Académique Documents
Professionnel Documents
Culture Documents
NZARAMBA Rene
Entrepreneurship Lecturer
Prepared by
Ahishakiye Anaclet
217049028
Computer and software engineering
Year 3
University Of Rwanda
College of science and technology
School of ICT
1|TW I S T A n i ma t i o n
Contents
Executive summary ........................................................................................................................................................4
1.0 Introduction .............................................................................................................................................................6
1.1 Twist Animations .................................................................................................................................................7
1.2.Mission ................................................................................................................................................................7
1.3 Keys to Success ....................................................................................................................................................8
2. Industry Analysis .......................................................................................................................................................8
2.1. FUTURE OUTLOOK ..............................................................................................................................................8
2.2. SWOT analysis .....................................................................................................................................................8
2.3 PESTEL analysis ....................................................................................................................................................9
2.3.1. POLITICAL ANALYSIS OF ANIMATION STUDIO .............................................................................................9
2.3.2. ECONOMICAL ANALYSIS ANIMATION STUDIO ...........................................................................................10
2.3.3. SOCIAL ANALYSIS ANIMATION STUDIO .....................................................................................................10
2.3.4. TECHNOLOGICAL ANALYSIS ANIMATION INDUSTRY .................................................................................11
2.3.5. LEGAL ANALYSIS OF ANIMATION INDUSTRY .............................................................................................11
2.3.6. ENVIRONMENTAL ANALYSIS OF ANIMATION INDUSTRY ...........................................................................12
2.4. Analyzing the Animation industry Customers ..................................................................................................12
3. Description of the Venture ......................................................................................................................................13
3.1. Products and Services .......................................................................................................................................13
3.2. Custom Content Development .........................................................................................................................14
3.3. Background of entrepreneurs ...........................................................................................................................15
3.4. Company Locations and Facilities .....................................................................................................................15
4.0 Market Analysis .....................................................................................................................................................16
4.1. Market segmentation .......................................................................................................................................16
4.2 Target Market Segment Strategy .......................................................................................................................17
4.2.1 Market Needs .............................................................................................................................................17
4.2.2 Market Trends ............................................................................................................................................17
4.2.3 Market Growth ...........................................................................................................................................18
4.3 Service Business Analysis ...................................................................................................................................18
4.3.1. Main Competitors ......................................................................................................................................18
5.0 Marketing Strategy and Implementation ..............................................................................................................18
5.1 Strategy Pyramid ...............................................................................................................................................19
5.2 Value Proposition ..............................................................................................................................................19
5.3 Competitive Edge ...............................................................................................................................................19
5.4 Marketing Strategy ............................................................................................................................................20
2|TW I S T A n i ma t i o n
5.4.1 PRODUCT ....................................................................................................................................................20
5.4.2 PRICE ...........................................................................................................................................................20
5.4.3 PLACE ..........................................................................................................................................................20
5.4.4 PROMOTION ...............................................................................................................................................20
5.5 Product Branding Strategy .................................................................................................................................22
5.5.1 Branding strategy........................................................................................................................................22
5.6. Distribution strategy .........................................................................................................................................23
5.7. IMC (integrated marketing communication) ....................................................................................................24
5.7.1. AIDA ...........................................................................................................................................................24
6.0 Organizational Plan ................................................................................................................................................25
6.1. Form of ownership............................................................................................................................................25
6.2 Organizational Structure ....................................................................................................................................26
6.3 Management Team............................................................................................................................................27
7.0. Risk Assessment ....................................................................................................................................................27
7.1. Overall aspect ...................................................................................................................................................27
7.1.1. Macro-Economic Risk: ...............................................................................................................................27
7.1.2. Business Model Risk...................................................................................................................................28
7.1.3. Geographic Risk .........................................................................................................................................28
7.1.4. Financial Risk..............................................................................................................................................28
7.1.7. Operational Risk.........................................................................................................................................28
7.2. Risk Factors .......................................................................................................................................................29
7.3. Contingency ......................................................................................................................................................29
8.0 Financial Plan .........................................................................................................................................................30
8.2. Source of fund. .................................................................................................................................................30
9.0 Exit strategy ...........................................................................................................................................................33
3|TW I S T A n i ma t i o n
Executive summary
The global animation industry is one of the most consistent performing industries over the course
of the last many years, but in our country is still on lower level compare to other fields of
entertainment, TV production, advertisements. Within that time it has witnessed many changes
in dynamics. And the changes are in motion even now. Although the holy trinity of animation:
USA, Japan and Korea still dominate, and Nigeria and Kenya also dominate in Africa in animation
industry, new entrants are beginning to venture into their reign in hopes for a greener patch. It
is understandable that African countries are showing interest in the animation industry; after all,
it has been growing at a phenomenal rate of 35% over the last 5 years.
