell Men Watch

Monthly Production 1,000

TOTAL 5,200Table 7.1: Production schedule

Take sample of watches and display in the factory and main office.

Supply the watches to the retailers.

Issue invoices and receive payment.

Conduct marketing activities such as promotion and discounts of purchases.

7.4 Material Requirement

Our company calculates the materials requirement based on our sales per month. The

company’s sale is approximately 5,200 watches per month. The raw materials needed

to produce watches are plastic, alloy metals, stainless steel, silicon, gallium arsenide,

gallium phosphide, liquid crystal, circuit boards, batteries and gold plated. The

quantity and the total cost of raw materials per month is RM 12,031.66 as shown in

the Table 7.2.

Material Requirement

No Item QuantityPrice per

Unit (RM)Total (RM)

1. Plastic raw materials 500kg 0.03 15.002. Alloy metals 500kg 0.38 190.00

3.Stainless steel raw materials

500kg 0.76 380.00

4. Silicon 60kg 1.05 63.005. Gallium arsenide 1kg 7,600.00 7,600.006. Gallium phosphide 1kg 988.00 988.007. Liquid crystal 3kg 760.00 2,280.00

8. Circuit boards111 boxes (1 box=50

pieces)3.80 421.80

9. Batteries7 boxes (1 box=1000

pieces)0.38 2.66

10. Gold plated12 boxes (1 box=500

pieces)7.60 91.20

TOTAL 12,031.66Table 7.2: Monthly material requirement for Waters Star Sdn. Bhd.

7.5 Machine and Equipment

We obtain the machine and equipment from various suppliers as the prices offered

were different. The machine and equipment are used to manufacture watches and

control qualities. The list of machine and equipment along with the suppliers and

costs are show in Table 7.3.

MACHINE AND EQUIPMENT

No.

ParticularsQuantity

(unit)Supplier

Price Per Unit (RM)

Total Amount (RM)

1. Hauser Jig-borer 2Iklim Hardware & Machinery Sdn. Bhd.

3,075.00 6,150.00

2.6" Baldor Model 532 Carbide Tool Grinder

2 Eng Tool Sdn. Bhd. 950.00 1,900.00

3.Rusnok Vertical Horizontal Milling Machine model 70

2 Knight Auto Sdn. Bhd. 3,610.00 7,220.00

4. Habegger Swiss Lathe 1 Knight Auto Sdn. Bhd. 4,936.20 4,936.20

5. 4-axis CNC-mill 1Iklim Hardware & Machinery Sdn. Bhd

4,328.20 4,328.20

6. Scaublin Lathe Model 102

1Iklim Hardware & Machinery Sdn. Bhd

5,700.00 5,700.00

7. Optical Comparator ST 1Iklim Hardware & Machinery Sdn. Bhd

8,763.20 8,736.20

8.40X-2500X LED Lab Binocular Compound Microscope

2Excel Precision Sdn. Bhd.

600.40 1,200.80

9. Shredder Machine 1

Machine and Equipment Manufacturers Association

1,290.00 1,290.00

10. Duplicating Machine 1

Machine and Equipment Manufacturers Association

2,300.00 2,300.00

11. Fax Machine 1

Machine and Equipment Manufacturers Association

924.00 924.00

TOTAL 44,685.40

Table 7.3: Machine and equipment used by Waters Star Sdn. Bhd.

7.6 Operational Budget

Table 7.4 shows the operational expenditure of Waters Star Sdn. Bhd.

OPERATIONAL EXPENDITURE

RM RM

Fixed Assets/ Capital Expenditure

Hauser Jig-borer 6150.00

6" Baldor Model 532 Carbide Tool Grinder 1,900.00

Rusnok Vertical Horizontal Milling Machine model 70 7,220.00

Habegger Swiss Lathe 4,936.20

4-axis CNC-mill 4,328.20

Scaublin Lathe Model 102 5,700.00

Optical Comparator ST 8,736.20

40X-2500X LED Lab Binocular Compound Microscope 1,200.80

Shredder Machine 1,290.00

Duplicating Machine 2,300.00

Fax Machine 924.00

Lorry 200,000.00

244,685.40

Working Capital/ Monthly Expenditure

Plastic raw materials 15.00

Alloy metals 190.00

Stainless steel raw materials 380.00

Silicon 63.00

Gallium arsenide 7,600.00

Gallium phosphide 988.00

Liquid crystal 2,280.00

Circuit boards 421.80

Batteries 2.66

Gold plated 91.20

Lorry Driver Salary 4,380.00

Store Assistant Salary 2,750.00

Security Guard Salary 2,480.00

Utilities Expense 1,900.00

Transportation Expense 560.00

Rent Expense 6,500.00

30,601.66

TOTAL 275,287.06

Table 7.4: Operational expenditure of Waters Star Sdn. Bhd.

