kitchen creations completed business plan[1]

Running Head: Kitchen Creations Business Plani

Kitchen Creation’s Business Plan

By Michelle Walker & Christina Miller

Walsh University S.P.S.

BJ Seif

October 19th, 2011

Kitchen Creations 2

Table of Contents Page1.0 Executive Summary 4

1.1 Introduction 41.2 Objective 41.3 Mission Statement 5

2.0 Company Summary 62.1 Company History 62.2 Locations & Facilities 62.3 Management Team 7

3.0 Products and/or Services 83.1 Current Products 83.2 Future Products 83.3 Sourcing & Fulfillment 9

4.0 Management Team 104.1 Organization 10

5.0 Marketing Strategy 115.1 Markets & Analysis 115.2 GDP & PPP Evaluation 155.3 Competitor’s Analysis 165.4 SWOT 16

6.0 Implementation Strategy 186.1 Phase I Expansion Regions 196.2 Phase II Expansion Regions 196.3 Phase III Expansion Regions 21

7.0 Execution Strategy 227.1 Prior Implementation 227.2 Manufacturing & Transportation 227.3 Phase I Execution 237.4 Phase II Execution 237.5 Phase III Execution 237.6 Assumptions 24

8.0 Product Change Strategy 258.1 Modifications 258.2 Packaging & Instructions 26

9.0 Ordering 279.1 Web Considerations & Changes 27

9.1.1 Language Considerations 279.1.2 Online Payments 27

9.2 Phone & Online Orders 2810.0 Management Team 29

10.1 Changes to Current Organization 2910.2 Additional Personnel 29

Kitchen Creations 3

Table of Contents Page10.3 Cultural Training 3010.4 Selling Strategy Considerations 31

10.4.1 Sales 3210.4.2 International Distributors 3210.4.2.1 Distributor Fees 32

10.5 Future Considerations 3310.6 Staffing Needs 33

11.0 Unit Forecast 3411.1 Phase I Units 3411.2 Phase II Units 3411.3 Phase III Units 3511.4 Forecast of Year Units 36

12.0 Implementation Costs 3912.1 Phase I Shipping Costs 3912.2 Phase II Shipping Costs 4212.3 Phase III Shipping Costs 4212.4 Cost Breakdown 43

13.0 Financial Analysis 4513.1 Sales Revenue 45

13.1.1 Phase I Revenue 4513.1.2 Phase II Revenue 4613.1.3 Phase III Revenue 46

13.2 Phase Analysis 4913.3 Cash Flow Projection 5013.4 Year Analysis & Break Even 5113.5 ROI 53

14.0 Risks Analysis 5514.1 Competition 5514.2 Market Acceptance 5514.3 Investment 55

15.0 Support Analysis 5615.1 Inventory on Hand & Handling Terms 5615.2 Turnaround Time 56

15.3 Support Location 5615.4 Personnel Needed 5715.5 Warranty 57

16.0 Exit Strategy 5816.1 Exit Conditions 58

16.2 Proactive Planning 58

Appendix A-Regional Cost Chart 59Appendix B- Pricing Comparison Chart 60

Kitchen Creations 4

1.1 Introduction

Kitchen Creations has proven itself as a successful and dynamic company.

For more than 30 years, we have been providing consumers across the United

States with quality kitchen products at great prices. We have managed to thrive

even in these tough economic times, making over $100 million last year. With a

highly experienced management team, Kitchen Creations has risen above the

competition. Today we are looking to share our wonderful products with the rest of

the world. In the following pages, you will find a plan for that expansion, a 12-

month project.

EXECUTIVE SUMMARY

1.2 Objective

Kitchen Creations strives to provide high quality products at affordable prices

for restaurant owners, cooking enthusiasts, and specialty shops. Opened in 1980 by

CEO Michelle Walker and President Christina Miller, Kitchen Creations is expanding

from a strictly domestic business to a global business. Through innovation, creative

marketing, and top quality products, Kitchen Creations plans to expand into

Western Europe, Canada, Mexico, and Asia within the next twelve months. We will

provide consumers and business owners all over the world with our “It's For Life”

Blend-All Blender and Max Mixer. An opportunity for success exists in developing

markets for exceptional quality commercial appliances that carry a limited lifetime

guarantee. Kitchen Creations lifetime guarantee creates competitive advantage

over our major competitors, who offer one-year manufacturer warranties and

Kitchen Creations 5

extended protection plans. Our success in International expansion will rely on this

advantage as well as utilizing our highly experienced staff, and effective marketing

approach.

1.3 Mission Statement

Kitchen Creations maintains a tradition of conducting its operations in

accordance with both the law and the highest standards of business ethics and

integrity. We value the reputation of our good name within the communities that we

serve. We are committed to providing top of the line products in a global

environment.

Kitchen Creations offers a continual focus on the personal development and

growth of our employees. We offer a wealth of opportunities with significant

advancement potential to anyone who enjoys working with and serving others,

embraces diversity and innovation, and has a strong commitment to being the best.

We care about our communities and take social responsibility and

environmental protection seriously. We work with several charitable organizations,

providing funding and assistance through corporate support and employee

engagement programs.

Kitchen Creations 6

COMPANY SUMMARY

2.1 Company History

Kitchen Creations, founded by Michelle Walker (currently CEO) and Christina

Miller (currently President), began as a partnership in 1980 selling their “It’s for

Life” line of high quality commercial appliances, and soon grew to a privately held C

corporation. The company’s shares are held by Michelle Walker, Christina Miller,

two family members, and three private investors. Kitchen Creations has become a

well-known name among restaurant owners, culinary institutions, cooking

aficionados, such as Rachel Ray and Emeril, and specialty shops such as Starbucks

and Pulp. Our blenders have become an industry staple across the United States.

Previous year’s sales topped $100 million, and with global growth, the opportunities

are endless.

Through constant process improvement and many phases of product

improvement as well as warranty extension, Kitchen Creations has ensured that our

products exceed current standards and are dedicated to continuous improvement.

We are ISO 9001 registered, ensuring our customers the benefit of consistent

service and products.

Kitchen Creations 7

2.2 Locations & Facilities

Kitchen Creations corporate office and parent plant is located in Akron, Ohio.

We also have manufacturing and fulfillment facilities located in Michigan, Louisiana,

Arizona, Oregon, Colorado, and New York. We also maintain a strong web

presence, with 80% of orders coming through our website,

www.kitchencreations.com.

2.3 Management Team

**Bio of Management Team Attached in Management Organization Section**

Kitchen Creations 8

PRODUCTS & SERVICES

3.1 Current Products

Michelle WalkerCEO

Christina MillerVice President

Keith MillerProduction

Rita NelsonServices

Victor AdlerHR

Aaron McCauley Sales

Marketing John Howard

R & DClaven Tesla

AdministationLeah Smith

Benoit DervishiForeign Relations

Kitchen Creations 9

Kitchen Creations currently sells a variety of commercial and noncommercial

kitchen appliances, from can-openers, to pasta makers in our “It’s for Life” line of

products. Previous year’s sales for this line was in excess of $100 million.