However, Rwanda so far, has not taken any step to take share of the spoils. Surprising when the
Animation Entertainment segment in this region is estimated at USD 122 Million (CY 2009) and is
expected to show a CAGR of 20% (2009-2013) to reach USD 253 million by 2013. More surprising
when 74% of the animation entertainment works in this region is outsourcing work for overseas
clients. Even if the economic benefits are overlooked, it appears almost criminal that such a rich
culture has little to no identity in the increasingly popular visual language of animations.
Twist is an attempt to put Rwanda on the ever-growing field of animation. With a vision to create
a visual identity for our culture much like the Japanese Anime and with a mission to become the
largest outsourcing service provider in the sub-continent by 2020, Twist is an attempt to
announce the arrival of Rwanda in the continental animation industry.
Animation is a process under which different drawings of imagined action (called frames)
representing a slight shift in the positioning of content are recorded in such a way that it gives an
illusion of motion when shown at a predetermined rate. Especially 3D Animation in done in world
of 3 axis, x, y and z. In a nutshell, it is a time sequencing of frames to create a
simulation of continuous movement. In this context, as the Rwandan Animation Industry is still
at its embryonic state, we will consider the regional animation industry to be the local industry
whereas the Rwandan industry shall be mentioned as the domestic industry henceforth.
Animation Industry in Rwanda (our major competitor) is a highly fragmented market. We have
profiled the leading players across Animation Entertainment, Entertainment VFX, and Custom
Content Development. But being fragmented and constrained to minor actions this competitors
are of small scale and many lack resources to compete with the foreigners’ animation studio and
their capabilities.
4|TW I S T A n i ma t i o n
The global economy is witnessing significant contraction with an unprecedented lack of
availability of business and consumer credits. This current decrease and any future decrease in
economic activity in the United States and other regions in the world, in which we do business,
could significantly impact our results operationally and financially. The business risks are both
inherent and perceived. The business of entertainment being a High Risk – High Return business
does test our patience, commitment and convictions time and again.
Animation software is increasingly being used across various market verticals - films, television
broadcasting, video game development, web designing, training and education services, and
corporate communications. Expanding use of animation in training and instruction programs,
need for effective animations in video games, and growing requirements of broadcast and media
sector are also important growth factors.
While it is true that Rwandan’s animation industry is growing at a remarkable pace, the fact
remains that this growth is largely a result of the mushrooming of “studios-for-hire.” In animation
feature films, for example, while Rwandan companies carry out the technological animation
work, character design, and storyboarding are done abroad. Rwanda is yet to become a
successful player in concept creation, the high value-adding segment of the industry which
remains a preserve of western firms. Rwanda’s advantages of low costs in this industry will be
too short-lived, and sooner rather than later, the country will have to start developing new
technologies.
5|TW I S T A n i ma t i o n
1.0 Introduction
The rapid advancement of technology has made computer animation available to the masses and
the animation industry is one of the fastest growing industries. The demand for animated
entertainment has expanded with the increase in broadcasting hours by TV along with the
growing popularity of the Internet. In the past, animation series were aimed at children aged nine
and below. In recent years however, TV stations from aboard have been producing animation
series for teenagers, adults and the whole family. Animation series like The Simpsons and King of
the Hill have been successfully aired on primetime TV. The major markets include the USA, Some
European countries like France and Japan. Licensing operations for T-shirts, caps and other items
have also been a major source of revenue for animation companies. More
broadly speaking, animation is increasingly used in advertisement videos, education materials,
TV shows and movies are also increasingly reliant on animation and computer graphic special
effects.
There is a considerable increase in the 2D and 3D animation outsourcing to Rwanda. Due to the
extremely competitive climate as well as the regional slow-down, some of the large studios in
the East Africa have implemented large amounts of layoffs of animators and artists. Rwanda is
slowly emerging as an alternative to Kenya, Nigeria and Ghana for animation outsourcing.
