8/8/2019 Final 489

1/55

8/8/2019 Final 489

2/55

3.2 Vision Statement

Through editorial efficiency and innovations and world class practices we will expand all over

the country as the dominant figure in the newspaper industry.

3.3 Key Product/ Services

The approach taken by the Impact study is to understand that the content and consumer

preferences are unique. Rather than asking consumers to describe what kinds of news and

information they want and how they should be covered, the Impact study measured newspaper

content, measured consumer reaction and then looked for significant correlations between the

two.

A remarkable consistency is demonstrated by the newspaper both in what is considered news and

how its covered. A typical daily Bangladesh newspaper offers a story mix emphasizing sports,

politics, government, war, crime, health, home, food, fashion, travelling and business stories.

These nine categories take up almost 75 percent of the daily newspapers space. The other 25

percent is a mix of entertainment, science, arts, disasters, etc.

Weekends newspapers are more diverse than weekday newspapers. The top five topics still

dominate, but their proportion in the paper shrinks to 50 percent. Business, community news, arts

and science and other topics get more emphasis. This pattern holds true for newspapers

regardless of size.Politics and Sports, the two most frequently covered topics, can be described in more detail.

Sports coverage includes 40 percent professional sports, 38 percent college (National cricket

tournaments), 13 percent high school and 10 percent womens sports (at all levels). Politics

stories are 38 percent elections, 22 percent business (for example stories about the impact of

government on business), 11 percent crime (for example, stories about official corruption) and 8

percent war with the balance spread out over a range of other topics. Election coverage focused

60 percent of space on national elections (because of the March presidential primaries during the

time of the study), 20 percent local, 14 percent state and regional, and 6 percent international

elections.

The quantity of local coverage is another vital element of whats covered in the newspaper. A

glance at front page stories shows that smaller newspapers put more weight on local stories than

do larger papers 58 percent compared to 43 percent of front page space. Larger newspapers

2 | P a g e

8/8/2019 Final 489

3/55

devote more space to national and international stories on the front page. However, this greater

emphasis on local stories is limited to the front page.

Looking at the overall content picture, newspapers cover local news in the same proportion.

Most newspapers devote 34 percent of space to local news, 16 percent to state and regional news,

40 percent to national news, and 10 percent to international. Larger papers devote slightly more

space to international events, but the difference is minimal.

Some themes are primarily written with a local geographic focus: community announcements,

obituaries and stories about ordinary people; education; crime; disaster and arts. The themes least

likely to be written with a local angle are movies; television; politics, government, war and

international; and sports.

The purpose of Impact is to determine how to increase newspaper readership. The contents of

our newspaper are-

Front Page

My country

Capital

Green Bangla

Open column

Editorial

Education

Information and Technology

Culture

World News

Finance and Business

Entertainment

Sports

Last Page

New Idea for the Paper

The Daily Star, The Daily Observer and The Daily New Age are some leading newspaper in our

country. To attract the attention of the customers from these market leaders towards our

newspaper requires something innovative which will satisfy the readers demand appropriately.

Though our papers target market will be the mass people of Dhaka city still we will focus on the

young generation of our country.

3 | P a g e

8/8/2019 Final 489

4/55

A new page names Fresh Knowledge will be introduced in our daily publication. After

going through lots of local newspaper weve found that no newspaper provides

educational page daily. They either have it in weekends or in special dates. In our

newspaper this page shall contain all news regarding education and knowledge about

educations in different country. This page will contain all the necessary circulars of all

the schools, colleges, universities in our country. Again this page will be a helpful for

those who want to have their graduation and masters degree from abroad because we

will allow different agencies to put their advertisement in this page. Again we will open a

column for the scholars who will share the different concepts and issues related to

education. So obviously this page will attract the youth which will increase our sales.

To attract various readers we will open a page named Culture which shall be published

on weekends that will contains news related to arts and culture of the country. This page

will include all schedules of different plays that will be acted in different theaters. Again

this page will contain a column for the scholars who will introduce the arts and culture of

our country to our youth. So that they will feel interested to know and maintain our

culture. The page will contain quotation of famous writers and poets and autobiography

of their life and time.

Well also introduce a page called Information and Technology which will contain all

the necessary information and technologies evolving in the world. This page will containall the information regarding upcoming technologies and sciences which are already in

the market and about those which are yet to come. This page will have all the information

which will help people to know how to use a particular technology for the betterment of

their lives. Again there will be a column for the scholars who will introduce different

technologies to youth, which will make them more advanced.

