Aubry’s Koi Fish Aubry’s Koi Fish FarmFarm

By By

Michael AubryMichael Aubry

Business OverviewBusiness Overview

Aubry’s Koi Fish Farm is a high quality Aubry’s Koi Fish Farm is a high quality reseller and purveyor of premium Koi and reseller and purveyor of premium Koi and other exotic fish.other exotic fish.

Aubry’s currently operates out of Orange Aubry’s currently operates out of Orange County, California and is looking to expand County, California and is looking to expand into China and Vietnaminto China and Vietnam

With a unique business model that With a unique business model that incorporates a strong business acumen, the incorporates a strong business acumen, the owners of Aubry’ Koi Fish Farm believe that owners of Aubry’ Koi Fish Farm believe that China and Vietnam will present a viable China and Vietnam will present a viable business opportunity business opportunity

ObjectivesObjectives With expansion outside of the United States, With expansion outside of the United States,

Aubry’s Koi Fish Farm believes that it will Aubry’s Koi Fish Farm believes that it will need to solidify its’ strategic decision making need to solidify its’ strategic decision making by doing the following:by doing the following:

- Increase sales from $35,000,000 to Increase sales from $35,000,000 to $70,000,000 within the first year of operations$70,000,000 within the first year of operations

- Develop 15 sustainable relationships with Develop 15 sustainable relationships with possible distributors in each of the host possible distributors in each of the host countriescountries

- Increase profit margins by 15% over the next Increase profit margins by 15% over the next two years using various cost reductions and two years using various cost reductions and premium pricing modelspremium pricing models

Mission StatementMission Statement

““Aubry’s Koi Fish Farm will be the Aubry’s Koi Fish Farm will be the premier provider of koi fish in the premier provider of koi fish in the Chinese and Vietnamese regions. Chinese and Vietnamese regions. Aubry’s Koi Fish Farm will do this by Aubry’s Koi Fish Farm will do this by continuing to provide service and continuing to provide service and quality that contributes to the quality that contributes to the community and adheres to the community and adheres to the highest standards of excellence”.highest standards of excellence”.

ProductsProducts

Aubry’s Koi Fish Farm will be exporting the Aubry’s Koi Fish Farm will be exporting the following types of Koi:following types of Koi:

-Kohaku -Taisho Sanke (known as Sanke) -Showa -Utsurimono -Asagi -Shusui -Koromo -Kawarimono -Hikarimono -Hikari - Utsurimono -Hikarimoyo - Mono -Tancho -Kinginrin

ServicesServices

Aubry’s Koi Fish Farm currently Aubry’s Koi Fish Farm currently provides the following services:provides the following services:

- BreedingBreeding- DistributionDistribution- Koi Health CareKoi Health Care- Consumer EducationConsumer Education

Guidelines for SuccessGuidelines for Success

For the Customer:For the Customer:

- Individualized service for individual - Individualized service for individual needsneeds

- Accurate orders that are delivered - Accurate orders that are delivered and timely and efficient mannerand timely and efficient manner

- Creating an experience that - Creating an experience that customers will reflect upon, as they customers will reflect upon, as they yearn for high quality, cleanliness, and yearn for high quality, cleanliness, and service that they will surely rememberservice that they will surely remember

Guidelines for SuccessGuidelines for Success

For the Community and For the Community and Environment:Environment:- Using products that are - Using products that are environmentally sensitiveenvironmentally sensitive- Convenience, portability, and ease of - Convenience, portability, and ease of product availabilityproduct availability- Superior standards of product - Superior standards of product selection, refinement, and distributionselection, refinement, and distribution- A high quality product, that is - A high quality product, that is inexpensive, and highly attainableinexpensive, and highly attainable

Guidelines for SuccessGuidelines for Success

For the Associates:For the Associates:

- Understanding and embracing diversity - Understanding and embracing diversity within the organizationwithin the organization

- Ensuring opportunities for upward mobility- Ensuring opportunities for upward mobility

- Furthering employee growth by offering - Furthering employee growth by offering continuous training.continuous training.

- Creating a positive environment, where the - Creating a positive environment, where the employees can gain the trust of employees can gain the trust of management, and receive continuous management, and receive continuous feedback from customersfeedback from customers

Why Shanghai?Why Shanghai? Significant growth – according to the United Significant growth – according to the United

States Department of Agriculture the GDP States Department of Agriculture the GDP increased over 19.4% in 2004increased over 19.4% in 2004

The citizens of Shanghai have a disposable income The citizens of Shanghai have a disposable income that is higher than 90% of all other Chinese that is higher than 90% of all other Chinese citizenscitizens

The average income has increased from 2,000 The average income has increased from 2,000 rmb ($265) in 1990 to 17,000 rmb ($2,260) in rmb ($265) in 1990 to 17,000 rmb ($2,260) in 20042004

They are brand conscious consumers – seeking a They are brand conscious consumers – seeking a mixture of equitably priced, high quality products.mixture of equitably priced, high quality products.