3.2 Future Products

Kitchen Creations will offer commercial quality blenders for use by

professional chefs, restaurants, specialty shops and culinary institutions. Two

options are offered, a lower-end model, called the Max Mixer and a high-end model,

called the “It’s For Life” Blender. Each product uses a universal plug, with adaptors

available where applicable. We provide manufacturing, customer service, and order

fulfillment.

“It’s For Life” Blend-All Blender – (Illustration 3.1)

Commercial Quality 2 peak horsepower motor that propels blades up to 240 MPH 1380 watt motor Chop, cream, blend, cook, grind, knead, churn, and more with one

machine Cleans itself with a drop of dish soap and warm water, just run for 30

seconds Preprogrammed settings allow for restaurant quality creations 64 oz. container & 8 quart mixing bowl Lifetime warranty

Illustration 3.1

Kitchen Creations 10

Max Mixer-(Illustration 3.2)

Chop, cream, blend, cook, grind, knead, churn, and more with one machine

5 year limited warranty Stainless steel blades that go up to 150 MPH 800 watt motor 32 oz. Container Dishwasher Safe

Illustration 3.2

3.3 Sourcing & Fulfillment

We will take orders at our Akron, OH office, which will be automatically sent

to our distribution company, Worldwide Distributions. Product will primarily be

shipped from our Ohio and New York manufacturing facilities to the port in Newark,

NY.


MANAGEMENT TEAM

4.1 Management Organization & Qualifications

Aaron McCauley, Sales Manager

Aaron has 20+ years experience as a sales manager. He has consistently achieved

a strong record of outperforming sales quotas, developing new business, and

strengthening customer relations. He also brings advanced knowledge in

ecommerce solutions. In the five years Aaron has been with Kitchen Creations, he

has generated on average 200 new accounts annually, becoming a major driver in

our business growth.

Previously, Aaron was a Sales Manager for Dell Corporations where he was awarded

sales manager of the year for three consecutive years. Dell Corporations has been

one of the leading industries for desktop computers and laptops.

Aaron’s responsibilities as Kitchen Creations Sales manager is to capitalize on new

revenue potential, assign sales territories, set goals, establish training programs for

their sales representatives, and advise on ways to improve sales performance and

achieve goals in order to obtain expected quotas.

Keith Miller, Production Manager

Keith Miller holds a Master’s Degree in Management obtained from Akron

University. He has ten years experience in operations and previously worked for

Little Tikes in Hudson Ohio where he oversaw production of their high-quality,

innovative children’s products.


Keith Miller’s responsibilities for Kitchen Creations include overseeing the

production process, drawing up production schedules, and cost effectiveness

analysis. He is responsible for on-time production, as well quality control in order to

meet the standards set by the ISO 9001. He is responsible for maintenance of

equipment, liaising among different departments (the suppliers, department heads,

etc.), ensuring health and safety guidelines are followed along with company

policies and goals, reviewing performances, and identifying training needs.

John Howard, Marketing Manager

John Howard is a highly qualified Marketing Manager with 10 years of distinguished

service in the manufacturing industry. Previously John was employed by Curtis, a

software development company, based in Akron, Ohio, that created and developed

software applications, like OEM imaging. John Howard’s strategic planning skills and

excellent presentation skills helped make Curtis products a leader in their

respective industry segments.

John Howard’s responsibilities for Kitchen Creations are to develop marking plans,

coordinate with web teams to develop web sites and e-commerce logistics, develop

financial models including forecasting, marginal analysis, and pricing policy,

collaborate with research professionals to conduct primary research, successfully

execute business plans, and communicate on various levels.

Rita Nelson, Customer Service Manager

Rita Nelson recently left HH Gregg as a department supervisor and joined our team

as the Service Manager. She has brought with her a high-energetic and results-


oriented professional personality. She has a lifetime of sales and customer service

experience from working in retail for over 30 years.

Rita will be the key contact and company representative for the company

partnership with Worldwide Distribution. She will oversee the transition from

company fulfillment centers to distribution through Worldwide Distribution. She will

work with Worldwide Distribution to establish high call center standards and

implement automated call center customer survey and tracking systems in order to

measure customer service performance. She will monitor all customer relations,

whether through Worldwide Distribution or through Kitchen Creation’s website.

Claven Tesla, Research & Development

Claven Tesla, great, great, great, grandson of Nikola Tesla, inventor and mechanical

engineer credited for his contribution in commercial electricity, holds degrees in the

fields of computer, electrical, mechanical and civil engineering and has worked for

Kitchen Creations for 7 years.

Claven’s responsibilities for Kitchen Creations are to oversee all scientific aspects on

research projects. He will be responsible for recruitment of qualified scientists, the

allocation funds for company projects, and developing research projects to measure

Kitchen Creation’s success. Additionally, he will provide advice and suggestions to

senior managers on R & D options available in the organization, build and manage

experimental programs for testing equipment, and assuring excellence of products.

He will also manage the inspection and/or modification of electrical components,


mechanical and quality assurance for all markets, and be responsible for giving

demonstrations and presentations of new products.

Benoit Dervishi, Foreign Relations

Benoit is a recent hire with 15 years of broad-based international experience from

companies such as Coca-Cola bottling Company, IBM, Hoover, and Ford Motor

Company. He is highly articulate and an effective communicator, who is fluent in

several languages, and works well with individuals on all levels. He possesses

expertise in developing business plans for expansion, interpersonal skills and cross-

functional team interactions, as well as in utilizing intelligence and facilities,

allowing several companies to successfully expand internationally under his

direction.

Benoit’s responsibilities with Kitchen Creations will be to oversee the company’s

foreign business by having the knowledge and awareness of various cultures,

political and operational challenges of foreign markets, finance and foreign

currency, as well as available opportunities in foreign markets. He will also serve as

the primary contact for global distributors, take responsibility for project deadlines,

and in accord with company and U.S. policy, regarding exporting products to foreign

destinations, establish and monitor procedures and service standards for export

clearance standards and conduct training and seminars for staff and clients in

shipping and export administration.


MARKETING STRATEGY

5.1 Marketing Analysis

Kitchen Creation’s target market for the lower-end blenders is adults with

families, ages 30-50, are middle to upper class and love to cook and bake. Primarily

women, the target market is looking for reasonable priced kitchen appliances that

will help them whether making dinner or a birthday cake for their child. They spend

a lot of their free time cooking, and are very enthusiastic about the products they

use.

We intend to reach this market through targeted marketing in cooking

magazines, such as Taste of Home, as well as Parents Magazine and Real Simple

Magazine. Commercials will air in primetime slots for shows such as Desperate

Housewives, Dancing with the Stars, and other top-rated female favorites as well as

daytime commercials during soap operas, Ellen, The View, etc. We have an

agreement with Rachel Ray, who uses our product on her show, and will air

commercials with special pricing for viewers during that time-frame. We will also

market the product on home-shopping channels such as QVC and the Home


Shopping Network. Finally, we will also provide advertising in online format through

news sites, social networking sites, and entertainment sites.

