final e commerce laxman

7/31/2019 Final e Commerce LAXMAN

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Chapter 1

Introduction

In this competitive business world, information system and technology plays the vital role for

success of any business. The way of doing business has changed due to change in technology.

The biggest challenge the business has been facing is the changing operational scenario and

highly fluctuating needs of customers. Information technology can help all kinds of businesses

improve the efficiency and effectiveness of their business processes, managerial decision

making, and workgroup collaboration, thus strengthening their competitive positions in a rapidly

changing marketplace. This changing environment in marketplace has evolved the practice of

electronic business which has now made business possible through single click

1.1 Objectives

The main objective of the Milky Way Dairy is to promote suitable measures to empower the

milk producers and farmers through methods that are equitable and also to ensure that they

receive fair market price for their milk supplies.

Our business strategy will therefore revolve around receiving milk from various suppliers and

delivering processed quality milk and milk products to our various target customers subsequently

meeting their expectations fully. For this, we have intended to hire a professional team to cater

the customers demand and fulfill their needs.

We will target our products to various market segments and do several marketing campaigns to

promote our products and establish a clear advantage in this strong competitive market. Also, we

shall position ourselves as a quality, reliable and healthy brand that is dedicated towards

customers health, taste and satisfaction.

In summary we intend to attain the following objectives:

To provide on demand dairy product to the customers. To establish Milky Way as a synonym of quality, health and taste.


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To explore the possibilities and capitalize the opportunities of online dairy business. To operate the industry making balance with the local environment. To use local employees and support domestic farmers by providing training and resources

required.

To meet the local demand of dairy products

1.2 Mission

Our mission is to evolve as one of the industry greats in Nepal and lead the market of the online

dairy product business making consumers available with the best quality and healthy products

integrating the local resources and precise information technology. Meanwhile, we will also be

focused towards the benefits and development of the local farmers and the society by providing

specialized training, knowledge and resources required to them.

1.3 Keys to Success

The keys to Milky Ways success will undeniably be effective market segmentation through

identification of several markets and implementation strategies. Our business strategies will

rotate around keeping in touch with our prime suppliers, establishing good rapport with them,

entertaining their queries and feedback and most importantly delivering the best milk and milk

products to our valuable customers to their fullest satisfaction. Hence our key success factors

will include the following:

1 Delivering the promise: We intend to offer completely qualitative, delicious and above allhealthy dairy products so as to ensure that customers are satisfied throughout the consumption of

our products and intend to stick to our products.

2 Using precise technologies: New technologies and software for the required information systemwill be employed making users able to access to our website easily, manage the transactions

effectively, order and do payment effortlessly. As a whole, it will make our business

comparatively more advanced but secured, user-friendly and functional than the others.

3 Interactive marketing with the customers: We will be continually communicating with ourvaluable and loyal customers to ensure that we are being able to meet their expectations by

answering their queries and addressing their feedback regarding our products. So, it will be a two


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way process around where customers will be encouraged to give their important feedback and we

will be focused on entertaining those issues effectively.

4 Strategic alliances: By tying up strategically and maintaining superior relationship with thelocal farmers and various stakeholders in the market, we plan to fulfill every needs and desires of

our customers as the major concern of our business is to satisfy them ultimately.


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CHAPTER 2

COMPANY SUMMARY

2.1 Company ownership

Milky Way is a partnership business comprising of four partners: Mohammad Ishak, Rajeeb Giri,

Sandesh Lamichhane and Tirtha Gurung. Each partner has equal share of 25 %. It has a start-up

capital of Rs. 20,000,000 where the owner's equity comprises of Rs. 10,000,000 (Rs. 2,500,000

of each partner.

2.2 Company location

Our company will be situated in Bhaktapur, Kathmandu. We chose Bhaktapur as a key location

for carrying out our business operations because most of the people there are still engaged in

agricultural and farming activities. So, it is one of the best places to start business like ours

where we could easily collect milks from various suppliers at once without having any kind

difficulties in collecting milks from different suppliers at different locations. However, we have

decided to move our companys location to more accessible place like Dhulikhel/Panauti in the

near future.

2.3 Product and Service Description:

Milky Way aims to buy raw milk from the farmers and supply dairy products after processing the

milk in a hygienic condition to the consumers. The prime objectives of our business are to

process milk and produce milk related products. Milky Way will trade the dairy products as

demanded by the customers for their changing needs. The following are the various products

offered by MilkyWay:

2.4 Competitive Comparison

Since our business is not a new one in the industry, there are already very competent players in

the market who have positioned themselves strongly into the customers mind but we are among

the few ones who are specialized in this particular field. There are many competitors offering


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services similar to ours and competing for the same customer base. Competitors like Sitaram,

DDC and Rahul are some of the reputed brand names in the current market who have succeeded

in establishing themselves as a strong brand. Hence, we, not only have to establish and position

ourselves tightly in the market, but also correctly differentiate ourselves from the competitors. In

the course, one key factor that will differentiate our firm from others is the employment of the

latest information technology in our business that will make our business more functional,

effective and better than others. Other companies in the industry may be potential threat to our

company but we will move ahead with our every defensive and offensive strategy to come across

these competing firms.

