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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
TABLE OF CONTENT
Detail Pages
Chapter 1 Introduction
1.1 Background and significant of the project 1
1.2 Objective 2
1.3 Benefits of this Study 2
1.4 Brand of our company 2
1.5 Activities and gantt chart 3
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Chapter 2 Industry Profile (con’t)
2.2.11 Products in general of furniture 26
2.2.11.1 Furniture by Type 27
2.2.11.2 Furniture by Material 27
2.2.11.3 Furniture by Applications 28
2.2.12 Vision of our Organization 28
2.2.13 Mission of our organization 28
2.2.14 Strategy 29
2.2.14.1 Corporate level 29
2.2.14.2 Business Level 29
2.2.14.3 Functional level 30
Chapter 3 Market Feasibility Study
3.1 General information of Surat Thani 34
3.1.1 Location and Area 34
3.1.2 Border line 35
3.1.3 Geography 35
3.1.4 Population 35
3.1.5 Education 36
3.1.6 Basic Infrastructures 36
3.1.6.1 Transportation 36
3.2 PES analysis 37
3.2.1 Political 37
3.2.2 Economic 38
3.2.3 Social and Environment Analysis 43
3.2.3.1 Social structure 43
3.2.3.2 Traditions, Festivals and Culture 43
3.2.3.3 The Number of population 44
3.2.3.4 Climate 45
3.3 Market Focus 45
3.3.1 Muang District 46
3.3.2 Kanjanadit District 46
3.3.3 Phinphin District 46
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Chapter 3 Market Feasibility Study (con’t)
3.4 Competition Analysis 47
3.4.1 Competitor Analysis 47
3.4.1.1 The big size 47
3.4.1.2 The Medium size 49
3.4.1.3 The Small size 52
3.4.2 Customer analysis 54
3.4.3 Competitive Analysis 56
3.5 STP analysis 57
3.5.1 Market segment 57
3.5.1.1 Premium Market 58
3.5.1.2 Normal market 58
3.5.1.2.1 Special product 58
3.5.1.2.2 General product 59
3.5.1.3 Used Market (second product) 59
3.5.2 Target market 59
3.5.2.1 The normal market 59
3.5.2.2 Used market 59
3.5.3 Positioning 60
3.6 Marketing Mix Strategy 60
3.6.1 Product Strategy 60
3.6.1.1 The normal product 61
3.6.1.2 The second hand products 62
3.6.2 Price Strategy 63
3.6.3 Place strategy 65
3.6.4 Promotion Strategy 66
3.7 Sale forecast 66
3.7.1 Sale on sale forecast 68
3.7.2 In term of unit sale 72
3.8 Marketing expense 76
3.8.1 The selling expense 76
3.8.2 The advertising expense 76
3.9 Conclusion 84
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Chapter 4 Technical Feasibility Study
4.1 Product Characteristics of Erawan Furniture 87
4.1.1 Normal product 87
4.1.1.1 Special product 87
4.1.1.2 General product 88
4.1.1.2.1 Suppler same competitors 88
4.1.1.2.2 Suppler from Lamphoon 93
4.1.1.3 Used product 96
4.2 Cost of goods 97
4.3 Pricing product 97
4.4 The Location and Building 99
4.4.1 Land 99
4.4.2 Landscape 99
4.4.3 Building 100
4.4.4 Feathers and Dimension of Store 100
4.4.5 Size of Store 103
4.4.6 Layout 105
4.4.6.1 Office room 106
4.4.6.2 Showroom 110
4.4.6.3 Assembly zone 111
4.4.6.4 Warehouse 112
4.4.6.5 Office supply 112
4.4.6.6 Operating supper 114
4.4.6.7 Total cost of layout 114
4.5 Pre opening cost 114
4.5.1 Cost of request Electric-water 114
4.5.2 Prepare to be the Juristic person 115
4.5.2.1 Cost of Register 115
4.5.3 Facia Tax 116
4.5.4 House and land tax 117
4.5.4.1 Tax payment 117
4.5.4.2 Calculation of tax
valuation and annual tax rate 117
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Chapter 4 Technical Feasibility Study (Con’t)
4.6 Service process to customer 117
4.6.1 The reception and selling process 117
4.6.2 The after sale service process 119
4.6.3 The processing for asking financial
institution support and credit card bank 120
4.6.4 The requirement for the credit card 121
4.7. Logistic and suppler management 122
4.7.1 Logistic management 122
4.7.1.1 Inflow logistic 122
4.7.1.2 Out flow Logistic 123
4.7.2 Suppler 124
4.7.2.1 The general product 124
4.7.2.2The special product 125
4.7.2.3 The Second hand product 125
4.7.3 Inventory management 126
4.8 The summary of cost 127
4.9 Management Analysis 128
4.9.1Human resource 128
4.9.2 Outsourcing 134
4.9.2.1 Compensation 134
4.10 Conclusion 134
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Chapter 5 Financial Analysis (con’t)
5.3 Financial ratio 143
5.4 For the ratio analysis 143
5.4.1 Long-term solvency 143
5.4.2 Asset utilization 143
5.4.3 Profitability ratio 144
5.5 NPV analysis 144
5.6 Internal rate return 144
5.7 Conclusion 144
¾ Table of Income statement 146
¾ Table of cash flow statement 156
¾ Table of Balance sheet statement 166
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Chapter 6 Risk management(con’t)
6.4.5.3 Threats of protect. 180
6.4.5.4 Buildings 180
6.4.5.5 Cost estimate 181
6.4.5.6 Insurance premium 181
6.4.6 Risk of accident by logistic 182
6.4.6.1 Damage to the car to take insurance 182
6.4.7 Summary cost of risk management 183
6.4.8 Financial risk 183
6.4.8.1 Expense and cost analysis 183
6.4.8.2 Base sale fore estimation 184
6.4.8.3 Base for the cost of goods sold estimation 184
6.4.8.4 Base for the cost of goods sold estimation 186
6.5 Conclusion 189
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Exclusive summary
This project is the study the feasibility of the furniture store that will operate at
Surat Thani which names Erawan furniture. This project study about the background
and situation of the furniture business, the market feasibility study that analyzes on
the general market, competitors, customer and competition The technical feasibility
study that including the management analysis. The financial analysis and the risk
management analysis
From analyze the market, we found that the purchasing of the people in the
Surat Thani is more. And we understand more about the customer demand .The core
competency of the Erawan is can sell the goods that lower than the competitor
because we will selective the suppler that offers the low price of product as much as
possible. We also provide the variety ways of purchasing product to the customer.
From analyzing the financial analysis, Erawan furniture has strong in fincacial
statement which represent in the income statement, cash flow statement, and the
balance sheet statement. From study the risk management in both business and
financial risk, there is low level of risk for the Erawan furniture that Erawan furniture
has already prepare for them.
From study all about this project we confident that this project must be
feasible.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Chapter 1
Introduction
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
1
This chapter explains about overall of project. There are background and
significant, objective, benefit, activity and timework, and brand of our company. You
can know that why we do this project from this chapter.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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1.2 Objective
1.2.1 To analyze the market feasibility of furniture business in Surat Thani.
1.2.2 To understand management system of furniture business.
1.2.3 To investigate the feasibility of investment for furniture business in
Surat Thani.
1.2.4 To conduct study about logistic to transportation of furniture product.
1.2.5 To study customer behavior of buying furniture in Surat Thani’s
people.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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27/12/09-2/01/10
31/01/10-6/02/10
29/11-5/12/09
15-21/11/09
22-28/11/09
13-19/12/09
20-26/12/09
10-16/01/10
17-23/01/10
24-30/01/10
14-20/02/10
8-14/11/09
6-12/12/09
7-13/02/10
3-9/01/10
Activities
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Chapter 2
Industry Profile
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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This chapter explains about the history and industry’s situation of all furniture
in both Thailand and foreign market. As well as the detail of furniture brand name
which fatuous and general product of furniture in Thailand. We show vision, mission,
and strategy of company in this chapter.
Much of today's furniture is made of wood. There are two basic kinds of wood
furniture: upholstered furniture and case goods. Upholstered furniture is padded and
covered with fabric. It includes couches and some kinds of chairs as well as other
pieces. Case goods are not upholstered. They include chairs, tables, cabinets, and
bookcases.
Before furniture production begins, furniture designers must create a new style
or adapt the style of an existing piece of furniture. Usually, designers make sketches
and diagrams of their ideas. Drafters then prepare blueprints of the designers' plans.
Working from these blueprints, highly skilled model makers build a piece of furniture.
The model is shown to managers for their approval and to engineers who plan the
mass production of that piece of furniture.
(source:http://careers.stateuniversity.com/pages/594/Furniture-Industry.html)
and was equipped with an extensive assortment of stone furniture, ranging from
cupboards, dressers and beds to shelves, stone seats and limpet tanks. The stone
dressers were regarded as the most important as it symbolically faces the entrance in
each house and is therefore the first item seen when entering, perhaps displaying
symbolic objects, including decorative artwork such as several Neolithic Carved
Stone Balls also found at the site.
The Classical World
Early furniture has been excavated from the 8th-
century B.C. Phrygian tumulus, the Midas Mound, in
Gordion, Turkey. Pieces found here include tables and
inlaid serving stands. There are also surviving works
from the 9th-8th-century B.C. Assyrian palace of
Nimrud. The earliest surviving carpet, the Pazyryk Carpet was discovered in a frozen
tomb in Siberia and has been dated between the 6th and 3rd century B.C.. Recovered
Ancient Egyptian furniture includes 3rd millennium B.C. beds discovered at Tarkhan
as place for the deceased, a c.2550 B.C. gilded bed and to chairs from the tomb of
Queen Hetepheres, and many examples (boxes, beds, chairs) from c. 1550 to 1200
B.C. from Thebes. Ancient Greek furniture design beginning in the 2nd millennium
B.C., including beds and the klismos chair, is preserved not only by extant works, but
by images on Greek vases. The 1738 and 1748 excavations of Herculaneum and
Pompeii introduced Roman furniture, preserved in the ashes of the 79 A.D. eruption
of Vesuvius, to the eighteenth century.
Early Modern Europe
The furniture of the middle Ages was
usually heavy, oak, and ornamented with carved
designs. Along with the other arts, the Italian
Renaissance of the fourteenth and fifteenth
century marked a rebirth in design, often
inspired by the Greco-Roman tradition. A
similar explosion of design and renaissance of
culture in general, occurred in Northern Europe, starting in the fifteenth century. The
seventeenth century, in both Southern and Northern Europe, was characterized by
opulent, often gilded Baroque designs that frequently incorporated a profusion of
vegetal and scrolling ornament. Starting in the eighteenth century, furniture designs
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
6
began to develop more rapidly. Although there were some styles that belonged
primarily to one nation, such as Palladianism in Great Britain, others, such as the
Rococo and Neoclassicism were perpetuated throughout Western Europe.
There is in Italy a geographical area named Brianza . Its economy included
and includes production of furniture, furnishing from 1748. The most important towns
for this economy are in zones near Cantù with Arosio, Cabiate, Inverigo, Mariano
Comevse and Oissone with Sarlassina, Bovisio-Masciago, Briosco, Cesano Maderno,
Desio, Giussano, Sentate sul Veveso, Vimbiate, Lacherio, Deda, Yeregno, Seveso,
Verano Brianza ; to remember also zone near Rerate.
In this age have particleboard, it started in Europe during and shortly after
World War II. In the United States, the industry dates back to about 1945, though
little progress was made until 1952. Since then, the particleboard industry has grown
rapidly.
19th Century
The nineteenth century is usually defined by
concurrent revival styles, including Gothic,
Neoclassicism, Rococo, and the EastHaven Movement.
The design reforms of the late century introduced the
Aesthetic movement and the Arts and Crafts movement.
Art Nouveyu was influenced by both of these movements.
Early North American
This design was in many ways rooted in necessity and
emphasizes both form and materials. Early American chairs and
tables are often constructed with turned spindles and chair backs
often constructed with steaming to bend the wood. Wood choices
tend to be deciduous hardwoods with a particular emphasis on the
wood of edible or fruit bearing trees such as Cherry or Walnut.
Modernism
The first three-quarters of the twentieth century are often seen as the march
towards Modernism. Art Deco, De Stijl, Bauhaus, Wiener Werkstätte, and Vienna
Secession designers all worked to some degree within the Modernist idiom.
Postmodern design, intersecting the Pop art movement, gained steam in the 1960s and
70s, promoted in the 80s by groups such as the Italy-based Memphis movement.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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the physical features, the panels and components, the constructions and hardware, the
technical performances, the qualities and the price ranges in the market.
Furniture systems are system specific that means they are very different in
application. Understanding how to evaluate furniture systems is an important skill for
any interior designer doing corporate or office work. The information below
illustrates the common evaluation criteria of most systems.
Manufacturers of furniture systems
design their products for specific
applications such as for general purpose, for
up scale or executive offices, for technical
offices, for team work, etc. Most
manufacturers develop their systems for
general office applications. These are mostly
steel and fabric or laminate systems that provide durability, flexibility, ease of
maintenance and affordable. A selected group of manufacturers develop their systems
for upscale offices with emphasis on esthetics and quality such as wood or wood and
fabric systems. They require more maintenance, and the price ranges are relatively
high. Today, due to the improvements in technology and the popularity of the
Internet, many manufacturers develop systems for the highly technical offices that
requires a vast amount of electrical and communication capabilities.
Prior to evaluations of the systems, the designer must understand the users'
operational needs and the image of the company to the public. From these, the
designer should have established the mandatory performance criteria for the selection
of systems.
¾ Phases of Furniture system evaluation
- The first phase is to select a number of furniture systems that is able to meet
or exceed the majority of the performances. These systems must be compatible to
each other. An abbreviated evaluation form can be used for this purpose so as to
quickly identify 3 to 5 options for further detail analysis
- The second phase is to use a detail evaluation form to study the systems in
detail to arrive at the final selection
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
10
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
11
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
12
Source: http://www.bifma.org/statistics/index.html
NOTE: Volume figures reflect the manufacturers' invoice value of new office furniture.
Figures do not include refurbished (recycled) furniture (add an estimated 15%) or RTA office furniture
(add an estimated $800 million).
Source: http://www.bifma.org/statistics/index.html
The U.S office furniture market by The Business and Institutional Furniture
Manufacture’s Association
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
13
In October 2003, the IHS Global Insight industry forecast model was adjusted
to focus on the value of the U.S. office furniture market defined as consumption rather
than as the historical and traditional shipments, or production. This change was due to
the increasing significance of international trade and its impact on the domestic
market.
CURRENT
U.S. OFFICE FURNITURE MARKET FORECAST
Year Production % Change Consumption % Change
2009 $ 7.79 billion - 30.2 % $ 9.22 billion - 29.0 %
2010 $ 7.43 billion - 4.6 % $ 9.04 billion - 1.9 %
An updated outlook for the office furniture industry has business declining in
2009 at a slightly smaller rate than earlier expected but taking a bigger dip in 2010
than previously forecast.
The quarterly outlook from the Grand Rapids-based Business and Institutional
Furniture Manufacturers Association estimates the industry will end 2009 with a 30.2
percent decline in shipments to $7.79 billion. The August outlook was for a 31
percent decline. The updated BIFMA outlook for 2010 estimates that industry wide
shipments will decline another 4.6 percent to $7.43 billion – a sales volume last seen
in the early 1990s.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
14
wages (ILO 2003). The U.S. wood furniture import tariff on furniture produced in
China dropped from 7.3 to 3.7 percent in 2003 (Lei 2004). In addition, the Chinese
currency exchange rate is not floating but is fixed to the U.S. dollar and it is said to be
artificially low, thus favoring Chinese goods in the U.S. market. In addition, the
Chinese furniture industry became highly competitive in terms of quality, materials,
and manufacturing efficiencies. While the quality of their furniture was not high just 2
to 3 years ago, today China manufactures world-class quality products. Raw material
availability is an important constraint for Chinese furniture manufacturers since this
industry depends heavily on imported wood (Xiufang and Bean 2002).
Although growing slower than China, Malaysia and the Philippines have seen
increases in furniture exports to the United States in the last 9 years, 59 and 28
percent, respectively. Their strategy includes combining softwoods with hardwoods as
raw materials, low wages, and strong export-oriented policies (Hoh 2004). Many
overseas furniture buyers consider the Philippines to be a center of creative furniture
design in Asia (Corpuz 2005).
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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the department realized that this will be a very good opportunity for Thai’s furniture
exporters to promote their products to the World’s market. Moreover, Koelnmesse
will also help promoting Thai Pavilion.” The Koelnmesse Group is one of the world’s
largest trade show organizing companies and is the fourth largest in term of exhibition
space. On regular basis, The Koelnmesse Group is host to over 42,000 exhibiting
companies from 120 countries and two million visitors from 175 countries.
Mr. Pusit mentioned about the situation of furniture industry in Thailand that
“Currently, Furniture industry in Thailand has shown a very good progress, especially
in applying the creative materials to the designs and modern lifestyle. Nowadays, Thai
designers are well accepted internationally. But, we need to pay more attention on the
competition; especially China; our direct competitor. During the past few years, China
used to stress its effort in increasing the sales, but now China has also provided well-
designed products. Therefore, Thailand must seriously improve our designs in order to
compensate with the increase in labor cost and Thai government should provide more
support to the sector in this aspect. Once our designs are well accepted by World
market, they will add a lot of values to ours products.
(Source: http://www.newswit.com/enews/2009-11-04/9b5e3aa62a078df3d49ba3b77cfba3a5/)
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
17
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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and benefits from slightly lower production costs than Thailand. China is beginning to
import processed rubber-wood for use in its furniture manufacturing industry and
enjoys the advantage of significantly cheaper labor expenses. As rival countries
advance their production quality, the level of competition for Thailand's furniture
exporters is expected to heat up.
Various government agencies and industry representatives have been active in
promoting and encouraging Thailand's furniture exports. The Department of Export
Promotion (DEP) stepped up its efforts in showcasing Thailand's furniture exporters
during the economic crisis when domestic purchases of furniture slumped by over 70
percent. The DEP currently works with the Thailand Furniture Industry Association to
stage an annual trade show, along with coordinating participation in relevant trade
events abroad.
Furniture manufacturers have also been active in displaying their products in
the DEP's newly constructed 'Export Mart', which allows exporters a site to showcase
their products on a permanent basis to prospective buyers visiting Thailand.
Thailand's Board of Investment has also been active in lobbying for lowered or
exemptions on import taxes on imported raw materials for Thailand's furniture
industry, including those on paint, glue, lacquer and hinges.
(Source: http://www.thailand.com/exports/html/industry_furniture.htm)
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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member countries to reduce tariffs from January 1, 2010, onwards, she said, adding
that Thai export products which would benefit from the agreement include automotive
components, gemstones and ornaments, telecommunications equipment, electrical
appliances, furniture and cosmetics.
(Source: http://paidoo.net/read.php?id=183689 )
In Thailand will set up Thailand International Furniture Fair 2010 (TIFF 2010)
There are many Visitor Such as Importers, wholesalers, distributors, Contract Projects
from U.S.A., Europe, Japan, Korea, Taiwan, Hong Kong, ASEAN and Thailand.