Rwanda is also emerging as a post-production hub for animation. Post production involves a lot
of ink, paint and compositing and scanning work, which is the labor intensive part of the entire
process of animation and requires less skill. Thus we can see that the animation industry in
Rwanda is following a similar evolutionary part as the software industry. In the early part of the
evolution of the Rwanda software industry, it was the low value jobs which were shifted to
Rwanda. Over time it is projected that more and more high value jobs would be outsourced to
Rwanda. For low value post-production works, it is easier for a studio in the Kenya to outsource
its post-production work as probably nothing is going to go wrong. Rwanda has one of the lowest
labor rates, which makes it an attractive destination for animation outsourcing.
6|TW I S T A n i ma t i o n
1.1 Twist Animations
Name of the Business: Twist Animations
Logo Design:
Twist Animations will be incorporated as a corporation, with principal offices located in
Kigali. All operations, from administration to website development, will take place at this leased
office location. The company also plans to establish an office outside the capital to facilitate,
control prices, and monitor the quality of work.
Owners
Anaclet Ahishakiye (Owner)
Ownership Style: Proprietorship
Nature of business: Profit
Twist Animations seeks to grow in the underdeveloped sector of Animation industry that
includes designing and graphical works including content development in media industry and
also becoming a forerunner in the animation film industry.
1.2.Mission
The mission of Twist Animations is to become a leader in its industry, utilizing the power of
animation to become the market leader in providing online graphic solutions, website designs,
graphic art designs, and animation film development sector that will unleash the true potential
of the firm. To accomplish this, the company will combine high-quality workmanship with the
lowest costs in the industry.
7|TW I S T A n i ma t i o n
1.3 Keys to Success
Establish a well-organized management and a competitive supply chain that will fuel
the entire organization.
Offer extended hours to serve a larger portion of the buying public than our
competitors do.
Educate the buying public by merchandising our products with informational/tutorial
signage and literature
Offer the services of a full time service department to our client base.
Continually modify the product and service offerings to stay on the leading edge of
technology within our market.
Exploit the many weaknesses of our local and national competitors to differentiate
ourselves from them.
2. Industry Analysis
2.1. FUTURE OUTLOOK
The growth potential for the industry has already been explained in the industry overview
section. In case of Bioscope Animation Studio, the growth potentials are explained in the action
plan for the first five years. For the later year, it plans to expand its operation more in the
original feature film content, as well as merchandizing (outsourced). After 15 years, we have a
plan to start our very own amusement park. The regional animation industry is currently at a
nascent stage, with a miniscule 1% share of the global animation and gaming industry and ~8%
share of the outsourcing work. This industry has demonstrated its capability in delivering high
quality, on time work and holds a promising potential both from the domestic and the overseas
demand market perspective. Increasing no. of co-production deals, overseas expansion,
increasing focus on IP development, attracting investments from Private Equity /Other Funds –
All these recent developments by Rwandan players bode positive for the industry.
Adequate supply of talent will need to be ensured to achieve the promise that this segment
holds. Government grants would also help in improving competitiveness of the industry.
8|TW I S T A n i ma t i o n
WEAKNESSES
Lack of trained manpower
High retraining costs
Lack of Government intervention to promote the industry.
Lack of awareness of the industry unlike IT industry.
OPPORTUNITIES
Strategic alliance of Twist studios with other companies to share risk and build long
term relationship.
Rwandan companies adopting inorganic growth route to expand their regional market
share.
THREAT
Growing competition from Kenya, Uganda, and Nigeria etc.
Government intervention in other countries like Kenya to promote the industry on the
regional front.
Opportunities for the Company to sustain and increase its market value emerge from:
a. Its creative competence;
b. Its technological capability;
c. The scalability of its production capacities;
d. Its ability to deliver high quality at competitive price;
e. Its ability to deliver on time;
f. Its ability to add value to customer needs;
g. Its ability to service large value projects;
h. Increased focus on value creation;
i. The growing demand for animated products in the television, DTH and Theatrical
space both in the local and global entertainment market
9|TW I S T A n i ma t i o n
project on start either by tools or/and money for capital; example BDF and SACCO have that
program for new business.
New Government Initiatives
The program of promoting products made by Rwanda in campaign called ‘Made in Rwanda’
is helping new startups to grow because every company in Rwanda must use local product
before looking aboard.