Kitchen Creation’s target market for the upper-end blenders is middle to

upper class owners of restaurants, coffee shops, bakeries, smoothie shops and

other specialty shops that frequently use blenders. The target market will already

be established in their respective industries with disposable income to spend on

product improvements. Quality is of the utmost importance to these businesses,

which is why Kitchen Creation’s lifetime guarantee is so important.

We intend to reach this market through trade journal advertising for

industries such as coffee and snack shops, chain restaurants, and individual single

site restaurants. We will participate in trade shows and conferences related to the

food industry, with special discounts if our products are purchased during the show.

We will list our products in food service catalogs as well as online advertising for

food service retailer sites.

The coffee and snack shop industry as well as chain restaurant industry

comprised an estimated $9.57 trillion in consumer spending in 2011, with an

expected $10.9 trillion in consumer spending by 2016. These figures show that

Kitchen Creations has an opportunity to capitalize on the success of these industries

by providing innovative, high quality, reasonably priced products that will help to

streamline their operations.

5.2 GDP & PPP Evaluation

In evaluating markets for expansion, we looked at several factors. We chose

regions with high or rapidly growing GDP (purchasing power parity). We also looked


at each country/region’s real growth rate from 2010, to ensure that there was

positive growth. We evaluated each area’s consumer pricing and local purchasing

power in comparison to the United States. Finally, we researched the current

economic conditions of each region and selected those that were already

established free markets, or those in the process of becoming a free market. We

ruled out Italy, Russia, and Guatamala.

*Please see attached chart for comparison of regions*

Expansion Plan

Phase 1 France Germany United KingdomPhase 2 Costa Rica Mexico CanadaPhase 3 India China Hong Kong

5.3 Competitor’s Analysis

Primary competitors for the lower-end model include Vitamix, Oster,

Blendtech, and Hamilton Beach. However, each of these companies sells much

cheaper, and lower quality, products. Their products are available at stores like

Target, Macy’s. Walmart, and Bed Bath & Beyond. Though technically competition,

they aim for a different target market than Kitchen Creations, and do not pose much

of a threat. Their target market is lower income, with casual and occasional users.

Competitors for the professional chef include the Power Pro Blender, Kitchen

Aid, and Vitamix Professional Series. Neither, however are currently selling

anywhere other than the U.S. The longest warranty is for 7 years and provided by

Vitamix.

Primary Competition

It’s For Life Competition Max Mixer Competition


Power Pro Blender Braun Power BlendKitchen Aid Vitamix

Vitamix Professional OsterKenwood Blendtech

Hamilton Beach

5.4 SWOT

Strengths

Kitchen Creations has a solid foundation and reputation in the Unites States,

as well as several U.S. customers that also operate globally, such as Starbucks. We

create our products with the finest parts and put finished product through multiple

tests to ensure peak performance. We offer a lifetime guarantee. Only one of our

competitors currently ships to Europe, all others are strictly U.S. based. We are ISO

9001 certified. We employ an excellent, and highly experienced, management

team. Prior year sales in the U.S. were $100 million.

Weaknesses

We have no prior experience in global sales. Our manufacturing plants are

spread throughout the U.S., which could pose a problem in terms of getting product

to the various overseas markets in a timely fashion if in a crisis. The majority of our

management team is primarily used to dealing in the United States. We have little

knowledge of international laws, political systems, and trade barriers. We currently

do not have a brick and mortar retail support system, but rely entirely on phone and

internet sales.

Opportunities

We have a great opportunity to reach entirely new markets with our

products. Many of the regions we are expanding into are favorite tourist locations,


meaning an added number of specialty shops and restaurants as potential

customers. We have the opportunity to build relationships with retail partners and

manufacturers’ in the global areas we will be operating, allowing us to further

expand our product and potentially, to lower costs. We have an opportunity to gain

a great deal of market share, considering our competition does not ship

internationally.

Threats

There is a threat that Kitchen Creations could fail in one, several, or all of the

market expansions. There may be existing stores selling blenders in the various

markets that we are unaware of, which would pose additional competition. We may

face skepticism or even hostility upon entering a new market. There may be

political factors, or challenges, that we will be forced to deal with in any one of the

markets. Additionally, we could miscalculate the projected sales and end up sitting

on a lot of inventory that we cannot sell, tying up capital.

IMPLEMENTATION & STRATEGY

In every area we analyzed, GDP indicated a healthy economy, and each area

showed a positive real growth rate in 2010. Though none was as high as the United

States, each region appears to be a good choice for expansion, with the exception

of Italy, Guatemala, and Russia. Each of the regions, while varying in terms of

economic practices, either has already established a free-market economy, or is

transitioning in that direction, (with the exception of Italy).This indicates a trend

toward globalization and a positive market environment in which to market our

products.


France

German

y

United

Kingdom

Italy Costa

Rico

Mex-ico

Canada

India Rus-sia

China

Hong

Kong

United

States

GDP 74.54

2.94 2.173

1.774

51.17

1.56699999999999

1.33 4.06 2.223

10.09

325.8

14.66

Real Growth Rate

1.5 3.5 1.3 1.3 4.2 5.2 3.1 10.4 4 10.3 6.8 2.8

25

75

125

175

225

275

325

GDPReal Growth Rate

6.1 Phase I Expansion Regions

Our first expansion will be into Western Europe. We compared France,

Germany, United Kingdom, and Italy. Consumer prices in Europe are higher

than those in the U.S.; however, local purchasing power is lower. This

indicates that consumers are able to buy less with their disposable income,

which was comparable to the average monthly disposable income in the

Unites States.


France Germany United Kingdom

Italy05

1015202530354045

22.97

1.06

21.36

40.72

Local Purchasing Power

Local Purchasing Power

6.2 Phase II Expansion Regions

Our second phase of expansion will be into Mexico and Canada. We analyzed

Costa Rica, Mexico, Guatemala, and Canada. Guatemala was determined not to be

a productive market for expansion. With the lowest GDP of all regions compared,

and a lack of information on consumer pricing and local purchasing power it seemed

a risky move. Mexico, overall, is characterized by lower consumer prices, local

purchasing power, and disposable income. However, since signing the NAFTA trade

agreement, expanded seaports, railroads, telecommunication, and airports makes it

an accessible market for expansion. Furthermore, the fact that Mexico is a free

market economy that enacted the North American Free Trade Agreement (NAFTA)

in 1994 means expansion should be less problematic than in other areas. Canada’s

economy is very similar to that of the U.S. and Canada also enacted NAFTA in 1994,

as well as the U.S. Canada Free Trade Agreement in 1989, which implies that

expansion is a good option for Canada.


Costa Rico Mexico Guatamala Canada

GDP 51.17 1.56699999999999

70.15 1.33

Local Pur-chasing Power

56.93 52.31 0 6.69

Median Monthly Disposable Salary

975 845.51 510 3018.76

250

750

1250

1750

2250

2750

3250

GDPLocal Purchasing PowerMedian Monthly Disposable Salary

6.3 Phase III Expansion Regions

Finally, our third phase of expansion is Asia. We analyzed India, Russia,

China, and Hong Kong, finding all but Russia to be a viable expansion point. Of all

the regions, Asia shows the highest levels of real growth rate in 2010. India is

currently developing into an open-market economy. China, though slowly, is

transitioning into a more market- oriented system and Hong Kong is already


operating under a free market economy. While still developing, Asia is a good

opportunity for business growth.