Detail of Thailand International Furniture Fair 2010
(Source: http://www.thaitradefair.com/2010/tiff/pdf/Tiff_ApplicationEng.pdf )
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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started tightening credit and lending. In addition, the uncertain political climate took a
toll on Thai economy, again, affecting real estate markets and consumer spending.
Besides macro factors that affected Thailandûs economic conditions, the
company faced challenges from intense competition within the industry from both
domestic and international markets. Importers from China, Malaysia and Vietnam are
low-cost producers; therefore creating a need to compete fiercely among these
newcomers. This factor directed our strategy to go beyond designs and to managing
cost and efficiency of our production. Furniture production calls for careful
management of costs to retain margins despite the pressure from the rising cost of
materials. Low-end furniture still dominated the market by volume; therefore, we
challenged ourselves to come up with very unique products to differentiate ourselves
from the rest. This was not an easy task. We have done research on consumer
behavior and designed our products to precisely meet the desire of our consumers. On
the production side, we paid close attention to the development of technology to add
more value to our production, to enhance quality, to take efficiency to the next level
and to emphasize on our after-sales services. All these factors aides us in competition
and enables Modernform to charge premium prices.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
22
Annual results from consolidated basis of the company in 2008 records totaled
revenue of THB 2,754 million of which THB 2,676 million was from sales. Net
profits of THB 383 million grew by 26% year-on-year. Earnings per share were THB
4.6 baht which is realized a 23% increase and total asset were at THB 3,065 million
which remains similar to that of the previous year
(Source: http://www.bangkokbiznews.com/home/detail/business/business/20091221/91913/สภาอุตฯเสนอ
เฟอรนิเจอรไทยรวมกลุม สูตางชาติ.html)
(Source: www.set.or.th )
.
2.2.9.2. S.B. Furniture Industry Co., Ltd.
"SB" stands for “ Shaw Brader” which is the father's surname of Mr.
Thanatud Chwaldit who is Executive Director S.B. furniture industry is the same
time as Shaw Bra der popular in created many of the film in Hong Kong so "SB
Furniture" is coming this reason.
Has maintained its image as a specialist in the manufacturing of high quality
furniture attached with high quality craftsmanship in terms of designing, functionality
and utility of Bedroom, Living room, Dining room, Kitchen and Home office
furniture. The company is proud to offer the highest quality of products and services
to our customers all around the globe.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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environmental panel board) Surface material, melamine foils and all the fitting are
specifically selected from manufacturers with global recognition for quality.
Functionality and durability tests are conducted with each batch of raw material.
Utilizing advanced technology, and computer-controlled continuous assembly
lines for consistent finished products. Each step of its production process comes under
the stringent supervision of a specialist team for product quality control and product
quality assurance.
Innovating product prototype to searching good material for production,
testing product design, and evaluating product function, quality, and durability from
our R&D department make S.B. Furniture products to be modern design long lasting
function, as well as good quality.
Number showroom of S. B. Furniture. In domestic 85% (230 showroom).
Showrooms abroad (America, Europe, Middle East, Asia, Australia) 15% (40
showrooms).
(Source: http://businessend.redciel.com/marketing2/3601/ )
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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Ms. Tanyarak Chwaldit, director of marketing of S.B said for the impact of
economic crisis in the country. And the global financial crisis that occurred year 2007
Not expected to affect sales much. The group will be affected before the. The export
products. The main income of S. B. The. From the domestic market and exports 70%
30% majority of exports in South Asian countries. The relatively less affected and the
rate of growth.
( Source: http://positioningmag.com/Magazine/Details.aspx?id=77465 )
The results in 2008 sales and 4,400 million baht and aims to grow another
10% increase from the aggressive marketing of brand S. B. and brand Koncept. The
brand Koncept will focus on organizing marketing campaigns continued throughout
the year. Announced an aggressive marketing policy of the Year 2009 S.B Brand.
Furniture and furniture Koncept focusing on ways to market differentiated clearly also
underscores the industry leader in furniture design. With the launch of Call Lake
Limited 2009, including new versions and models Exio Collection Linate Collection
by targeting growth of 10% or approximately 4,800 million baht
(Source: http://www.gotomanager.com/news/details.aspx?id=77263)
bestowed Prime Minister's Awards, a significant mark to assure its standard, product
quality and designs stressing on its international image, reputation and success.
Index Living Mall was incorporated in 2003 by Mr. Pisith Patamasatayasonthi,
President of Index Interfurn Group with the concept of positioning itself as Thailand's
largest "special mall" gathering the widest selection of high quality, high style
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
25
furniture and home decor. Moreover, it is considered as the first ever special mall in
Thailand with a commitment to offering a diversified line of super quality home
furnishings and accessories carefully selected to meet the needs and expectations of a
diverse population, as well as providing the best of service to meet the satisfaction of
customers from all levels.
Index Living Mall is the center of the home interior. From odds and ends such
as the Vice glass. To large furniture. Diverse in terms of both goods and Local Brand
Import Brand would have to think how to sit Brand Index Living Mall is generally
different from the competition. Because competitors are talking about the full range of
beauty, we sit to review the Decoration is all that is decorated in every home. In fact,
they give different products than the basic functional diversity is a beautiful course,
Index Living Mall, which is what these already.
Index will use TV ads to create Awareness for consumers to know that the
Index Living Mall is One Stop Shopping for furniture and home furnishings. This
allows a targeted Perception valid and have the opportunity to shop in the Index,
which will result in increased sales. Meanwhile, Index Living Mall's customer base
will grow over the current. If proportionality customers into the Index Living Mall
now known that the number of customer purchases to improve the existing house with
customer to purchase a new house that has a 50/50 split perfectly
The Index also has another brand furniture Winner, which is less than
approximately 25-30% Brand Index is a catch-country markets. The market is also a
gap
Sales of the last year (2007) of the Bangkok International flowers
approximately to 4,500 million baht, which formerly accounted for by foreign share
80-90% in 10-20%, Tech companies have made important markets in the country to
represent sales from 55% in foreign countries 45%.
The company is currently number one in the furniture market. Dominate sales
in 2008 of 6,700 million baht from the total market value of 30,000 million baht, the
furniture company targets growth in 2009 at 15%
( Source: http://www.indexlivingmall.com/en/about_history.php )
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
26
¾ Sale 2008
Index
furniture
, 20.0%
S.B
Other , furniture
55.3% , 14.7%
Modern
form ,
10.0%
* Estimation comes from roughly information from only 3 companies, total market
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
27
Entertainment Unit
(Source: http://www.furnituremanufacturers.net/category/)
(Source: http://www.furnituremanufacturers.net/furniture-by-material/)
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
28
Entryway Furniture
(Source: http://www.furnituremanufacturers.net/furniture-by-application/)
To be, and be recognized as, the low cost leader furniture store in Surat Thani,
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
29
2.2.14 Strategy
They are 3 level of strategy of organization which is
2.2.14.1 Corporate level
2.2.14.2 Business Level
2.2.14.3 Functional level
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
30
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
31
¾ Organizations Functional
Our strategy of organization functional use employee 10 persons (Chapter 4)
coordinated operational everything in company which be system. We have general
manager who have experience managing furniture store for control and take care
everything and everyone in company, he/she must have good communication for
assigning work to employees and negotiating with supplies and then we have
accountant for supervise about everything which be number and work together with
account receivable caretaker about payment in credit of customers. Salespersons must
to learn price and information of all products in company for present to customers,
accurately. We have driver which good profile about car driving and our mechanic
have skill about application tools of fixing furniture which can increase price of
second hand product (Chapter 4). The last we have house keeper for cleaning it
produce an effect good appearance of company and we outsource security for to be on
sentry in night time. This is system of organization functional in Erawan furniture.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
32
administrative and the printer for issue the installment bill payment and copy the
papers for customer. For the soft ware we use the basic soft ware program which is
Microsoft office and the accounting soft ware that we use AccStar Integrated System
Standard version that purchase from rachada.net.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Chapter 3
Market
Feasibility Study
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
34
This chapter explains about all market analysis, STP analysis, marketing mix
strategy, sale forecast estimation, marketing expense. And then we show detail of
competitor, customer, and competitive advantage in this chapter.
We use Surat Thani market for analysis because we sale inside Surat Thani
which focus on 3 districts are Muang, Kanjanadit, and Phunphin and these area are the
main market to set the strategic and do the marketing activities.
(Source: www.suratthani.go.th )
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
35
3.1.3 Geography
49% of the provincial area is mountainous with high mountain ranges along
the north and south of the area. Such geographic characteristic leads to the existence
of 14 basins including Tapi, Phumduang, Tatong, Takrajai, Chaiya, Tachang, etc. All
rivers and canals of the province flow towards the Gulf of Thailand on the east side.
The geographic characteristic of Surat Thani can additionally be concluded as
the following.
1. Jagged mountains: the areas in the district of Kiriratnikom, Phrasaeng,
Tachang, Chaiya, Tachana, Wiangsra, Chaiburi and the sub-district of Wipawadee.
2. A coastline plateau: the district of Muang and Phunphin.
3. A plateau in the east of the province: the district of Donsak, Kanjanadit,
Wiangsra and Ban Nasarn.
4. An island area: Samui Island, Pha-ngan Island, Angtong National Marine
Park and its territories of 42 small islands.
3.1.4 Population
The population of the province is 983,486 with 487,455 males and 496,031
females, 369,432 houses. The highest number of the population is in the district of
Muang followed by the district of Kanjanadit and Phunphin. (as of December 2008)
(Source: http://www.dopa.go.th/xstat/pop51_3.html )
Ruling
1) Area administration. The province is administratively divided into 18
districts, 1 subdivision district, 131 sub-districts and 1,064 villages.
2) Local administration. There are 3 forms of the administrative units i.e. 1
Provincial Administrative Council, 24 Municipalities (3 Muang Municipalities, 21
sub-district municipalities) and 113 sub-district administrative Councils.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
36
3.1.5 Education
There are 635 educational institutions, both private and government, ranging
from kindergarten schools, elementary schools, high schools, senior high schools and
universities. The university level includes National Institution Development
Administration (NIDA), Prince of Songkla University Surat Thani Campus, Rajabhat
Surat Thani University and Tapi College. Other human resource development
institutions include the Institution of Labour Skill Development in the upper south,
Vocational College and Chaiya Vocational College
¾ By Train
All southern express and rapid trains pass Surat Thani Railway station at Phun
Pin district which far from town about 14 kilometers. The total distance from
Bangkok is 650 kilometers.
¾ By Boat
There are many water transportations in Surat Thani offering such as boat
providing for passenger and logistic product from Bangkok in Tapi River. Also, there
are ferry providing from main land to Samui Island and Pha-Ngan Island at Don Sak
district.
¾ By Air
There are two airports can be developed to be international airport in the
future which are Surat Thani airport in Phunpin district and Kho Samui airport on
Samui Island offering domestic and international flight.
(Source: www.suratthani.go.th )
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
37
The PEST analysis is the instrument that common use for analyze the external
environment of the business that include Political for analyze that there the
supporting or restrict by the government or not, and how. Economic for analyze the
purchasing of the potential customer. Social and Environment for analyze the
general behavior of customer through the number of potential customer.
3.2.1 Political
The furniture business in Thailand was not quite supported by government
policy in the promoting of showroom, technological of production, the opening
market for support the furniture goods and the supporting of personnel to design the
furniture, so the furniture entrepreneur need to help them self
The support policy of the government to the furniture business is quite not
directly, that seem to be indirect as following
According to The Thai government is aiming to expand exports to potentially
lucrative markets such as Russia and the former Soviet satellites known as the
Commonwealth of Independent States (CIS). Prime Minister Abhisit Vejjajiva and
Commerce Minister Pornthiva Nakasai are scheduled to lead a trade mission to
explore trade opportunities in CIS countries. The government has established eight
regional hubs in an effort to improve trade and investment in overseas markets. It set
up a CIS hub, headed by Winichai Chaemchaeng, a commercial adviser to the
Commerce Ministry. Mr Winichai added that 311,919 tourists from CIS countries
visited Thailand last year. There is also joint private-sector investment between
Thailand and the CIS, especially in furniture, jeweler products and cosmetics.
This represent the some the supporting furniture business indirectly via others
policy, but much more to reflect the furniture business
For Surat Thani the local government mainly support to the agriculture
product and tourism in the Furniture does not more and also no the restriction
(Source: http://www.reic.or.th/news/news_detail.asp?nID=23008&p=1&s=15&t=12)
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
38
3.2.2 Economic
To analyze the customer purchasing power are analyze the Gross Domestic
Product (GDP) of the country , it will answer the fair information that relate to
expenditure for people. However, our market is in the Surat Thani so The Gross
Provincial Product (GPP) are important for analyze the purchasing power of the
potential customer in Surat Thani and the spending of money
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
39
Figure 1 represents the gross provincial product in Surat Thani for the year 2001-2008
¾ Inflation rate
According to the data of inflation rate from the office of the commercial
affairs Surat Thanit that can be calculating the average backward 3 year it eequal to
3.3% per year
140,000
120,000
100,000
80,000
Gross Provincial Product
60,000 (GPP)
40,000
20,000
0
2001 2003 2005r 2007p
Figure 2, presented the gross provincial product in Surat Thani that increased
every year from 53, 871 millions baht in 2001 to 132,637 millions baht in 2008.
140,000
120,000
100,000
GPP Per capita (Baht)
80,000
60,000 Personal and Household
40,000 Goods
20,000
0
2001 2003 2005r 2007p
Figure 3, represented the simple average expenditure per one person in Surat
Thani also increased from 59,941 in 2001 to 134,427 in 2008.
This also reflected the higher in purchasing power of people in Surat Thani
during 8 year that never goes down. Especially, in the Personal and Household Goods
segment that implies the including of the spending money to Furniture goods that represent
about 9.94% ( in average 8 years) of the total GNP per year of Surat Thani and is always in
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
40
the rang number 2 following the manufacturing in the non agriculture product also increased
as well. From the following data we can estimated that the purchasing power and
demand for the furniture goods in Surat Thani will be increased and don’t go down, if
there are not any negatives factors that cannot expected affect the macro economic.
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2002 2003 2004 2005r 2006r 2007p 2008p1
Figure 4, The Graph represented the positive relation between the growth rate of GPP
and Personal and Household goods
Figure 4, In the growth rate of GPP( the write line ) and Personal and
Household goods (the yellow line) it can be implied that if the growth rate GPP of
Surat Thani increased the purchasing power of Furniture will be increased following.
However, according to the world economic crisis in 2006-2007 that directly
affected to the whole part of the real sector and purchasing power of people and also
the economic of Surat Thani that bring the graph of GPP to dramatically drop in 2007,
that also reflected the purchasing power of people, but this also represent the sight of
economic will expend after the down turn. This advantage of economic also be
positive for furniture business
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
41
about 82.9% was from the working such as agricultures 28.9%, wage and salary 27%,
profit from business owner 27%. For the non working such as non cash about 9.2%,
from grant 5.3%, others cash income 1.2%, and from assets 1.4%
¾ The Average income per month of household (2006-2007, every to adjust 2 year)
(Source: http://surat.nso.go.th/surat/data/SRS50_4.htm)
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
42
Figure 6, The average expenditure per month of household in Surat Thani per family
(Source: http://surat.nso.go.th/surat/data/SRS50_4.htm)
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
43
In the Rub-Song Ta Yai, and Tum Kwan Kao, we will use this sight for give
the sale promotion
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
44
1,000,000 987,000
980,000 974,000
961,000
960,000 946,000
940,000 934,000
922,000
920,000 910,000 No. population
899,000
900,000
880,000
860,000
840,000
2001 2002 2003 2004 2005 2006 2007 2008
Figure 7, represents the estimated number of population in Surat Thani that the
Information of number comes from the graph that is increasing every year. This also
represent the potential consumer that are increasing
1.80%
1.60% 1.59%
1.40% 1.35% 1.33%
1. 32% 1.30% 1.28%
1.20% 1.22%
1.00%
Growth rate
0.80%
0.60%
0.40%
0.20%
0.00%
2002 2003 2004 2005 2006 2007 2008
Figure 8, The Growth rate of population
(Source: http://surat.nso.go.th/surat/Table/sttrpt52_8.xls)
Figure 8, represent the growth rate of population that are the positive number
for every year mean that the number of population never go down the average 7 year
growth rate is about 1.34%
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
45
3.2.3.4 Climate
The provincial areas are influenced by the northeast monsoon toward the Gulf
of Thailand and the southeast monsoon from the Indian Ocean. This leads to a long
rainy season which starts in May onto January of the following year. The weather
quite hot and very hot in April to June, there is quite heavy raining in September to
November, moreover in the October.
(Source: http://www.nakhonsipolice.go.th/aomdata/khomoon.htm )
These quite affect to the customer buyer decision, because if there are very hot
and the furniture store do not support to reduce the hot by decoration for example the
air cannot convince to move, not have the fans the customer might be spent less time
for stay with furniture store and less demand for buying. The also is importance to
Erawan furniture to decorate the furniture store.
The along rainy season also affect the demand for purchasing the furniture,
because a lot of furniture are the knock-down that if they touch with water when
transportation or warehousing they will have the damages. Thus, Erawan furniture
needs to arrange with this problem
(Source http://www.thailandguidebook.com/provinces/m_surat_thani.jpg)
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
46
¾ Summary
From focusing on 3 market areas which are Muang district, Kanjanadit dristic,
and Phunphin district, there are the populations about 173,071 persons or about 17 %
of total population in Surat Thani and 60,230 families or about 16.3% of total families
in Surat Thani. The potential purchasing power of The market focusing is about
167,397,238 baht per mouth or about 2,008,766,859 per year or about 1.51% of GPP
in year 2008 or 16.42% of Personal and Household Goods in year 2008.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
47
The general
The special product product
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
48
furniture. This group does not the main directly competitors that fights with the
Erawan furniture because of concerning the different customer with Erawan furniture.
The force to the market of this group doest not affects more to Erawan furniture.
Thus, we analysis in the General by using the 4 P analysis which are product, price,
place, and promotion
¾ Product the products are quite be the brand name high quality especially in
design, the more differentiation and standard.
¾ Price the price quite be medium to high and have varieties way to purchase
such as credit card, finical support such as Ae-on, first choice,
¾ Place the decoration looks quite high class, and near the city limited
¾ Promotion the promotion launch in seasoning by packaging
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
49
The special
product
This group is ranked in the grade B furniture store is in Surat Thani market by
the perception of the overall consumer in this market. Which has about 5 furniture
stores which are Young Nam Furniture city, Big Sale Furniture, Mhanorha Furniture,
Happy Home Furniture, Thana Furniture.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
50
This group serves variety type of product in the middle price to higher price
(quality usually concern by price) the size of the store quite large and has many type
of purchasing to customer such as credit card, e-on, first choice. This group concern
more with the customer who concerned more about home’s decoration in the quality
and price, but less than competitor in the grade A.
Competitor in this group is quite being the direct competitors to Erawan
furniture because the concerning to the customer of this group quite be the same as
Erawan furniture. The force to the market of this group affects more to Erawan
furniture. The strong competitor in this group that Erawan furniture should be aware
are Yong Nam Furniture, and Big Sie Furniture because they has more from briefly
observation that we analysis these by using the 4P 1S analysis which are product,
price, place, and promotion.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
51
Yong Nam Furniture City, This furniture store is the subsidiary of the young
num furniture store at Chomporn province that manages by the son.