2.3.2. ECONOMICAL ANALYSIS ANIMATION STUDIO
The cost of producing a 30-minute 3D animation program in United States and Canada is
US$250,000-400,000 while in Rwanda we still have movies series of more than 10 episodes that
cost about US$50,000. Rwanda has a cost advantage compared to the Nigeria, which is another
low cost producer of animations. The average monthly salary of an animation professional in
Rwanda is not known because there is no professional in this industry. The most of animation
used here in Rwanda are made by Nigerian or Kenyan whose cost is high even in whole industry
of multimedia.
• Lack of Finance
Animation studio is one of the most expensive studio in multimedia or in entertainment because
only one computer on the level of production cost at least US$1,200 without drawing tablet; And
for all beginners who wish to participate in industry this is the limitation. And about manpower,
3D artists are expensive for even models can cost you about US$15 an hour for modelling. But as
stated above, we are the first manpower of the studio.
2.3.3. SOCIAL ANALYSIS ANIMATION STUDIO
10 | T W I S T A n i m a t i o n
2.3.4. TECHNOLOGICAL ANALYSIS ANIMATION INDUSTRY
While it is true that Rwandan’s animation industry is growing at a remarkable pace, the fact
remains that this growth is largely a result of the mushrooming of “studios-for-hire.” In animation
feature films, for example, while Rwandan companies carry out the technological animation
work, character design, and storyboarding are done abroad. Rwanda is yet to become a
successful player in concept creation, the high value-adding segment of the industry which
remains a preserve of foreigner’s firms. Rwanda’s advantages of low costs in this industry will be
too short-lived, and sooner rather than later, the country will have to start developing new
technologies.
Skills
The animation industry is still young. Rwanda cinema is yet to make its mark on the regional
stage. The booming animation outsourcing industry is constantly demanding new skills and
fresh infusion of new talent into the industry. As such, it is imperative that we have a healthy
pipeline to supply talent to the industry. Skills required in the animation field can be clubbed
under two broad categories, mainly technical skills and soft skills. Programming expertise,
analytical ability, and proficiency on the software are basic requirements for technical skills.
Though Rwanda possesses the manpower with the requisite skill set, what remains an area
of concern is the education imparted to this manpower from the quality perspective.
This has resulted in mushrooming of multimedia institutes. What is interesting is that quite a few
reputed organizations have come forward and started a chain of multimedia institutions for two
reasons. One, they can use the trained professionals for in-house animation development and
secondly, use this education channel for market diversification and penetration. However,
companies need to invest considerable time and money in bringing these students up to the
levels where they start earning revenue for the organization.
Need For technological training to employees
There are no academic institutes like Rwandan Institutes of Technology, Regional Engineering
Colleges, Polytechnics, etc., churning out animators by the thousands. What we have are only
fine arts schools which teach the fundamentals but not the technical skills required for
production. This is a major drawback for the industry in Rwanda. Education in new media has to
be embedded into the mainstream curriculum. Students have to realize that they can have a
lucrative career as animators, and the governments as well as educational institutions have to
start programs for their career development. The animation sector will benefit greatly by giving
encouragement to the community of traditional artists as much as to technically trained
professionals. In other words, integration of the rural and urban talent will prove highly
beneficial.
11 | T W I S T A n i m a t i o n
Outsourcers have always been concerned with the protection of their intellectual property in
Rwanda. Rwanda is one of the few countries which have succeed to take stern action against its
infringement.
2.3.6. ENVIRONMENTAL ANALYSIS OF ANIMATION INDUSTRY
Ability to scale operations:
Rwanda firms are facing a talent shortage which affects their ability to scale up their operations
based on client demands. This also affects the client’s confidence in off shoring large chunks of
work. Though Rwandan companies have put in place huge expansion plans, these are often
marred by various reasons. Tie-ups with educational institutes are helping overcome this
difficulty.
12 | T W I S T A n i m a t i o n
Hence the threat of new entrants is directly related to the number of training academies and
institutes that open up and provide the relevant skill sets for the industry to exist and thrive
and on the technology to enable animation development.
Substitutes All forms of media and entertainment form a part of substitutes for animation industry.
The animation entertainment service models lie along different parts of the value chain.
Depending upon the service model that a player adopts, he can be present across the value
chain or in certain specific parts of it. Players also adopt multiple service models: for e.g. the
same player may operate on ‘service delivery model’ and ‘co-production’ model, varying from
one deal to the other.
13 | T W I S T A n i m a t i o n
Animation Entertainment Revenue Models
Service Model Revenue Model
Revenue Sharing
Co-production Model: Changes have been
Co-Production witnessed over a period of time.