2.5 Sales Literature

Our business will initially begin with publishing of general brochure that includes information

regarding our company and the various sorts of products we will be offering to our prospective

buyers, advertisers and other interested parties .This will eventually help us to position ourselves

in the market and generate awareness of the company and the products it aims to deliver. Also,

because it represents the company, we also intend to have pamphlets in our sales promotion

routines that will provide other important information

2.6 Sourcing and Fulfillment

Milkyway is planning to buy unprocessed milk from the suppliers in a bulk and process it to

manufacture various other milk related products. In a sense Milkyway will be internally sourced

so as to minimize the costs. Similarly, our employees, the key value of our company will be

delivering the products and the services as promised according to the needs and requirement of

the customers. Our professional expert team will make sure that the products and services we

deliver to them are beyond the expectations of our customers.

2.7 Technology

Milkyway will make sure that it employs some of the best suited and latest computer technology

in its system so as to guarantee that the company is continuously running at its 100 percent

endeavor. The technology will continue to develop, changing what we market as well as how we

market it. Our aim is to be aware of the new technology and utilizing it in our existing


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framework. We also intend to have the latest and most efficient software to enable smooth

operations. The following are the technology that we are employing in our business.

Hardware Requirement

Different kinds of hardware is needed to run the , followings are the requirement of hardware;

S.N Descriptions Type

1. Mother Board P-4

2. CPU C2D-2.93

3. RAM 2 GB

4. HDD 500 GB

5. Keyboard 108 Keys Keyboard

6. Casing with Power Supply ATX

7. Color Monitor LCD 21"

8. Mouse A4 Tech

9. DVD RW 1000 KB

10. Speaker Set Sony

Software requirement

MilkyWay requires one of the following operating systems:

Windows XP Windows Vista Windows 7

MilkyWay can also work on the following operating systems:


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Windows 95 Windows 98 Windows ME Windows NT 4.0

MilkyWay anywhere requires an Internet connection for synchronization with the DairyLive

server

Network requirement

Routers

Switches

Network interface card

Cables

High speed internet

2.8 Future Products and Services

The primary focus of Milkyway is to offer hygienic and nutritional milk products to the

customers and satisfy them to the fullest. Currently, we have planned to provide items like milk,

curd, cheese, and paneer only as we are the immature player in the market and we want to avert

risk of introducing number of products at once. However, in the near future, Milkyway is

planning to broaden its products offering by introducing various other products that have not

been introduced yet. For this purpose, Milkyway will co-ordinate the customers entire

experience regarding the consumption of our delivered products to the expectations regarding

our products. As time progresses, we will also work towards providing variety of milk related

products that are globally recognized at a reasonable price to our customers. Hence, Milkways

entire effort will spin around on providing qualitative products to the customers and fulfil their

changing demands no matter if we have to introduce additional products under our brand name.


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Chapter 3

Market Analysis Summary

Dairy Industry is growing industry in context of Nepal where milk and milk related products are

frequently consumed. Because of Nepalese trend of consuming these products we have the high

potentiality of upward growing.

After going through a rigorous study and research of the market, we realized that somewhere

there was need for milk and milk related products. Milk and milk related products are something

that people consume on daily basis especially the ones who are highly conscious about their diets

and health. However, there are many strong established brands operating successfully in themarket but we also believe that we can give all of them a tough competition by establishing

ourselves as one of the strong brands in the market. So we have seen the potentiality of our

survival.

We are also aware of the fact that it requires establishing good rapport and strong strategic

relationship with various hotels, restaurants, supermarkets, vendor street tea shops including

individual households. Hence, we intend to provide products of the highest level of standards

that aims to satisfy those customers by having good relationships among all of these customers.

According to our research, initial market share will be 10%of the market. So, we have decided to

implement aggressive marketing strategies to penetrate the market supported by our other

strategies.

3.1 Market Segmentation

MilkyWay's target customers are the people who are health conscious and prefer consuming

dairy related products for milk contains vitamins, proteins and minerals necessary for the proper

growth of the body. Small growing children and older people are the main consumption of our

products as they are considered the major recipient of the vitamins. However, people falling in

between are equally the potential consumer of our products as people here consume dairy

products either for daily purpose or for religious purpose. As mentioned earlier, our business is

technologically enabled one; one variable of our customer segmentation will be the customers


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who have access to the internet. In this sense mostly young customer are focused who have

access to IT so that they can place their orders through our website. These customers will be

marketed thorough different communication means.

3.2 Target Market Segment Strategy

MilkyWay will target the special niche of population and price dairy products accordingly. The

niche of the population would be growing children and old age people because they are usually

high consumer of milk and milk related products and they are or can spend fair amount of money

on our products. For communication among these targeted market segments, different means will

be effective such as newspapers, magazines, advertising, personal selling and internet medium

are best to use. Similarly, we will tie up strategically with many restaurants, hotels and

supermarkets to enter into the market more rigorously and robustly. Thus, our marketing strategy

will be based entirely on making the right products available to the right target customer at the

right price.

3.2.1 Market Needs

Because of the rapid changes in need and demand of dairy products over the last few years;

many other companies have come into existence to satisfy the customers by catering various

products. So, Milky Way has decided to enter the market with different approaches. Gone are the

days when people used to walk miles to purchase a bottle of milk. Now people's lifestyle and

access to information technology has created the possibility of delivering products and service

through the click of the mouse. People want to get their product on their doorstep. Because of

this perception of consumers and easy access of information technology, the market opportunity

is created in dairy business.

3.2.2 Market trend

As the number of consumer (population) is increasing day by day, the demand for milks and

milk related products is also increasing but supply is not adequate. Since supply hasnt met the

demand, people are compelled to consume powder milk as a substitute of milk. So, market trend

shows the opportunity for dairy business in Nepal.


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According to the statistics, total demand for the milk is 400,000 litres per day and is on

increasing trend. Meanwhile, the supply is only 350,000 liters. We can see the shortage of 50,000

litres still. So there is an opportunity to grow in this dairy business.

