FINAL PROJECT

PROJECT MANAGEMENT
Submitted By
ARSLAN SHAUKAT ( MBA-E, 2111058) SUBMITTED TO: MR. Altaf-Ur-Rehman

NATIONAL COLLEGE OF BUSINESS ADMINISTRATION & ECONOMICS

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Executive summary:
The plan is to open up a cell phone shop that is going to deal in all kind of cell phones, new and used, like Nokia, Samsung, Motorola and LG made. The shop also deals in all their accessories as well like batteries, chargers, and memory cards etc. Furthermore, in order to attract the customers, the shop also deals in easy loads and scratch cards. The location of the shop is wisely selected in the area of Defense Phase V as it is going to earn the benefits of being the only cell phone shop of the area. The shop solely enjoys the monopoly, as there are no other shops in the same aspect, and thus the shop can earn good by setting high prices. The location also provides a huge car parking area that eases the customers the most. There are several other beneficial aspects of the location as well that includes the area being densely populated. The shop uses both above the line and below the line advertising strategies. With the courtesy of the cable operator, footage is show about the shop opening. Secondly, stuff like printed shopping bags and key chains etc. are given to the customers. Apart, a junk ad is also to be distributed by the newspaper hawkers by enclosing it with any newspaper. The final goal is to make this business a franchise of some good cell phone dealer like Mz (Mobile Zone) or United.

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Business Descriptions:
The suitable name for a Cell Phone shop would be THE MOBILE SHOP as it going to be the only shop in that aspect of the area. Apart, the name being a little controversial also enables it get some fame for the shop. The location being decided for this venture is in Defense Phase V as the area is densely populated residentially and as from the commercial aspect the area is still being developed. Several other offices like traveling agencies, real estate agencies, banks etc are already operational. The shop facilitates its customer with all kind of cell phones, new and used, like Nokia, Samsung, Motorola and LG made. The shop also deals in all their accessories as well like batteries, chargers, and memory cards etc. Furthermore, in order to attract the customers, the shop also facilitates with easy loads and scratch cards. This venture possess a high potential of earning good profits as it is going to enjoy the monopoly because there are no other shops of the same aspect as this one is going to be.

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Market:
The shop uses both, above the line and below the line advertising methods. For above the line, footage is to be shown on cable channels with the courtesy of cable operator of that area.

Defence Housing Authority Location: Lahore Population 50,000 Area 852 acres Houses Built: 13,868 Residential (Covering Phase II & IV) Courtesy: Wikipedia.

The potential customers of the shop are those who either already have a cell phone and want any of its accessories or ones who wish to buy one. The total population of the area is 50k approx. Based on observations the following assumptions are made: An average of 1500 people travel through the road on which the shop is located at. Out of which around 700 makes a stop at the commercial spot, 300 would be attracted toward this shop.250 think they have the potential to shop and finally about 200 makes a purchase from the shop. After every ten minutes a customer is expected, especially after five in the evening and each customer is to be treated for around four to five minutes. The selling procedure includes ensuring the customer that the purchase they make for the product

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values and the product works perfectly. After that the customer is fully satisfied, he is provided with a copy of cash memo receipt. As mentioned earlier as well, the shop enjoys the monopoly as being the only shop of its own kind and thus the prices charged from the customers is a little above the normal markets, like Gulberg, Mall Road etc, rates. In case if the competition arises, the shop start selling its product with the guarantee of its own name as by the time the competition arises the shop would be able to gain some goodwill.

Research, Design and Development:

The major research done for this venture was related to the financial aspects and the location of the shop. These two factors enormously play a vital role for any retailers business to succeed. A location was to be chosen that ensures a high rate of customers to hit and get attracted toward the shop, the area should be densely populated and thus this market is supposed to be one of the busiest markets in the whole major area. As for the pricing and other aspects of the business are concerned, our own experience from the shop that we have worked on enables me to get an exposure toward all the pricing matters, estimating sales, and an overall view about how to manage a mobile shop. What we have observed is that an average of 1500 people travel through the road on which the shop is located at. Out of which around 700 makes a stop at the commercial spot, 200 would be attracted toward this shop. 250 think they have the potential to shop and finally about 200 make a purchase from the shop.

