Das uber leather werkz long version 2

DAS LEATHER WERKZ

Ho Fengkai (12662826)Sven Rischka (12662893)Lisa Pang Chih Pei (12661744)Sidhu Jujhar (12667282)

Table of contentResearch AnalysisConceptMarketingOperationsHuman ResourceFinanceConclusion

Research Analysis

Hypothesis

Questions our team asked before embarking on this project. What kind of problems did people usually face? Is there a business potential in solving this problem? Is there somebody already doing this that we do not

know? Finally, Is there a market in Singapore for handbag

customization?

Research AnalysisSecondary Literature ReviewBottega Venetta, Wilson(2010)

Contrary to popular belief, Bottega Venetta does customized orders

Very expensiveNiche segment of their consumer demographics

Research AnalysisSecondary Literature ReviewFreddy&Ma Online Store (2006)Most designer bags are copied within weeks of release.

By online mass customization orders, its possible to deter copy cats

Research AnalysisSecondary Literature ReviewCustom Orders, Khan(2012)

Growing number of rich individuals spending on branded custom made products with 2 months waiting time.

Custom orders account for nearly 20% growth in market share in certain markets.

Phenomenon attributed to the rise in prestige and recognition as individuals grow more rich.

Research Analysis

Primary Survey Research Survey construction

Objective of our survey is to investigate the some of the reasons why female and males would buy leather products

Questions are formulated in order to determine the underlying meaning of inference

Research Analysis

Primary Survey Research Survey methodology

Team of 4, with 30 surveys handouts each City Hall interchange as the place of our survey

location (Reason being it is near our potential shop

space and has a high human traffic) Conducted over several days Target focus is on more female participants

Research Analysis

Primary Survey Research Survey findings

80.70%

19.30%

Figure 1. Gender Proportion Females

Males

<18 19-25 26-35 36-45 >450

0.4

0.8

0.00%

61.95%38.05%

0.00% 0.00%

Figure 2. Age Group

<4 5 to 9 >100.00%

20.00%

40.00%

60.00%

80.00%

100.00%

10.88%

79.34%

9.78%

Figure 3. How many leather bags being owned

More than once a month

Once a month Once every 6 months

Once every year0

10.00%

76.08%23.92% 0.00%

Figure 4. How often do you buy leather bags

Research Analysis


Quality Colour Branding Size Affordability Others0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

0.2826

0

0.304300000000001

0.4131

0 0

Figure 5. Reason for buying leather bag

<50 50-100 100-150 150-200 >2000

0.2

0.4

0.6

0.8

0.00%

76.09%

16.31%7.60%

0.00%

Figure 6. Spending on one leather bag

Service Price Quality Others Not Applicable0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

30.44% 29.35%

40.21%

0.00% 0.00%

Figure 7. Reason for being un-happy with any of the purchases

Research Analysis


70.65%

29.35%

Figure 8. Interest in customizing own leather bag Yes

No

Yes No0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

<18

19-25 Age Group

26-35 Age Group

36-45 Age Group

>45

0.00% 0.00%

48.91%

13.04%

15.21%22.82%

0.00% 0.00%

0.00% 0.00%

<18

19-25 Age Group

26-35 Age Group

36-45 Age Group

>45

Figure 9. Interest in customizing own leather bag if unbranded.

Research Analysis

Primary Survey Research Survey findings regarding potential for

secondary market of males

Belt Bags Wallet Shoes Jacket0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%95.45%

27.27%

95.45% 95.45%

0.00%

Figure 11. What leather products do males use

54.54%

45.56%

Figure 12. Males interest in customizing leather

productsYes

No

Research Analysis

Primary Survey Research Survey conclusion

Demand for customized leather bag exists in Singapore

Target Market Conclusion 18-35 women, mostly locals. Price range is somewhere between 150SGD to

200SGD

Justifications of Business Plan

Business Concept So what is it we are doing?