Finally well introduce two additional magazine named Youth and Humor. The first

magazine shall contain writings from both professional writers and also from the freelancer

writers. There will be a section where students and young generation may ask for the solutions to

their daily life problems and which shall be answered by the professionals. The second magazine

will basically be published for enlightening the mass people with some sort of humor and jokes

that shall give them some breaks from their monotonous daily life. There will be fictions and

comics as well as parody writings collected from both the professionals and amateurs. Readers

4 | P a g e

8/8/2019 Final 489

5/55

will be open to write their own stories and share their daily experiences which will be published

under these two magazines from time to time.

3.4 Strategic goals and objectives

As taught by our honorable faculty member, Strategic Management is the process of specifying

an organizational objective, developing policies and plans to achieve these objectives, allocate

resources to implement the policies and plans to achieve organizational objectives. It should be

communicative as well as ethical. This project has created a opportunity to execute the five task

of the strategic management with our practical project related to the newspaper industry.

Enhancing the five task of strategic management; the project with the fresh idea that will be

enrolled in The Daily Bangladesh anticipating that this idea will be a revolting landmark in the

industry of newspaper of Bangladesh with the whole world in our focal point.

Vision: Through editorial efficiency and innovations and world class practices we will

expand all over the country as the dominant figure in the newspaper industry.

Mission: Work for the country and people with the pride of independence and

patriotism to educate them with the right knowledge and right news accurately and

transparently.

Our motto is: For the Pride, For the Truth, and For the Country

Objective: The core objective of our newspaper is to convert the strategic mission and

vision in to action by educating the people and by practicing the values of social welfare.

Execution: With the help of innovations and diversification we shall represent ourselves

in a different look with patriotic and professional human resource.

Monitor: To refurnish and redesign our objective and daily operation a periodic

monitoring will be carried out for reacting immediately with the situation and change in

time.

4. Industry Overview and Analysis

5 | P a g e

8/8/2019 Final 489

6/55

The newspaper industry in Bangladesh is becoming a profitable sector over time. Although the

main thrust of the newspaper is to provide service but investors also seek to make profit or at

least to get back their investment. In Bangladesh, since investment in newspaper now has been

recognized as profitable one, therefore lots of Companies invested in this sector and got success.

The businessmen are increasingly getting more interested in newspaper publication, realizing the

power of the press. They are also buying newspapers and magazines which are not economically

viable. As a result, concentration, rather than diversification, is gradually becoming the trend of

the day. Newspaper industry is still developing in our country, except a very few, most of

Bangladeshi newspaper are published by big business houses. So it can be safely said that they

have a good financial support. Some of the newspapers are published with political backing. This

political support makes them financially solvent. With this background, one cant deny that the

newspaper industry in Bangladesh is not so weak.1

We will use Porters 5 forces model to analyze the newspaper industry.

4.1 Porters Five Forces

Threat of New Entrants:

As newspapers companies have high fixed cost so its very important to have economic

of scale to reduce per product cost.

1 Country Report: BFUNPW

6 | P a g e

Newspaper

Industry

8/8/2019 Final 489

7/55

Newspaper industry does require high initial investment. But it is possible to focus on

weekly or monthly publications with low investment.

There are some big newspapers that have been doing this business for many years, so

they are enjoying learning & experience curve effect which reduces their costs.

The switching costs for the customers are very low.

Technology of the newspaper industry can be achieved easily.

Reading habits are difficult to change and long-term readers are very unlikely to switch.

So its clear that threat of new entrants in the newspaper industry is moderate.

Threat of Substitutes:

The core business of newspaper is to provide news which is threatened heavily by TV,

radio, mobile and most importantly internet. News are provided through these sources are

widely available and easy to access.

The cost of switching to the substitute products is very low. Some cases it is even free to

gather news like internet.

The current trend of people is become internet centric.

Threat of substitution for newspaper industry is very high. Today newspapers industry requires

innovation to survive.

Bargaining Power of Customers:

There are many sellers of newspapers in this industry.

Switching cost of the product is pretty low.

High fixed cost forces the newspaper companies to sell more.

It is hard to differentiate the core product, so all the newspapers are somewhat

standardize.

It is evident that customers have moderate bargaining power in this industry.

Bargaining Power of Suppliers:

Newspaper industry requires raw materials ink, papers, printing machine, journalists, editors,

information, and other supplies.