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After every ten minutes a customer is expected, especially after five in the evening and each customer is to be treated for around four to five minutes. The selling procedure includes ensuring the customer that the purchase they make for the product values and the product works perfectly. After that the customer is fully satisfied, he is provided with a copy of cash memo receipt.

Manufacturing:
The shop is located in the heart of the commercial area of Defence Phase V Ext. Factors that were considered before deciding upon the location were like the nearness to the suppliers market, highly dense (populated) area, etc. Following are the advantages of the current location of the shop: 1. Potential of being the only cell phone shop in the whole commercial area. 2. Nearness to the suppliers market (wholesaler and importers) 3. Densely populated area as majority of the population lives in Villas & their servants nearby smaller areas. Offices and few shops are on the developing stage. 4. The location provides a huge car parking area that eases the most to the people who wish to make a stop at the market. 5. Being one of the posh areas, the general public is quite well off and shows a Non Bargaining attitude if the prices are tagged on the products.

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6. The location also avails from the easy accessibility of almost every sort of transportation say busses, taxi, autos, rent a car etc. along with the fueling stations as well.

The shop space is of 10 by 30 and a height of 12. The shop is built at a height of 3 from the ground that simply ensures the eye-catching display level to the person walking on road. Flooring is already done with shiny marble tiles that are simply going to set a good impression on who so ever comes in. The shop has a strong shuttering and structure made of brick walls, and in general the overall area is secure as well as few money changers surrounds the shop too.

Developing Project Plan:

It includes the WBS of our Project and it also includes the activities & tasks to be undertaken on the Project. This WBS will help us to assess the progress of the project. Work Breakdown Structure (WBS) of Mobile Phone Shop

1.

Market Survey 1.1 1.2 1.3 Area (Commercial) Shop Area (Size) Convenient to the Supplier Market (Wholesalers/Importers)

2. 3.

Resource Allocation 2.1 Self Funding

Civil Works 3.1 Bathroom Page 7 of 27

3.1.1 3.1.2 3.2 3.3 3.4 3.5 3.6 3.7 3.2.1

Sewerage Water Supply Gas

Kitchen Flooring Wooden Display Boxes Paint Electricity Wires & Boxes Board 3.7.1 3.7.2 Name Board Printing

4. 5.

Locks Lightening 5.1 5.2 5.3 5.4 5.5 Tube Lights Frames Energy Savers Lamps Fans

6.

Fixtures 6.1 Front Counter 6.1.1 6.1.2 6.1.3 6.2 6.2.1 6.2.2 6.3 6.3.1 Glass Wood Mirror Glass Wood Hooks

Wall Hanging

Grilling

7.

Furnitures 7.1 Chair Type 1 Page 8 of 27

7.2 7.3 7.4

Chair Type 2 Stools Tables

8.

Water Dispenser 8.1 8.2 Bottles Glasses

9.

PTCL 9.1 9.2 Exchange Sets Air Conditioner 2 Tons (2 units) 1.5 Tons (3 units) Ad for Salesman Newspaper Cable T.V Show Case Dummies Dummies Stands Contracting Suppliers Mobiles Mobile Cards & Easy Loads Accessories

10.
10.1 10.2

11.
11.1 11.2

12.
12.1 12.2

13.
13.1 13.2 13.3

13.1.1 Wholesalers (Hafeez Center) 13.2.1 All Telcos 13.3.1 AMB 13.3.2 First Copy China (Import) 13.4 Civil Work Contractor 13.4.1 Bathroom 13.4.2 Kitchen