Chinese CultureChinese Culture

According to Geert Hofstede the According to Geert Hofstede the Chinese have been found to exhibit Chinese have been found to exhibit the following characteristics:the following characteristics:

- High Long-Term OrientationHigh Long-Term Orientation- Low IndividualismLow Individualism- High Power DistanceHigh Power Distance- High ContextHigh Context

Why Ho Chi Minh City?Why Ho Chi Minh City? Economic Growth - “TNS market researchers Economic Growth - “TNS market researchers

found that annual per capita gross domestic found that annual per capita gross domestic product in Ho Chi Minh City households was product in Ho Chi Minh City households was about $2,400, three times the official about $2,400, three times the official nationwide figure of $720 for this year”.nationwide figure of $720 for this year”.

FDI and Job Growth – Foreign Direct FDI and Job Growth – Foreign Direct Investment has nearly doubled in the last four Investment has nearly doubled in the last four years – it is believed that this will add years – it is believed that this will add thousands of jobs to the local regionthousands of jobs to the local region

Privatization – This will lead to domestic Privatization – This will lead to domestic migration that will increase the consumer migration that will increase the consumer populationpopulation

Vietnamese CultureVietnamese Culture

According to Geert Hofstede the According to Geert Hofstede the Vietnamese have been found to Vietnamese have been found to exhibit the following characteristics:exhibit the following characteristics:

- High Power DistanceHigh Power Distance- High CollectivismHigh Collectivism- Moderate Uncertainty AvoidanceModerate Uncertainty Avoidance- High ContextHigh Context

Domestic CompetitionDomestic Competition Quality Koi – Quality Koi – www.qualitykoi.comwww.qualitykoi.com - this - this

competitor is comparable to Aubry’s Koi Fish competitor is comparable to Aubry’s Koi Fish Farm. Their main focus is to “breed high quality Farm. Their main focus is to “breed high quality American koi”.American koi”.

- Their target market consists of wholesalers and - Their target market consists of wholesalers and retailers. Wholesalers account for more than retailers. Wholesalers account for more than 90% of their sales.90% of their sales.

- Their current strategy involves a low high cost - Their current strategy involves a low high cost high quality approachhigh quality approach

- They will ship their products anywhere in the - They will ship their products anywhere in the world – they currently have an “airport to airport world – they currently have an “airport to airport policy”policy”

Domestic CompetitionDomestic Competition

Price’s Fish Farm, Inc. - Price’s Fish Farm, Inc. - http://www.pricesfishfarm.com/http://www.pricesfishfarm.com/ - They - They believe in a “fair business deal” believe in a “fair business deal” approach – this consists of a philosophy approach – this consists of a philosophy that emphasizes the health of the fish, that emphasizes the health of the fish, and educating the consumer.and educating the consumer.

- They are also an international provider, - They are also an international provider, guaranteeing live delivery of the fish. guaranteeing live delivery of the fish.

International International CompetitionCompetition

Shanghai Wanjin Beauty Fish Farm – Shanghai Wanjin Beauty Fish Farm – http://www.fancy-goldfish.com/http://www.fancy-goldfish.com/ - This is - This is currently the largest fish farm in Eastern China currently the largest fish farm in Eastern China –with over 1.8 million square feet of dedicated –with over 1.8 million square feet of dedicated aquaculture – they currently export their aquaculture – they currently export their products to international regions including products to international regions including Europe and the United StatesEurope and the United States

Kodama Koi Farm – Kodama Koi Farm – http://www.kodamakoifarm.com/http://www.kodamakoifarm.com/ - - Another Another high quality Koi provider. They have been high quality Koi provider. They have been exporting Koi to the United States since 2001. exporting Koi to the United States since 2001. They also offer worldwide service and deliveryThey also offer worldwide service and delivery

Competitors StrategiesCompetitors Strategies

The strategies of the competition are The strategies of the competition are quite similar – they are all using the quite similar – they are all using the following tactics to bolster their following tactics to bolster their business opportunities:business opportunities:

- ExportingExporting- BreedingBreeding- CustomizationCustomization- Creating a unique environment Creating a unique environment

Differentiated StrategiesDifferentiated Strategies Aubry’s Koi Fish Farm will enter the Chinese Aubry’s Koi Fish Farm will enter the Chinese

and Vietnamese markets using each of the and Vietnamese markets using each of the following strategies:following strategies:

- ExportingExporting- LicensingLicensing- Joint VenturesJoint Ventures- FranchisingFranchising- Distributor PartnershipDistributor Partnership• Aubry’s will not explore foreign direct Aubry’s will not explore foreign direct

investment until initial strategic investment until initial strategic operations have proved to be profitableoperations have proved to be profitable