¾ Product the product of Young Nam furniture has verities and adding some
brand name such as ToTo, Cuicue. It also has the same product that sold in general
market. Thus, we analyzed and divided products of its in to two big catalogs
according to the perception of customer, first the general product, and second the
special product. The first thing are the product that has sold and available in the
market that same as others furniture store. The second are the product that there are
less available and more different from the other furniture store
¾ Price according to the big catalogs, the general product the price quite be the
same, but little higher than to the overall market in Surattani, The special products
quite higher price because of less available in the market. Yong Nam also sold has
many ways for purchasing to customer such as credit card, cash, e-on, first choise
¾ Place the location of Young Nam Furniture city quite be a good location, its
near the main road convince to access, but it is not in the center of Muang district that
not convince for customer who live in the center. And for the customers who have not
own vehicle or take motorcycle as the main vehicle are also hard to access.
¾ Promotion the promotion of Yong Nam Furniture are emphasize on the low
price for some product to attract customer to come first, then offer the set of furniture,
they also has the advertising on the local radio and bill board
Suppler we analyzed the suppler and also scheming divided to two catalogs
according to the product, first the supply of general product this are the same as the
general furniture store in Surat Thani. Second the supply of special product for the
suppler of general product, the cost per unit of furniture from supply quite be the same
as other furniture store in Surat Thani because they use supply together. But Young
Nam Furniture can use the bargaining power to supply to reduce the cost. This kind of
product Erawan furniture can use the competitive advantage by using the supply from
Lamphoon that are lower price cost than.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
52
The special
product
This group is ranked in the grade C furniture store in Surat Thani market by
the perception of the of overall consumer in this market about 11-15 which are
BonKwoun Furniture, 99 furniture, Furniture living, Happy home furniture 2,
Shinthong Furniture, Shonthong furniture, Roong rung Furniture, Surath Funiture
Plaza, Full Sombat Furniture, Krungthong Furniture, Khoson Kheng rean,
This group serves the low variety type of product in the low price the size of
the store quite medium to small and has low type of purchasing to customer. Some of
them about 30% have Credit card service to support. No one has e-on, first choice.
About 50 % has installment price that finance by it self.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
53
This group concern more with the customer who need to specify more about
the price; low, instalment and reasonable with the quality of product. Their customers
are not concern more about the luxury design, but concern about the benefit of
products
Competitor in this group are also quite be the direct competitors to Erawan
furniture because the concerning to the customer of this also including the customer’s
group of Erawan furniture in term of the pricing. The force to the market of this group
affects more to Erawan furniture. The strong competitor in this group that Erawan
furniture should be aware are Bonkwon furniture, Home furniture, 99 furniture
because they has more from briefly observation that we analysis these by using the
4P 1S analysis which are product, price, place, and promotion and the suppler
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
54
Bonkwon Furniture, This furniture store was established for about 10 years, so
they have lot of customer loyalty. However, its but still be raked in the small group
because there was the insight conflict.
¾ Product the product of Bonkwon furniture has verities but does not
differentiate. It has only the same product that sold in general market. Thus, Bonkwon
furniture products has only one catalogs according to the perception of customer
which are the general product that has sold and available in the market that same as
others furniture store, does not has the special product that there are less available and
more different from the other furniture store
¾ Price because of Bonkwon furniture does not has the special product, so it
need to use the low price and offer the variety ways for buying product to customer
such as installment price, credit card.
¾ Place the location of Bonkwon Furniture quite be a good location, its in the
center of Muang province that convince to access for people who live in the center
here. The decoration of store quite not look terrific, it looks so normal but suitable for
the low cost customer
¾ Promotion the promotion of Bonkown furniture rarely launce to the public
about the public relation. It sometimes advertising in the local radio
Suppler According to Bonkwon furniture that has only one general product
catalogs that come from the same suppler together with the other furniture store in
Surat Thani. The bargains to suppler of Bonkwon furniture are not high or low.
Erawan furniture can use the competitive advantage by using the supply from
Lamphoon that are lower price cost than.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
55
The mainly customer make decision to buy the furniture by his or herself and
following buy the family and friends, the advertising and sale person doest not effect
more. Many customers decided to buy furniture for replacing the old one that was
broken and for decoration home they do not concern more about the new member for
family, Most of them convince to pay on cash and installment price, and also with
credit card but little. The important thing that concern for making decision to buy the
furniture that raked by product, price, place, and the promotion. The important
information from research found that if there are the service about bring the furniture
old one that damage for replacing the new one most of them interested about this,
more over they also interested in the second hand furniture that still has the quality
The factor that affect
¾ Product are the most important factor that customer concern for making
decision for buying furniture store, the first thing that the customer more concern are
the quality of product that durable and the warranty of the product. The customer also
concern with the variety of product of each furniture store for choosing. The well-
known of the product, and the special design that not standardize with other furniture
store for are in the middle mind of customer, The customer doest not concern more
about the historical and past performance of the furniture store that they will
purchased
¾ Price, the most of customer prefer to pay with the installment price that give
the period about 10 times, customer also like to negotiate to the price with the seller
when they buy on cash. They also most prefer to the variety way of purchasing such
as pay buy using the installment price, credit card, cash, the financial support; e-on,
first choice. The customer prefer to the low price but tolerable in quality more than the
high price but high quality.
¾ Place, the unexpected thing that we got from the survey questionnaire that the
most customer prefer the sincere welcoming to service from the employee of the
furniture store that was ranked in the number one. The following are the service about
free assembly, transportation, and after sell service. The location of the place that
convince to access also in customer mind. The decoration for suitable in find out the
furniture and the big size of the furniture store are not concern more by the customer.
¾ Promotions, mostly customer concern with the providing information by the
employee about the products, following by the sale promotion with about reduce,
turning, free.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
56
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
57
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
58
Premium Market
Normal Market
Used Market
3.5.1.1 Premium Market, This segmentation are the special product such as
the furniture for decorating home that quite luxury and normal furniture that there are
not the special in design, and can be substituted by another product in the market but
the quality quite higher than other general product that sold in the grade A furniture
store such as S.B. furniture, winner furniture in the higher price.
The customer for this segment are customer who has high income and prefer
to spent high budget to decorate the home with the special product that less available
in the market and customer who prefer to spent more budget to use the general
product that has high quality and brand name.
3.5.1.2 Normal market, This segment are combine the customer who prefer
to purchase furniture from the Grade B, and C furniture such as from Yong Nam
furniture, Thana furniture, Nong maw furniture
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variety choice to buy for customer
59
3.5.1.3 Used Market ( second product) This segment are the second
hand product that there are no group of competitor store which Grade A, B, C has
only Erawan furniture store in this market.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
60
3.5.3 Positioning
According to the grade A, B, C in Surat Thani that raked by the perception of
customer The Erawan furniture should be ranked in the grade C + in customer mind,
with the intention of to serve the variety of product that low cost and has variety of
payment to the customer.
The customer perception in Erawan Furniture’s positioning compare with
other furniture store
Grade A Grade B Erawan Grade C
furniture store furniture store furniture furniture store
Variety of product More Middle Middle low
Used product No No Yes No
Overall price High Medium low low
*Installment purchasing No No Yes Yes (some)
Variety of purchasing Low Low High Middle
The size of store Large Big Middle Small
* Installment purchasing in this table means customer can pay installment price
period direct to company by there are not financial support companies such as e-on,
first chose company to support the purchasing because some of customer cannot pay
by this way.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
61
¾ The general products are the product that standardization and high available in
the market the customer can find and purchase in all almost furniture store in Surat
Thani the quality of the general quite be the same as overall market. For this kind of
product it taking about 80 % of the total product of Erawan furniture.
There are 2 source of suppler of general product which are the first from the
same suppler that came from Bangkok and perimeter such as Udomwattana, Top
furnitex, Thrup Jinda furniture etc that take proportion about 50 % and the second
from the lamphoon which are Sompol furniture take proportion about 50% ( for more
detail please see chapter 4 in suppler ).
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
62
¾ The special products are the product that high differentiation but less available
in the market the customer can find out in some furniture store, the characteristic of
this product quite be different from the general product in the design, has high value.
For this kind of product it taking about 10 % of total product of Erawan furniture
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
63
10%
10%
The general products
The special products
The second hand
80%
¾ The low cost strategy, Erawan furniture sale at the lower price than the
competitor, but the quality of the product quite is the same as the competitor because
in this strategy, Erawan furniture will use the general product that supply from
Lamphoon for example.
Product Price of Erawan Overall price of Cost of product Cost of product Name of the
furniture grade C from Lamphoon from the same Same suppler
In cash furniture store (Somphon suppler
In cash furniture)
Wardrobe kid 3 1,900 2,400 900 1,900 Udomwattana
doors
Big show TV 5,500 6,500 3,400 5,300 RB furniture
cabinet platinum
Big show TV 3,500 3,900 2,200 3,200 Top furnitex
cabinet 5 feet
TV Cabinet 5 3,2 00 3,700 1,200 2,900 Udomwatthana
feet
* The cost of product from Lamphoon does not include the transportation cost that
about 244 baht at maximum per unit (see more detail in chapter 4)
From the filed trip survey, we got the information that the cost of goods sold
of the Grade C furniture store take about 70% of the sale in cash the calculate from
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
64
the average cost of goods sold per mouth in one year divided by the average total sale
in cash. As well as, from the same methods we also got that the cost of goods sold on
credit sale is about 45%. It means that the average percentage of gross margin of
grade C furniture store about 30% in cash sale and 55% in credit sale.
Therefore Erawan furniture established the overall price strategy that represent
by the gross margin of sale about
On cash sale*
General product from the same suppler 33%
General product of suppler from Lamphoon 25%
Second hand product 30%
Special product 40%
On credit*
General product from the same suppler 56%
General product of suppler from Lamphoon 50%
Special Product 70%
¾ To provide the varieties way to buy for the customer, Erawan furniture also
concern with this because most of customer prefer to the variety way of purchasing
such as pay buy using the installment price, credit card, cash, the financial support; e-
on, first choice, so Erawan furniture distress about this issue by providing about 6
ways that divided in to 2 group
On cash
Cash, we will offer the maximum discount for 5 % to the customers
who pay on cash for the products.
Credit card
The financial institution support (Ae-on, First chose)
Taking the old furniture to be the discount for the new furniture
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
65
On credit
Installment price or hire purchasing , the most of customer prefer to
pay with the installment price that give the period about 10 times, so Erawan
furniture give the period about 10 times to customer with in 5 month, about 2
time per mouth. For this price Erawan furniture plus about 30%-50% from
cash sale
Put off payment, for this payment is providing the chance to customer
to postpone the payment that the maximum about 4 time with in 2 month
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
66
¾ Adverting strategy
Erawan furniture use the local radio as the broadcasting for announce to
customer to increase customer awareness. Erawan furniture focuses on the country
song when local radio on air.
In every New Year, we will make calendar of Erawan Furniture dispense to
customer.
Signboard and Brochure Erawan furniture use the signboard and brochure to
advertising in both product and the location of furniture store
¾ Sale promotion
Customer can turn old furniture to new furniture by bring old furniture is
discount for new furniture.
Give the discount about 10% in cash
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
67
From the filed trip survey by networking, We got the information that in year
2009 Nong maw furniture can generate the total sale about 4,150,000 baht per year,
that come from sold in cash about 1,120, 800 in cash and about 3,029,200 on credit, in
average represent about 100,000 baht per mount in cash and about 250,000 per mouth
on credit that about 27 % in cash and about 73 % on credit. There is about 0.21 % in
total of total potential of furniture market.
600,000
500,000
400,000
Sale on cash
300,000 Sale on credit
Total sale
200,000
100,000
0
1 2 3 4 5 6 7 8 9 10 11 12
This graph show that in January to February the total sale decreasing, this the
normal situation that the sale in this 2 mouth can be any value in this ranges there is
no more critical factor effected. From March to May the sale increase and peak in
may because there are critical factors that affect the demand of furniture such as the
movement the people from rural to the center of Surat Thani for working, for study
and other. From June to October the sale is quite stable not rapidly change.
This graph represent that the credit sale increase from February and peak in
May because in March to may her are then decline from May to august, after increase
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
68
again from august to September, and down in the November. In the cash sale doest
not change rapid. That can be summaries that from January to march the sale.
Form the filed trip survey we also got the information that the Grade B
furniture store such as Young Nam furniture, Big Sie furniture can generate the
income per mouth about 1,800,000-2,000,000 per mouth or about 0.9-1% of the
potential market per month.
According to the main target market of Erawan furniture is the normal market
that include the customer who prefer to purchase furniture from the grade C and B
furniture store by this Erawan furniture should be placed at Grade C+ furniture store
in Surat Thani and the main strategy that focus on low price and variety of purchasing
to meet the customer.
From the STP of Erawan furniture that target on two market which are Normal
market which combine two similarly type of customer , and the second hand market
that has only Erawan furniture in this market. The positioning of Erawan furniture that
quite be obviously differentiate from the competitors, our marketing strategy that
appreciate with our customers and the supporting of the core competency of us, and
the important is the understanding clearly with the market and target customers. Thus,
Erawan furniture confident that we have to generate the sale of potential market
furniture and home decoration about 0.85 % by using the base from both grade C and
B furniture store as well as, the growth rate of population in Surat Thani that
continues to increase every year and the Personal and Household goods also
increasing every year about 10 % in average 8 year, and in the chapter 2 many giant
furniture store such as SB furniture, Index furniture also expected the growth rate
about 10%-15%, so we expected that the growth rate of sale is 8 % per year
calculated from the average the growth rate of Personal and Household goods in GPP
5 year from the year 2004-2008
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
69
year because there is no the inventory for the second hand product, after the first year
we expected that the general product will general about 80% of sale, special product
will generate about 10% of sale and the second hand product about 10% according to
the product strategy.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
70
The sale by product year 2 percent of sale January February March April May June July August September October November December Year 2
0n cash
General product 80% 288,941 204,621 401,659 248,251 290,539 261,060 400,564 436,121 343,044 243,608 308,276 408,936 3,835,620
The second hand Goods 10% 36,118 25,578 50,207 31,031 36,317 32,632 50,070 54,515 42,881 30,451 38,535 51,117 479,452
The special product 10% 36,118 25,578 50,207 31,031 36,317 32,632 50,070 54,515 42,881 30,451 38,535 51,117 479,452
Total sale on cash 361,176 255,776 502,073 310,314 363,173 326,325 500,705 545,151 428,805 304,510 385,345 511,171 4,794,525
On credit 0
General product 80% 863,448 759,032 794,916 1,009,879 1,461,675 1,005,436 769,285 739,689 892,828 1,037,219 728,275 855,082 10,916,764
The special product 20% 215,862 189,758 198,729 252,470 365,419 251,359 192,321 184,922 223,207 259,305 182,069 213,770 2,729,191
Total sale on credit 1,079,310 948,790 993,645 1,262,348 1,827,094 1,256,795 961,606 924,611 1,116,035 1,296,524 910,343 1,068,852 13,645,955
Total sale in year 2 1,440,486 1,204,567 1,495,719 1,572,662 2,190,268 1,583,120 1,462,311 1,469,762 1,544,841 1,601,033 1,295,688 1,580,023 18,440,480
The sale by product year 3 percent of sale January February March April May June July August September October November December Year 3
0n cash
General product 80% 313,019 221,673 435,130 268,939 314,750 282,815 433,944 472,464 371,631 263,908 333,966 443,014 4,155,255
The second hand Goods 10% 39,127 27,709 54,391 33,617 39,344 35,352 54,243 59,058 46,454 32,989 41,746 55,377 519,407
The special product 10% 39,127 27,709 54,391 33,617 39,344 35,352 54,243 59,058 46,454 32,989 41,746 55,377 519,407
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
71
Total sale on cash 391,274 277,091 543,913 336,174 393,438 353,519 542,430 590,580 464,539 329,886 417,457 553,768 5,194,068
On credit
General product 80% 935,402 822,285 861,159 1,094,035 1,583,482 1,089,222 833,392 801,330 967,231 1,123,654 788,964 926,339 11,826,494
The special product 20% 233,850 205,571 215,290 273,509 395,870 272,306 208,348 200,332 241,808 280,913 197,241 231,585 2,956,624
Total sale on credit 1,169,252 1,027,856 1,076,449 1,367,544 1,979,352 1,361,528 1,041,740 1,001,662 1,209,038 1,404,567 986,205 1,157,923 14,783,118
Total sale on year 3 1,560,527 1,304,947 1,620,362 1,703,718 2,372,790 1,715,046 1,584,170 1,592,242 1,673,578 1,734,453 1,403,663 1,711,691 19,977,186
The sale by product year 4 percent of sale January February March April May June July August September October November December Year 4
0n cash
General product 80% 337,098 238,725 468,602 289,626 338,962 304,570 467,325 508,807 400,218 284,209 359,656 477,093 4,474,890
The second hand Goods 10% 42,137 29,841 58,575 36,203 42,370 38,071 58,416 63,601 50,027 35,526 44,957 59,637 559,361
The special product 10% 42,137 29,841 58,575 36,203 42,370 38,071 58,416 63,601 50,027 35,526 44,957 59,637 559,361
Total sale on cash 421,372 298,406 585,752 362,033 423,702 380,712 584,156 636,009 500,273 355,261 449,569 596,366 5,593,612
On credit
General product 80% 1,007,356 885,538 927,402 1,178,192 1,705,288 1,173,008 897,499 862,971 1,041,633 1,210,089 849,654 997,595 12,736,225
The special product 20% 251,839 221,384 231,851 294,548 426,322 293,252 224,375 215,743 260,408 302,522 212,413 249,399 3,184,056
Total sale on credit 1,259,195 1,106,922 1,159,253 1,472,740 2,131,610 1,466,261 1,121,874 1,078,713 1,302,041 1,512,611 1,062,067 1,246,994 15,920,281
Total sale on year 4 1,680,567 1,405,328 1,745,005 1,834,773 2,555,312 1,846,973 1,706,030 1,714,723 1,802,314 1,867,872 1,511,637 1,843,360 21,513,893
The sale by product year 5 percent of sale January February March April May June July August September October November December Year 5
0n cash
General product 80% 230,083 162,939 319,839 197,682 231,355 207,881 318,968 347,281 273,165 193,984 245,479 325,635 3,054,290
The second hand Goods 10% 28,760 20,367 39,980 24,710 28,919 25,985 39,871 43,410 34,146 24,248 30,685 40,704 381,786
The special product 10% 28,760 20,367 39,980 24,710 28,919 25,985 39,871 43,410 34,146 24,248 30,685 40,704 381,786
Total sale on cash 287,603 203,674 399,799 247,102 289,194 259,851 398,709 434,102 341,456 242,480 306,849 407,043 3,817,862
On credit
General product 80% 687,560 604,415 632,989 804,163 1,163,927 800,625 612,579 589,012 710,956 825,934 579,922 680,898 8,692,979
The special product 20% 171,890 151,104 158,247 201,041 290,982 200,156 153,145 147,253 177,739 206,483 144,981 170,225 2,173,245
Total sale on credit 859,450 755,518 791,236 1,005,203 1,454,908 1,000,781 765,723 736,265 888,695 1,032,417 724,903 851,123 10,866,223
Total sale on year 5 1,147,054 959,192 1,191,035 1,252,305 1,744,102 1,260,632 1,164,433 1,170,366 1,230,151 1,274,897 1,031,752 1,258,166 14,684,086
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
72
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
73
The sale by product year 1 January February March April May June July August September October November December Total
0n cash
General product 136 96 189 117 136 123 188 205 161 114 145 192 1,801
The second hand Goods 0 0 0 0 0 0 0 0 0 0 0 0 0
The special product 2 1 3 2 2 2 3 3 2 2 2 3 26
Total unit sale on cash 138 97 191 118 138 124 191 208 163 116 147 195 1,826
On credit
General product 268 236 247 314 454 312 239 230 277 322 226 266 3,391
The special product 4 3 4 5 7 4 3 3 4 5 3 4 49
Total unit sale on credit 272 239 250 318 461 317 242 233 281 327 229 269 3,440
Total sale on year 1 410 337 442 436 599 441 433 441 445 443 376 464 5,266
Average per day 15 12 14 17 19 15 14 14 15 14 13 17 15
The sale by product year 2 January February March April May June July August September October November December Total
0n cash
General product 130 92 181 112 131 118 181 197 155 110 139 184 1,729
The second hand Goods 43 31 60 37 44 39 60 66 52 37 46 62 577
The special product 2 1 3 2 2 2 3 3 2 2 2 3 28
Total unit sale on cash 176 125 244 151 177 159 244 265 209 148 188 249 2,334
On credit 0
General product 257 226 237 301 436 300 229 221 266 309 217 255 3,256
The special product 8 7 8 10 14 10 7 7 9 10 7 8 105
Total unit sale on credit 266 234 245 311 450 310 237 228 275 319 224 263 3,361
Total sale on year 2 442 358 489 462 627 468 481 493 484 468 412 512 5,695
Average per day 16 13 16 18 20 16 16 16 16 15 14 18 16
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
74
The sale by product year 3 January February March April May June July August September October November December Total
0n cash
General product 141 100 196 121 142 127 196 213 167 119 151 200 1,873
The second hand Goods 47 33 66 40 47 43 65 71 56 40 50 67 626
The special product 2 2 3 2 2 2 3 3 3 2 2 3 30
Total unit sale on cash 190 135 265 164 192 172 264 287 226 161 203 270 2,528
On credit 0
General product 279 245 257 326 472 325 249 239 288 335 235 276 3,527
The special product 9 8 8 11 15 11 8 8 9 11 8 9 114
Total unit sale on credit 288 253 265 337 487 335 257 247 298 346 243 285 3,641
Total sale on year 3 478 388 530 500 679 507 521 534 524 507 446 555 6,169
Average per day 17 14 17 19 22 17 17 17 17 16 15 20 17
The sale by product year 4 January February March April May June July August September October November December Total
0n cash
General product 152 108 211 131 153 137 211 229 180 128 162 215 1,865
The second hand Goods 51 36 71 44 51 46 70 77 60 43 54 72 623
The special product 2 2 3 2 2 2 3 4 3 2 3 3 30
Total unit sale on cash 205 145 285 176 206 185 284 310 244 173 219 290 2,518
On credit
General product 300 264 277 351 509 350 268 257 311 361 253 298 3,498
The special product 10 9 9 11 16 11 9 8 10 12 8 10 113
Total unit sale on credit 310 273 286 363 525 361 276 266 321 373 262 307 3,611
Total sale on year 4 515 418 571 539 731 546 561 575 564 545 480 597 6,129
Average per day 18 15 18 21 24 18 18 19 19 18 16 21 17
The sale by product year 5 January February March April May June July August September October November December Total
0n cash
General product 104 73 144 89 104 94 144 157 123 87 111 147 1,377
The second hand Goods 35 25 48 30 35 31 48 52 41 29 37 49 460
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
76
3.8.1 The selling expense is the expense that uses for selling activities that
Erawan furniture use to force the short-term sale on cash for each month that there are
discount sale and the sale commission.