8.0 Financial Plan

8.1 Project Implementation Cost Schedule

Table 8.1 indicates the project implementation cost of Waters Star.

PROJECT IMPLEMENTATION COST

Requirements COSTRM RM

FIXED ASSETMachinery and Equipment 41,461.40Lorry 200,000.00Office Equipment 35,459.00Deposit 43,200.00Contingency Cost (10%) 78,486.31

SUB TOTAL 398,606.71

WORKING CAPITAL

Raw materials 12,031.66Salary 382,976.00

Utilities Expense 1,900.00Transportation Expense 560.00Rent Expense 12,500.00Office Supplies 1,900.00

SUB TOTAL 411,867.66

MARKETINGPromotion 9,600.00

SUB TOTAL9,600.00

OTHER EXPENDITURE

Registration 75.00

Rent Deposit 37,500.00Utilities Deposit 5,700.00SUB TOTAL

43,275.00

GRAND TOTAL 863,349.37

Table 8.1: Project implementation cost schedule

8.2 Sources of Finance

The breakdown of financing sources is as shown in Table 8.2. Total financing sources

required will be obtained from our own capital amounting to RM100, 000.00, whereas

the balance of RM900, 000.00 will be obtained through financing from Public Bank

Berhad. The company issues RM400, 000.00 of common shares to its shareholders.

SCHEDULE OF FINANCIAL SOURCES AS AT YEAR 2014SOURCES AMOUNT (RM)

EQUITY/OWN CONTRIBUTIONSCash 100,000.00EXTERNAL SOURCESBank Loan (Public Bank Berhad) 900,000.00OTHERSShareholders 400,000

GRAND TOTAL 1,400,000.00

Table 8.2: Schedule of financial sources

8.3 Loan

Table 8.3 indicates the loan amortization schedule of Waters Star Sdn. Bhd.

WATERS STAR SDN. BHD.LOAN REPAYMENT SCHEDULE

Loan Amount (RM): 900,000.00 Interest Rate: 4.85%

Loan Period (Year): 10 Method: Reducing Balance

Year Principal Interest Total Payment Principal

- - - 900,000.00

1 90,000.00 43,650.00 133,650.00 810,000.00

2 90,000.00 39,285.00 129,285.00 720,000.00

3 90,000.00 34,920.00 124,920.00 630,000.00

4 90,000.00 30,555.00 120,555.00 540,000.00

5 90,000.00 26,190.00 116,190.00 450,000.00

6 90,000.00 21,825.00 111,825.00 360,000.00

7 90,000.00 17,460.00 107,460.00 270,000.00

8 90,000.00 13,095.00 103,095.00 180,000.00

9 90,000.00 8,730.00 98,730.00 90,000.00

10 90,000.00 4,365.00 94,365.00 0

Table 8.3: Loan amortization schedule

9.0 Summary

As a summary, Waters Star Sdn. Bhd. wants to make it in the watch industry. The

company can work side by side with other companies in the watch industry as well.

Furthermore, Waters Star Sdn. Bhd. has increased its effort in varying innovative

activities in terms of technological research and design in order to produce high

quality and trend setting watches. This approach is important to capture the local

market.

In connection with that, we aim to supply watches according to the customers’

desires and demands. Waters Star will continuously strive and cooperate closely with

various government agencies and private sectors to be a successful and outstanding

company in Malaysia.

References

Malaysia Machinery, Malaysia Machinery Manufacturers and Suppliers.

Retrieved from : www.alibaba.com

Malaysia Machinery, Malaysia Machinery Manufacturers and Suppliers.

Retrieved from : www.ebay.com

Malaysia Machinery, Malaysia Machinery Manufacturers and Suppliers.

Retrieved from : http://www.madehow.com/Volume-1/Watch.html

Malaysia Machinery, Malaysia Machinery Manufacturers and Suppliers.

Retrieved from : http://www.historictimekeepers.com/tools_of_the_trade.htm

Sarimah Hanim Aman Shah, Cecilia Soon Teik Lan (2013). Entrepreneurship

Third Edition.

SWOT analysis of competitors, CASIO. Retrieved from:

www.mbaskool.com/brandguide/lifestyle-and-retail/3268-casio.html

SWOT analysis of competitors, OMEGA. Retrieved from:

www.mbaskool.com/brandguide/lifestyle-and-retail/2817-omega.html

SWOT analysis of competitors, SWATCH. Retrieved from:

www.mbaskool.com/brandguide/lifestyle-and-retail/2820-swatch.html

SWOT analysis of competitors, TISSOT. Retrieved from:

http://www.mbaskool.com/brandguide/lifestyle-and-retail/2819-tissot.html

Yusniza Kmarulzaman, Nor Khalidah Abu (2013). Principles of Marketing

Second Edition: Product, Price, Place, 127-216.

Appendices