Initially the revenue share was based on
territorial rights with regional
studios getting continental rights which
generally generate less revenue.
Content Creation Currently, coproduction deals are being
struck on a global revenue sharing
model.
Work for Hire
Specific activities along the value chain,
Service Provider for example, production, and post
production are outsourced to regional
players. Revenues for these activities
are generally realized on a per hour basis.
As majority of the outsourcing
happens in the production part most of
Integrated Studio – Offshore Facility the regional players realize revenue
on this model only. An integrated studio
offshore facility Refers to a captive of
a foreign producer.
Revenues from Multiple Streams
The integrated studios who own the IP
and produce local content can realize
Integrated Studio – Own Content revenues through various streams. These
revenues can be from box office
sales, TV and DVD/home video,
merchandizing, and music rights.
14 | T W I S T A n i m a t i o n
Figure 1 custom content development
I am looking at leasing approximately 60 sq. meter space, which will allow sufficient room for
setting up the computers and necessary storage and office space. But with further development
space will be renovated.
15 | T W I S T A n i m a t i o n
4.0 Market Analysis
Twist will focus on small and start-up business customers in Rwanda. It plans to aggressively
pursue and acquire customers through direct business promotions and convert them into
repeat paying customers. It will continually strive to provide consumers with more cost
effective avenues, offering substantial savings rather than just a less money. Twist will also be
configured to stay ahead of, and capitalize on, emerging market trends such as integration of
information/markets and increasing sophistication of online offerings. This will provide a
continuously improving, superior customer experience and grow value. There is a serious
benefit deficiency in existing "brick and mortar" Twist Animations establishments that create
inefficiencies in the ordering and production process. Utilizing the benefits of Internet selling
will eliminate many of these problems and create a lower-cost environment.
16 | T W I S T A n i m a t i o n
4.2 Target Market Segment Strategy
The company will be primarily targeting small and start-up businesses in Rwanda; however
the company plans to negotiate deals with big businesses. Vendors will include printers and
graphic art designers around the world that will be able to help define these markets using the
Twist Animation B2B portal. Will also focus on large businesses. The advantage with this
market segment is that each job usually offers a higher margin than compared with the small
business segment.
Finally, the company will also address individual needs. This is potentially the largest market;
however, there is a relatively high churn rate in this segment that will require more extensive
marketing efforts to attract new customers. This, in turn, lowers the margin and makes this
segment the least attractive.
4.2.1 Market Needs
Twist Animations has chosen to focus on the small business market segment as its primary
customer base because these customers usually have the lowest switching costs, do not have
long-term relationships with other Animations companies, and are the most aggressive in
searching for low-cost Animations services.. The target clientele, though varied, can be
approached in very much the manner according to their needs of
Selection
Value
Service
In addition, new entrée businesses have traditionally been treated poorly and by reversing this
trend, reinforced by ongoing sales training and with unbiased customer interaction through
sales staff, Twist Animation scan further exploit the weaknesses of its top local competitors.
17 | T W I S T A n i m a t i o n
4.2.3 Market Growth
There isn’t much information in numbers about the Animations industry in Rwanda. But the
local Animation studios have emerged in few corners of the city. They are inefficient in
operation and takes time in delivering large scale works. No instances of large scale animation
studio are in operation and have been seen in the market. So there is a huge scope for market
growth driving the customers to the newly introduced Animation studio.
Create New Services. Capitalize on being one the first animation studio to target the
business market by aggressively introducing new services and promotions.
18 | T W I S T A n i m a t i o n
Build brand recognition. Build brand recognition by promoting the Twist
Animations brand through diverse marketing channels, such as online advertising, public
relations, and trade-show participation.
Expand relationships. Expand the company's marketing relationships by aggressively
developing new relationships with leading destination websites and media companies.
This will accelerate customer acquisition and increase usage of our online shop.
Build customer base. Build a customer base and stimulate repeat usage by exposing
customers to products and services that most closely meet their needs.
Expand services. Expand services by creating a range of new services and aggressively
marketing these services to current and future customer bases.
Leverage and extend technology. Leverage and extend the company's technology
platform by enhancing the functionality of the Twist Animations and B2B. Websites
and the technology that supports them. This will be done to improve order flow and
business planning, expands service offerings, facilitate more complete integration with
print vendors, expedite payment processing, and improve the efficiency of the system.