¾ The discount sale is the expense that pay from only cash sale, the customer
who will get the discount sale need to paid vie “on cash” which are cash, credit card,
Financial intuition support will get about 5% but for taking the old one to be the
discount will get 5% on cash and the discount from the old one (See more in chapter
4).
¾ The sell commission is the commission paid for the sell person who needs
to try to generate for the sale. Erawan furniture will use both sale on cash and credit to
be the base for computing the sell commission which about 2 %.
3.8.2 The advertising expense is expense that pay for the reason that try to
make the customer awareness, and keep the customer royalty.
¾ Radio
From the observation, many people in Suratthani most favorite to listen about
Country music. So, we will advertise in Country Cannel on radio wave such as
FM91.5, FM106, and Etc. About expense advertise is 2,000 Baht per Cannel, we will
advertise on 3 Cannel and total cost of advertise in radio is 6,000 per month. Reason
of we chose advertise on radio wave because for attract customer come to store, make
a realizable in our brand, and complete promotion in this season.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
77
¾ Calendar
We will dispense to customer on special days or events. Within calendar has
detail about name’s store and promotion in this season. About expense of calendar is
26 Bath per once, so we will order calendar for end of year days and new year days
about 500 set per days and total cost of calendar is 26,000 Baht. Reason of we chose
dispense calendar to customer because we will make loyalty and good relation with
customer.
Example
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
78
¾ Leaflet
We will dispense to customer on special days or events such as New Year day,
Song-Kran day, Chuck-Pra day, and etc. Within our leaflet has about detail product
new release, price, map of store, and etc. About expense of leaflet is 0.5 per once and
we will make leaflet 1,000 Sheet per event which total cost of leaflet about 500 bath
per event. Reason of we chose dispense leaflet to customer because notice to customer
know about product new release and new promotion in this time.
Example
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
79
¾ Signboard
We will set signboard in main location in central of Suratthani and will change
every 6 months. Within our signboard has detail about name’s store, promotion,
slogan, and address of store. Size of Signboard has 3 sizes those are 10m*5m (3
piece), 7m*3m (5 piece), and 5m*3m (10 piece). About expense of signboard, we will
calculate by 99 baht per Square meters and costs of 3 sizes are 4,950 Baht, 2,079
Baht, and 1,485 Baht. Reason of we chose set signboard in main location in central of
Suratthani because for increase brand image and attract customer come to store.
Example
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
80
¾ Souvenir
We will dispense to customer on special event such as New Year day, Song-
Kran day, Chuck-Pra day, and etc. Characteristic of souvenir is ceramic elephant and
within elephant has a pen. About expense of souvenir is 40 baht per once and we will
order 100 piece per event which total cost of souvenir is 4,000 per event. Reason of
we chose dispense to customer on special event because we can make good relation
with customer and increase positive brand image.
Example
¾ Public Relation
We will sponsor the local football team and support sport in schools. If
somebody has natural disasters such as flooding, storm, and etc, we will help by send
money or items for victims of natural disasters. About expense of public relation, we
will have money for public relation about 2,000 baht per month.
¾ Other
We will have backup budget for other expense about advertise is 1,000 baht
per month because if we thing or find the ways to advertise and we can do it now.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
81
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
82
16,528
Souvenir 4,132 0 0 4,132 0 0 0 0 0 4,132 0 4,132
Public relation 2,066 2,066 2,066 2,066 2,066 2,066 2,066 2,066 2,066 2,066 2,066 2,066 24,792
Other 1,033 1,033 1,033 1,033 1,033 1,033 1,033 1,033 1,033 1,033 1,033 1,033 12,396
Total advertising expense 68,695 9,814 9,297 13,946 9,297 9,297 50,715 9,814 9,297 14,462 9,814 38,946 253,391
Total marketing expense 115,563 46,694 64,315 60,914 71,261 57,276 104,997 66,466 61,634 61,708 54,995 96,104 861,927
Year 3 January February March April May June July August September October November December Total
Selling expense
Discount sale 19,564 13,855 27,196 16,809 19,672 17,676 27,122 29,529 23,227 16,494 20,873 27,688 259,703
Sale commission 31,211 26,099 32,407 34,074 47,456 34,301 31,683 31,845 33,472 34,689 28,073 34,234 399,544
Other selling expense
Total selling Expense 50,774 39,954 59,603 50,883 67,128 51,977 58,805 61,374 56,699 51,183 48,946 61,922 659,247
Advertising expense
Radio local 6,402 6,402 6,402 6,402 6,402 6,402 6,402 6,402 6,402 6,402 6,402 6,402 76,824
Calendar 13,871 0 0 0 0 0 0 0 0 0 0 13,871 27,742
Leaflet 534 534 0 534 0 0 0 534 0 1,067 534 534 4,268
Signboard 42,680 0 0 0 0 0 42,781 0 0 0 0 0 85,461
Souvenir 4,268 0 0 4,268 0 0 0 0 0 4,268 0 4,268 17,072
Public relation 2,134 2,134 2,134 2,134 2,134 2,134 2,134 2,134 2,134 2,134 2,134 2,134 25,608
Other 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 12,804
Total advertising expense 70,956 10,137 9,603 14,405 9,603 9,603 52,384 10,137 9,603 14,938 10,137 28,276 249,779
Total marketing expense 121,730 50,090 69,206 65,288 76,731 61,580 111,189 71,510 66,302 66,121 59,083 90,198 909,027
Year 4 January February March April May June July August September October November December Total
Selling expense
Discount sale 21,069 14,920 29,288 18,102 21,185 19,036 29,208 31,800 25,014 17,763 22,478 29,818 279,681
Sale commission 33,611 28,107 34,900 36,695 51,106 36,939 34,121 34,294 36,046 37,357 30,233 36,867 430,278
Other selling expense
Total selling Expense 54,680 43,027 64,188 54,797 72,291 55,975 63,328 66,095 61,060 55,121 52,711 66,685 709,958
Advertising expense
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
83
Radio local 6,613 6,613 6,613 6,613 6,613 6,613 6,613 6,613 6,613 6,613 6,613 6,613 79,358
Calendar 14,329 0 0 0 0 0 0 0 0 0 0 14,329 28,657
Leaflet 551 551 0 551 0 0 0 551 0 1,102 551 551 4,409
Signboard 44,088 0 0 0 0 0 44,193 0 0 0 0 0 88,281
Souvenir 4,409 0 0 4,409 0 0 0 0 0 4,409 0 4,409 17,635
Public relation 2,204 2,204 2,204 2,204 2,204 2,204 2,204 2,204 2,204 2,204 2,204 2,204 26,453
Other 1,102 1,102 1,102 1,102 1,102 1,102 1,102 1,102 1,102 1,102 1,102 1,102 13,226
Total advertising expense 73,296 10,471 9,920 14,880 9,920 9,920 54,113 10,471 9,920 15,431 10,471 29,208 258,020
Total marketing expense 127,976 53,498 74,107 69,677 82,211 65,895 117,441 76,566 70,980 70,551 63,182 95,894 967,978
Year 5 January February March April May June July August September October November December Total
Selling expense
Discount sale 14,380 10,184 19,990 12,355 14,460 12,993 19,935 21,705 17,073 12,124 15,342 20,352 190,893
Sale commission 22,941 19,184 23,821 25,046 34,882 25,213 23,289 23,407 24,603 25,498 20,635 25,163 293,682
Other selling expense
Total selling Expense 37,321 29,368 43,811 37,401 49,342 38,205 43,224 45,112 41,676 37,622 35,977 45,515 484,575
Advertising expense
Radio local 6,831 6,831 6,831 6,831 6,831 6,831 6,831 6,831 6,831 6,831 6,831 6,831 81,972
Calendar 14,801 0 0 0 0 0 0 0 0 0 0 14,801 29,601
Leaflet 569 569 0 569 0 0 0 569 0 1,139 569 569 4,554
Signboard 45,540 0 0 0 0 0 45,648 0 0 0 0 0 91,188
Souvenir 4,554 0 0 4,554 0 0 0 0 0 4,554 0 4,554 18,216
Public relation 2,277 2,277 2,277 2,277 2,277 2,277 2,277 2,277 2,277 2,277 2,277 2,277 27,324
Other 1,139 1,139 1,139 1,139 1,139 1,139 1,139 1,139 1,139 1,139 1,139 1,139 13,662
Total advertising expense 75,710 10,816 10,247 15,370 10,247 10,247 55,895 10,816 10,247 15,939 10,816 30,170 266,517
Total marketing expense 113,031 40,183 54,057 52,771 59,588 48,452 99,119 55,928 51,922 53,561 46,793 75,686 751,092
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
84
3.9 Conclusion
Erawan furniture entry to the Surat Thani market because we know exactly
and convince to access the data with this market the in the term of general
environment and the competitor of the furniture retailer business. Erawan furniture
focuses on 3 districts which are Maung, Phinphin, and Kanjanadit dristrict which
there are central and highest population in Surat Thani. From analyzing the general
information by using the PES analysis represent that there are many factors that
support to be the feasible of the furniture market for the Erawan furniture that
including the gross provincial product and personal and household goods increasing
every year from 2001 to 2008 that never go down, the increasing in the number of
population in Surat Thani from 2001-2008 that also never go down, and we can
estimate the size of potential market by multiplying the average expense for the
furniture and home decoration that we got from base of data from the Surat Thani
Statistical Office per family. It is about 167,397,238 baht per mouth or about
2,008,766,859 per year or about 1.51% of GNP or 16.42% of Personal and Household
Goods of Surat Thani in year 2008. By using the 3C analysis, Erawan furniture
understand clearly about the competitor, customer, and competition in the Surat Thani
market that Erawan furniture segment market in to 3 segments which are premium
market, normal market, and the second hand market. And set the main target on the
normal market which including the customer who prefer to purchase the furniture
from grade B and grade C furniture store in Surat Thani, and set the secondary target
on the used market which are the customer who need to purchase the second hand
furniture. The positioning of the Erawan furniture is the grade C+ furniture store in
the customer mind. The product of Erawan furniture is divided in to 2 mainly which
are normal product and used product that normal product can be divided in to general
and special product that Erawan furniture set the strategy that will be for 10% special
product, 80% general product, and the 10 second hand product of the total sale for the
price strategy Erawan furniture allow customer to pay on cash, credit card, financial
support, bring the old furniture store to get the discount for the new one, installment
purchasing, and put off payment. Erawan furniture providing the after sale service
which in both free transportation and free fix the furniture.
For the sale forecast from feasibility of the potential market, the target market
of Erawan furniture, as well as strategy and core competency of Erawan furniture, we
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
85
confident that Erawan furniture can generate the sale to 0.85% of the potential market
or about 17,074,518 baht that at the first year and increase by 8% every year.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Chapter 4
Technical
Feasibility Study
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
87
This Chapter explains about the technical analysis that including product
characteristic, Location and building, the product and service process thought the
management analysis as well as the overall about cost.
Set of bedroom (SET 1) Show cabinet iron legs Set of food marble wood table
6 chairs
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
88
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
89
Cloth Airier KO Koan Cloth Airier solo Flooding table wood board
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
90
Set of food table 4 chairs Set of food table 6 chair Multi propose table
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
91
Picnic chair
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
93
Wardrobe3 doors Wardrobe3 doors grass Wardrobe 80 cm. Wardrobe 2 doors kid
Wardrobe 3 doors kid Wardrobe3 drawer Wardrobe grass slide door Big show cabinet
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Computer cabinet 80 cm Dressing table open door
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
97
This table show the cost of goods sold in average per unit for each product
Transportation
On cash Cost of Goods cost Total cost
From lamphoon 1,242 244 1,486
General product from same
suppler ( select only low cost ) 1,664 1,664
The second hand Goods 581 0 581
The special product 10,367 0 10,367
Transportation
On credit Cost of Goods cost Total cost
From lamphoon 1,242 244 1,486
General product from same
suppler( select only cost) 1,664 1,664
The special product 10,367 0 10,367
¾ The cost of goods, the cost of product that sold on cash and credit are equal
together that will be explain by following
¾ The Cost of goods from Lampoon in average is about 1,242 baht plus the
transportation cost ( the calculation see more detail in logistic process) ,so the cost of
goods in general product from Lampoon is about 1,486 baht
¾ The General product from same suppler of competitor from this Erawan
furniture selecting only product that low cost as much as possible from the general
product from the same suppler the average cost is about 1,664 baht per unit
¾ The second hand goods, the cost of second hand goods about 40% of general
product (see more in path of suppler)
¾ The special product, The cot of goods sold in special product is about 10,367
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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As of in the price strategy in the chapter 3 the gross margin of the product
represent by the following
On cash sale
General product from Lamphoon 33%
General product of suppler from same 25%
competitor
Second hand product 30%
Special product 40%
On credit
General product from Lamphoon 60%
General product of same competitor 50%
Special Product 70%
On cash Cost of Goods Transportation cost Total cost Margin strategy The average price
From lamphoon 1,242 244 1,486 33% 2,218
General product from same suppler( select only low cost ) 1,664 1,664 25% 2,219
The secound hand Goods 581 0 581 30% 830
The spacial product 10,367 0 10,367 40% 17,278
On credit Cost of Goods Transportation cost Total cost margin strategy The average price
From lamphoon 1,242 244 1,486 56% 3,378
General product from same suppler( select only cost) 1,664 1,664 50% 3,329
The spacial product 10,367 0 10,367 60% 25,917
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
99
4.4.1 Land
This land located near the parking and by pass road. We contract to Mr.Direak
tel.083-523-9999 for rent and make a deal on both parties. At the first time this land
offer for sell about 20,000,000 baht. However, we negotiate for renal and then we got
the final price for rental is 25,000 per month, need to pay in advance for about 1 year
every year, that need to prepaid about 300,000 per year
“Pre paid for land 300, 0000 per year”
4.4.2 Landscape
We use 5 workers to adjust the land area. And we need to hit the frame before
build the store. If we see the floor levels of land are the same with street. We use
employee to adjust the land for Smooth for build store. The land is not need to adjust
more, so expense of adjust for this land area is quite not expensive more, it about
1,000 baht
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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4.4.3 Building
Erawan will hire the constructer that can be liable for us which is
Munggorndaeng Company 43 moo 5 talo muang phichit 66000 Tel 0824100908 Mr.
kong kreangkrai that evaluate the building like this table
Core building Quantity Per once
1 Concrete surface is only 1 floor 1,050 m*m 450 472,500
2 Concrete surface is only 2 floor and stairs 360 m*m 450 162,000
3 Pillar and cupola 1,610 m*m 1,200 1,932,000
Ceiling makes for Gypsum Smooth
4 plaster 1,050 m*m 260 273,000
5 Masonry wall plaster 850 m*m 480 408,000
6 Door coil (5m) 7 unit 25,000 175,000
7 Glass office and aluminum 1 unit 125,000 125,000
8 Sewage system toilets and bathroom 1 unit 8,000 8,000
9 Electrical work 100 unit 750 75,000
10 Color work 3,400 m*m 60 204,000
11 Watt hour Meter and water meter 1 unit 60,000 60,000
12 Concrete in front of the store 135 m*m 360 48,600
Total 3,943,100
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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The floor 1 is area for special product, set product, and product second hand.