3.2.3 Market growth:

Many people are going vegetarian these days, they demand for paneer and other milk related

products, increasing craze in ice-cream, chocolates, sweets and coffee. Also increasing consumer

demand for milk shows that market is unsaturated and tremendous growth.

3.3 Industry analysis:

According to statistics, 1.49 million tones of milk is produced every year in the country, but the

quantity is not sufficient to meet the growing demand. Demand for milk in the Corporation, the

state-owned enterprise, has been importing 50,000 liters of milk daily from India. Prime minister

during visit to India admitted to get 10000 improved breed of cow from India to meet the

demand. On the other way milk powder companies have always sought for shortage, so big

companies have been established. No companies have yet facilitated the automated supply chain

of milk and milk product to ultimate target customer. Only manual distribution with a nominal

use of information technology is used.

3.3.1 Industry participants:

For the smooth operation of our business, we need farmers and co-operatives, who will be

supplying us with required milk, and also restaurants, hotels, supermarkets for which we will be

delivering required materials.

3.3.2 Distribution pattern:

MilkyWay is automated dairy company. The company plans to distribute its products by

maintaining a relationship with its customers. In this regard, relationships mean having good

links with the hotels, lodges, restaurants, supermarkets. We will have 35 outlets in 35 wards of

Kathmandu. Milk and its related products are sold to retailers from companys owned outlets.

The orders are placed through SMS by the customers in the evening and orders are processed by

the delivery van early in the morning. For assistance, if excess products are demanded then


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customer who placed order before 8:30 in the morning are processed till 9 am and then if order

are placed after that then the ordered is placed at 2:30 pm from the subsequent outlets through

delivery van.

3.3.3 Competition and buying pattern:

There is intense competition among different companies and they have almost made oligopoly

(mutual contract). Since milk has been basic product and demand is greater than supply so

competition is to grow market share rather than to develop quality and manage appropriate price.

As report reveals that people are not very much concerned about the price. They are willing to

consume at the available market price. Peoples demand is almost consistent every day. Quality

seeker people get milk and their related products directly from farmers. There is a rush of selling

in the peak hour or on the special occasion and festivals like dashain and tihar.

3.3.4 Main competitors:

As the industry demand and profitability is booming. Different old companies are increasing

their production and newly companies are esatablished with new plans and aprocedures.

Precisely talking, our competitors are Sitaram Gokul mills Ktm ltd. Kathmandu dairy pvt ltd,

Bhagwati dairy, Pandav dairy farm, Nepal dairy, Krishna dairy etc.These competitors may be

threat for us, but we can prosper as we are doing our business differently, we have got first

mover advantage in automated supply chain of dairy products and we are going to achieve a

higher market share soon.


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Chapter 4`

Strategy and Implementation Summary

Initially MilkyWay will focus on local market of Kathmandu valley. Being relatively the new

company will mostly focus on milk and some certain kind of milk related products. The strategy

of market segment will be mostly concerned with child and old age people. Therefore the initial

strategy will be to raise awareness and confidence in our products.

4. 1 Strategy Pyramids

The Strategy Pyramid places strategy at the top, supported by tactics in the middle, and programs

at the base. Strategy means nothing without tactics and programs to make it real.

This illustration shows a basic Strategy Pyramid for marketing plans.

The Strategy Pyramid emphasizes the practical importance of building a solid marketing plan

structure. Most marketing plans are developed from the top-level strategy first.

Strategy, at the top of the pyramid, is a matter of focusing on specific markets, market needs, and

product or service offerings of MilkyWay. Tactics follow and set the marketing message and the


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way it should be transmitted. Programs, at the base of the pyramid, provide the specifics of

implementation. Programs include specific milestone dates, expense budgets, and projected sales

results.

4.2Value PropositionAlthough there are many dairy business operating their businesses in Nepal, MilkyWay Dairy

has a new idea of using IT to differentiate itself from the compititors. Customers can easily

interact with the firm via our websites and through feedback feature which makes two-way

communication more effective. The information about the customers needs, wants collected

through IT will help the business to know much more about the customer. Hence, understanding

the need of customer and deliver product and services accordingly definitely add customer value

to the business.

4.3Competitive EdgeMilkyway will have the ability to produce goods and services more effectively than competitors

do, thereby outperforming them. This means Milkyway must stay ahead in four areas: being

responsive to customers, innovation, quality, and efficiency.

4.4 Marketing Strategy

The marketing strategy will be based on generating awareness about milkyways products. The

strategy will rely on several different forms of communication. Milkyway will tie advertising

efforts into a comprehensive marketing strategy that will be carefully designed to attract

attention in the marketplace. Advertising campaign will be used as the means of marketing

strategy. The main venues for advertisements will be on TV, radio, magazines etc.

4.5 Positioning Statements

MilkyWayportrayed itself in the customers mind as an e-commerce portal which enables them

to purchase milk and related product without visiting physical marketplace. The slogan for this

product is" Healthy food; Healthy family"


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4.6 Pricing Strategy

As there are many dairy companies, operating their businesses in Nepal, we have to compete

with them in term of price.So, we have decided to charge reasonable and affordable price as

compared to our competitors so that they are not frightened by our price range and they donot

feel cheated in terms of price..Also, our price will depend on the Break Even Point (BEP)

analysis. It will be done for determining price of our products after analyzing the BEP and

Compeititors' price.