India Russia China Italy0

2

4

6

8

10

12

2.84

10.3

6.8

Real Growth Rate

Real Growth Rate

EXECUTION STRATEGY

7.1 Prior to Implementation

Three to six months prior to execution, several individuals need to be hired and trained.

Personnel Needs


Personnel Quantity NeededInformation Technology Professionals (Experienced in International Business)

2

Call Center Representatives (bilingual) 10International Consultant 1Loading Warehouse Personnel 2

The IT professionals will work with our current IT team to create a duplicate

website in French, German, Spanish, and Chinese. Customers will have the option

of choosing which website they want through a highly visible drop down box in the

top and center of our current webpage. The call-center representatives will be

trained by our service manager, Rita Nelson, in order to be able to troubleshoot,

take and process orders, handle returns, etc. prior to expansion. The International

Consultant will help Kitchen Creations to ensure a smooth transition into the various

markets. He will consult on packaging and instructions, website creations, as well

as be a hands-on participant in the actual phases of implementation.

7.2 Manufacturing/Transportation

Of the five manufacturing plants, Ohio and New York will produce product

strictly for our international orders. Road Runner Transportation will truck the

product from Ohio to New York. All product will ship out of the port in Newark, New

York. Production needs to be at full capacity. 50,000 units of each product need to

be ready to ship by the execution date. Though we only ship 12,000 units in phase

1 we want to ensure that we have a cushion throughout the implementation process

in case we need to quickly move product.

7.3 Phase I Timeframe


o Phase 1: France, Germany, and the United Kingdom. o Timeframe: 6 months

Sales Manager, Foreign Relations Manager, and Consultant are on-site

throughout implementation. Product ships from port in Newark, New York to

Worldwide Distribution’s Belgium distribution center. Website and call-center reps

route orders to DC for fulfillment.

7.4 Phase II Timeframe

o Phase 2: Mexico, Costa Rica & Canadao Timeframe: 3 months

Sales Manager, Foreign Relations Manager, and Consultant stationed in

Mexico. Local executives will be in charge of Canada implementation. Orders will

be fulfilled through World Distribution’s New York distribution center. 75,000 units

will be shipped during phase 2.

7.5 Phase III Timeframe

o Phase 3: India, China, and Hong Kongo Timeframe: 3 months

Sales Manager, Foreign Relations Manager, and Consultant are on-site

throughout implementation. Product ships from New York Mfg. facility to Belgium

Distribution Center. Website and call-center reps route orders to DC for fulfillment.

135,000 units will be shipped during phase 3.


Implementation

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Implementation Plan By Month

January-JuneJuly-SeptemberOctober-December

France, Ger-many, United Kingdom

Mexico Costa Rica, Canada

IndiaChinaHong Kong

7.6 Assumptions

1 out of 500 units will may be defective 200 units will be on hand for every 100,000 for replacement The New York Manufacturing Plant will focus on providing product for

Europe. Estimated time between deliveries: 1 month, initially Future plans include building a manufacturing plant near Belgium and

hiring an executive staff.


PRODUCT CHANGE STRATEGIES

8.1 Product Modifications

The logo on each design will need to be modified/translated for the

appropriate market. After researching the various plugs used in each region, we

determined that it would be easier to include a universal adaptor, rather than

modify the products for each region.

Country/

Region

Design

Modificatio

ns

Certification

Considerati

ons

New Labels

and Marketing

MISC.

France Logo in

French

Fitted with

Europlug

230 Volt

Instructions &

Packaging in English

& French

Germany Logo in

German

Europlug Instructions &


& German

EuroPlug (France,

Germany & United

Kingdom)

United

Kingdom

No Change

Necessary

Europlug Instructions &


Canada None 240 Volt

Modifications

Instructions &


Mexico/Costa

Rica

Logo in

Spanish

Same as U.S.,

Canada

Instructions &


& Spansih

Japan Logo in

Japanese

100 Volt-Step

Down

Instructions &


& Japanese


Converter

Needed

China Logo in

Chinese

220 Volt Flat

blade or V-

blade plug

Instructions &


& Chinese

Flat blade

plug

V-shaped

flat prongs

Hong Kong Logo in

Mandarin

220 Volt,

Rounded

Triangle Plugs

Instructions in

English, &

Mandarin.

Three round pins

arranged in a triangle

Three round

pins arranged in a

triangle

Two parallel

flat pins with ground pin

8.2 Packaging & Instructions


Instructions will be printed in English and the primary language for each region.

Packaging will reflect a region’s culture, in a manner that will be appropriate and

eye-catching for sales/marketing purposes.

ORDERING

9.1 Web Considerations

The IT professionals will work with our current IT team to internationalize our

website in order to improve communications with our wide international audience,

which includes the United States, Canada, Mexico, France, Germany, Costa Rica,

India, United Kingdom, China, and Hong Kong.

9.1.1 Language Considerations

Customers will have the option of choosing which language they want

through a highly visible menu to the left of the page, as well as easy national flag

navigation buttons across the top of the page (See Figure 3.1).

9.1.2 Online Payments

We will use Paypal, Visa, Mastercard, and American Express. Customers also

have the options of entering their routing number and account number to authorize

an automatic transfer from their bank account.

Our customer service page will include email addresses as well as phone

numbers for customers to contact us with any web issues, problems related to

ordering, or general questions and feedback. This will be beneficial in building

loyalty and also a good tool to gain valuable feedback to use for future

improvements.


9.1.3 Future Enhancements

Further enhancements include a Frequently Asked Questions page, an instant

messaging option during normal business hours, and a delivery calculator that tells

the customer when they can expect to receive their product. There will also be a

link allowing customers to post feedback on our website.

9.2 Phone & Online Orders

The call-center representatives will be trained by our service manager, Rita

Nelson, in order to be able to troubleshoot as well as take and process online &

phone orders. They will also handle the returns, customer service complaints,

confirmation emails, email alerts, new product information, and registration

information.

The International Consultant, working with our Director of Foreign Relations,

will help Kitchen Creations to ensure a smooth transition into the various markets.

He will assist in developing a training program for the company, as well as in

implementation. He will consult on packaging and instructions, website creations,

as well as be a hands-on participant in the actual phases of implementation.


MANGEMENT TEAM

10.1 Change to Current Organization

New Hires Cost/Salary Responsibility Current Mgr. Responsible for

Training4 Loading Personnel

$37,500 Each Annually(2 at NY, 2 at AZ)

Load product from NY & AZ Fulfillment centers to be sent to international markets.

Keith Miller-Production Manager

10 Bilingual Customer Service Representatives

$30,000 Each Annually

3 Each to Manage each phase of Implementation

Rita Nelson-Customer Service Manager

2 IT Professionals $45,000 Each Annually

Work with existing team to format website for all regions/languages

John Howard-Marketing Manager

International Consultant

$150,000 (18 mos.)