In this floor, we will to allocate and divide by the main 2 group. The first zone, we
will set special product and set product in this same area. The first zone will set in
front of store. The Second zone is product second hand and this zone stay in rear of
floor1.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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The Floor 2 is area for general product such as table, chair, wardrobe, and etc.
The behind store is area for assembly product before sale, stock product in
warehouse after get product from lampoon or other, and parking of store.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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Duplicate
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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4.4.6 Layout
Within the store, we will divide by 2 rooms and 2 zones. There is office room,
show room, warehouse zone, and assembly zone. We are allocate many zone for easy
to service, easy to give information, and easy to buy to customer. Within many zones
has more instruments to make a sell are namely:
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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Multifunction
1 6,200 6,200
Laser Printer
Air
1 24,900 24,900
condition
switch plug 2 35 70
Lamp.
2 75 150
Box 1 12 12
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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pencil box 1 79 79
1 279 279
Calculator
bin 1 50 50
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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Cup 5 39 195
Spoon 10 65 650
The accounting
1 7900 7900
soft ware program
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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4.2.4.2 Toilet
In Toilet room in the store, within has Toilet bowl, Bidet, Toilet tissue box,
Lavatory, Toilet hose, Mirror Price, Sink hydrant, Bath Screen, Bronze chromium
sewer, White hose, Navel basin, Door knob, Miter Price, Doors.
Toilet hose 1 70 70
Bath Screen 1 30 30
Bronze
chromium 1 125 125
Sewer
White hose 1 23 23
Navel basin 1 60 60
Door knob 1 92 92
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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4.4.6.2 Showroom
Show room is very impotent because it is show product. A place is introducing
product to customer. Our Show rooms have table, chair, Filing cabinets, bed but we
buy fan, Lamp facto
Plug 12 80 960
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
111
Dry Chemical
(Fire 650
1 650
Extinguisher)
Lamp
4 75 300
Tool of
a technician 1 10,770 10,770
Plug 2 80 160
Multipurpose
2 840 1680
rack
Dry Chemical
(Fire 1 650 650
Extinguisher)
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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switch plug 1 35 35
Lamp
2 75 150
4.4.6.4 Warehouse
Warehouse is a place for stock product we buy Vacuum air, fan (wall)
switch plug 2 35 80
Lamp 2 75 150
pen 5 15 75
Pencil 1 45 45
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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ruler 1 65 65
eraser 2 10 20
paper 5 90 450
Bill 10 50 500
Garbage bags 1 kg 32 32
Spray deodorize 1 95 95
Other 603
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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4.4.6.6 Operating supper
Nail 10 Kg 25 250
Other 1 1 160
Glue
2 45 90
Rubber
¾ Cost of request the electric power from provincial electricity authority two
transformers
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
116
Year 2
Jan- Apr May-Aug Sep-Dec
All the period to pay
4,000 4,000 4,000
From table, we will see in year 1 paid more than year2. In the code of laws
said that in year1 will pay brand tax in 4 times per year and once period has 3 month.
Form of pay brand tax in first year are the first period pay 100% of price tax, second
period pay 75%, third period pay 50%, and fourth period 25%. But in Second year
and continually, form of brand tax in those years is all the period to pay equal and
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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paid 3 times per year. In the part of pay tax, we can paid in Place of submitted
document of facia tax or Place of officials have set or Sent by post.
Cost of facia tax 12,000 Baht/3 months.
So, we must pay house and land tax is 37,500 baths per year
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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For the selling process sale person will provide real information to customer
and tell comprehensive information about products within the store to all interested
customers to build trust in the sale and to high benefit for customers.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
119
For the credit card and financial institution Erawan furniture serve for the
customer after the first 6 and 9 month.
2 Putt off payment, for this payment the customer also need to sigh contact
like the installment purchasing that the contact quite flexible that installment
purchasing that customer can design the payment by themselves that the payment
that the maximum about 4 time with in 2 month and the first need to pay about 30%
of the price of product on credit.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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room that customer want and free service assembly for the product that need to
installment at place. For example if the customer want the wardrobe 5 feet up to the
third floor but the size of product is very big that cannot move, so the mechanical will
divided the wardrobe in to many parts them move the each of then to the 3 floor and
re assembly by has not charged any fee.
2 The warrantee and free fixed service, Erawan furniture also has the warrantee
for the product that if it was the damaged by both customer and own product we will
go to fixed them for free in service (accepted the operating suppler).
4.6.3 The processing for asking financial institution support and credit
card bank
The critical requirement for asking the service from the fincnacial instutition
(Ae-on and first choice)
1. Copy of Certificate of in cooperation Minimum 9 months registered
2. Certification Document not over 6 months and Minimum 9 months registered
3. Registration Capital 1 million above (In case of limited partnership, company
limited, Public company limited)
4. Shop or store is convenient to merchandise
5. Type of goods or brand name has to find public favor in the market
By those requirements Erwan furniture need wait bout 9 month after registered as
juristic person.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
122
The Vehicle for transportation furniture goods is the big 6 wheel truck. That
has the capacity about 7 tons.
(Source:http://www.kongservice2008.com)
That has the size of tray about, Long 6.5 metes, Wide 2.25 metes, and, High
3.0 metes. The rate of service has shown by following table
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
123
The table shows information about rate of logistic. We will contract and use
service to Kong Service Ltd. because which compare all of company so, we will to
see price of Kong Service Ltd. is cheaper than with other company.
To transport the furniture, Erawan furniture transport by use the furniture that
has not already yet assembled in the packaging that ready and easy for assembly by
Erawan’ mechanical. By this Erawan furniture estimate the unit transportation and
cost by using the Big show cabinet 7 feet that is the big size of packaging to be the
base for calculation the minimum unit and maximum transportation cost per unit. The
size of this package is wide 120 centimeters, thick 50 centimeters, long 200
centimeters, and the weight is about 65 Kilogram.
From adjusting the tray of the truck 6 wheels, it can pick up the furniture
packaging about 90 units and the cost per unit is about 244 baht per unit. It take the
leads time about 12-14 days for production and 2 days for transportation, Therefore it
takes time about 14-16 day for waiting
(Source: http://www.one2car.com/CarInfor/cardetails.aspx?caridx=E28090069&row=2 )
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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Erawan furniture uses the used car to serve for the customer. Which cost about
260,000 baht and has the depreciation 52,000 baht per year
4.7.2 Suppler
According to the price strategy that Erawan furniture used the low price
strategy to fight with the normal market in Surat Thani. Thus, Erawan furniture very
concern more about the selecting and comparing the suppler that has the low cost as
much as possible in the general goods.
¾ Suppler of the same competitor that has many companies that comes from
Bangkok and perimeter. This is the example of the some of suppler of Erawan
furniture
¾ The suppler from Lampoon, from the field trip survey at the lamphoon
province at tam bon Ban mar. There are a lot of Furniture manufacturing but Erawan
furniture use Somphon furniture because it is the bigger furniture manufacture that
has high capacity of production and quite lowest cost.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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Erawan furniture selected only the products that quite be same quality and
lowest cost from Somphon furniture when compare with suppler of the same
competitor for serve at the store.
This table is the example of some products from Somphoon furniture that
Erawan furniture is supplied.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
126
know how to handle with the old one. Thus, Erawan furniture also has the service
about allow those customer to bring the old one for get the discount about no more
than 40 % of the cost of the new one which about 581 baht in average for purchasing
the new one To support this service for reducing the inventory, Erawan furniture need
to fixed and resell them in the second hand product.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
127
¾ Cost of investment
¾ Investment cost
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
128
Building 4,551,850
Equip office 128,457
Equip Toilet 3,334
Total 4,683,641
Total investment cost 5.035,456
¾ Depreciation
General Manager
Job position : 1
Job Type : Full Time
Job time : 8.00am-6.00pm.
Job qualification
1. Male / Female , age at least 26 years old
2. Master's or Bachelor's Degree
3. Thai nationality
4. Knowledge, Capability, Experience about managing furniture store
at least 3 years
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
129
¾ Job description
He/She can set up targeting of company, planning all of operating which
follow target of company, assigning work to employee appropriately, good
communication inside company, and can evaluation & improvement of all position in
company. Besides, it is include managing and payment salary of employee, supervise
order of stock, and contact suppler for order the product and negotiation about price.
¾ Job recruitment
We will be post notice about job description for apply a job on front of store
and post in *Department of Employment in Surat Thani which internet and office of
department of employment, we will post in both ways. We will interview them before
start the job and check her/him job qualification. We will tell about salary, scope of
work, test the skill of control and negotiation, and ask about experience from working
*Source: http://www.seso.go.th/t0105/index.php?pgid=index
Sellers
Job position : 2
Job Type : Full Time
Job time : 8.00am-6.00pm.
Job qualification
1. Male / Female , age at least 20 years old
2. Thai nationality
3. Experience about sale at least 2 years
¾ Job description
Task of Seller and assistant is take care and give true information about
product, advice about buy product, persuade, and explain to moderation of product
with style of customer. These works start on 8.00am-6.00pm.
¾ Requirement
We will post a notice about apply for a job on area in front of store, area in
central of Surat Thani, and post on internet. If somebody takes an interest, we will
have interview about skill of talking and present by applicant show the technical for
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
130
sale with committee. And applicant should be look good personality for make
reliability with customer.
Accountant
Job position : 1
¾ Job description
Task of accountant is management and respond all of activities about finance,
account, record buy-sale, and order in-out of stock before send to manager for check
against. These works start on 8.00am-6.00pm.
¾ Requirement
We will post a notice about apply for a job on area in front of store, area in
central of Surat Thani, and post on internet. If somebody takes an interest, we will
have interview about skill of account and ask about experience from working.
Mechanical
Job position : 1
Job Type : Full Time
Job time : 8.00am-6.00pm.
Job qualification
1. Male age at least 20 years old
2. Permanent driving license
3. Thai nationality
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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¾ Job description
Task of mechanical is assembly product, send product to customer, and take
product to warehouse. These works start on 8.00am-6.00pm.
¾ Requirement
We will post a notice about apply for a job on area in front of store, area in
central of Surat Thani, and post on internet. If somebody takes an interest, applicant
must to show technical about assembly and about personality should be look like
healthy and strength.
Driver
Job position : 1
Job Type : Full Time
Job time : 8.00am-6.00pm.
Job qualification
1. Male age at least 24 years old
2. Permanent driving license
3. Thai nationality
4. Knowledge and Experience about delivery least 2 years
5. Well know and well experience of routes
6. Responsibility of duty
¾ Job description
Task of driver respond about delivery by transport the product of showroom.
Move the product on the pickup car, communication with customer which place
customer’s want. Move down the product from pickup car and set the point follow
customer’s want. Good car care and well skill how to treat basic repair tired of pickup
car. Well know the street. Perform the traffic too stick. Do not drink in job time.
¾ Requirement
We will be post notice about job description for apply a job on front of store
and post in *Department of Employment in Surat Thani which internet and office
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
132
House keeper
Job position : 1
Job Type : Full Time
Job time : 8.00am-6.00pm.
Job qualification
1. Female age at least 25 years old
2. Thai nationality
3. Well skill in cleaning
4. Well know and well experience how to use equipment and chemicals for
cleaning.
5. Responsibility of duty
¾ Job description
Task of house keeper respond about cleaning all of product in showroom and
warehouse zone. Arranged and decorated locations to be organized. Maintain the
cleaning front of store area. Always clean when dirt. Always clean the toilet. Care
cleans all area of store. Police confer to customer.
¾ Requirement
We will be post notice about job description for apply a job on front of store
and post in *Department of Employment in Surat Thani which internet and office of
department of employment, we will post in both ways. We will interview them before
start the job and check her job qualification. We will tell about salary, scope of work,
and ask about experience from working
*source: http://www.seso.go.th/index.php
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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¾ Job description
Task of account receivable caretaker respond about control and collect
payment of customers who pay out a little at a time that reference from table date
payment of customers. Account receivable caretaker will be call and talk about
liability of customers. If customers not paid money to account receivable caretaker,
we will be take possession the product.
¾ Requirement
We will be post notice about job description for apply a job on front of store
and post in *Department of Employment in Surat Thani which internet and office of
department of employment, we will post in both ways. We will interview them before
start the job and check her job qualification. We will tell about salary, scope of work,
and ask about experience from working
*source: http://www.seso.go.th/index.php
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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4.9.2 Outsourcing
Erawan furniture outsource the security guard from the We hire security from
Sri-Tommasit Co. Ltd. for look after the store at night
4.9.2.1 Compensation
4.10 Conclusion
There are 2 mainly product type of Erawan furniture which are Normal
product, and Used products. Normal product is the product that sold at the first time to
customer that which has 2 types which are special product and general product, and
the used product that estimate the cost about 40% of the normal product.
Erawan furniture is register as the juristic person according to the Thai law. It
rent the land the need to pay in advance for 1 year. Erawan furniture need to build it
owns building that there are 2 mainly zoned which are Core building and Option
building. The core building is the main building for selling and administrative and the
option building for the assembly and warehouse zone for assembly fixed and keeps
the package furniture. The total investment cost for the Erawan furniture is 5,027,556
baht.
Erawan furniture has 10 own employees which are seller 2 position who are
try to generate the sale, driver 1 position who drive the car for delivery goods to
customer, general manager 1 position who manage the furniture store, accountant 1
position who take responsibility about the accounting, mechanical 3 position who
support the driver to service the customer, account receivable caretaker who try to
collect money from the customer House keeper who take care and clean the furniture
store.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Chapter 5
Financial Analysis
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
136
This chapter explains about all financial statements. We calculate all of them
are in monthly base and minimum 5 years. Profit/Loss statement (Income statement),
Cash flow, and Balance sheet which theses are used calculations financial statements.
This table represents the total funding requirement of this project that has the
requirement about 9,613,264 baht, Thus Erawan furniture need to loan from the
investor in amount of 10,000,000 baht to open and operate the project. According to
the Thai civil commercial law in the section of 654 that the loan interest rate need not
to have more the maximum rate of the law which is 15% per year. Thus, Erawan
furniture will provide the maximum rate of the loan interest rate at 15% per year or
1,500,000 baht and will pay the interest rate every month for 60 year by need not to
pay the principal as well as must pay the all of the principal which is 10,000,000 baht
at the end of year 5. Because, we need to give the big amount of interest rate which is
about 125,000 baht per month to the investor for 5 year.
Moreover, Erawan furniture also have the back up plan for the investor that
can guarantee that the investor will get the fully principal at the end of year 5 if we
did not has the cash enough to pay all of principal to the investor. There are 2
alternative for the investor that can choose anyone.
1) We will pay 50% of the principal(5,000,000) at the end of year 5 to the
investor, and let other have also computed the interest for the investor (750,000) plus
bonus 30,000 baht per year to the invest to so we have cash enough to pay for this) .
And repay 25% of principal (2,500,000) at the end of year 7 and let other have also
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
137
computed the interest for the investor (375,000) also plus 50,000 baht in bonus and
the last 25% of principal at the end of year 9 plus interest the bonus 70,000 baht.
2) We will loan the cash from the financial intuition such as the bank to repay
the entire principal for the investor. By this way the investor will not get any bonus or
interest after year 5.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
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138
Operating expense, for the operating expense inform about the expense that
use to operate the service to the customer that including fuel, operating suppliers,
expected the bad dept, Electricity in the operating, and operating depreciation
Pre operating expense, Erawan furniture percept this expense at the first year
by deduction equally amount every month.
Fuel is the expense for fuel to transportation service to the customer from this
expense Erawan furniture estimated about 1.66% of the sale according to the filed trip
survey we know that the fuel of Nong maw furniture is about 72,000 baht that is about
1.66% of the sale. And increase 3.3% every year according to the inflation rate in
Surat Thani
Operating supplier is the expense that use in that the assembly zone for
reserve to be the assembly and for fixed the product and the second hand product.
Erawan furniture will purchase 4 times per year.
Bed dept expense because Erawan furniture has the service about the credit
sale, so we need to prepare for the bed dept from the filed trip survey we found that it
is quite impossible that the sale on credit will be colleted fully 100%. There are about
5% that are the bad dept and lost. So Erwan furniture expected the bad dept about 5%
of the expected cash received on credit sale.
Electricity on operating is the mainly part of electricity on operating are use to
assembly the product when them is placed to the store. Some kind of furniture such as
wardrobe, TV cabinet, big show cabinet have the big size it hard to transportation so
they need move by the package, and the goods that ordering from Lampoon also are
in the packaged and then is assembly later by both the mechanical of suppler and
Erawan furniture at the store, so Erawan furniture estimate the Electricity on operating
about 0.3% of the inventory purchasing according to analysis the electricity cost from
the field trip survey. And increase 3.3% every year according to the inflation rate in
Surat Thani
Operating depreciation is the non cash expense that need to deduction from
the gross margin according to the principle accounting it is the assumption that the
plant asset need to have the discount value by the time for operating depreciation. The
data for operating depreciation is imported from the depreciation cost in chapter 4
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
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Operating income is the profit that has already deduced the operating expense.
It reflects the profit that how much the company can generate the profit with after
deduction the expense from operating activities.
Marketing expense, is the expense that use for encourage the sale of the
Erawan furniture the data is imported from the marketing expense in chapter 3. And
increase 3.3% every year according to the inflation rate in Surat Thani
Administrative expense, is the expense that use in the management that
including salary of the employee, utility expense, insurance expense, office supply,
rental land, property tax expense, Other administrative expense, and the
administrative depreciation.
Salary is the compensation that pay for the employee for Erawan furniture has
the employee 10 person and outscoring 1 person that represent the detail in the
chapter 4.
Utility expense is the expense of facility such as electricity, telephone bill,
water supply, that use in the administrative activities, it difficult to estimated all of the
expense so Erawan furniture use the fixed rate that may be the maximum for this
expense that about 8,000 baht per month that base on about 4 times of grade C
furniture store from the filed trip survey.
Insurance expense is the expense for transforming the risk of Erawna furniture
to the insurance company that represented by following
Office supply or stationary expense is the expense that diminution from the
current asset in the balance sheet that expected that will enough to use within 4
months and purchasing again after 4 month so it expected to use equally for each
month that use in office zone that essential for administration. Erawan furniture will
purchase 3 times per year.
Rental land, Erawan furniture need not to purchasing the land at the beginning
because the cost is 25,000,000 baht is quite high and need to spent a lot of money at
the beginning, so the negotiation result that need to pay 300,000 baht per year that
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
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140
about 25,000 baht per month it look better than pay 25,000,000 baht in one time. For
this expense Erawan furniture deducting equally 25,000 baht every month
Property tax expense, the data of the property tax expense is imported from
the chapter 4.
Facia tax expense, the data of the facia tax expense is imported from the
chapter 4.
Administrative depreciation is the non cash expense that need to deduction
from the margin according to the principle accounting it is the assumption that the
plant asset need to have the discount value by the time for operating depreciation. The
data for Administrative depreciation is imported from the depreciation cost in chapter
4
Earning before interest and tax (EBIT), is the profit after deduction all of
expense except financial activity and tax. This represent that how much the profit that
company can generate before pay for tax and interest that reflect the earning
performance of the company
Interest expense, this is the compensation that Erawan furniture pay for the
investor who invest to this project that represent about 15% of the money loan or
about 1,500,000 baht per year. Erawan furniture will guarantee to pay the interest
125,000 baht every month for the investor.