4.7 Promotion Strategy

Our promotional strategy will be entirely based on promoting our products that we will be

offering to our prospective customers by informing them about our products and making the

right information available to our target customer. Promotional schemes such as discounts and

other incentives will be provided in a bulk purchase. We are determined to leverage our presence

using quality brochures and other sales literatures. We intend to spread the word about our

business through the following.

Advertising: This shall be undertaken through trade and industry publications, which are

read by tourists, as well as the local newspapers.

Advertisement through sales literature will be mainly targeted at potential clients and

placed or made available at strategic points, such as travel agencies. With time we also

intend to utilize billboards to advertise ourselves, likewise located at strategic points.

Hence, we intend to design and put up posters communicating the services we provide

located around hotels, lodges, airports and other such areas where tourists typically pass

by.

Personal Selling: Undoubtedly customer solicitation face-to-face will be a powerfulform of promotion mainly due to the fact that its flexibility will enable us to match

the customer's needs to specific attributes of our services as well as giving concise

details of what we have to offer. Another important determinant in utilizing personal

selling is the fact that we are relatively new on the market.


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Direct Marketing: This will be used but only to a limited extent in the form oftelemarketing and informing potential customers and obtaining referrals where

possible through e-mails, telephone, fax, letters, and social networks.

Events: These are increasingly becoming important as more firms establish in thecountry and hence the need to be known. The organization aims to promote itself

through attending trade shows and expositions. Not only will these increase

awareness of our services and business name, but also enable us to interact with

potential clients who may decide to utilize our service. Trade shows that come to

mind include International Trade Fair 2012, Visit Nepal 2012 etc.

In all the above we intend to communicate our ability to deliver a good service that will satisfy

the customers needs. Hence, our messages will influence the engagement decision of

prospective customers by emphasizing our customer focus and, persuade prospective clients that

we are different from our competitors

4.8 Sales Strategy

Milkyways sales strategy will be based on the conversion of qualified sales leads into paying

customers. The key emphasis here is customer satisfaction. We recognize that customers desire

and their needs are taken care of. Additionally, Milkyway will provide a sales commission to

retailers to promote the sales of our products. Milkyway recognizes that the transactions should

not be thought of as individual sales, but as long-term relationships. This is a reasonable

assumption based on the fact that the customers consume milk ev8ery day, that they will

continually have the need for milks. And milkyway will provide quality milk for them.

4.8.1 Sales Forecast

The sales forecast indicates that growth will be slow but steady. Growth will be slow because of

the time and effort needed to develop the customers. Production is not the slowing element asMilkyway can increase the level of production as per the demand. Sales are expected to increase by

10% for the first three years. We anticipate actual sales will be much higher after the renovation,

but we want to plan for other contingencies.


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4.9 Milestones

The value of Milkyways milestones is in creating a set of measurable activities that will be

achievable goals. The achievement of the milestones will be closely monitored and the assigned

person will be held accountable for hitting the milestones.


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Chapter 5

E-commerce Plan Summary

5.1 Analysis of available delivery channel (market industry analysis)There are number of Dairy manufacturing industry in Nepal. But their delivery channels are still

operating in traditional way. The company directly delivers the product to the retailers through

the use of their logistics. The retailers ask the product as per their forecast and the company

delivers as per their order. The order is mainly done once in a day i.e. in morning and there is no

any other time for delivery of the product even when there is scarce of the product. The delivery

is mainly made through mini trucks when there is large number of demand.

5.2 Rationale of choosing the delivery channels

Since competitors are following only traditional means of delivery channels, we come with the

new idea of using technology in our delivery process. Our delivery channel can be explained

through the figure below:

In above figure, S1, S2 and S3 are the suppliers of MilkyWay. They are the collectors of milk

form the local farmers. MilkyWay will collect the milk from these suppliers and distribute to itscustomers. We have our different outlets O1, O2, O3 in different part of Kathmandu city.

Through these outlets retailers are delivered the products. Outlets are connected with main office

through intranet by the use of information technology. Server is located at the central office and

these servers are directly connected with the outlets. When there is shortage of milk in the outlets

then the system will be informed at the central server and inventories are fulfilled accordingly.

MilkyWay

O1

S2

S1

S3

O2

O3

Retailer

Retailer

Retailer

Retailer

Retailer

Retailer


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These outlets will supply the demanded milk to the retailers. As there are numbers of retailers,

products are delivered to them through the outlets established by MilkyWay.

5.3 Payment system:

The payment systems of the MilkyWay for the transaction are as follows:

1. Cash:Cash is one of the simplest payment methods in our business. Cash is paid at the point of

transaction. Real time transaction occurs while transacting via cash.

2. Bank cheques / Deposit slip:The buyers can pay through cheques or deposit slip at point of sale. The bank account of

MilkyWay is credited when cheques or deposit slips are issued.

3. Payment Gateway (e-Sewa):A payment gateway is a way to process electronic transactions. Payment gateways

provide the tools to process payments between customers, businesses, and banks.

Payment system can be described as follows:


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1. (Order Placed): Customer places order through secure connection on website,or merchant manually keys in transaction.

2. (Authorization Request): Payment Gateway receives the transaction throughthe secure internet connection, encrypts it, and submits an authorization to the

credit card issuing bank.

3. (Authorization Response): Credit card issuing bank either approves ordeclines the request and sends a response back through the payment gateway to

the website.

4. (Order Fulfilled): Once approved the merchant processes and ships thecustomer's order.

5. (Settlement Request): The Payment Gateway sends a settlement request tothe merchant account provider each day that transactions are processed.

6. (Settlement Deposited): The merchant account provider deposits the amountfor each settlement into the merchant's bank account.