Assist with coordination of each implementation, Educate current staff on different cultures/Ensure proper licensing, packaging, and certifications are followed in each region

N/A

10.2 Additional Personnel

Bilingual Customer Service Representatives


Kitchen Creations will hire 2 bilingual representatives for each of the languages we

will be dealing with (Spanish, French, German, Chinese, and Japanese), in addition

to English. Rita Nelson and the current customer service team will train them in the

company procedures. Hire date will be 3 months prior to Phase 1.

Information Technology Professionals

Kitchen Creations will hire two additional IT professionals whose primary

responsibility will be to convert the current website to the new website tailored for

each region. The team will work with Benoit Dervishi, our Director of Foreign

Relations to ensure that adaptations are made for each region to ensure that the

proper grammar, culture, and graphics are utilized. Hire date will be 6 months prior

to Phase 1.

International Consultant

Kitchen Creations will hire an International Consultant to work will the entire

management team to prepare for all phases of implementation, including but not

limited to cultural differences, packaging, licensing, and certification requirements,

shipping regulations, and import/export regulations. The consultant will also

accompany our Sales Manager to the site of each implementation phase to assist in

coordination of the process and ensure a smooth transition into the international

markets we have targeted. Hire date will be 6 months prior to Phase 1.

10.3 Culture Training Considerations


Cultural Training: Kitchen Creation’s Director of Foreign Relations, along with the

International consultant will create and implement a training program for all current

Kitchen Creations employees educating them on the various cultural differences

relevant for each region.

Foreign Language Courses: Kitchen Creations will cover the cost of foreign language

classes at Akron University for interested employees. All top management is

required to enroll. Cost per class is $1,155.57

Load

ingCSR IT

Consulta

nt

In House Tra

ining Costs

*Akro

n Universi

ty Costs

Total

Costs $-

$100,000.00

$200,000.00

$300,000.00

$400,000.00

$500,000.00

$600,000.00

$700,000.00

$800,000.00

$900,000.00

Staffing & Training Costs

Staffing & Training Costs

*Assuming 15 Enrollments


10.4 Selling Strategy Considerations

10.4.1 Sales

Method of Sales: Online, Phone

Percentage of Sales per avenue: 80% Online 20% Phone

Cost of Website Upgrade: $10,000

Website Maintenance: $150/Month

Telecommunications: $2000/Month

10.4.2 International Distributors

Method of Fulfillment: New York & Ohio Kitchen creations Fulfillment Centers

Distribution Centers:

Phase 1: Worldwide Distribution, located in Brussels, Belgium - European

Distribution

Phase 2: Worldwide Distribution, located in Albany, NY – Mexico, Costa Rico, &

Canadian Distribution

Phase 3: Worldwide Distribution, located in Beihal, China – Asian Distribution, &

Brussels, Belgium –European Distribution


10.4.2.1. Monthly Distribution Center Fees:

Fixed “Rental” Cost: $1,500 each

Cost Per Case: $ .10

Phase 1 Phase 2 Phase 3 Total Distribuion Costs

$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$4,500 $4,500 $4,500 $3,000

$6,000 $9,000

$7,500 $10,500

$13,500

$31,500

Distribution Costs through Implementation

Fixed CostCost Per CaseTotal DC Costs

10.5 Future Considerations

Once established in all markets, hire a regional sales manager for each.

Further staffing needs as required

Potential for International Fulfillment Centers in future

10.6 Staffing Needs

Met through Akron, Ohio Corporate Office and Fulfillment Center


UNIT & COST FORECAST

11.1 Phase I Units

Units Shipped Per Regions in Phase I

France 4,000

Germany 4,000

United Kingdom 4,000

Total Units 12,000

France Germany United Kingdom Total Units 0

2,000

4,000

6,000

8,000

10,000

12,000

11.2 Phase II Unit Forecast


We will increase the units to 6,000 units each for regions of phase I (50-50 mix of low and

high end) and begin to ship to regions Mexico, Costa Rico, and Canada, 4,000 units each.

Total units shipped will be 30,000 units for phase II.

Units Shipped Per Regions in Phase II

France 6,000

Germany 6,000


Mexico 4,000

Costa Rico 4,000

Canada 4,000

Total Units 30,000

France

German

y

United Kingd

omMex

ico

Costa Rico

Canad

a

Total

Units0

5,000

10,000

15,000

20,000

25,000

30,000



11.3 Phase III Unit Forecast


We will continue to ship to regions I & II but will also continue to increase units shipped to

our other regions as market acceptance increases. We will also begin to ship 4,000 units

each to regions India, China and Hong Kong, for a total of 60,000 total units shipped in

Phase III.

Units Shipped per Region in Phase III

France 10,000

Germany 10,000


Mexico 6,000

Costa Rico 6,000

Canada 6,000

India 4,000

China 4,000

Hong Kong 4,000

Total Units 60,000

France

German

y

United Kingd

omMex

ico

Costa Rico

Canad

aIndia

China

Hong Kong

Total

Units

0

10,000

20,000

30,000

40,000

50,000

60,000




11.4 Forecast of Total Units for First Year

France, Germany, and the United Kingdom will see 20,000 units each shipped during the

first year. Mexico, Costa Rico, and Canada, will see 10,000 units each shipped during the

first year. India, China, and Hong Kong, will see 4,000 units each shipped the first year.

Total number of units to be shipped is 102,000 with 12,000 units shipped in phase I,

30,000 units shipped in phase II, and then 60,000 units shipped in phase III.

Yr 1 - Units Shipped Per RegionFrance 20,000Germany 20,000United Kingdom 20,000Mexico 10,000Costa Rico 10,000Canada 10,000India 4,000China 4,000Hong Kong 4,000Total Units 102,000

France

German

y

United Kingd

omMex

ico

Costa Rico

Canad

aIndia

China

Hong Kong

Total

Units0

20,000

40,000

60,000

80,000

100,000

120,000

Yr 1 - Units Shipped Per Region



France

German

y

United Kingd

omMex

ico

Costa Rico

Canad

aIndia

China

Hong Kong

Total

Units0

20,000

40,000

60,000

80,000

100,000

120,000



Units Shipped Trend

Phase I Phase II Phase III Total0

20,000

40,000

60,000

80,000

100,000

120,000


IMPLEMENTATION COSTS

12.1 Phase I Shipping Costs

After considering two reputable freight service providers, we decided to use Road

Runner Transportation Services (found at www.freightrater.com) to move our

merchandise from our warehouse in Akron, Ohio to the port or distributor in New

York. They outbid typical semi-truck transportation by ¾ of the cost because they

use different carriers such as freight rail. (See Table 12.1)

Phase I costs will include costs of $20,907.98 freight cost to ship to the port Newark

in NY, a cost of $109,943.90 for shipping charges from the port Newark to the Port

of Brussels in Belgium (Found using shipping calculator.com see figure 12.2), and

approximately $10,000 forecasted for customs, duties, and misc. fees.

Phase I will also incur 50% of the cost of training and staffing the expansion, or

$391,167 and distribution costs of $7500, and Advertising costs of $200,000 (See

Table 12.3).