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13.4.3 Flooring 13.4.4 Wooden Display Boxes 13.4.5 Paint 13.4.6 Electricity Wires & Boxes 13.5 13.6 Electrician Furniture, Lightening & Wood 13.5.1 UPS 13.6.1 Int. Light House 13.6.2 Naeem Traders 13.7 13.8 13.9 AC, Fans, Water Dispenser Stationary Security Guards 13.7.1 Lahore Cooling Point 13.8.1 Feroz Sons 13.9.1 Sutlaj Securities 13.10 Computers/Laptops 13.10.1 HP

14.
14.1

Shop Selling Items Cell Phones

14.1.1 Nokia 14.1.2 Samsung 14.1.3 Sony Ericson 14.1.4 China Phones 14.2 14.3 14.4 14.5 14.6 14.7 14.8 14.9 Charger Hands free Batteries Memory Cards Pouches Casings SW CDs Key Pads Page 10 of 27

14.10 Fancy Items 14.11 Infrared & Bluetooth Devices 14.12 USB Cables

15.
15.1 15.2 15.3

Services Easy Loads Prepaid Cards PTCL Cads Bank Account on Shop Name Bank Al Falah Stationary Pens Registers Invoice Books Staplers Visiting Cards Stamps/Pads Calculators Price Tag Machine Security Security Guards Security Gadgets Computers Desktop (2) Laptops (2) Printers (2) Scanners

15.1.1 All Telcos

16.
16.1

17.
17.1 17.2 17.3 17.4 17.5 17.6 17.7 17.8

18.
18.1 18.2

19.
19.1 19.2 19.3 19.4

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Developing Resource & Financial Plan:

The resource plan would be formed now and it will help us to allocate the resources required to undertake each of the activities & tasks within the project. Similar to resource plan we have made financial plan that would help us to identify the quantity of money required for each stage in the project like total cost of labor, equipment & materials. It would help us with an understanding of forecast spending vs. actual spending throughout the project. Below we have mentioned the labor, equipment and materials and the money required to spend on it.

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Start up capital Board Name Board Printing Labor 8000 1000 2000 450 Tube Lights Frame Energy Saver Lamps Frame Fans Labor Front Counter Glass Wood Mirror Labor Wall hanging Glass Wood Labor 195 450 340 80 2400 1000

11000 450

Locks Lightning

4465

Fixtures

18000

12000

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Grilling Grilling Hooks Labor Furniture Chairs type 1 Chairs type 2 Stools Table 900 600 750 700 10000 2000 1000 Dummies Stands Cell Phones Batteries Chargers Handsfree Memory Cards Pouch 1 Pouch 2 Casing 1 Casing 2 Software CDs Keypads 9000 1000 150000 31500 15600 9000 15000 3000 2000 3000 2000 1000 500

15000

2950 10000 2000 1000

Water Cooler PTCL News Paper Ad for salesman Show Class Dummies

10000

Shop Selling Items

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Fancy Items Infra red devices Bluetooth devices USB Cable/Cords MP3 MP4 Ez load sim Telenor Ez load sim Mobilink Ez load sim U-pop Budget for used cell phones 3 used mobiles for E-load Bank A/c by shop name Stationary Ball Point Pen x 2 Sales Registers x 2 Stapler x 1 One hole punch machine x 1 Two hole punch machine x 1 Files x 4 Cash Memo x 2 Price Tag Roll x 2 Price Tag Machine x 1 Calculator x 1 Visiting Cards x 1000 Rubber Stamps x 2 Ink Pad x 1 Shop Acquisition Shop Estate Agent Commission