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eSewa is the payment gateway of Milkyway. While payment is made through online system

eSewa act as a medium of such payment. eSewa offers extremely high security as well as user

friendly environment. The settlement bank of Esewa is Laxmi Bank Ltd. Customer can recharge their

account of eSewa either through ESewa Recharge Cards or through partners bank e-banking system or

Counter Deposit in Partner Banks.

While charging their account by customers if customer has his/her account in Kist Bank (assume) then

following transactions will take place.

At eSewa:

eSewa at Laxmi bank Dr

To eSewa A/c Cr

At Kist Bank (Partner Bank)

Customer A/c Dr.

To Payable (eSewa) Cr.

At Laxmi Bank (Settlement Bank)

Kist Bank A/c Dr

To eSewa A/c Cr

During the payment process following transaction will take place.

Case 1: If both customer and MilkyWay have account in Laxmi Bank

Customer A/c Dr

To MilkyWay A/c Cr.


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Case 2: If customer has account in Kist bank and MilkyWay has account in Global Bank. Then

At Kist bank (Customer's bank) At Global Bank (MilkyWay)

Customer A/c Dr. Receivable A/c Dr.

To Payable Cr. To Customer A/c Cr.

At Settlement Bank

Kist bank A/c Dr

To Global Bank Cr

5.4 Detail functionality of each module of the software systems

The different kinds of software needed for online business of MilkyWay are:

Database management system (DBMS):

A DBMS is a system software package that helps the use of integrated collection of data records

and files known as databases. It allows different user application programs to easily access the

same database. DBMSs may use any of a variety of database models, such as the network models

or relational models. In large systems, a DBMS allows users and other software to store and

retrieve data in a structured way. Instead of having to write computer programs to extractinformation, user can ask simple questions in a query language. Thus, many DBMS packages

provide Fourth-generation programming language (4GLs) and other application development

features. It helps to specify the logical organization for a database and access and use the

information within a database. It provides facilities for controlling data access, enforcing data

integrity, managing concurrency, and restoring thedatabase from backups.

Customer Relationship Management (CRM) Software:

It is a cross functional e-business application that integrates and automates many customer

serving processes in sales marketing, account and order management, and customer service and

support. This company requires CRM which have following features:

Contact and Account Management


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Sales optimization tool: Cross sale and up sale Marketing and fulfillment Customer service and support Retention and loyalty Programs

Enterprise Resource Planning (ERP) Software

ERP systems are designed to tackle the problems mentioned above by integrating all of the

regular functions of business (finance/accounting, human resources, customer relationship

management, manufacturing, project management, sales, supply chain management etc.) and

providing a means to better manage the companys resources.

5.5 Development Requirements

MilkyWays's website will be initially developed with few internal technical resources. Bent Ray

Hosting will host the site and provide the technical back end. Bent Ray Hosting is a leading web

hosting and server solution company in Nepal. It has been providing the cheapest and the best

web hosting services to its clients. The clients includes government agencies, large corporate

houses, US based business houses, NGOs and INGOs etc. Webtech Nepal will produce the

graphics, logos, artwork, and flash media as they will be developing our website from scratch.

Our site will be maintained by one of the owners.


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Chapter 6

Security measures and disaster recovery plan

6.1 VeriSign:

VeriSign is an online security & SSL certification provider. Websites having authentic seal of

VeriSign are secure and protect privacy. The authentic website is indicated with VeriSign .The

process how VeriSign work is described

Browser checks the certificate to make sure that the site you are connecting to is the realsite and not someone intercepting.

Determine encryption types that the browser and web site server can both use tounderstand each other.

Browser and Server send each other unique codes to use when scrambling (or encrypting)the information that will be sent.

The browser and Server start talking using the encryption, the web browser shows theencrypting icon, and web pages are processed secured.

The website with these VeriSign sign is considered as highest secure page. Customers can make

any transaction more trustworthy and reliable when they are certified by VeriSign. .

6.2 Disaster Recovery Plan

It is not possible to run any business without information, so organization should make good

plan to preserve and reduce the risk of loss of data. Loss of data means loss of customer

information without which survival of the organization is not possible. Hence, the firm largely

depends on IT as to have a Disaster Recovery Plan (DRP). Backup and recovery is more

challenging than ever with exponential data growth, sprawling virtualized environments, ever

shrinking backup windows, and escalating storage and tape costs. The main focus of the Disaster

Recovery Plan is to restore the operability of the system that supports mission-critical and the

critical business processes. Controlling the occurring events to reduce the risk of any additional

loses is a must during the recovery phase.


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6.3 Classification of Disasters

Disaster can be classified in two broad categories:

Some of the well-known natural disasters are floods, hurricanes, tornadoes andearthquakes. While preventing a natural disaster is very difficult, measures such as good

planning which includes mitigation measures can help reduce or avoid losses.

The second category is manmade disasters. These include hazardous material spills,infrastructure failure or bioterrorism. In these instances surveillance and mitigation

planning are invaluable towards avoiding or lessening losses from these events.

6.4 Control measures in recovery plan

Control measures are steps or mechanisms that can reduce or eliminate computer security threats.

Different types of measures can be included in BCP/DRP. Disaster recovery planning is a subsetof a larger process known as business continuity planning and should include planning for

resumption of applications, data, hardware, communications (such as networking) and other IT

infrastructure. A business continuity plan (BCP) includes planning for non-IT related aspects

such as key personnel, facilities, crisis communication and reputation protection, and should

refer to the disaster recovery plan (DRP) for IT related infrastructure recovery/continuity. This

article focuses on disaster recovery planning as related to IT infrastructure. Types of measures:

1. Preventive measures - These controls are aimed at preventing an event from occurring.2. Detective measures - These controls are aimed at detecting or discovering unwanted

events.