Phase I shipping will be CIF (destination – Brussels, Belgium)

CFR (Cost and Freight) Seller paid costs necessary to bring the goods to the named port of destination.

CIF (Cost, Insurance and Freight) Same as CFR but seller also has to include marine insurance loss or damage to goods during the shipment.

http://www.freightrater.com/


Table 12.1

Carrier NameEst. Days

Dir./Indir. Est. Price

Roadrunner Transportation ServicesInsurance Included.

3 Direct $20,907.78

YRC 2 Direct$1,084,233.4

5

Shipping Details:

From OH 44312 to NY 12214Ready for pickup 11/01/11

400 Boxes of New commercial goodsFreight class: 50 Dimensions: 12 x 24 x 18 in.Total weight: 10000 lbs. Stackable: Yes Hazardous: No

Quoted on: 10/03/2011Carrier: Dugan Truck LineEstimated Transit: 3 Business days

Total: $1,408.25 USD

Sign Up Now


Figure 12.2

DESCRIPTION VALUE RATE QTY. AMOUNT

Freight 40' Container $1,532.00 20 $30,640.00

Bunker Adjustment Factor [BAF Charges] 40' Container $80.00 20 $1,600.00

Warfage 0.01 MT $2.90 $2.90

Bill Of Lading $50.00

GRI Charges $75.00 20 $1,500.00

Residential Pickup Charges $35.00

Charges for High Security Seal (What is this?)

$15.00

Surcharge for Personal Effects (with or without Cars)

$120.00

Drayage to Loading Area (11 - 50 Miles)

$485.00 20 $9,700.00

Fuel Surcharge $2,231.00

Customs Brokerage Fee $0.00

Delivery Charges (11 - 50 Miles) $0.00 20 $0.00

Insurance Charges ($500 Deductible)(Type Of Goods: Household Goods – International Move (with or without Cars))

$3,300,000.00 2 % $66,000.00

Shipper's Declaration (Over $2,499.00) $3,300,000.00 $50.00

Less: Online Allowance $2,000.00

Total US $109,943.90

12.2 Phase II Shipping Costs


Phase II costs will be $41,815.86 freight service charges using Road Runner

Services (See table 4.12) to move 12,000 units to our distributor in Albany, NY, and

18,000 units to the port of Newark, NY.

From the port of Newark, NY, the charges will be CIF (destination – Brussels,

Belgium) of $109,943.90 to move 30,000 units, plus the additional costs of

approximately $10,000 for customs, duties, and misc. fees.

Phase II will also have costs of $195,583 for staffing & training (1/4 of a yr),

distribution costs of $10,500, and $400,000 advertising expenses.

12.3 Phase III Shipping Costs

Phase III will have costs of $62,723.34, to move 42,000 units using Road Runner

Services to move from our facilities in Akron, Ohio to the port of Newark, NY, and

18,000 units to our distributor in Albany, NY.

From the port of Newark NY, shipping charges will be $219,887.80 to move 42,000

units CIF (destination- BeihaI, China) and 18,000 units CIF (destination-Brussels),

plus the additional costs of approx. $10,000 for customs, duties, and misc. fees.

Phase III will also have costs of $195.583 for training & staffing (1/4 of a yr),

distribution costs of $13,500, and $600,000 advertising expenses.

Figure 12.3

Cost Forecast Phase I Phase II Phase III

http://en.wikipedia.org/wiki/Beihai


Shipping cost FCA Road Runner Service 20,907.78 41,815.56 62,723.34

FOB Seaport 109,943.90109,943.9

0219,887.8

0Customs, duties, & Misc Fees 10,000.00 10,000.00 30,000.00

Hiring Personnel 391,167.00195,583.0

0195,583.0

0Distribution Costs 7500.00 10,500.00 13,500.00

Advertising 200,000.00400,000.0

0600,000.0

0Total Costs of Implementation 739,518.68

767,842.46

1,121,694.14

12.4 Cost Breakdown

In breaking down the cost per unit, we see that in phase I costs per unit will average

the most because of phase I’s time frame being that of 6 months. On average

though, between the cost of product changes and the cost of shipping, the cost per

unit is around $111.27 for the “It’s For Life” high-end model and $81.27 for the

“Max Mixer” low-end model.

It’s For Life Blender Cost Per Unit

Max Mixer

Cost of Product 90.00 60.00

Cost of Product Changes Packaging and Instruction 5.00

5.00

Labels & Certification 5.00 5.00

Cord/Adapter 6.50 6.50

Unit Cost 106.50 76.50


Units Costs

Shipping$243,351.6

8$130,443.9

0$363,611.1

4Units $12,000 $30,000 $60,000Average Cost of Unit w/shipping $8.11 $2.17 $4.04Plus Cost of Product Changes

$106.50/76.50

$106.50/76.50

$106.50/76.50

High End Total Unit Costs $114.61 $108.67 $110.54Low End Total Unit Costs $84.61 $78.67 $80.54

*Shipping costs include FCA Road Runner Service, FOB Seaport,

Customs/Duties/Misc. Fees, Distribution Costs, and Hiring/Training Costs for

additional Loaders only.*


FINANCIAL ANALYSIS

13.1 Sales Revenue

Unit costs were determined using the pricing comparison table (Table 13.1

Appendix B). Our marketing team, together with the international consultant,

compared pricing in each of the regions using similar blender brands and

determining the mark-up used in each region. As a secondary comparison, they

compared the price of the same model of new car in each region to help ensure our

pricing was in-line with regional pricing.

13.1.1 Phase I Revenue


The 6,000 high-end & 6,000 low-end units that will be shipped during phase I will

generate $3,897,008 in revenue.

Phase I High End SalesRegions Units Unit Cost COGS Sales Revenue Gross Profit

United Kingdom 2,000 114.61 $229,220.00 $815,168.00 $585,948.00 Germany 2,000 114.61 $229,220.00 $730,432.00 $501,212.00 France 2,000 114.61 $229,220.00 $852,544.00 $623,324.00 Phase I High End Totals $687,660.00 $2,398,144.00 $1,710,484.00

Phase I Low End SalesRegions Units Unit Cost COGS Sales Revenue Gross Profit

United Kingdom 2,000 84.61 $169,220.00 $509,488.00 $340,268.00 Germany 2,000 84.61 $169,220.00 $456,528.00 $287,308.00 France 2,000 84.61 $169,220.00 $532,848.00 $363,628.00 Phase I Low End Totals $507,660.00 $1,498,864.00 $991,204.00 Total High & Low End Totals 12,000 $1,195,320.00 $3,897,008.00 $2,701,688.00 Unit Breakdown $99.61 $324.75 $225.14

13.1.2 Phase II Revenue

Phase II will increase the number of units shipped to phase I regions, and begin

shipping a 50-50 mix of low end and high end units for regions of phase II bringing

the total to 30,000 units generating $8,681,548.00 in sales revenue.