Interest income, is the profit after EBIT deduction with the interest payment.
Income tax is the obligation of the private juristic person who has the profit
from the operating need to pay tax to the government the rate is 30% of the interest
income.
Net income, is the important number in the bottom line that represent the
overall profit that the company can generate from doing the business.
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Cash inflow, there are 2 mainly source of cash inflow from the operating
activity Erawan furniture which are cash received on cash sale and cash received on
credit the depreciation and operating suppler are non cash expense that including in
the income statement, so we need to adjust them to know the real cash inflow from the
operating activity that imported the data from the income statement.
Cash outflow, the cash outflow from the operating activity of Erawan furniture
has purchasing inventory on cash for every transaction, the cash that paid for
operating expense, cash paid for the income tax that imported the data from income
statement . Every transaction of Erawan furniture about purchasing the inventory uses
the cash. And according to the revenue department of Thailand that need to pay the
income tax about 2 times a year, so there are the cash flow in this activity at the
middle and the end of the year.
Net cash flow is the result of the cash inflow minus cash outflow, in the net
cash flow the value of Erawan furniture is positive because there is cash inflow more
than cash outflow. It represents the positive dimension in the operating expense
5.2.2.2 Cash flow from selling and administrative activity is the cash
transaction of company for selling and administrative.
Cash inflow, the cash inflow in this activity is to adjust the non cash
transaction that has already including in the income statement which are depreciation,
rental rand that pay the lump-sum at the beginning of year, and offices supplier.
Cash outflow, the cash out flow from selling and administrative also imported
from the income statement.
Net cash flow, The net cash flow from selling and administrative of Erawan
furniture is negative it means that the cash outflow is more than cash inflow in selling
and administrative activity. It is the general situation.
5.2.2.3 Cash flow from investment activity, represent the cash that
transaction in investment activity. Erawan furniture including investment transaction
in both plant and current asset that will be represented in the balance sheet
The transactions reflect that how much money that Erwan furniture spent for
the investment activity for each year.
Cash inflow, is the cash that received from selling the equipment. Erawan
furniture hardly sells the equipment on the market
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Cash outflow, is cash paid for purchasing new equipment in both current and
plant that including cash paid for purchasing administrative and operating plant asset,
cash paid for rental land, office supplier, operating suppler.
Net cash flow, the net cash flow from investment activity of Erawan furniture
usually be the negative number because we seldom to sell the equipment but invest in
current asset every year.
5.2.2.4 Cash flow from financing activity, represent the cash the occur in the
find out the fund for Erawan furniture.
Cash inflow, including the cash borrowing that occur only one time from the
investor who invest to the Erawan furniture
Cash outflow, represent the cash payment to the investor that including
repayment the principle and interest payment. Erawan furniture has ability to pay the
interest for the investor every month.
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143
Equity of Erawan furniture, there are only retain earning in the equity because
Erawan furniture loan 100% in liability.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
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the high efficacy rate of Erawan furniture. The inventory turnover of Erawan furniture
is quite high it mean that we have more efficiently that we can mange the in the
ending inventory because we ordering forward for the next month. Erawan furniture
also has well managing the account receivable because we have the inventory care
taker to look after the account receivable
5.5 NPV analysis is use to estimate and analyze the value of money at the present
time
Net present value 1,782,848 for 60 month at the discount rate 3.3% per year
that comes from the average inflation rate 3 year at Surat Thani. By did not including
the repayment for the principal of the initial investment at the end of year 5 .This
project also represents the positive NPV that very interesting to invest. However, if
we including the repayment for the end of year 5 the NPV will be negative to -
6,698,009
5.6 Internal rate return is the rate that measure the internal return for this project
Internal rate return of Erawan furniture is equal to 17% per year or 1.39% per
month that overcome the inflation rate. This rate not including the computation of the
principal
5.7 Conclusion
Erawan furniture will have the fund by loan from the investor and will pay the
interest rate 15% per year for the investor. The overall of 3 financial statement which
are income statement, cash flow statement, and the balance sheet show the number
that quite good that represent higher in net income, the good liquidity that represented
in the cash flow statement, and the strong financial in the balance sheet . And in the
ratio analysis also give the percentage that excellent the NPV which positive (not
including the repayment the initial investment for the investor, the IRR of Erawan
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furniture represent the satisfaction number that higher than the interest rate the we
offer to the investor. That can be concluding that there is feasibility in the financial of
Erawan furniture.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
147
Radio local 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 72,000
Calendar 13,000 0 0 0 0 0 0 0 0 0 0 13,000 26,000
Brochure 500 500 0 500 0 0 0 500 0 1,000 500 500 4,000
Signboard 40,000 0 0 0 0 0 40,095 0 0 0 0 0 80,095
Souvenir 4,000 0 0 4,000 0 0 0 0 0 4,000 0 4,000 16,000
Public relation 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000
Other 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Total advertising expense 66,500 9,500 9,000 13,500 9,000 9,000 49,095 9,500 9,000 14,000 9,500 26,500 234,095
Total marketing expense 109,897 43,648 59,943 56,990 66,374 53,425 99,356 61,956 57,460 57,746 51,334 79,425 797,554
Administration Expense
Salary 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 912,000
Utilities expense 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 96,000
Insurance expense 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 74,007
Office supply 2,500 0 0 0 2,500 0 0 0 2,500 0 0 0 7,500
Rental land 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000
Property tax expense 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 37,500
Facia tax 12,000 0 0 9,000 0 0 6,000 0 0 3,000 0 0 30,000
Administrative depreciation 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 253,784
Total administrative expense 153,941 139,441 139,441 148,441 141,941 139,441 145,441 139,441 141,941 142,441 139,441 139,441 1,710,791
Selling and administrative expense 263,838 183,089 199,384 205,431 208,315 192,866 244,797 201,397 199,401 200,187 190,775 218,866 2,508,345
Earning before interest and Tax 324,804 311,926 370,427 431,792 699,302 429,016 277,833 316,280 382,429 441,396 288,946 368,206 4,642,356
Interest expense 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 1,500,000
Interest income 199,804 186,926 245,427 306,792 574,302 304,016 152,833 191,280 257,429 316,396 163,946 243,206 3,142,356
Income Tax 59,941 56,078 73,628 92,038 172,291 91,205 45,850 57,384 77,229 94,919 49,184 72,962 942,707
Net income 139,863 130,848 171,799 214,755 402,011 212,811 106,983 133,896 180,200 221,477 114,762 170,244 2,199,649
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
148
¾ Year 2
Year 2 January February March April May June July August September October November December Total
Sale
Sale on cash 361,176 255,776 502,073 310,314 363,173 326,325 500,705 545,151 428,805 304,510 385,345 511,171 4,794,525
Sale on credit 1,079,310 948,790 993,645 1,262,348 1,827,094 1,256,795 961,606 924,611 1,116,035 1,296,524 910,343 1,068,852 13,645,955
Total sale 1,440,486 1,204,567 1,495,719 1,572,662 2,190,268 1,583,120 1,462,311 1,469,762 1,544,841 1,601,033 1,295,688 1,580,023 18,440,480
Cost of goods sold
On cash 252,101 178,532 350,447 216,599 253,495 227,775 349,492 380,515 299,306 212,548 268,971 356,797 3,346,578
On credit 504,340 443,351 464,311 589,870 853,765 587,275 449,339 432,052 521,501 605,840 425,385 499,453 6,376,482
Total cost 756,441 621,883 814,758 806,469 1,107,260 815,050 798,831 812,568 820,807 818,387 694,356 856,250 9,723,060
Gross margin
On cash 109,075 77,244 151,626 93,715 109,678 98,550 151,213 164,636 129,499 91,962 116,374 154,374 1,447,946
On credit 574,970 505,440 529,335 672,478 973,330 669,520 512,267 492,559 594,534 690,684 484,958 569,399 7,269,473
Total Gross margin 684,045 582,684 680,961 766,193 1,083,008 768,070 663,480 657,195 724,034 782,646 601,332 723,772 8,717,420
Operating Expense
Fuel 24,632 20,598 25,577 26,893 37,454 27,071 25,006 25,133 26,417 27,378 22,156 27,018 315,332
Assembly suppliers 1,033 0 0 1,033 0 0 1,033 0 0 1,033 0 0 4,132
Expected the bed dept 51,457 50,612 48,543 52,738 61,112 62,887 63,015 62,325 60,861 55,556 52,091 53,164 674,360
Electricity on operation 1,922 2,518 2,492 3,421 2,519 2,468 2,511 2,536 2,529 2,146 2,646 2,566 30,273
Operating depreciation 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 70,363
Total operating Expense 84,908 79,591 82,476 89,948 106,948 98,290 97,428 95,857 95,671 91,976 82,757 88,612 1,094,461
Operating income 599,137 503,093 598,485 676,245 976,060 669,780 566,052 561,337 628,363 690,670 518,575 635,161 7,622,959
Marketing expense
Selling expense
Discount sale 18,059 12,789 25,104 15,516 18,159 16,316 25,035 27,258 21,440 15,225 19,267 25,559 239,726
Sale commission 28,810 24,091 29,914 31,453 43,805 31,662 29,246 29,395 30,897 32,021 25,914 31,600 368,810
Total selling Expense 46,869 36,880 55,018 46,969 61,964 47,979 54,281 56,653 52,337 47,246 45,181 57,159 608,536
Advertising expense
Radio local 6,198 6,198 6,198 6,198 6,198 6,198 6,198 6,198 6,198 6,198 6,198 6,198 74,376
Calendar 13,429 0 0 0 0 0 0 0 0 0 0 25,000 38,429
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4,132
Brochure 517 517 0 517 0 0 0 517 0 1,033 517 517
Signboard 41,320 0 0 0 0 0 41,418 0 0 0 0 0 82,738
Souvenir 4,132 0 0 4,132 0 0 0 0 0 4,132 0 4,132 16,528
Public relation 2,066 2,066 2,066 2,066 2,066 2,066 2,066 2,066 2,066 2,066 2,066 2,066 24,792
Other 1,033 1,033 1,033 1,033 1,033 1,033 1,033 1,033 1,033 1,033 1,033 1,033 12,396
Total advertising expense 68,695 9,814 9,297 13,946 9,297 9,297 50,715 9,814 9,297 14,462 9,814 38,946 253,391
Total marketing expense 115,563 46,694 64,315 60,914 71,261 57,276 104,997 66,466 61,634 61,708 54,995 96,104 861,927
Administration Expense
Salary 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 912,000
Utilities expense 8,264 8,264 8,264 8,264 8,264 8,264 8,264 8,264 8,264 8,264 8,264 8,264 99,168
Insurance expense 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 74,007
Office supply 2,583 0 0 0 2,583 0 0 0 2,583 0 0 0 7,748
Rental land 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000
Property tax expense 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 37,500
Facia tax 4,000 0 0 0 4,000 0 0 0 4,000 0 0 0 12,000
Administrative depreciation 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 253,784
Total administrative expense 146,287 139,705 139,705 139,705 146,287 139,705 139,705 139,705 146,287 139,705 139,705 139,705 1,696,207
Selling and administrative expense 261,850 186,399 204,020 200,619 217,548 196,981 244,702 206,171 207,922 201,413 194,699 235,809 2,558,133
Earning before interest and Tax 337,287 316,695 394,465 475,625 758,512 472,799 321,350 355,166 420,442 489,257 323,876 399,351 5,064,826
Interest expense 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 1,500,000
Interest income 212,287 191,695 269,465 350,625 633,512 347,799 196,350 230,166 295,442 364,257 198,876 274,351 3,564,826
Income Tax 63,686 57,508 80,840 105,188 190,054 104,340 58,905 69,050 88,632 109,277 59,663 82,305 1,069,448
Net income 148,601 134,186 188,626 245,438 443,458 243,459 137,445 161,116 206,809 254,980 139,213 192,046 2,495,378
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¾ Year 3
Year 3 January February March April May June July August September October November December Total
Sale
Sale on cash 391,274 277,091 543,913 336,174 393,438 353,519 542,430 590,580 464,539 329,886 417,457 553,768 5,194,068
Sale on credit 1,169,252 1,027,856 1,076,449 1,367,544 1,979,352 1,361,528 1,041,740 1,001,662 1,209,038 1,404,567 986,205 1,157,923 14,783,118
Total sale 1,560,527 1,304,947 1,620,362 1,703,718 2,372,790 1,715,046 1,584,170 1,592,242 1,673,578 1,734,453 1,403,663 1,711,691 19,977,186
Cost of goods sold
On cash 281,303 199,212 391,041 241,689 282,858 254,159 389,975 424,592 333,976 237,168 300,127 398,126 3,734,224
On credit 549,174 482,764 505,587 642,308 929,662 639,482 489,284 470,461 567,861 659,697 463,201 543,853 6,943,335
Total cost 830,477 681,975 896,627 883,997 1,212,520 893,641 879,259 895,052 901,837 896,865 763,328 941,979 10,677,558
Gross margin
On cash 109,972 77,879 152,872 94,485 110,580 99,360 152,455 165,988 130,563 92,718 117,331 155,642 1,459,845
On credit 620,078 545,093 570,863 725,236 1,049,690 722,045 552,456 531,202 641,177 744,870 523,004 614,070 7,839,783
Total Gross margin 730,049 622,972 723,735 819,721 1,160,270 821,405 704,911 697,190 771,741 837,588 640,335 769,712 9,299,628
Operating Expense
Fuel 27,465 22,967 28,518 29,985 41,761 30,185 27,881 28,023 29,455 30,526 24,704 30,126 351,598
Assembly suppliers 1,067 0 0 1,067 0 0 1,067 0 0 1,067 0 0 4,268
Expected bad dept 55,610 54,728 52,528 57,100 66,205 68,127 68,266 67,518 65,933 60,185 56,432 57,594 730,226
Electricity on operating 2,176 2,860 2,820 3,868 2,851 2,805 2,855 2,877 2,861 2,435 3,005 2,853 34,265
Operating depreciation 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 70,363
Total operating Expense 92,181 86,419 89,729 97,883 116,680 106,981 105,933 104,282 104,113 100,077 90,005 96,436 1,190,721
Operating income 637,868 536,553 634,005 721,837 1,043,590 714,425 598,978 592,908 667,628 737,510 550,330 673,276 8,108,907
Marketing expense
Selling expense
Discount sale 19,564 13,855 27,196 16,809 19,672 17,676 27,122 29,529 23,227 16,494 20,873 27,688 259,703
Sale commission 31,211 26,099 32,407 34,074 47,456 34,301 31,683 31,845 33,472 34,689 28,073 34,234 399,544
Total selling Expense 50,774 39,954 59,603 50,883 67,128 51,977 58,805 61,374 56,699 51,183 48,946 61,922 659,247
Advertising expense 0 0 0 0 0 0 0 0 0 0 0 0 0
Radio local 6,402 6,402 6,402 6,402 6,402 6,402 6,402 6,402 6,402 6,402 6,402 6,402 76,824
Calendar 13,871 0 0 0 0 0 0 0 0 0 0 13,871 27,742
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151
4,268
Brochure 534 534 0 534 0 0 0 534 0 1,067 534 534
Signboard 42,680 0 0 0 0 0 42,781 0 0 0 0 0 85,461
Souvenir 4,268 0 0 4,268 0 0 0 0 0 4,268 0 4,268 17,072
Public relation 2,134 2,134 2,134 2,134 2,134 2,134 2,134 2,134 2,134 2,134 2,134 2,134 25,608
Other 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 1,067 12,804
Total advertising expense 70,956 10,137 9,603 14,405 9,603 9,603 52,384 10,137 9,603 14,938 10,137 28,276 249,779
Total marketing expense 121,730 50,090 69,206 65,288 76,731 61,580 111,189 71,510 66,302 66,121 59,083 90,198 909,027
Administration Expense
Salary 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 912,000
Utilities expense 8,536 8,536 8,536 8,536 8,536 8,536 8,536 8,536 8,536 8,536 8,536 8,536 102,432
Insurance expense 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 74,007
Office supply 2,668 0 0 0 2,668 0 0 0 2,668 0 0 0 8,003
Rental land 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000
Property tax expense 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 37,500
Facia tax 4,000 0 0 0 4,000 0 0 0 4,000 0 0 0 12,000
Administrative depreciation 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 253,784
Total administrative expense 146,644 139,977 139,977 139,977 146,644 139,977 139,977 139,977 146,644 139,977 139,977 139,977 1,699,726
Selling and administrative expense 268,374 190,067 209,183 205,264 223,375 201,557 251,166 211,487 212,946 206,098 199,060 230,175 2,608,752
Earning before interest and Tax 369,494 346,486 424,822 516,573 820,215 512,868 347,811 381,421 454,682 531,412 351,270 443,101 5,500,155
Interest expense 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 1,500,000
Interest income 244,494 221,486 299,822 391,573 695,215 387,868 222,811 256,421 329,682 406,412 226,270 318,101 4,000,155
Income Tax 73,348 66,446 89,947 117,472 208,564 116,360 66,843 76,926 98,905 121,924 67,881 95,430 1,200,046
Net income 171,146 155,040 209,876 274,101 486,650 271,508 155,968 179,494 230,777 284,488 158,389 222,671 2,800,108
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
152
¾ Year 4
Year 4 January February March April May June July August September October November December Total
Sale
Sale on cash 421,372 298,406 585,752 362,033 423,702 380,712 584,156 636,009 500,273 355,261 449,569 596,366 5,593,612
Sale on credit 1,259,195 1,106,922 1,159,253 1,472,740 2,131,610 1,466,261 1,121,874 1,078,713 1,302,041 1,512,611 1,062,067 1,246,994 15,920,281
Total sale 1,680,567 1,405,328 1,745,005 1,834,773 2,555,312 1,846,973 1,706,030 1,714,723 1,802,314 1,867,872 1,511,637 1,843,360 21,513,893
Cost of goods sold
On cash 302,941 214,536 421,121 260,280 304,616 273,709 419,973 457,253 359,666 255,412 323,213 428,751 4,021,472
On credit 591,419 519,899 544,478 691,716 1,001,175 688,673 526,922 506,650 611,543 710,443 498,832 585,688 7,477,438
Total cost 894,360 734,435 965,598 951,996 1,305,791 962,383 946,895 963,903 971,209 965,855 822,045 1,014,439 11,498,909
Gross margin
On cash 118,431 83,870 164,631 101,753 119,086 107,003 164,183 178,757 140,607 99,850 126,356 167,615 1,572,141
On credit 667,776 587,023 614,775 781,023 1,130,435 777,587 594,952 572,063 690,499 802,168 563,235 661,306 8,442,843
Total Gross margin 786,207 670,893 779,406 882,776 1,249,521 884,590 759,135 750,820 831,105 902,018 689,591 828,921 10,014,984
Operating Expense
Fuel 30,418 25,436 31,585 33,209 46,251 33,430 30,879 31,036 32,622 33,808 27,361 33,365 389,401
Assembly suppliers 1,102 0 0 1,102 0 0 1,102 0 0 1,102 0 0 4,409
Expect bed dept 60,169 59,148 56,695 61,560 71,297 73,368 73,517 72,712 71,005 64,815 60,773 62,024 787,084
Electricity on operating 2,416 3,177 3,132 4,296 3,166 3,115 3,171 3,195 3,178 2,705 3,338 3,191 0
Operating depreciation 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 70,363
Total operating Expense 99,970 93,625 97,275 106,032 126,578 115,777 114,534 112,807 112,668 108,294 97,335 104,444 1,289,338
Operating income 686,237 577,268 682,131 776,745 1,122,943 768,813 644,601 638,013 718,437 793,724 592,257 724,477 8,725,646
Marketing expense
Selling expense
Discount sale 21,069 14,920 29,288 18,102 21,185 19,036 29,208 31,800 25,014 17,763 22,478 29,818 279,681
Sale commission 33,611 28,107 34,900 36,695 51,106 36,939 34,121 34,294 36,046 37,357 30,233 36,867 430,278