3. Corrective measures - These controls are aimed at correcting or restoring the system afterdisaster or event.

These controls should be always documented and tested regularly.

6.5 Strategies for data protection

The following is a list of the most common strategies for data protection:

Backups made to disk on-site and automatically copied to off-site disk, or made directlyto off-site disk.( use of portable hard disk)


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In addition to preparing for the need to recover systems, the firm must also implement

precautionary measures with an objective of preventing a disaster in the first place. These

include the following measures:

Local mirrors of systems and/or data and use of disk protection technology such as RAID Uninterruptible power supply (UPS) and/or backup generator to keep systems going in

the event of a power failure

Fire preventionsalarms, fire extinguishers Anti-virus software and other security measures

Firewall

A firewall is a part of a computer system or network that is designed to block unauthorized

access while permitting authorized communications. It is a device or set of devices which is

configured to permit or deny computer applications based upon a set of rules and other criteria.

Firewalls can be implemented in either hardware or software, or a combination of both. Firewalls

are frequently used to prevent unauthorized Internet users from accessing private networks

connected to the Internet, especially intranets. All messages entering or leaving the intranet pass

through the firewall, which examines each message and blocks those that do not meet the

specified security criteria.

We are planning to use the following firewall as it meets our requirements and is within our

budget.

Brand name: NETGEAR Model no: FVS318 Throughput: 12.5 Mbps LAN to Wan throughput 1.2 Mbps 3DES throughput Size: 10*7.1*1.4(inches) Weight: around 1 kg.


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6.6 Websites Home Interface

6.7 Content of MikyWays website

The.com is a simple and understandable website that is newly offered to the customer. It

provides all the required information so that the customers can easily view and order the

products which they want.

The site disseminates all the information about types of milk-related products. Customer can

login as per their login id and username to view and order the products. Detail information about

our organization has also been contained in the website.


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Home

Home page of the shows the products and their details. Customers can view and order the

products by visiting the home page. The search facility is made in order to facilitate the

consumer to search the desired product quickly. User can login into account with their own user

id and password to know more about products and order them.

Register (Sign up)

Customer who wants to buy the milk-related products through our website needs to register with

all his detail information of name, address, city, country, etc. Once he/she is registered into our

website he/she will be provided with a permanent username and password so that she/he need

not to register for a new id time and again. Once a customer creates a profile into our system,

she/he gets updated about the arrival of new products. The so registered profile information will

be automatically stored in our database.

Login

The costumer, after having the id and password, can login to their account and use all the

features of the website. S/he can also send feedbacks, lodge complaints and suggest the products

to their friends and relatives who are registered members of the website


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Product directory

The page will contain all the product-related information such as names of products, the

ingredients each product contains, prices, delivery timeframe, etc.

Costumer support

This caption will contain the information such as firm's helpline, email addresses, Frequently

Asked Questions (FAQ), etc so that customers can easily order and get information of the

products they want to buy or want to know about. If customer found any problem then they can

mail to the MikyWays e-mail address and can get solution of that problem.

Feedback

If a customer feels like giving a positive or negative response to the goods and services provided

to them, the Feedback page will help them do so online by entering their user id followed by the

feedback they want to give.

About us

This page will provide all the company-related information such as its inception, location,

branches, location of the branches, business partners, company's goals and visions, etc. which

will help customers get to know about the company and make deals confidently.


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Fig: Two-way flow of information

Top level management provides guidelines to employees either by conducting meetings or by

sending message via LAN (Local Area Network)

7.2 Management Team

Milkyway will have the owners in the management as they all have the necessary skills and

qualification related to different aspect of the management like Human Resource, Sales and

Marketing, Accounting and Finance, Information technology etc.

7.3 Management Team Gaps

As all of the owner are fresh MBA graduates and they will be responsible for handling different

department according to their skills and specialization in their academic degree there will be

lacking experience among them. Hence after doing their responsible work for certain period of

Shows Information flows downward from top level management

Shows flow of feedback and suggestion from each department

CEO

(Sandesh Lc)

ProductionManager

(Manish Sharma)

Accounting &Finance Manager

(Mukunda Aryal)

MarketingManager

(IshakMohammad)

IT Manager

(Rajeeb Giri)

HR Manager

(Tirtha Gurung)


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the time, they will be able to handle each key job in efficient and effective way and they will be

assigned respective job accordingly.

7.4 Personnel Plan

HR Department will be main responsible for the personnel plan of the every employee needed

for the company. The lists of the needed personnel for the first year of the operation are as

follows:

CEO: 1

Department Manager: 5

Supervisors: 5

Outlet Employee: 70

Sales Representative: 35

Factory Worker: 50

Technician: 4

Driver: 15

Security Guard: 5


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CHAPTER 8

Financial Plan

The financial plan is to borrow RS. 10,000,000 as a long-term loan from Nabil bank at an interest

rate of 12%, to make the building along with to buy necessary plant and machinery. We will

repay this loan over 10 years. We will secure this loan with our equity in the value of the existing

property. The installation of advance technology will open up a new revenue stream for the

business, and attract new steady customers.

Capital structures

Composition Weightage Amount (Rs)

Personal Contribution (4*2,500,000) 0.5 10,000,000

Bank Loan 0.5 10,000,000

Total 1.00 20,000,000

With aggressive target marketing and the sales strategies outlined above, we will increase sales

over 5% in the first year. We expect a bigger increase in year two, with the extensive renovation

generating some free publicity and with existing customers making referrals, but the largest

expansion is planned for thought the year 5.