• Diversification will equal successDiversification will equal success

Product Delivery Product Delivery ProceduresProcedures

Aubry’s Koi Fish Farms will form a Aubry’s Koi Fish Farms will form a distributor partnership with UPS – this will distributor partnership with UPS – this will give Aubry’s a significant competitive give Aubry’s a significant competitive advantage. Further benefits include:advantage. Further benefits include:

- Reduction in transportation costsReduction in transportation costs- Reduced brokerage feesReduced brokerage fees- ““Streamlined and accelerated supply chain”Streamlined and accelerated supply chain”- Improved delivery times – this will improve Improved delivery times – this will improve

customer satisfactioncustomer satisfaction- Future growth and expansion opportunities Future growth and expansion opportunities

Core CompetenciesCore Competencies

ProductsProducts Customized Koi at No Additional Customized Koi at No Additional

CostCost DistributionDistribution Customer ServiceCustomer Service Location Location PricePrice Website Website

GrowthGrowth

As demand and growth increase it is As demand and growth increase it is important for the organization important for the organization develop a bi-annual needs develop a bi-annual needs assessment so that management can assessment so that management can determine whether or not the determine whether or not the current strategic outline is feasiblecurrent strategic outline is feasible

Marketing StrategyMarketing Strategy

ProductProduct

- Differentiated- Differentiated PricePrice

- Aubry’s will follow a low price high - Aubry’s will follow a low price high quality strategy that will attract the quality strategy that will attract the attention of local consumersattention of local consumers

- Aubry’s will offer bulk and early - Aubry’s will offer bulk and early payment discountspayment discounts

Marketing StrategyMarketing Strategy

PromotionPromotion- Local Radio- Local Radio- Billboards- Billboards- Local Newspapers- Local Newspapers- Community Outreach- Community Outreach

PlacePlace- Aubry’s will be the only known Koi - Aubry’s will be the only known Koi provider in Ho Chi Minh City and provider in Ho Chi Minh City and ShanghaiShanghai

Sales StrategySales Strategy

Educate the customerEducate the customer Enhance the visual appeal of the Enhance the visual appeal of the

productproduct Promote Special OccasionsPromote Special Occasions Public RelationsPublic Relations CouponsCoupons Membership at Civic OrganizationsMembership at Civic Organizations Health PerceptionHealth Perception

Start-Up RequirementsStart-Up RequirementsStart-up ExpensesLegal $200,000Stationery etc. $5000Brochures $30,000Consultants $1,000,000Insurance $500,000Total Start-up Expenses $1,735,000

Start-up Assets NeededCash Balance on Starting Date $2,000,000Start-up Inventory $2,000,000Total Current Assets $4,000,000

Long-term Assets $4,000,000

Total Assets $8,000,000

Total Requirements $9,735,000

FundingInvestmentAngel Investor 1 $4,000,000Angel Investor 2 $4,000,000Other $0Total Investment $8,000,000

Current LiabilitiesAccounts Payable $500,000Current Borrowing $500,000Current Liabilities $1,000,000Long-term Liabilities $735,000Total Liabilities $1,735,000

Financial ExpectationsFinancial ExpectationsAubry's Koi Fish FarmINCOME STATEMENT

1 2 3 4 5 6 7 8 9 10 11 12SALES 700,000 700,000 1,400,000 1,400,000 1,400,000 1,400,000 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 2,100,000 DIR COST OF SALES 560,000 560,000 1,120,000 1,120,000 1,120,000 1,120,000 1,680,000 1,680,000 1,680,000 1,680,000 1,680,000 1,680,000 GROSS MARGIN 140,000 140,000 280,000 280,000 280,000 280,000 420,000 420,000 420,000 420,000 420,000 420,000 Expenses:Advertising/Promo 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 Auto & Travel 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 Contract Services 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 Employee Benefits 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 Insurance 2,100 2,100 2,100 2,100 2,100 2,100 2,100 2,100 2,100 2,100 2,100 2,100 Accounting 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 Payroll Tax 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 3,150 OPERATING EXPENSES 74,225 74,225 74,225 74,225 74,225 74,225 74,225 74,225 74,225 74,225 74,225 74,225 Earnings Before Tax 65,775 65,775 205,775 205,775 205,775 205,775 345,775 345,775 345,775 345,775 345,775 345,775

Conclusions and Conclusions and RecommendationsRecommendations

Exporting koi to Shanghai and Ho Exporting koi to Shanghai and Ho Chi Minh City is a viable business Chi Minh City is a viable business opportunityopportunity

To be successful Aubry’s Koi Fish To be successful Aubry’s Koi Fish Farm must penetrate the market Farm must penetrate the market before any major competitor, so that before any major competitor, so that it can increase brand recognition, it can increase brand recognition, customer loyalty, and its’ consumer customer loyalty, and its’ consumer base.base.

Questions?Questions?

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