1000 2200 2500 1800 6000 10000 4000 4000 4000 30000 3000 10000

301100 10000

10 90 100 90 120 60 100 110 650 850 400 180 40 1400000 6000

2800

1406000

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Transportations

Board Lightning Fixtures Furniture Products

1000 500 1000 1000 1000

4500

1811265 13735

Miscellaneous

TOTAL

1825000

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Management:
We will manage this whole venture because we are capable enough to perform the core functions as well as able to deal with all the technical aspects of the management as well. The reason is that we have already worked as a salesman at a similar shop for one year in order to come up with a business of our own in the same field. We are going to hire a salesman through a newspaper advertisement and a servant/helper and a security guard, and also going to work ourselves as well look after all the areas that need our considerations like making purchases, clients queries, customers problems etc. throughout the venture the staff plays a participative role in making major decisions, their opinion will be asked and considered but we will be making the final decision what we feel like benefiting in the long run regarding the venture. Following is the advertisement to be published in newspaper for hiring a salesman: A cell phone shop located in Defence Phase V. requires the services of an energetic salesman possessing a presentable personality. The candidate should have at least 2 years of working experience in the same field. Preference would be given to those residing near the area and having their own conveyance. For further details call Arslan: 0333-1234567

Helper would be hired on reference. As far as security guard is concern, his hiring would be done through a security service provider on mutually agreed conditions.

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All interviews would be conducted at a simple hotel, and the final candidates would be directed toward the shop. Following is supposed to be the ideally expected CVs of the candidates:
Salesman Name Address Experience Academics Religion Salary Expectations Timing Holidays Salary Decided Duties ??? Within 5 km square 2years or more Inter / B.com Islam 6000 to 8000 1pm to 10 pm Natural, Sunday, strike 7000 Client dealing Servant/Helper ??? " NIL Max 5th grade " 3000 to 5000 " " 4000 Assisting Security guard ??? " 1 year or more Matriculation " 6000 to 8000 " " 7000 Ensure safety

Developing Risk Plan:

There are several problems that can show up after the launch of the venture. These might include arising of the competition, customer behavior and latest market trends or even falling short of finance. What if it is a major flop? Sales projections are not met. Unexpected costs increase, personal matters like health or family problems, all need to be considered, and for those reasons following calculations are provided:

Risk

Likelihood

Consequences

Intensity of Risk

Arising of Competition Customer Behavior Change in market trend

0.3 0.2 0.2

0.7 0.6 0.4

0.21 0.12 0.08

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Financing Lacks Sales projections are not met Being a Flop

0.3 0.4 0.2

0.6 0.8 0.9

0.18 0.32 0.18

Case 1: Arising of the competition. In case if the competition arises, the shop starts selling all products on guarantee on the name of the shop. By the time our competitor will form the shop would be able to earn at least some goodwill. How this guarantee is treated? If the product does not work properly, the customer is entitled to have a full replacement, after that he is fully satisfied with the replacement, he is informed that if this replacement does not work, he is not suppose to get further replacements. Value added gifts like a free casing or handsfree would be provided with new cell phones.

Case II: Customer Behavior In case if the customer buying behavior changes, for instance MP3/MP4 players or any other gadgets like PDAs, the shop start purchasing those item from its next purchase put those things on main display for sale.

Case III: Change in Market Trend What if no used mobiles are being sold in the market, just because of the fear of being a stolen/snatched property? The shop simply stops investing in them and makes no further purchase. In short, the shop does every thing to coupe with the latest market trend.

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Case IV: Lacks of Finance What if the actual financing exceeds the budgeted amount? The management has a reserve of Three Hundred Thousands, kept in form of Prize Bonds, which are supposed to be enough to deal with any unforeseen financial deficiencies.

Case V: Sales Projections are not met In case if the sales projections are not met, heavy investment is done on marketing and advertising campaign. More frequent the footage about the shop is to be shown on cable channels. More direction boards are positioned and more junk ads are placed in the newspaper. Case VI: Being a Flop No matter how much efforts are put to this venture, if this business does not operates well with in its first six month, and is supposed to be shut down, an advertisement in the newspaper is published stating Business for Sale. If that doesnt work either all products displayed at shop can be sold at 2/3rd price of the wholesale market that almost equals the price that the management makes a purchase from the importers (e.g. rate in wholesale = 35 and rate from importer = 25) thus making a minute loss on the products. Now either the shop is sold, if it is going in making profit, else the shop is give on rent. The person who rent is supposed to pay a nine-month security and a three-month advance payment. The renting rate for the area of a shop like this is Rs12000/month.the total amount is 144000.the shop is going to cover its cost, but in a longer run.