Phase II High End

UnitsUnit Cost COGS

Sales Revenue Gross Profit

United Kingdom 3,000 108.67 $326,010.00 $1,222,752.00 $896,742.00 Germany 3,000 108.67 $326,010.00 $1,095,648.00 $769,638.00 France 3,000 108.67 $326,010.00 $1,278,816.00 $952,806.00 Canada 2,000 108.67 $217,340.00 $783,104.00 $565,764.00 Mexico 2,000 108.67 $217,340.00 $607,616.00 $390,276.00

Costa Rico 2,000 108.67 $217,340.00 $599,980.00 $382,640.00 Phase II High End Totals $1,630,050.00 $5,587,916.00 $3,957,866.00

Phase II Low End

UnitsUnit Cost COGS


United Kingdom 3,000 78.67 $236,010.00 764,232.00 $528,222.00 Germany 3,000 78.67 $236,010.00 684,792.00 $448,782.00 France 3,000 78.67 $236,010.00 799,272.00 $563,262.00 Canada 2,000 78.67 $157,340.00 359,740.00 $202,400.00 Mexico 2,000 78.67 $157,340.00 287,792.00 $130,452.00

Costa Rico 2,000 78.67 $157,340.00 197,840.00 $40,500.00

Phase II Low End Totals $1,180,050.00 $3,093,668.00 $1,913,618.00 Total High & Low End Totals

30,000 $2,810,100.00 $8,681,584.00 $5,871,484.00

Unit Breakdown $93.67 $289.39 $195.72

13.1.3 Phase III Revenue

Phase III will ship a total of 60,000 units, a 50-50 mix of low-end & high-end models

for regions of phase III, and an increase in units shipped to regions I & II. Sales

revenue generated totals $18,345,700.00.


Phase III High End

UnitsUnit Cost COGS


United Kingdom 5,000 110.54 $552,700.00 $1,957,760.00 $1,405,060.00 Germany 5,000 110.54 $552,700.00 $1,826,080.00 $1,273,380.00 France 5,000 110.54 $552,700.00 $2,131,360.00 $1,578,660.00 Canada 3,000 110.54 $331,620.00 $1,174,656.00 $843,036.00 Mexico 3,000 110.54 $331,620.00 $899,970.00 $568,350.00 Costa Rico 3,000 110.54 $331,620.00 $911,424.00 $579,804.00 China 2,000 110.54 $221,080.00 $2,664,200.00 $2,443,120.00 India 2,000 110.54 $221,080.00 $356,320.00 $135,240.00 Hong Kong 2,000 110.54 $221,080.00 $607,616.00 $386,536.00 Phase III High End Totals $3,316,200.00 $12,529,386.00 $9,213,186.00

Phase III Low End

United Kingdom 5,000 80.54 $805,400.00 1,273,720.00 $182,900.00

Germany 5,000 80.54 $805,400.00 1,141,320.00 $976,200.00

France 5,000 80.54 $805,400.00 1,332,120.00 $67,900.00

Canada 3,000 80.54 $604,050.00 539,610.00 $137,850.00

Mexico 3,000 80.54 $604,050.00 431,688.00 $475,170.00

Costa Rico 3,000 80.54 $604,050.00 296,760.00 $137,850.00

China 2,000 80.54 $402,700.00 238,624.00 $301,350.00

India 2,000 80.54 $402,700.00 164,192.00 $190,350.00

Hong Kong 2,000 80.54 $402,700.00 298,280.00 $488,100.00 Phase III Low End Totals $5,436,450.00 $5,716,314.00 $2,957,670.00 Phase III Total High + Low 60,000

$8,752,650.00

$18,245,700.00

$12,170,856.00

Unit Breakdown102,00

0 $145.88 $304.10 $202.85


High End Product Sales Revenue

Low End Product Sales Revenue

Total Sales Revenue$0.00

$2,000,000.00

$4,000,000.00

$6,000,000.00

$8,000,000.00

$10,000,000.00

$12,000,000.00

$14,000,000.00

$16,000,000.00

$18,000,000.00

$20,000,000.00

Sales Revenue Projections

Phase 1Phase 2Phase 3


13.2 Phase Analysis

The product costs and sales revenue per unit have been carried over from the Sales

Revenue tables in order to show monthly operating breakeven point.

Monthly Fixed

Costs

Fixed Costs

Insurance 2,200.00

Rent 6,800.00

Utilities & Telecommunication 3,340.00

Telecommunication Payments 2,000.00

Machine & Equipment 5,500.00

Land & Building 4,400.00

Total Fixed Costs $24,240.00

Variable CostsPhase I Variable

CostsPhase II Variable

Costs

Shipping Costs FCA Road Runner 20,907.78 41,815.56

CFI Seaport 109,943.90 109,943.9

Customs, Duties & Misc. Fees 10,000.00 10,000

Hiring Personnel 391,167.00

Distribution Costs 7,500.00 10,500

Advertising 200,000.00 400,000

Wages & Salaries 700,000.00 466,666.67

Product Costs (Table 5.1) 1,195,320.00 2,810,100.00

Total Variable Costs 2,634,838.68 3,849,026.13

Fixed Costs (6 Months/3 Months/3 Months) 133,440.00 72,720.00

Revenue per unit 324.75 299.49

Variable Costs per Unit $219.57 $128.30Operating Breakeven Point (UNITS) 1268.68 424.79


13.3 Cash Flow Projection

Sales revenue has been carried over from the Sales Revenue tables, as well as all

other expenses.

Quarter 1 will not generate any revenue because our invoicing terms are 20% 30

net 60 and we will make the assumption that our distributor will take advantage of

the 20% discount and pay within 30 days.

Q1 Q2 Q3 Q4

CASH REVENUES

Revenue from Product Sales $0.00 $3,897,008.0

0 $8,681,584.0

0 $18,245,700.0

0

TOTAL CASH REVENUES$3,897,008.0

0 $8,681,584.0

0 $18,245,700.0

0

CASH DISBURSEMENTS

Salaries and Wages 350,000.00 350,000.00 350,000.00 350,000

Onetime expenses 195,583.50 195,583.50

Promotion Expense Paid 100,000.00 100,000.00 400,000 600,000

Rent/Mortgage Payments 6,800 6,800 6,800 6,800

Insurance Paid 2,200 2,200 2,200 2,200Telecommunications Payments 1,340 1,340 1,340 1,340

Utilities Payments 2,000 2,000 2,000 2,000

Machine & Equipment 5,500 5,500 5,500 5,500

Land & Building 4,400 4,400 4,400 4,400

Operating Expenses 597,660.00 597,660.00 2,810,100.00 8,752,650.00TOTAL CASH DISBURSEMENTS 1,265,483.50 1,265,483.50 3,582,340.00 9,724,890.00

RECONCILIATION OF CASH FLOW


Add Beginning Cash Balance 0 -1,265,483.50 1,366,041.00 $6,465,285.00

Add: Total Cash Revenue $0.00 $3,897,008.0

0 $8,681,584.0

0 $18,245,700.0

0 Deduct: Total Cash Disbursements 1,265,483.50 1,265,483.50 3,582,340.00 9,724,890.00

CLOSING CASH BALANCE($1,265,483.5

0)$1,366,041.

00 $6,465,285.

00 $14,986,095.