Hypothesis proven, therefore market existsThus, offering a chance to build your own custom made leather bag

Customer Value is in the experience of watching your own leather bag “come alive”

Focus filling of a market gap and solving the “if only it was in this color” problem faced by many women.

Business ConceptTarget Market Analysis

Target market of range of 18-25 years old womenMore fashion oriented and willing to try new trendsHigher priority of liking the bag itself over branding

Not very brand loyalUsually possess more than 5 handbagsStill depends on the overall quality

Business ConceptBackground/Situational AnalysisFirst in Singapore for Customized Leather Handbags

Quality Italian Leather2hrs Turnaround Time for crafting

Business ConceptMarket Summary by PEST

Political Stable political situation

Economical One of the most highly developed and successful free-market

economy Social

A steadily growing population of 5.3 million Technological

Highly developed infrastructure Environment

Small but fast channel distribution

Business ConceptMarket Summary by SWOT

Strength

Uniqueness

Versatility

High quality leather

High traffic location

Professionally trained staffs

Weakness

Limited productivity

High rental cost

Lack of warehousing support

Human Resource management

Opportunities

Rising potential in domestic market

Minimal local competition

Near Monopoly structure

Never Outdated

Utilization of fine quality product and skilled master workers

Threats

The lack of brand recognition

Major part of industry is unrecognized

Niche supplier

Low threshold for new entrant

Business ConceptThe Leather Werkz Mission and Vision With the Justification of the business concept The Leather Werkz motto is “The Brand is You” Aimed at providing our customers the unique

experience of creating their own branded leather bags.

Marketing Plan

MarketingMarketing Objective for 5 years

Establish a customer awareness of our product / service and to clearly distinguish ourselves from our competitors

Focused on the waterfall strategyAfter 2-3 years we could open another outlet in a different part in Singapore

MarketingSummary of the 7Ps

Product : Selling high quality, customized leather bags Wide selection of Product design


Price: 180 S$ (proof: research) justified by quality Launch promotional price of 10% discount


Place: Marina Square Near MRT, SMU Near attractions, hotel, SMU, Suntec Offices Huge crowd Easy to spot


Promotion: traditional media through Word of mouth, Flyers, Brochures,

Magazines Social media through social networks including Facebook,

Youtube. Special initiation perk collaboration with nearby offices aiming

at fresh graduates looking for jobs.


People: Founders must continuously improve on product attributes to

create sustainable comparative advantage. Detailed training plans for craftsmen and managers Customer Service


Physical Evidence: Mainly through word of mouth, user stories and

recommendation


Processes: 2 hours until bag is finished, Swift reactions to complaints. TAT 2 days

Marketing Competitors Analysis Isn’t there somebody doing this already?Very expensive high end customization from branded names

Most suppliers are for industrial use, not commercial use

Singapore still doesn’t have well recognized concept store that focuses on leather crafting

The potential shop spaces in Marina Square

Operations Plan

Operations Prototype from Leather Bag Manufacturer (different type and colour)

Handbag Accessories from Wholesalers Example: straps, hooks,

Operations Daily operations

4 Workstations, Hand sewn at our shop in Marina square Walk-in Customers on Weekend and Public Holidays Appointments on Weekdays Max Customers in Shop per hour? on Weekends: 12

Value Chain Diagram

Import multiple designs and accessories and inner sleeve

Customer comes in and chooses the design outlook for the first stage

Craftsmen assembles the initial bag with accessories

Same customer move on to next stage and choose the customization/embossing

Next Craftsmen finishes the customization and frees up the earlier craftsmen slot

Customer pays at the cashier for the bag

Customer leaves satisfied with a new hand sewn custom made leather bag

Customer comes back for in-house cleaning and repair, or to trade in for another bag