19 | T W I S T A n i m a t i o n
5.4 Marketing Strategy
Twist Animations will strive to develop the most recognized and trusted brand for printing
services on the Internet. To expand our customer base and to extend the image of the
company, we plan to aggressively promote the Twist Animations brand through a
combination of online and traditional media advertising, public relations and participation
in trade shows. The company also plans to expand our affiliate and co-branded online
website strategies through agreements with a range of destination websites.
5.4.1 PRODUCT
The product decisions should consider the product's advantages and how they will be
leveraged. Product decisions should include:
Brand name: Twist Animations
Tagline: “…where dreams are shaped to reality” symbolizes the magnanimity of the
studio and its brilliance in reflecting human imagination to its closest form of reality.
5.4.2 PRICE
For Twist Animations, first movers pricing strategy will be followed which will incorporate cost
leadership pricing strategy as well. This is because the market targeted would be willing to pay
a less price since they are small in size and the serving company is one of the new in its
sector. Since, Twist Animations would be the only supplier of such service in the domestic
market, it can avail this advantage for a significant amount of time. The objective of employing
the market skimming pricing is to benefit from high short term profits because the product is
new in the market and for being able to effectively segment the market. Moreover, charging
high prices initially would help Paradigm Animations to build a high quality image for its
products. If there is threat of new entrants in the market, Twist Animations can effectively
lower its prices to present a high entry barrier.
5.4.3 PLACE
Place - refers to providing the product at a place which is convenient for consumers to access.
Place is synonymous with distribution. The product needs to be distributed in the market
considering the convenience of its consumers. Convenience takes into account the ease of
buying the product, finding the product, finding information about the product, and several
other factors.
The product will be reached through direct marketing out to the field level straight at the hands
of its consumers. The rationale for the chosen distribution channel is that the targeted audience
is mostly in the rising businesses. Thus to reach this segment direct marketing as well as online
marketing will be used.
5.4.4 PROMOTION
Stage 1: Building the awareness of the product
20 | T W I S T A n i m a t i o n
Since there is no brand of service a business firm to become more efficient in terms of cost in
the market, the consumers are unlikely to be aware of Twist Animations and its advantages. In
the first stage of the promotional campaign, necessary steps needs to be taken to generate
awareness about it and its benefits. Strategies that can be implemented to generate awareness
are:
1. Online Banners Ads
2. Online Blogs
3. YouTube Channels
4. Social Banner Sharing
Publication in the above mentioned sources about the advantages of Twist Animations can
generate awareness and curiosity among the target audience.
The large business firms can be reached effectively through seminars and conferences catching
their eyes. Moreover online social networking sites such as Facebook could play an interesting
part. Online advertising in such media can generate the necessary buzz for the conscious group
to gain curiosity about Twist Animations. Furthermore, business consultants and magazines can
be potential opinion leaders who can influence the usage of Twist Animations.
In order to target the smaller business firms, TVCs and print ads will be designed promoting the
benefit of Twist Animations. The cost benefit of using Twist Animations will be highlighted in a
series of TVC and print ads. For a more effective reach of the segment, opinion leaders will be
cultivated. Consultants and online blogs would be ideal candidates for the opinion leaders. This
strategy of buzz marketing will be particularly effective against the concerned people of
Rwanda. Moreover word-of-mouth is another way to spread out the name of this brand.
21 | T W I S T A n i m a t i o n
Stage 3: Promoting greater usage of Paradigm Animations
Brand Audit
Brand Audit: the initiation of a brand starts from selecting the target and getting an insight of
the product in the market. To get a better understanding of the brand we are using a target
matrix which will identify the pros and cons of our brand and align it with its competitors.
Competitive Brand Competitive Brand
Users Users
Size/Profile limited large
Decision Criteria or
Cost effective Quality
Motivators
22 | T W I S T A n i m a t i o n
Decision Process Willing Diversified
Price and High price and less
Barriers/Concerns
preservatives affordability
Brand Importance Moderate Low
Role of price High High
Satisfaction moderate Negligible
Table 2 Comparison between Competitive Brand Users & Category non-users
Currently the trend of going online is alarming. Even a slight reflection of competitiveness leads
people to adapt such services and in some business groups high end service/products have
become a symbol of core competence. So this will act as a sweet spot for Twist Animations
to perform well in the market with an unmet need to be fulfilled by this product.