Developing Financial Forecasting:

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Financing Property Value Mortgage @ 70% Monthly = 1.33 % Starting amount 1st month 2nd month 1st installment Balance 3rd month 2nd installment Balance 4th month 3rd installment Balance 5th month 4th installment Balance 6th month 5th installment Balance 7th month 6th installment Balance 8th month 7th installment Balance 9th month 8th installment Balance 10th month 9th installment Balance 11th month 10th installment Balance 2100000 2127930 2156231.469 170625 1985606.469 2012015.035 170625 1841390.035 1865880.523 170625 1695255.523 1717802.421 170625 1547177.421 1567754.881 170625 1397129.881 1415711.708 170625 1245086.708 1261646.361 170625 1091021.361 1105531.945 170625 934906.9454 947341.2078 170625 776716.2078 787046.5333 170625 616421.5333 3000000 210000016% annually

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12th month 11th installment Balance 13th month 12th installment Balance 14th month 13th installment Balance 15th month 14th installment * Balance

624619.9397 170625 453994.9397 460033.0724 170625 289408.0724 293257.1998 170625 122632.1998 124263.208 124263.208 0

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Shop Operating Expenses

Monthly Salesman Helper/Servant Self Drawings Telephone Electricity Water Cann Security Guard Advertising on Cable (footage) Miscellaneous TOTAL 7000 4000 9000 45000 1300 1300 2600 7000 3000 3800 84000

Daily 269.2308 153.8462 346.1538 1730.769 50 50 100 270 115.3846 146.1538 3230.769Around 3230

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Sales Projection
Following data is anticipated on the basis of observations Item Cellphones Batteries Chargers Handsfree/ Earphones Memory Cards Pouch1 Pouch2 Casing1 Casing2 Software CDs USB Cables/ Cords Keypads Fancy Items Infra red devices Blue tooth devices MP3 Players Mp4 Players Used Mobiles Ez loads Telenor # Of Customers 5 6 15 8 2 9 6 12 6 3 1 1 1 1 1 1 3 6 Avg Cost @ Total Cost 25000 540 450 240 1000 90 210 360 240 60 45 10 100 220 250 1500 6000 21000 Selling Price @ Total Sale 5300 200 100 120 750 35 250 80 250 105 220 20 250 550 550 2000 2800 4000 26500 1200 1500 960 1500 315 1500 960 1500 315 220 20 250 550 550 2000 8400 24000

avg

avg

5000 90 30 30 500 10 35 30 40 20 45 10 100 220 250 1500 2000 3500

12

avg

500

500

520

520

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Mobilink Ufone Scratch Cards telenor mobilink ufone warid Total # of Customers

20 12

avg avg

1000 500

1000 500

1040 520

1040 520

12 18 12 27 200

avg avg avg avg

2000 2500 2000 3500

2000 2500 2000 3500

2060 2575 2060 3605

2060 2575 2060 3605

TOTAL COST Estimation: 69315 70,000 Total Profit Working 26 days a month Material Acquisition Cost Transport Damages Replacements Obsolesces Shop Operating Expenses

TOTAL SALE 84620 85,000 15,000

500 1200 500 800

3000

3250 Total Operating Expenses

3250 6250

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NET PROFIT/ day

Total Profit - Total Operating Expenses

Monthly Profit 0.75 0.25

8,750

227500 170625For Monthly Bank Payment 56875For Shop Up gradation

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Contract Suppliers:
For the initial maintenance of the shop, accessories, fixtures, lightening, furniture, shop selling items, services, security, stationary & electronic items we have contracted suppliers and the details has been given in WBS.

Perform Phase Review:

Now at the end we will be going to perform phase review to ensure that our project went according to that planning

Conclusion:
In my opinion this venture is going to be a major success, the location of the shop makes it win over the competitive edge, high customer strike rate, nearness to market, and the prices being offered from the importers give an additional boost to earn good profits.

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