Post Purchase Customer Service

Seal of proof for authentic leather included in every bag

Leather Care Products are sold in storeFurture: Inhouse Cleaning

Human Resource Plan

Human Resource

CEO

Sales Director

Logistics Director

2 Store Managers

4 Assistants

Operation Director

2 Master Craftsmen

4 Junior Craftsman

12 Employees in Total at the Start-Up

Organization Chart

Human ResourceRole of ownersCEO Ho Fengkai

in charge of the entire managementkeeping company profitable and planning the company future

Overseeing InvestmentSetting BudgetEvaluation of Projects

Human ResourceRole of ownersSales Director Jujhar Sidhu

Responsible for reviewing current trendsEstablishing sales quotas for store managersBlueprinting the future market expansion in terms of planning promotions, collaborations with the other companies or the organizations

Generate more publicity and awareness of our workshops and the services.

Human ResourceRole of ownersLogistic Director Lisa Pang Chih Pei

Works directly with transportation companies to ensure the best pricing on shipping of our import goods

Time communicating with the sales director and the operation director to maintain supply and demand equilibrium

Optimize resources utilization and the productivity maximization.

Human ResourceRole of ownersOperations Director Sven Rischka

Supervising and assuring the smooth run of the whole operation process

Ensuring that the business policy and imperative created by the CEO are being implemented and accomplished

Manage subordinate headsCoordinate with sales and logistic directors to make sure that all the goals are being met

Human Resource

• Consistency Training Managers→ Shop assistant : ∆ Sales Ability ∆ Communication Skill Master craftsmen → Junior craftsmen : ∆ Quality Assurance

• Weekly reflection based on weekly performance

Training Program

Human Resource

• 1 Manager• 2 Shop Assistants• 1 Master Craftsman• 2 Junior Craftsmen

Weekdays Working ShiftsIncreased manpower shall be allocated during weekend and holiday based on the day traffic

Store manager Master craftsman Junior craftsman Shop assistant

SGD 2,200 SGD 2,000 SGD 1,700 SGD 1,200

Salary Monthly

Financial Plan

The Finances Total amount we need to start is $144,450

Includes Rent deposit of 6 months, taken at 800sqft, $19 per sqft

Startup Cost of business

Direct Materials

Cost of bag imported $3,100Cost of accessories imported $200Cost of inner bags $1,850 Direct Labour Mangers 2 $4,400Craftsmen 6 $10,800Assistants 4 $4,800 Overhead Rent deposit for 6 months $91,200Renovation costs $10,000advertising costs for 6 months $17,100Equipment Purchase $1,000 Total Startup cost $144,450

The FinancesBreak even point under different scenarios Break even bag per day, average at ~9 bags a day Per month cost of $40,350

Per month basis for 500 bags

Direct Materials

Cost of bag imported $3,100Cost of accessories imported $200Cost of inner bags $1,850 Direct Labour Mangers 2 $4,400Craftsmen 6 $10,800Servers 4 $4,800 Overhead Rent deposit per month $15,200 Total Monthly cost $40,350

The FinancesBreak even point under different scenarios Break even bag per day, average at ~6.9 bags a day Per month cost of $45,300

Per month basis for 1000 bags

Direct Materials Cost of bag imported $6,200 Cost of accessories imported $200 Cost of inner bags $3,700 Direct Labour Mangers 2 $4,400 Craftsmen 6 $10,800 Servers 4 $4,800 Overhead Rent deposit per month $15,200 Total Monthly cost $45,300

The Finances

1 2 3 4 5$0.00

$1,000,000.00

$2,000,000.00

$3,000,000.00

$4,000,000.00

$5,000,000.00

$6,000,000.00

$7,000,000.00

$1,131,124.61

$2,730,424.61

$5,272,722.96

$6,108,976.83$6,597,694.97

End of Year Cash Flow

Cost of Capital 10%Net Present Value = $129,814.70 (positive NPV)

Conclusion

Conclusion

There is a market for customized leather handbags Our business proposal can fill this gap in the market Overall project is feasible

Thank You

Das uber leather werkz long version 2

Business

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