Brand Strategy
The purpose of the brand equity pyramid is to outline the basic building blocks of a brand
should stand for in order to guide the process of building brand equity. It is the basis for
determining key elements of the brand strategy – brand vision, brand positioning, and brand
personality and brand measurement. Now to build a strong brand strategy the following “brand
pyramid” with its elements have to be defined with respect to our brand. Through this process
we will establish a brand that will deliver high level of satisfaction to the consumers and as a
result will create a resonance in the market leading to high growth and development of the
product. But all of it starts at the base where we need to define our identity, which is stated in
brand positioning statement delivering the true motives of our product.
Brand Execution
Successful branding doesn’t happen without the careful integration of strategy, creative and
execution. Many brands fall short during the brand execution process, when real-world
requirements are not taken into account during the design feasibility stage.
This should provide Twist Animations with a distinct competitive edge over the key players
in the industry, which in turn will result in plentiful sales of Twist Animations regardless of
its competitors’ promotional movements.
23 | T W I S T A n i m a t i o n
in this case TWIST ANIMATIONS. The product will be reached through a mixed
strategy of direct and indirect marketing strategy to reach out to the field level straight at the
hands of its consumers.
The no. 1 channel is an example of B2C (Business to Consumer) and the rest are B2B (Business
to Business) channels. We select a mix of the first and second channel of the figure that is in
other words direct and indirect distribution strategy. Direct strategy will be applied
(manufacturer to consumer) in the early stages when penetrating the market to promote the
sales of TWIST ANIMATIONS in the temporary stalls located in and around sports fields, parks
and gymnasiums. As TWIST ANIMATIONS would be implementing skimming pricing initially,
retailers would benefit from the high mark ups. Thus, retailers would be willing to feature
TWIST ANIMATIONS products and provide a greater shelf space.
5.7.1. AIDA
What helps reach this goal is the AIDA concept, which stands for the stages of consumer
involvement with a promotional message. These stages being: attention, interest, desire, and
actions.
24 | T W I S T A n i m a t i o n
ATTENTION INTEREST DESIRE ACTIONS
In regards to action, the Twist Animations Company uses "mass communication" which
involves communicating a concept or message to large audiences. Studies have shown that
consumers usually buy products if they hear or read positive reviews on the product by other
consumers as opposed to the actual company. Twist Animations has taken note of this and on
its website it has a section specifically designed for new movie releases, and feedback on these
new releases - this section is called Movies | New & Classic Twist Animations Films. Not only
does Twist Animations incorporate personal feedback through its website, but it also has a
Facebook, YouTube, and Twitter page. Indeed, the Twist Animations Company has completely
convinced many consumers to take action.
25 | T W I S T A n i m a t i o n
1. Name and address of partnership.
2. Duration of partnership.
3. Business purpose.
4. Bank account information.
5. Partners' contributions.
6. Partners' compensation.
7. Management authority.
8. Circumstances under which new partners might be admitted into the partnership.
9. Work hours and vacation.
10. Kinds of outside business activities that will be allowed for partners.
11. Disposition of partnership's name if a partner leaves.
12. Dispute resolution.
13. Miscellaneous provisions.
14. Buy-Sell Agreement.
The human resources element shall be an essential component in the delivery of the total
service. By envisaging all employees to handle customers well, and by having enthusiastic,
capable and empowered people interacting with its customers, Twist Animations intends to
build the competitive advantage of being able to comprehensively meet its customers' needs.
There will be need to evaluate jobs and remuneration packages against market benchmarks to
employees for their agreed and set out tasks so as to ensure they are competitive. These
principles extend to accident, medical, death and Welfare benefits.
26 | T W I S T A n i m a t i o n
Content Graphic and model Software
Chief production officer
developers developers engineers
Legal Legal Officials Head of Legal
Table 3 organizational structure
President/CEO
Production
Admission Business Division Education Lab Division
Division Marketing team Division
Ainamtion
Finance Publishing Training team
Modelling
General affair Regional business team Training Lab
Direct/layout
27 | T W I S T A n i m a t i o n
The markets are getting increasingly competitive, Technological obsolescence and lack of skilled
& trained human resources demand sustained and enhanced levels of investments in both
depreciating as well as appreciating assets. Our success is primarily dependent on the audience
accepting our products which is extremely difficult to predict or guarantee. The revenue
derived from a feature film does not necessarily bear any correlation to the production or
distribution cost incurred.