There are many suppliers for the newspaper industry.

7 | P a g e

8/8/2019 Final 489

8/55

The customers of the suppliers are not fragmented rather their requirements standardize.

There are also substitutes for the inputs required by the newspapers.

So the bargaining power of suppliers in the newspaper industry is low.

Intensity of Rivalry:

There are many competitors competing for the same customers.

Market growth is slow which means intense competition.

Because of high fixed cost everyone tries to achieve economic of scale.

As products lose value if not sold in one day, so selling as soon as possible is a motive for

everyone.

Core product is hard to differentiate.

These indicate that competition among the existing players is high.

4.2

Creating core competencies and distinctive competencies

The very first steps to enter Newspaper industry is to find a way to the communication and

information. This communication and information backdrop is the ultimate play ground that is

8 | P a g e

8/8/2019 Final 489

9/55

enormous than the traditional newspaper environment. To stay in the race to bottom, to survive

and flourish in the changing world and changing industry structure as well as competitive state,

the business undoubtedly require an unique competitive strategy. Business requires adapting to

necessary changes and shows a quick response to sustain its competitive advantage.

A greater personalization of relationship and interactivity between customers and Newspaper

Company can be achieved through an integration of activities. Our Newspaper may offer

package of services and products in to a complete service bundle for the customers. Services

such as searchable news archives, interactive forum, and hottest information and media

presentations will be offered by the business. The potential competitive advantage of newspaper

company is lay out by the increased integration of activities with the help of new technologies. A

firms specific strength that allow it to differentiate its product and services are better known as

Distinctive competencies. It may come in the shape of achieving substantially lower cost than its

rival and thus gain a competitive advantage. Distinctive competencies arise from two

complementary sources: resources and capabilities. Substantial investment in capital and

adequate expertise is required to use these technologies in a competitive way.

By strengthening distribution network capability the business can increase its capability.

Example, distribution costs contribute about 20% of the total costs of a newspaper

company. Scale economies may help to gain a larger distribution network with the recentdevelopment of the technology. To network more efficient and faster, the information

technology will help us with networking. As a result a reduction in total cost of

distribution is possible due to one common distribution network or also outsourcing can

be an option to carry out distribution through independent companies.

Another method to increase capability is to increase the efficiency in the production

process. The existence of economies of scale due to spreading product specific fixed

costs include the relative high expenses to set up a production process, for example, thetime and expense required to set up a newspaper before printing. With a unique design

product market it can develop competitive advantage. Hence, economies of scale in

producing a circulation are incorporated as a result of the possibilities of mass production

of the circulation.

9 | P a g e

8/8/2019 Final 489

10/55

Resources can be increased by marketing. A substantial fixed cost is involved with

marketing; this implies the existence of economies of scale. Marketing is used for another

purpose that is to create brand image and loyalty of customers. Image and loyalty are

related to the notion of Goodwill. The business shall build up goodwill with a

consistent policy, marketing and highly qualified circulations. A newspaper reputation

and reliability depends crucially on the circulation of that paper. Circulation products are

sold in two markets: the reader market and the advertising market. A change in reputation

in one market will affect the sales in both markets. Companies with a good reputation can

sell their circulation to wider range of people.

4.3 Industries SWOT

Strength:

Convenience: We will provide our newspaper in every possible locations where our

customers can easily find it.

Enthusiastic Management: We are some enthusiastic and energetic young

Entrepreneurs and we are committed to the business to make it very profitable.

Quality products: Our newspaper will be superior from our competitors andquality will be monitored strictly. We will not compromise anything with quality issue.

Easy and Faster delivery: Our delivery process is faster and customer can get

their newspaper easily because we will also provide the newspaper by the hockers.

Latest and updated news: We will try to find all the latest news and also we will

provide some updated news.

News for Children: Basically other newspaper company does not provide news for

children but we are going to add some news and cartoons only for the children.

Weakness:

Lack of experience: We have no previous business experience and it is our

weakness.

10 | P a g e

8/8/2019 Final 489

11/55

Lack of capital: We have lack of capital so we are going to take loan from the bank and

have to outsource.

No online facility: As we are new in the market and have less capital thats why we can

not provide these facility at this moment.

Opportunities:

Geographic Expansion: We have an opportunity to expand our business

geographically in future, like in all over Bangladesh.

Threats:

Economic Fluctuation: Economic instability will lead our business into chaos.