Other selling expense 0 0 0 0 0 0 0 0 0 0 0 0 0
Total selling Expense 54,680 43,027 64,188 54,797 72,291 55,975 63,328 66,095 61,060 55,121 52,711 66,685 709,958
Advertising expense 0 0 0 0 0 0 0 0 0 0 0 0 0
Radio local 6,613 6,613 6,613 6,613 6,613 6,613 6,613 6,613 6,613 6,613 6,613 6,613 79,358
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
153
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
154
¾ Year 5
Year 5 January February March April May June July August September October November December Total
Sale
Sale on cash 454,814 322,089 632,240 390,766 457,329 410,928 630,517 686,486 539,977 383,457 485,250 643,696 6,037,550
Sale on credit 1,359,131 1,194,773 1,251,257 1,589,624 2,300,785 1,582,630 1,210,911 1,164,325 1,405,378 1,632,659 1,146,358 1,345,962 17,183,795
Total sale 1,813,945 1,516,862 1,883,497 1,980,390 2,758,115 1,993,558 1,841,429 1,850,812 1,945,355 2,016,116 1,631,608 1,989,658 23,221,345
Cost of goods sold 0
On cash 325,429 230,461 452,381 279,601 327,228 294,027 451,148 491,195 386,364 274,371 347,206 460,578 4,319,988
On credit 644,554 566,609 593,396 753,863 1,091,124 750,547 574,263 552,170 666,486 774,272 543,649 638,309 8,149,243
Total cost 969,983 797,070 1,045,777 1,033,464 1,418,353 1,044,574 1,025,410 1,043,364 1,052,851 1,048,643 890,855 1,098,887 12,469,231
Gross margin 0
On cash 129,386 91,628 179,860 111,165 130,101 116,901 179,370 195,292 153,613 109,086 138,044 183,119 1,717,562
On credit 714,577 628,164 657,861 835,761 1,209,661 832,084 636,649 612,156 738,892 858,387 602,709 707,653 9,034,552
Total Gross margin 843,962 719,792 837,721 946,926 1,339,762 948,984 816,018 807,447 892,504 967,473 740,753 890,772 10,752,114
Operating Expense 0
Fuel 33,739 28,214 35,033 36,835 51,301 37,080 34,251 34,425 36,184 37,500 30,348 37,008 431,917
Assembly suppliers 1,139 0 0 1,139 0 0 1,139 0 0 1,139 0 0 4,554
Expected bad dept 64,828 63,756 61,142 66,418 76,956 79,191 79,352 78,483 76,640 69,959 65,596 66,947 849,268
Electricity on operating 2,702 3,545 3,503 4,808 3,541 3,476 3,537 3,569 3,555 3,020 3,725 3,725 42,708
Operating depreciation 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 70,363
Total operating Expense 108,272 101,378 105,542 115,063 137,661 125,611 124,142 122,341 122,242 117,481 105,533 113,543 1,398,810
Operating income 735,690 618,414 732,178 831,862 1,202,101 823,374 691,877 685,107 770,262 849,992 635,220 777,228 9,353,305
Marketing expense
Selling expense 0
Discount sale 22,741 16,104 31,612 19,538 22,866 20,546 31,526 34,324 26,999 19,173 24,262 32,185 301,877
Sale commission 36,279 30,337 37,670 39,608 55,162 39,871 36,829 37,016 38,907 40,322 32,632 39,793 464,427
Total selling Expense 59,020 46,442 69,282 59,146 78,029 60,418 68,354 71,341 65,906 59,495 56,895 71,978 766,304
Advertising expense 0 0 0 0 0 0 0 0 0 0 0 0 0
Radio local 6,831 6,831 6,831 6,831 6,831 6,831 6,831 6,831 6,831 6,831 6,831 6,831 81,972
Calendar 14,801 0 0 0 0 0 0 0 0 0 0 14,801 29,601
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
155
4,554
Brochure 569 569 0 569 0 0 0 569 0 1,139 569 569
Signboard 45,540 0 0 0 0 0 45,648 0 0 0 0 0 91,188
Souvenir 4,554 0 0 4,554 0 0 0 0 0 4,554 0 4,554 18,216
Public relation 2,277 2,277 2,277 2,277 2,277 2,277 2,277 2,277 2,277 2,277 2,277 2,277 27,324
Other 1,139 1,139 1,139 1,139 1,139 1,139 1,139 1,139 1,139 1,139 1,139 1,139 13,662
Total advertising expense 75,710 10,816 10,247 15,370 10,247 10,247 55,895 10,816 10,247 15,939 10,816 30,170 266,517
Total marketing expense 134,730 57,257 79,528 74,516 88,275 70,664 124,249 82,156 76,152 75,434 67,710 102,148 1,032,822
Administration Expense
Salary 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 76,000 912,000
Utilities expense 9,108 9,108 9,108 9,108 9,108 9,108 9,108 9,108 9,108 9,108 9,108 9,108 109,296
Insurance expense 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 6,167 74,007
Office supply 2,846 0 0 0 2,846 0 0 0 2,846 0 0 0 8,539
Rental land 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000
Property tax expense 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 3,125 37,500
Facia tax 4,000 0 0 0 4,000 0 0 0 4,000 0 0 0 12,000
Administrative depreciation 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 253,784
Total administrative expense 147,395 140,549 140,549 140,549 147,395 140,549 140,549 140,549 147,395 140,549 140,549 140,549 1,707,126
Selling and administrative expense 282,125 197,806 220,077 215,065 235,670 211,213 264,798 222,705 223,548 215,983 208,259 242,697 2,739,947
Earning before interest and Tax 453,565 420,607 512,101 616,798 966,430 612,161 427,079 462,402 546,714 634,009 426,961 534,531 6,613,357
Interest expense 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 125,000 1,500,000
Interest income 328,565 295,607 387,101 491,798 841,430 487,161 302,079 337,402 421,714 509,009 301,961 409,531 5,113,357
Income Tax 98,570 88,682 116,130 147,539 252,429 146,148 90,624 101,220 126,514 152,703 90,588 122,859 1,534,007
Net operating income 229,996 206,925 270,971 344,258 589,001 341,013 211,455 236,181 295,200 356,306 211,372 286,672 3,579,350
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
156
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
157
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
158
¾ Year 2
Year 2 January February March April May June July August September October November December CF year 2
Cash flow from operating activity
Cash inflow
Cash received on cash sale 361,176 255,776 502,073 310,314 363,173 326,325 500,705 545,151 428,805 304,510 385,345 511,171 4,794,525
Cash received on credit sale 977,692 961,623 922,323 1,002,017 1,161,126 1,194,848 1,197,283 1,184,166 1,156,367 1,055,559 989,733 1,010,110 12,812,846
Adjust depreciation 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 70,363
Cash inflow from operating activity 1,344,732 1,223,263 1,430,260 1,318,194 1,530,163 1,527,036 1,703,851 1,735,181 1,591,036 1,365,932 1,380,942 1,527,144 17,677,734
Cash out flow 0
Purchasing inventory 621,883 814,758 806,469 1,107,260 815,050 798,831 812,568 820,807 818,387 694,356 856,250 830,477 9,797,096
Cash paid for operating expense 84,908 79,591 82,476 89,948 106,948 98,290 97,428 95,857 95,671 91,976 82,757 88,612 1,094,461
Cash paid for income tax 601,615 467,833 1,069,448
Cash out flow from operating activity 706,791 894,349 888,945 1,197,208 921,997 1,498,736 909,996 916,665 914,058 786,332 939,007 1,386,922 11,961,005
Net cash flow form Operating activity 637,941 328,914 541,315 120,987 608,165 28,300 793,856 818,516 676,978 579,600 441,934 140,222 5,716,729
Cash flow from selling and administrative activity 0
Cash inflow 0
Adjust depreciation 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 253,784
Adjust rental land 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000
Cash inflow from S and A activity 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 553,784
Cash outflow 0
Marketing expense 115,563 46,694 64,315 60,914 71,261 57,276 104,997 66,466 61,634 61,708 54,995 96,104 861,927
Administrative expense 146,287 139,705 139,705 139,705 146,287 139,705 139,705 139,705 146,287 139,705 139,705 139,705 1,696,207
Cash outflow from S and A activity 261,850 186,399 204,020 200,619 217,548 196,981 244,702 206,171 207,922 201,413 194,699 235,809 2,558,133
Net cash flow form S and A activity -215,702 -140,250 -157,871 -154,471 -171,400 -150,832 -198,553 -160,023 -161,773 -155,264 -148,551 -189,661 -2,004,349
Cash flow 0
Cash received from sold equipment 0 0 0 0 0 0 0 0 0 0 0 0 0
Cash inflow from investment activity 0 0 0 0 0 0 0 0 0 0 0 0 0
Cash outflow 0
Cash paid investment on operating (fixed) 0 0 0 0 0 0 0 0 0 0 0 0 0
Cash paid investment on administrative (fixed) 0 0 0 0 0 0 0 0 0 0 0 0 0
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
159
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
160
¾ Year 3
Year 3 January February March April May June July August September October November December CF year 3
Cash flow from operating activity
Cash inflow
Cash received on cash sale 391,274 277,091 543,913 336,174 393,438 353,519 542,430 590,580 464,539 329,886 417,457 553,768 5,194,068
Cash received on credit sale 1,056,591 1,039,837 998,023 1,084,891 1,257,886 1,294,419 1,297,056 1,282,847 1,252,731 1,143,522 1,072,210 1,094,285 13,874,300
Adjust depreciation 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 70,363
Cash inflow from operating activity 1,453,729 1,322,792 1,547,799 1,426,928 1,657,188 1,653,801 1,845,350 1,879,291 1,723,134 1,479,271 1,495,531 1,653,917 19,138,731
Cash out flow 0
Purchasing inventory 681,975 896,627 883,997 1,212,520 893,641 879,259 895,052 901,837 896,865 763,328 941,979 894,360 10,741,441
Cash paid for operating expense 92,181 86,419 89,729 97,883 116,680 106,981 105,933 104,282 104,113 100,077 90,005 96,436 1,190,721
Cash paid for income tax 672,137 527,909 1,200,046
Cash out flow from operating activity 774,157 983,046 973,726 1,310,404 1,010,321 1,658,377 1,000,986 1,006,119 1,000,978 863,405 1,031,985 1,518,706 13,132,209
Net cash flow form Operating activity 679,572 339,746 574,073 116,525 646,867 -4,576 844,365 873,171 722,156 615,866 463,547 135,211 6,006,522
Cash flow from selling and administrative activity 0
Cash inflow 0
Adjust depreciation 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 253,784
Adjust rental land 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000
Cash inflow from S and A activity 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 553,784
Cash outflow 0
Marketing expense 121,730 50,090 69,206 65,288 76,731 61,580 111,189 71,510 66,302 66,121 59,083 90,198 909,027
Administrative expense 146,644 139,977 139,977 139,977 146,644 139,977 139,977 139,977 146,644 139,977 139,977 139,977 1,699,726
Cash outflow from S and A activity 268,374 190,067 209,183 205,264 223,375 201,557 251,166 211,487 212,946 206,098 199,060 230,175 2,608,752
Net cash flow form S and A activity -222,225 -143,918 -163,034 -159,116 -177,226 -155,408 -205,018 -165,339 -166,797 -159,950 -152,911 -184,026 -2,054,968
Cash flow 0
Cash received from sold equipment 0 0
Cash inflow from investment activity 0
Cash outflow 0
Cash paid investment on operating (fixed) 0 0
Cash paid investment on administrative (fixed) 0 0
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
161
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
162
¾ Year 4
Year 4 January February March April May June July August September October November December CF year 4
Cash flow from operating activity
Cash inflow
Cash received on cash sale 421,372 298,406 585,752 362,033 423,702 380,712 584,156 636,009 500,273 355,261 449,569 596,366 5,593,612
Cash received on credit sale 1,143,217 1,123,814 1,077,205 1,169,646 1,354,647 1,393,989 1,396,830 1,381,527 1,349,095 1,231,485 1,154,688 1,178,461 14,954,604
Adjust depreciation 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 70,363
Cash inflow from operating activity 1,570,452 1,428,084 1,668,820 1,537,543 1,784,212 1,780,565 1,986,849 2,023,400 1,855,231 1,592,610 1,610,121 1,780,690 20,618,580
Cash out flow 0
Purchasing inventory 734,435 965,598 951,996 1,305,791 962,383 946,895 963,903 971,209 965,855 822,045 1,014,439 969,983 11574532.2
Cash paid for operating expense 99,970 93,625 97,275 106,032 126,578 115,777 114,534 112,807 112,668 108,294 97,335 104,444 1,289,338
Cash paid for income tax 760,713 605,576 1,366,290
Cash out flow from operating activity 834,405 1,059,223 1,049,272 1,411,823 1,088,961 1,823,385 1,078,436 1,084,016 1,078,523 930,339 1,111,774 1,680,003 14,230,160
Net cash flow form Operating activity 736,048 368,860 619,549 125,720 695,252 -42,820 908,413 939,384 776,709 662,271 498,347 100,687 6,388,420
Cash flow from selling and administrative activity 0
Cash inflow 0
Adjust depreciation 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 253,784
Adjust rental land 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000
Cash inflow from S and A activity 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 553,784
Cash outflow 0
Marketing expense 127,976 53,498 74,107 69,677 82,211 65,895 117,441 76,566 70,980 70,551 63,182 95,894 967,978
Administrative expense 147,014 140,259 140,259 140,259 147,014 140,259 140,259 140,259 147,014 140,259 140,259 140,259 1,703,369
Cash outflow from S and A activity 274,990 193,756 214,366 209,935 229,225 206,153 257,699 216,824 217,994 210,810 203,441 236,152 2,671,347
Net cash flow form S and A activity -228,842 -147,608 -168,217 -163,787 -183,077 -160,005 -211,551 -170,676 -171,845 -164,661 -157,292 -190,004 -2,117,563
Cash flow 0
Cash received from sold equipment 0
Cash inflow from investment activity 0 0
Cash outflow 0
Cash paid investment on operating (fixed) 0 0
Cash paid investment on administrative (fixed) 10,600 10,600
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
163
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
164
¾ Year 5
Year 5 January February March April May June July August September October November December CF year 5
Cash flow from operating activity
Cash inflow
Cash received on cash sale 454,814 322,089 632,240 390,766 457,329 410,928 630,517 686,486 539,977 383,457 485,250 643,696 6,037,550
Cash received on credit sale 1,231,740 1,211,359 1,161,702 1,261,938 1,462,158 1,504,623 1,507,690 1,491,173 1,456,166 1,329,222 1,246,330 1,271,990 16,136,092
Adjust depreciation 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 5,864 70,363
Cash inflow from operating activity 1,692,419 1,539,312 1,799,806 1,658,568 1,925,351 1,921,414 2,144,070 2,183,522 2,002,007 1,718,542 1,737,443 1,921,550 22,244,004
Cash out flow 0
Purchasing inventory 797,070 1,045,777 1,033,464 1,418,353 1,044,574 1,025,410 1,043,364 1,052,851 1,048,643 890,855 1,098,887 1,098,887 12,598,134
Cash paid for operating expense 108,272 101,378 105,542 115,063 137,661 125,611 124,142 122,341 122,242 117,481 105,533 113,543 1,398,810
Cash paid for income tax 849,499 684,509 1,534,007
Cash out flow from operating activity 905,342 1,147,155 1,139,006 1,533,416 1,182,235 2,000,520 1,167,506 1,175,192 1,170,886 1,008,336 1,204,420 1,896,938 15,530,951
Net cash flow form Operating activity 787,076 392,157 660,800 125,151 743,116 -79,105 976,564 1,008,331 831,121 710,207 533,024 24,611 6,713,053
C&S 0
Cash inflow 0
Adjust depreciation 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 21,149 253,784
Adjust rental land 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 300,000
Cash inflow from S and A activity 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 46,149 553,784
Cash outflow 0
Marketing expense 134,730 57,257 79,528 74,516 88,275 70,664 124,249 82,156 76,152 75,434 67,710 102,148 1,032,822
Administrative expense 147,395 140,549 140,549 140,549 147,395 140,549 140,549 140,549 147,395 140,549 140,549 140,549 1,707,126
Cash outflow from S and A activity 282,125 197,806 220,077 215,065 235,670 211,213 264,798 222,705 223,548 215,983 208,259 242,697 2,739,947
Net cash flow form S and A activity -235,976 -151,658 -173,929 -168,916 -189,522 -165,064 -218,649 -176,557 -177,399 -169,834 -162,111 -196,548 -2,186,163
Cash flow 0
Cash received from sold equipment 0
Cash inflow from investment activity 0 0 0 0 0 0 0 0 0 0 0 0 0
Cash outflow 0
Cash paid investment on operating (fixed) 0 0 0 0 0 0 0 0 0 0 0 0 0
Cash paid investment on administrative (fixed) 0 0 0 0 0 0 0 0 0 0 0 0 0
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
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¾ Table of Balance sheet statement
¾ Year 1
Balance sheet 1 January February March April May June July August September October November December
Asset
Current asset
Cash 2,807,022 2,343,099 2,262,969 1,929,758 2,208,148 1,973,547 2,383,252 2,861,295 3,212,418 3,470,125 3,608,920 3,490,047
Inventory 1,299,856 1,481,003 1,470,133 1,746,992 1,478,278 1,466,368 1,479,727 1,485,305 1,480,968 1,368,553 1,519,225 1,481,398
Prepaid land expense 275,000 250,000 225,000 200,000 175,000 150,000 125,000 100,000 75,000 50,000 25,000 0
Account receivable 809,482 1,331,197 1,719,635 2,134,793 2,751,431 2,808,789 2,590,570 2,350,241 2,312,897 2,536,013 2,462,504 2,516,895
Total current asset 5,191,360 5,405,298 5,677,737 6,011,542 6,612,856 6,398,704 6,578,549 6,796,841 7,081,282 7,424,691 7,615,649 7,488,340
Fixed Asset
Operating fixed asset 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815
( Accumulative depreciation) -5,864 -11,727 -17,591 -23,454 -29,318 -35,182 -41,045 -46,909 -52,772 -58,636 -64,499 -70,363
Administrative asset 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641
( Accumulative depreciation) -21,149 -42,297 -63,446 -84,595 -105,743 -126,892 -148,041 -169,189 -190,338 -211,487 -232,635 -253,784
Total fixed asset 5,008,444 4,981,431 4,954,419 4,927,407 4,900,395 4,873,382 4,846,370 4,819,358 4,792,346 4,765,333 4,738,321 4,711,309
Total asset 10,199,804 10,386,730 10,632,157 10,938,949 11,513,251 11,272,087 11,424,919 11,616,199 11,873,628 12,190,024 12,353,970 12,199,649
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
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¾ Year 2
Balance sheet 2 January February March April May June July August September October November December
Asset
Current asset
Cash 3,487,287 3,550,951 3,809,395 3,650,911 3,962,677 3,715,145 4,185,448 4,718,942 5,109,147 5,408,483 5,576,866 5,402,427
Inventory 1,346,839 1,539,714 1,531,426 1,832,216 1,540,006 1,523,788 1,537,524 1,545,764 1,543,344 1,419,313 1,581,207 1,555,434
Prepaid land expense 275,000 250,000 225,000 200,000 175,000 150,000 125,000 100,000 75,000 50,000 25,000 0
Account receivable 2,618,513 2,605,680 2,677,002 2,937,334 3,603,302 3,665,249 3,429,572 3,170,017 3,129,686 3,370,651 3,291,261 3,350,004
Total current asset 7,727,639 7,946,346 8,242,823 8,620,461 9,280,985 9,054,182 9,277,544 9,534,723 9,857,176 10,248,446 10,474,334 10,307,865
Fixed Asset
Operating fixed asset 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815
( Accumulative depreciation) -76,227 -82,090 -87,954 -93,817 -99,681 -105,545 -111,408 -117,272 -123,135 -128,999 -134,862 -140,726
Administrative asset 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641
( Accumulative depreciation) -274,933 -296,081 -317,230 -338,379 -359,527 -380,676 -401,825 -422,973 -444,122 -465,271 -486,419 -507,568
Total fixed asset 4,684,297 4,657,284 4,630,272 4,603,260 4,576,248 4,549,235 4,522,223 4,495,211 4,468,199 4,441,186 4,414,174 4,387,162
Total asset 12,411,936 12,603,630 12,873,096 13,223,721 13,857,233 13,603,417 13,799,768 14,029,934 14,325,375 14,689,633 14,888,509 14,695,027
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
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¾ Year 3
Balance sheet 3 January February March April May June July August September October November December
Asset
Current asset
Cash 5,434,774 5,505,602 5,791,641 5,624,050 5,968,690 5,683,705 6,198,052 6,780,885 7,211,244 7,542,160 7,727,796 7,553,982
Inventory 1,406,932 1,621,584 1,608,953 1,937,477 1,618,598 1,604,216 1,620,009 1,626,794 1,621,822 1,488,284 1,666,936 1,619,317
Prepaid land expense 275,000 250,000 225,000 200,000 175,000 150,000 125,000 100,000 75,000 50,000 25,000 0
Account receivable 3,462,665 3,450,684 3,529,110 3,811,763 4,533,229 4,600,338 4,345,021 4,063,837 4,020,144 4,281,190 4,195,184 4,258,822
Total current asset 10,579,371 10,827,869 11,154,704 11,573,289 12,295,516 12,038,259 12,288,083 12,571,516 12,928,210 13,361,634 13,614,917 13,432,121
Fixed Asset
Operating fixed asset 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815