8.1Costing of System

As we are planning to automate our dairy business we need to have heavy investment in the

installation of the system along with the plant and machinery needed to operate the business in

best possible way.

8.2 Important Assumptions

This business plan was developed for Milkyway, assuming the following:

For the initial implementation of plans adequate loan will be taken from the bank. Competition and buying patterns remain similar to those used for forecasting. Long-term interest rate will be no more than 12%.


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New customers will be gained through direct sales and advertising. Sales will increase 5% in second year of operation. All the financial statements are assumed under the use of e-commerce platform.

If Milkyway will not use the e-commerce platform for doing the business, the initial investment

needed will be lower than the mentioned below. Although the installment of the system cost high

at the initial phase it will reduce the operating expenses, which will definitely help to achieve

higher profit along with providing platform to communicate directly with the customer.

8.3 Break-even Analysis

Break-even is based on fixed costs of approximately Rs. 1,200,000 including loan repayment,

insurance, maintenance and labor. Additionally, controllable such as service labor, taxes,

advertising and legal/professional fees are included. Margins are harder to assume. Our FY 2005

gross margin is forecasted at 69.98%. In the following years our gross margin will continue to

grow beyond our starting point because of the continued growth in total product sales.

Break-even Analysis

Monthly Revenue Break-even in Rupees Rs.2, 000,000

Assumptions:

Average Percent Variable Cost 40%

Estimated Monthly Fixed Cost 1,200,000

8.4 Projected Profit and Loss

Cost of sales reflects our cost to manufacture the feed and purchase all other non-manufactured

products. Gross margin will continue to rise at a steady pace throughout the years forecasted.

Advertising and marketing expenses (news ads, magazine ads, etc.) are projected to increase as

net profits increase and positive results are accomplished as a direct result of the same marketing

and advertising.


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Depreciation forecasted includes normal wear and mechanical tune-ups on plant and machinery,

trucks and all equipment in the factory. Fuel and electricity costs are projected to grow as the

amount of sales made that require delivery increase. This projected expense includes electricity,

fuel for the vehicles etc.

Projected income statement (using e-commerce)

Particulars

Amt (Year

1)

Amt (Year

2)

sales revenue 62,000,000 68200000

Total revenue 62,000,000 68200000

Less: Variable cost

Service Charge to eSewa 1,798,000 1,977,800

Direct Material Cost 11,000,000 12,100,000

Rent expenses 1,500,000 1,650,000

Advertising and promotion 3,000,000 3,300,000

Insurance expenses 1,300,000 1,430,000

Water and electricity 1,700,000 1,870,000

Telephone expenses 850,000 935,000

Stationary expenses 250,000 275,000

Fuel expenses 1,750,000 1,925,000

Maintenance expenses 950,000 1,045,000

Total Variable Cost 24,098,000 26,507,800

Less: Fixed Cost

Salaries and wages 8,500,000 8500000

Domain Name Registration 1,000 1,000

Website hosting 96,000 96,000Rent 1,800,000 1,800,000

Depreciation 1,750,000 1,750,000

Total Fixed Cost 12,147,000 12,147,000

Total Cost (Fixed + Variable) 36,245,000 38,654,800


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EBIT (Earnings before Interest and Tax) 25,755,000 29,545,200

Less: Interest 1,200,000 1,200,000

EBT (Earnings before Tax) 24,555,000 28,345,200

Less: Tax @ 40% 9,822,000 11,338,080

Net Profit 14,733,000 17,007,120

If e-commerce platform is not used than some of the expenses will not incurred such as service

charge to eSewa, domain name registration, website hosting etc. But while operating the business

it will reduce the operating cost of the business. If e-commerce platform is used for doing

business, it will be easy to process the order, it will reduce the human resource needed etc. The

income statement without using e-commerce platform will be as follows.

Projected income statement (without e-commerce)

Particulars

Amt (Year

1)

Amt (Year

2)

sales revenue 58,000,000 63,800,000

Total revenue 58,000,000 63,800,000

Less: Variable cost

Sales Commission 2,500,000 2,500,000

Direct Material Cost 11,000,000 12,100,000

Rent expenses 1,500,000 1,650,000

Advertising and promotion 3,000,000 3,300,000

Insurance expenses 1,300,000 1,430,000

Water and electricity 1,700,000 1,870,000

Telephone expenses 850,000 935,000

Stationary expenses 250,000 275,000

Fuel expenses 1,750,000 1,925,000

Maintenance expenses 950,000 1,045,000

Total Variable Cost 24,800,000 27,030,000

Less: Fixed Cost


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Salaries and wages 8,500,000 8,500,000

Rent 1,800,000 1,800,000

Depreciation 1,750,000 1,750,000

Total Fixed Cost 12,050,000 12,050,000

Total Cost (Fixed + Variable) 36,850,000 39,080,000

EBIT (Earnings before interest and Tax) 21,150,000 24,720,000

Less: Interest 1,200,000 1,200,000

EBT (Earnings before Tax) 19,950,000 23,520,000

Less: Tax @ 40% 7,980,000 9,408,000

Net Profit 11,970,000 14,112,000

Net income using e-commerce is higher than without using it because of the operating cost

reduction due to e-commerce platform.