00

Q1 will end with a negative cash balance that will be carried over to Q2

Q2 generates enough revenue to cover the prior quarter’s negative cash balance

and to pay for the current phase’s expenses but it does not generate enough

revenue to cover Q3. Positive cash balance is carried over to the next quarter. Q3

makes enough revenue to cover current phase expenses and the excess cash is

carried over to Q4. By the end of Q4 we are making enough profit, to cover the

following quarter’s expenses.

1 2 3 4($1,265,483.50)

$1,366,041.00

$6,465,285.00

$14,986,095.00

CLOSING CASH BALANCECLOSING CASH BALANCE


13.4 Year Analysis & Break Even

Sales revenue has been carried over and calculated into yearly sales revenue.

Variable costs have also been carried over and calculated into yearly variable costs

and then broken down to variable costs per unit of $168.98

The firm’s break-even operating point is the point at which its total operating costs

(the sum of its fixed & variable costs) equals sales revenue

Break Even

Units Unit Cost Total

Total Fixed Costs $278,880.00

Total Variable Costs 2093.46 168.98 $353,752.87

Total Operating Costs $632,632.87

Average Sales Revenue per unit 2093.46 302.2 $632,643.61

Break Even Point is at approximately 2093.46 units

Q1 Q2 Q3 Q4 12 months

Units 0 12,000 30,000 60,000Operating Costs 597,660.00 597,660.00

$2,810,100.00 $8,752,650.00 12,758,070.00

Sales Revenue $0.00 $3,897,008.0

0 $8,681,584.0

0 $18,245,700.0

0 $30,824,292.0

Fixed Costs $66,720.00 $66,720.00 $72,720.00 $72,720.00 $278,880.00

Variable costs$1,317,419.3

4 $1,924,513.0

7 $3,849,026.1

3 $10,145,427.8

1 $17,236,386.3


Breakeven Point

At this point, Earnings before taxes & interest are $0

Above this point, we will make profit

Below this point, we will have a loss

(See Table below)

13.5 Return on Investment

Return on Invest is: Gain from Investment - Cost of Investment

Cost of Investment

Q1 will be the only quarter in which we have a negative return. From Q2 and forward, the return continues to increase over time.


Q1 Q2 Q3 Q4

Gross Profit -1,265,483.50$1,366,041.0

0 $6,465,285.00 $14,986,095.00 Cost of Investment 1,265,483.50 1,265,483.50 3,582,340.00 9,724,890ROI -200.00% 7.95% 80.48% 54.10%

1 2 3 4

-200.00%

-150.00%

-100.00%

-50.00%

0.00%

50.00%

100.00%

ROI

ROI


RISK ANALYSIS

14.1 Competition Market Positions

Currently there is very little competition in the regions that we chose. The

biggest competitors are Kitchen Aid for our high-end model and Braun Power Blend

for our low-end model. Kitchen Creation’s products are priced cheaper than the

competition, giving us a competitive advantage. We also offer longer warranties

than that of any of our competitor’s.

14.2 Market Acceptance of Our Product

As with any new product introduced into a market, there is a chance that

customers will reject it. Initially, we may face skepticism or even hostility.

However, since similar products are already being used and we offer the

competitive advantage of lower prices and longer warranties, we are confident that

consumers will accept and purchase our products.

14.3 Investment

The first quarter is incredibly risky, since we will be investing heavily and

receiving no return on that investment. Starting in the second quarter though, we

will begin to see a profit that steadily increases from quarter to quarter. There is


the risk that sales will not go as planned, and we will have to go for a longer period

without seeing a return on our investment. Such a situation could cause serious

financial concerns for Kitchen Creations. On the other hand, we will still have our

U.S. operations to sustain us through any difficult times, with over $1 million in

sales annually.

SUPPORT ANALYSIS

15.1 Inventory on Hand & Handling Returns

We will maintain a cushion of 25,000 cases of each of our products at each of

our three distribution centers. In case of emergency we could also ship from one of

our five manufacturing sites directly to the customer.

All returns will be processed through the Customer Service Department in

Akron. If the product is damaged, we will ship replacement product on the same

day we receive the damaged package (if during business hours). Customer service

places the order with the DC and sends the confirmation email. Customer should

receive product within 2-3 days and will receive a confirmation email letting him/her

know that his/her replacement product is on the way.

15.2 Turn Around Time

Each order that is received at the corporate office is instantly transmitted via

the ordering system to whichever DC the product will ship from (based on location).

Typically, a customer will receive their product in 3-5 days, barring any disasters.

Shipments between Kitchen Creations and Worldwide Distributions will occur once a

month initially, and increase as needed.

15.3 Support Location


Our support location is Kitchen Creations Corporate office in Akron, Ohio. Our

manufacturing plants in Akron and New York will provide the product for the

expansion project. We also have manufacturing plants in Michigan, Louisiana,

Arizona, Oregon, and Colorado that can be utilized if necessary.

15.4 Support Team

15.5 Warranty

“It’s For Life” Blender: Lifetime warranty for manufacturer defects. Provides for full

replacement of product.

Christina Miller President Michelle Walker CEO

Aaron McCauley Sales Manager

5 Assistant Sales Managers

Keith Miller Production Manager

Warehouse & Loading Personnel

John Howard Marketing Manager

3 IT Personnel

Rita NelsonCustomer Service

Manager

25 Customer Service Representatives

Claven Tesla Research/Development

Victor AdlerHuman Resources

Benoit Dervishi Foreign Relations


Max Mixer: 5 year limited warranty on parts and electrical. Provides for

replacement of specific parts, or in the case of electrical issues, full product

replacement.

*Customers must register their product through our website to be eligible for

warranty.*

EXIT STRATEGY

16.1 Exit Conditions

Under the following situations, Kitchen Creations will exit the region.

Reason For Exit Timeframe of ExitFailure of Phase 1 1 monthPolitical Upheaval, War, Dangerous Situation

Immediately

Natural Disaster (Rebuild Possible) As soon as possibleFinancial Crisis for Kitchen Creations, or affecting Kitchen Creations to the point of no profit.

1 month

16.2 Proactive Planning

Management teams will visit the various regions one every 3-6 months to monitor

processes, environment, to ensure that standards are being upheld. These visits

will also help us to build relationships with our partners, which will give us a local

contact for information sharing. For the first 5 years, monthly sales and budget

analyses will be conducted to ensure that we are on plan. Our Director of Foreign

Relations will be directly responsible for monitoring current events, market


conditions, and political situations so that we can be prepared and plan ahead in the

face of a crisis.

Summary

We sincerely hope you enjoyed our presentation. We hope you share in our

excitement over the global success Kitchen Creations can achieve. With your help,

we can accomplish great things in virtually untapped markets. With the further

development of countries worldwide, there is a tremendous opportunity for growth.

Kitchen Creations hopes to capitalize on that opportunity. We hope that you will

share in and support our vision, creating an extremely successful partnership. We

are confident that we have considered all aspects of this expansion and are fully

prepared to make it an extremely profitable endeavor.

kitchen creations completed business plan[1]

Documents

objective kitchen creations

introduction kitchen

quality kitchen products

phaseii units

phaseiii units

phaseii execution

phaseiii execution

phasei units