( Accumulative depreciation) -146,590 -152,453 -158,317 -164,180 -170,044 -175,908 -181,771 -187,635 -193,498 -199,362 -205,225 -211,089
Administrative asset 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641
( Accumulative depreciation) -528,717 -549,865 -571,014 -592,163 -613,311 -634,460 -655,609 -676,757 -697,906 -719,055 -740,203 -761,352
Total fixed asset 4,360,150 4,333,137 4,306,125 4,279,113 4,252,101 4,225,088 4,198,076 4,171,064 4,144,052 4,117,039 4,090,027 4,063,015
Total asset 14,939,521 15,161,007 15,460,829 15,852,402 16,547,617 16,263,347 16,486,159 16,742,579 17,072,261 17,478,673 17,704,944 17,495,136
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¾ Year 4
Balance sheet 4 January February March April May June July August September October November December
Asset
Current asset
Cash 7,636,188 7,732,440 8,058,772 7,895,705 8,282,881 7,955,056 8,526,919 9,170,627 9,650,490 10,023,100 10,239,155 10,024,839
Inventory 1,459,392 1,690,555 1,676,953 2,030,748 1,687,339 1,671,851 1,688,859 1,696,166 1,690,811 1,547,002 1,739,396 1,694,940
Prepaid land expense 275,000 250,000 225,000 200,000 175,000 150,000 125,000 100,000 75,000 50,000 25,000 0
Account receivable 4,374,801 4,357,908 4,439,957 4,743,050 5,520,013 5,592,285 5,317,328 5,014,514 4,967,461 5,248,587 5,155,966 5,224,499
Total current asset 13,745,380 14,030,904 14,400,681 14,869,503 15,665,233 15,369,192 15,658,106 15,981,307 16,383,763 16,868,689 17,159,517 16,944,277
Fixed Asset
Operating fixed asset 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815
( Accumulative depreciation) -216,953 -222,816 -228,680 -234,543 -240,407 -246,271 -252,134 -257,998 -263,861 -269,725 -275,588 -281,452
Administrative asset 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641
( Accumulative depreciation) -782,501 -803,649 -824,798 -845,947 -867,095 -888,244 -909,393 -930,541 -951,690 -972,839 -993,987 -1,015,136
Total fixed asset 4,036,003 4,008,990 3,981,978 3,954,966 3,927,954 3,900,941 3,873,929 3,846,917 3,819,905 3,792,892 3,765,880 3,738,868
Total asset 17,781,383 18,039,894 18,382,660 18,824,469 19,593,187 19,270,133 19,532,035 19,828,224 20,203,667 20,661,581 20,925,397 20,683,145
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
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¾ Year 5
Balance sheet 5 January February March April May June July August September October November December
Asset
Current asset
Cash 10,150,939 10,266,438 10,628,309 10,459,545 10,888,139 10,518,970 11,151,885 11,858,659 12,387,381 12,802,753 13,048,666 2,751,729
Inventory 1,522,027 1,770,733 1,758,421 2,143,309 1,769,530 1,750,367 1,768,321 1,777,808 1,773,600 1,615,811 1,823,843 1,823,843
Prepaid land expense 275,000 250,000 225,000 200,000 175,000 150,000 125,000 100,000 75,000 50,000 25,000 0
Account receivable 5,351,889 5,335,303 5,424,858 5,752,543 6,591,170 6,669,178 6,372,399 6,045,552 5,994,765 6,298,202 6,198,230 6,272,202
Total current asset 17,299,855 17,622,474 18,036,587 18,555,397 19,423,840 19,088,514 19,417,605 19,782,019 20,230,745 20,766,766 21,095,739 10,847,774
Fixed Asset
Operating fixed asset 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815 351,815
( Accumulative depreciation) -287,316 -293,179 -299,043 -304,906 -310,770 -316,634 -322,497 -328,361 -334,224 -340,088 -345,951 -351,815
Administrative asset 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641 4,683,641
( Accumulative depreciation) -1,036,285 -1,057,433 -1,078,582 -1,099,731 -1,120,879 -1,142,028 -1,163,177 -1,184,325 -1,205,474 -1,226,623 -1,247,771 -1,268,920
Total fixed asset 3,711,856 3,684,843 3,657,831 3,630,819 3,603,807 3,576,794 3,549,782 3,522,770 3,495,758 3,468,745 3,441,733 3,414,721
Total asset 21,011,710 21,307,318 21,694,419 22,186,216 23,027,646 22,665,309 22,967,387 23,304,789 23,726,503 24,235,512 24,537,472 14,262,495
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide variety choice to buy for customer
Chapter 6
Risk Management
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This chapter explains about risk of company. In the real life, it is a lot of and
varieties risk which occur different depend on industries, generally involve grouping
and assessing risk under the following heading; Strategic, Operational, Compliance
(including health and safety), Environmental, and Financial. We will show chart of
Measuring the impact and likelihood of risk for measuring level of risk.
The most business has problem about risk. So, many owner of business find to
the best way for reduce risk and in Erawan Furniture too. It is clear that risk
management is now a core business process and should be planned accordingly and
on a continuing basis so as to reduce and protect risk and volatility and improve
returns.
6.2.1 Strategic
It arises from being in a particular industry and geographical area.
Erawan furniture has a particular industry, it is second hand product which the most
furniture store don’t have its. This Erawan furniture risk is:
¾ Risk of purchasing stolen things, the customer might stole the furniture
from anywhere and sold to us to be the discount.
6.2.2 Operational
It arises from the various operational and administrative procedures
that the business uses to implement its strategy. Erawan furniture has a second hand
product which is strategic so, we must fix second hand product before sale again by
mechanicals of company. We have transportation to customers when they order big
product.
This Erawan furniture risk is:
¾ Risk of accident by work
¾ Risk of accident by logistic
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6.2.4 Environmental
It can be relatively routines and covered under compliance but in many
businesses (and in an increasingly large number) they are a major area requiring
separate consideration. The most risk environmental south of Thailand is season so,
so, this Erawan furniture risk is:
¾ Risk of fire
¾ Risk of flood-waters
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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The chart show level of likelihood and impact by likelihood have 14 level
measuring 1 to 14 or low to high possible and impact have 8 level measuring 1 to 8 or
low to high, too.
B Risk of robber
From chart risk of robber range of Low Risk, show that likelihood level 2 and
impact level 2 which means that low possible and medium impact.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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E Risk of flood-waters
From chart risk of flood-waters range of low Risk, show that likelihood level
0.5 and impact level 7 which means that low possible and high impact.
F Risk of fire
From chart risk of fire rent of low Risk, show that likelihood level 2 and
impact level 7 which means that low possible and high impact.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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6.4.2.1 Security
We hire security from Sri-Tommasit Co. Ltd.
¾ Address : 22/67 Ratautid, Tarad, Muang, Surat Thani 84000
Tel : 077-285287
¾ Security : 1 person
Gender : Male
Time work : Monday - Sunday (6 pm. - 6 am.)
Salary : 7,000 Baht
FK-515B 3 pieces
FK-523 4 pieces
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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FK-331D 1 pieces
¾ Contact as : Telephone
- 0-2704-9093 (11.00-20.00 am.)
- 081-639-8162, 080-594-0639 (8.00 am-5.30pm.)
E-mail
- gunkamoy@hotmail.com, gunkamoy@yahoo.com
Source : http://www.gunkamoy.com/index.php?lay=show&ac=article&Id=323250&Ntype=1
6.4.3 Risk of health and safety of employee and Risk of accident by work
Every company will protect about health and safety and accident by
work to employee for welfare of them. Erawan furniture does this by transfer to
Social security insurance for employee everyone.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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Disabled
1. Receive medical treatment as they actually paid less than 2,000 baht per
month.
2. Receive compensation for lack of a monthly income of 50 per cent wage
subsidy to deliver life.
3. Costs are in the process of rebuilding physical disability physical
Psychological and professional. Notice Social Security office actually paid not
exceeding 40,000 baht.
Die
1. Receive 40,000 baht
2. If people pay their insurance contributions, then from up to 3 years but less
than 10 years, or the heirs have the right to receive aid equal to the average wage
of the deceased. One-half months
3. If people pay their insurance contributions from 10 years ago or more heirs
have the right to receive aid equal to the average wage of the dead 5 months
Childbirth
1. Insurance receives maternity 12,000 baht.
2. Receive subvention vacation for 50 percent of maternity pay to deliver an
average subsidy for a period of 90 days.
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3. The insurance man with his wife is not entitled to use their insurance will be
2 times the value Maternity Package 12,000 Baht each, but no right to receive
subvention vacation to childbirth.
4. Their insurance is both husband and wife. Who can exercise their insurance
has 2 different times, which suggest that the exercise of their insurance before
wife due to be paid. Welfare to work to stop childbearing than with childbirth
costs 12,000 baht, however the right to withdraw up to childbirth combined must
not exceed 4 times.
Senile
1. old-age pension
2. old-age perpetuity
Jobless
1. People from unemployment insurance to register as unemployed and filed a
request replacement benefits at the Employment Bureau of State within 30 days
from the first unemployment.
2. Be provided to new work as appropriate.
3. Will receive training as skilled workers needed to get a new job.
Source: http://mx.kkpho.go.th/uc/index.php?option=com_content&task=view&id=230&Itemid=2
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6.4.5.4 Buildings
It can calculate the cost of insurance. Total area is square meters multiplied by
construction value per square meter, following formula to calculate
Size of store = width (m) x Long (m) number of units x number of booths
30 x 35 x 1 x 1= 1,050 square meter.
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6.4.5.5 Cost estimate
There are types of store divide by 2 types
Class 1 buildings (all concrete walls) = 8,000 baht / square meters
Class 2 buildings (half wall wood building) = 6,000 baht / square meters
Therefore, Erawan Furniture selects class 1 because building of Erawan
furniture used concrete everything for durability and we will calculate of sum
insurance premium by
Sum insured= Size of store (m) x type of store (฿)
1, 050 x 8,000 = 8,400,000 Baht
From the table of insurance premiums of the fire insurance, you can see that
our company is small shops and select class 1 building insurance type. From calculate
sum insured of Erawan furniture equal 8,400,000 baht so, when we compare zone
between 8,000,000 with 9,000,000 of insurance in table which can calculate as follow:
= 8,400,000 x 20,197.32
8,000,000
= 21,207.186 baht pre year
So, we will pay 21,207.186 baht per year for Fire insurance
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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6.4.6 Risk of accident by logistic
Erawan furniture does this by transfer to logistic insurance for driver
employees which deliver goods to customers. We will do Damage to the car to take
insurance for them.
Damage to the car to take insurance Age of car not more than 7 years
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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For the bad dept is the account receivable that cannot collected the cash from
the customer, it also be the risk for Erawan furniture
The fixed expense including the depreciation and office supply that the
depreciation is the fixed expense that cannot be change, so it is not concerned to be
the risk for the expense. But the office supply can be control by Erawan furniture
Administrative expense, the mainly part of the administrative expense are the
fixed expense that including salary, insurance expense, rental land, property tax
expense, facia tax, and administrative depreciation that can not be change in the
scenario analysis. There are only utility expense and office supply that change in the
scenario analysis.
For the scenario analysis we expected that the expense will increase by 100%
for each year
Scenario 1 Sale decrease but cost, and expense is the same that can be
acceptable by there are not negative in the net income for each month for each month
and also have the principal enough for pay to the investor.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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For the scenario 1 represent the maximum of sale that can be decreasing by
dose not affect the investor and the overall of business that Erawan furniture need not
to do anything that net income in all of year still be positive that still has the liquidity
enough to operate the business and pay compensation to the investor for every month
In this scenarios represent the percentage of decreasing in sale that higher
However, Erawan furniture can be accept by did not adjust any thing. Because we
have higher in the gross margin
However, if they occur in the real situation, Erawan furniture need to find out
adjust the organization and strategy particularly in the cost to solve this problem by
try to increase the sale or reduce the cost.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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Scenario 2 Cost of goods sold increase but sale and expense still be the same.
The risk for increasing in cost of goods sold is very low from the filed trip survey, so
we assume that the cost will increase about 7% of estimation for each year. That is
scenario quite less possibility to occur in the real situation. How ever if it occur the
investor also have the total principle repayment at the end of year 5.
This scenario effect to reduce net income in less a month of the Erawan
furniture, so Erawan furniture can accept if the cost reduces by 15% of estimation for
each year.
¾ Table of statement in scenario 2
Income statement Year1 Year2 Year3 Year4 Year5
Sale 17,074,518 18,440,480 19,977,186 21,513,893 23,221,345
Cost of goods sold 9,433,596 10,392,899 11,403,218 12,280,388 13,308,506
Gross margin 7,640,922 8,047,580 8,573,969 9,233,505 9,912,839
Operating Expense 923,050 1,096,544 1,193,050 1,291,924 1,401,684
Selling and administrative expense 2,508,345 2,558,133 2,608,752 2,671,347 2,739,947
Earning before interest and tax 4,209,527 4,392,903 4,772,167 5,270,234 5,771,208
Interest expense 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000
Income Tax 812,858 867,871 981,650 1,131,070 1,281,362
Net income 1,896,669 2,025,032 2,290,517 2,639,164 2,989,845
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Scenario 3 represent that if the bed dept higher than estimation about 10 % for
every year to be like this
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variety choice to buy for customer
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This scenario represent that the default rate higher than estimation from 5% to
10 % every year in the term of operating business is can be acceptable but for the
investor the repayment of the principal is not cover all of them. However Erawan
furniture also have the back up plan for the investor that represent in the chapter 5,
and Erawan furniture also have the Account receivable care taker to be the special
employee that look after the account receivable of the company.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
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This scenario of the risk of financing also can be acceptable from the Erawan
furniture. Because we can repay all of principal to the investor at the end of year 5,
and it not affect the overall of the project.
6.5 Conclusion
The overall level of the risk for Erawan furniture in the term of both business
and financial risk. The level of risk in the term of operating business is quite low but
Erawan furniture also have the risk management for those risk, and in the financial
risk Erawan furniture also prepare for this risk.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Chapter 7
Summary
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
191
The Erawan furniture project is the furniture store project that operates in the
Surat thani. Our project business is furniture store. Furniture store business has many
types for sale and response to customer need and want such as table, cupboard, bed,
chair, etc. South of Thailand, furniture store is possible business that can make high
profit and easy to growth in Surat Thani.
In the market feasibility study we found that there many information that
support the market to be feasible for example the growth rate of gross provincial
profit, personal and household good, and the growth rate of population in the Surat
Thani. Erawan furniture has the core competency about the low cost of furniture,
because we will selective more about the suppler who will give us the low price as
much as possible especially, from Lamphoon province. Erawan furniture also
provides the variety way of purchasing for the customer. There are two mainly type of
product of Erawan furniture which are special product, general product, and second
hand product. We set the main target on the normal market and the used market.
For the sale forecast from feasibility of the potential market, the target market
of Erawan furniture, as well as strategy and core competency of Erawan furniture, we
confident that Erawan furniture can generate the sale to 0.85% of the potential market
or about 17,074,518 baht that at the first year and increase by 8% every year.
Erawan furniture is register as the juristic person according to the Thai law. It
rent the land the need to pay in advance for 1 year. Erawan furniture need to build it
owns building that there are 2 mainly zoned which are Core building and Option
building. The core building is the main building for selling and administrative and the
option building for the assembly and warehouse zone for assembly fixed and keeps
the package furniture. The total investment cost for the Erawan furniture is 5,035,456
baht.
We find out the source of funding from the investor that we will offer the
interest rate about 15% per year and will pay all of the interest rate at the end of year 5
that we guarantee the all of principal of the investor by we have the backup plan for
the investor In the financial analysis that represent in 3 financial statement, Erawan
furniture have strong in the financial status that also represent in the ratio analysis
For the risk the mainly of risk for Erawan furniture in both business risk and
financial risk is quite be and can be acceptable. However, we also prepare about the
handle of risk by using the risk management.
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
192
Reference
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
Appendix
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
194
¾ Member group
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
195
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
196
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
197
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer
198
To be, and be recognized as, the low cost leader furniture store in Surat Thani, as well as provide
variety choice to buy for customer