7.1.2. Business Model Risk
We currently operate principally on one business segment i.e. 3D animation and our lack of
diversified business could adversely affect us. Unlike most of the major studios in the national
market which are a part of large diversified corporate group that include Television that can
provide stable source of earnings and cash flows that offset fluctuations in their financial
performance we are predominantly dependent on the availability of Work for hire projects and
the success of our coproduction deals. To mitigate the risk in our business model we
consciously ensure that we maintain a mix of "work-for-hire" projects along with ownership of
content / intellectual property rights on projects in addition to strongly exploring the Gaming
and Digital asset management.
7.1.3. Geographic Risk
We are significantly dependent on the US & European markets and any change in the nature
and structure of these markets would adversely affect our financials. We do believe that the US
& European markets are adequate enough to provide us with continuous and sustainable
business opportunities for the foreseeable future, the African markets are also warming up to
the possibilities of the CGI Industry and we have already made a headway in establishing
strategic relationship with producers of repute in these emerging markets.
7.1.4. Financial Risk
The production of animated products is capital intensive and our capacity to generate revenues
from our work for hire projects may be insufficient to meet our anticipated cash requirements.
To mitigate the risk the company has through proactive and effective risk management
techniques entered in forward contracts with its clients. The company has through its strategic
initiatives and sustained reconnaissance established formidable relationship in the financial
markets that facilitate innovative financial arrangement to provide for its capital requirements.
7.1.7. Operational Risk
We cannot predict the impact the rapidly changing technology or alternative forms of
entertainment may have on us. Animated products are expensive to produce and the
uncertainties inherent in their production could result in the expenditure of significant amounts
on projects that are abandoned or delayed for reasons beyond our control.
We try to mitigate these risks by investing in developing proprietary tools that enable increase
in efficiencies and standardization of processes. We also ensure that we abreast with the
28 | T W I S T A n i m a t i o n
changes in technology and constantly upgrade the capabilities and capacities our human
resources as well as technological resources.
The production completion of animated projects is subject to number of uncertainties,
including delays and increased expenditures in lieu of creative and technical difficulties,
availability of talent, cost technology and increase in wages.
We mitigate these risks through an effective amalgamation of operational planning &
management, enhancing creative and technological competence as well as good Corporate
Governance.
7.3. Contingency
At any point of time, if the business fails, our contingency plan includes the following:
1. Limiting our operation to outsourced content only. If in any case, that fails, we shall go
for
2. Legal procedures of winding up
3. Selling all hardware to independent PC owners, Cyber Cafes, Gaming Cafes, or Other
multimedia based organizations.
29 | T W I S T A n i m a t i o n
4. Selling software license to freelancer animators or other studios.
Twist
Hardware cost:
Desktops US$4600
Wacom Tablets US$1500
Other hardware US$610
Software Cost:
Autodesk Bulk License US$1200
Blender US$0
Windows OS US$90
Salaries
Artists and graphic designers US$600 per month
HR manager US$420 per month
Accounts manager US$450 per month
Marketing manager US$450 per month
TOTAL COST Initial setup: US$8,000 monthly: US$ 1,920
Table 4 start-up capital breakdown
30 | T W I S T A n i m a t i o n
Start-up expenses US$8,000
Balance forward to US$32,000
operations
Income Statements
Income Year 1
Item Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total
Individuals 1400 2500 3000 1400 8300
Businesses 0 8000 3000 400 11400
Total Income 1400 10500 6000 1800 19700
Expenses
Item Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total
Taxes 817 817 817 817 3268
Transportation 60 150 92 57 359
Utilities 120 120 120 120 480
Advertising 200 200 200 200 800
Office Supplies 15 15 15 15 60
Insurance 80 80 80 80 320
Legal and Accounting 75 75 75 75 300
Telephone/Internet 80 80 80 80 320
Miscellaneous 30 30 30 30 120
Total Operating Expenses 1477 1567 1509 1474 6027
Net Profit (Loss) Pretax -1477 -1567 -1509 -1474 -6027
31 | T W I S T A n i m a t i o n
Balance sheet
Item End of Yr 1
Assets
Cash 15490
Equipment 6000
Total Assets 21490
Liabilities
Accounts Payable 250
Common stock 21240
Total equities 21490
Forecast
60000
50000
40000
30000
20000
10000
0
Year1 year2 year3
Forecast
32 | T W I S T A n i m a t i o n
Forecast
250000
200000
150000
100000
50000
0
Year4 Year5 Year6
Forecast
33 | T W I S T A n i m a t i o n