8.5 Projected Cash Flow

The cash flow projection for Milkyway shows that provisions for ongoing expenses are adequate

to meet the needs of the company, as the business generates sufficient cash flow to support

operations and future expansions. Cash flow projections are critical to our success. The monthly

cash flows for the first year are shown as follows:

Particulars Year 1 Year 2

1. Cash-flow from operating activities

Net Income 14,733,000 17,007,120

Adjustment of non-cash expenses:

Depreciation 1,750,000 1,750,000

Adjustment of change in working capital

Increase in inventory (2,400,000) (240,000)

Increase in accounts receivable (2,000,000) (200,000)


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Increase in accounts payable 1,560,000 156,000

Increase in Accruals 1,440,000 144,000

Net cash from operating activities 15,083,000 18,617,120

2. Cash-flow from investing activities

Purchase of Furniture (1,200,000)

purchase of vehicle (5,500,000) -

purchase of plant and machinery (6,420,000) (5,637,120)

Purchase of office supplies (800,000) (800,000)

Net cash from investing activities (13,920,000) (6,437,120)

3. Cash-flow from financing activities - -

Net change in cash 1,163,000 12,180,000

Add: Cash and bank at the beginning of the year 4,637,000 5,800,000

Cash and bank at the end of the year 5,800,000 6,380,000

8.6 Projected Balance Sheet

The Balance Sheet shows healthy growth of net worth, and strong financial position. It is a

summary of the financial balances of the company. Milkyway is strong enough to meet the any

obligation at required time.

There are two different balance sheets presented below, one is balance sheet if doing business

using e-commerce and another one is without e-commerce.


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Projected Balance sheet (using e-commerce)

Assets Year 1 Year 2 Lib. and Equity Year 1 Year 2

1. Current Assets

1. Current

liability

Cash 2,700,000 2,970,000 Account payable 1,560,000 1716000

Bank 3,100,000 3,410,000 Accruals 1,440,000 1584000

Inventory 2,400,000 2,640,000

Total current

liability 3,000,000 3300000

Account Receivable 2,000,000 2,200,000 2. Equity

Total current assets 10,200,000 11,220,000 Equity 10,000,000 10,000,000

2. Fixed Assets loan @ 12% 10,000,000 10,000,000

Furniture 1,200,000 1,200,000 Retained earning 4,950,000 5,670,000

Vehicles 5,500,000 5,500,000 Total equity 24,950,000 25,670,000

Accumulated dep. -550,000 -550,000

Office supplies 800,000 800,000

Equipment 12,000,000 12,000,000

Accumulated dep. -1,200,000 -1,200,000

Total fixed assets 17,750,000 17,750,000

Total Assets 27,950,000 28,970,000

Total liability &

equity 27,950,000 28,970,000


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Projected Balance Sheet (Without e-commerce)

Assets Year 1 Year 2 Lib. and Equi Year 1 Year 2

1. Current Assets 1. Cur liability

Cash 2,700,000 2,970,000 Account/P 1,560,000 1716000

Bank 3,100,000 3,410,000 Accruals 1,440,000 1584000

Inventory 2,400,000 2,640,000

Total current

liability 3,000,000 3300000

Account Receivable 2,000,000 2,200,000 2. Equity

Total current assets 10,200,000 11,220,000 Equity 10,000,000 10,000,000

2. Fixed Assets loan @ 12% 10,000,000 10,000,000

Furniture 1,200,000 1,200,000 R/E 1,950,000 2,670,000Vehicles 5,500,000 5,500,000 Total equity 21,950,000 22,670,000

Accumulated dep. -550,000 -550,000

Office supplies 800,000 800,000

Equipment 9,000,000 9,000,000

Accumulated dep. -1,200,000 -1,200,000

Total fixed assets 14,750,000 14,750,000

Total Assets 24,950,000 25,970,000

Total liability

& equity 24,950,000 25,970,000

8.7 Business Ratios

Milkyways projected business ratios areas bellows.

Current Ratio = Current assets / Current Liabilities

Year 1: 10,200,000/3,000,000 = 3.4 times

Year 2: 11,220,000/3,300,000 = 3.4 times

Quick Ratio = Quick Assets / Current Liabilities


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Year 1: 7,800,000 / 3,000,000 = 2.6 times

Year 2: 8,580,000/ 3,300,000 = 2.6 times

Debt to assets ratio = Total debt / Total asset

Year 1: 10,000,000 / 27,950,000 = 0.3578

Year2: 10,000,000 /28,970,000 = 0.3452

Net profit margin = Net Income/ Total Sales

Year 1: 14,733,000/62,000,000= 23.7629%

Year 2: 17,007,120/68200000 = 24.9371%

Percent of Total Assets

Year 1 Year 2

Inventory 7.16% 9.11%

Other Current Assets 27.91% 29.62%

Total Current Assets 36.49% 38.73%

Long-term Assets 63.51% 61.27%

Total Assets 100.00% 100.00%

8.8 Long-term Plan

Milkyway, is expected to grow at a steady pace. As we expand our customer base, offer more

products and bring more demand in the existing market, we will be positioning Milkyway

amongst the elite Dairy factory in the nation. We will continuously review our business plan as

we implement changes. By doing so, we will ensure accuracy and stability. Our goal is to take

over this great business, protect it, nurture it, and provide for it. Doing these things will enable usto grow and expand the business in a professional atmosphere.

Milkway is planning to increase the sales volume by 15% in the year 3 and thereafter. Having

advance technology and doing business in e-commerce platform will help milkyway to grab the

large number of customer in the future too. Although the installation of the system costs high at


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first it will provide the competitive advantage for the company and reduce the cost also

accordingly in the following year.

final e commerce laxman

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