And inflation, recession, depression, etc. will lead economic downturn of the

company.

Demand of the customer: As we are new in the market so at the initial time the

demand of the customer will low. So if the demand is continuously low then that will

be a great threat for us.

Unstable raw material market: In our country the price of the raw material is

increasing day by day so as we are new and our initial capital is low so it will be a great

threat for us.

4.4 Competitive Advantage

A competitive advantage is an advantage over competitors gained by offering consumers greater

value, either by means of lower prices or by providing greater benefits and service that justifies

higher prices.

11 | P a g eResources

8/8/2019 Final 489

12/55

Low Cost

Differentiation

Figure: Competitive Advantage

In order to achieve a superior customer response we wish position our papers, as a symbol of

uniqueness where it will be act as an independent entity. This can only be achieved by pursuing a

Differentiation strategy. We are also going to follow low cost strategy along with differentiation.

So it means we will follow the focus strategy which includes both low cost and differentiation

strategy.

Here our selection of criteria is unique design and high quality which will justify our premium

price. However we beg to differ in our product by following the best cost structure. The best cost

structure is the combination of low cost strategy with differentiation. We will produce

competitively priced products that charge the same price as the premium quality producers

existing in the market however the look of the product will be unique as well as attractive.

The core competences described above will help us to achieve this Strategy. Since we are group

of new generation newspaper we know the total quality management effectiveness in the

production system. The efficiency level will rise.

(http://www.12manage.com/methods_porter_competitive_advantage.html)

Some competitive advantages described below which will distinguish us from other competitor

shop:

Qualitative service: We are so enthusiast to provide the customers better qualitative

paper than our competitors.

12 | P a g e

Distinctive

Competencies

Capabilities

- Innovation

- Quality

- Efficiency

- Customer

Response

ValueCreation

http://www.12manage.com/methods_porter_competitive_advantage.htmlhttp://www.12manage.com/methods_porter_competitive_advantage.html

8/8/2019 Final 489

13/55

Convenient place: We will have lots of distributor throughout the Dhaka city that will

help us to reach to the remotest customer in the city.

Young customers: As our business is mainly focused on upcoming generation, we will

to give them most important needs along with the update news. It will be very productive

for us to serve them because we are also seven young entrepreneur and we can

understand their feelings and needs.

4.5 Additional Strategic Consideration

Action to capitalize on new opportunities and defense against threats:

Action to capitalize on new opportunities:

1. Making public relation for publicity

2. Establishing strong and flexible distribution channel for reducing cost

3. Evaluating market and trying to enter into new industry

4. Making good relation with employees for their best effort

5. Expand and enrich relation with suppliers

Action against threats:

1. Try to creating monopoly

2. Increase diversification

3. Create market barriers for new entrants

4. Giving different promotion

5. Vast amount of advertisement

6. Doing CSR for enabling customers positive attention

7. Establish low cost leadership

Strategic alliance or collaborative partnership:

A Strategic Alliance is a formal relationship between two or more parties to pursue a set of

agreed upon goals or to meet a critical business need while remaining independent organizations.

Our intention to make Partners for which they may provide the strategic alliance with resources

such as products, distribution channels, manufacturing capability, project funding, capital

equipment, knowledge, expertise, or intellectual property. Our newspaper purpose to alliance is a

13 | P a g e

8/8/2019 Final 489

14/55

cooperation orcollaboration which aims for a synergy where each partner hopes that the benefits

from the alliance will be greater than those from individual efforts.

Our newspaper will do this typical strategic alliance formation process that involves these steps:

Strategy Development: Strategy development involves studying the alliances

feasibility, objectives and rationale, focusing on the major issues and challenges and

development of resource strategies for production, technology, and people. It requires

aligning alliance objectives with the overall corporate strategy.

Partner Assessment: Partner assessment involves analyzing a potential partners

strengths and weaknesses, creating strategies for accommodating all partners

management styles, preparing appropriate partner selection criteria, understanding a

partners motives for joining the alliance and addressing resource capability gaps that

may exist for a partner.

Contract Negotiation: Contract negotiations involves determining whether all parties

have realistic objectives, forming high caliber negotiating teams, defining each partners

contributions and rewards as well as protect any proprietary information, addressing

termination clauses, penalties for poor performance, and highlighting the degree to which

arbitration procedures are clearly stated and understood.

Alliance Operation: Alliance operations involves addressing senior managements

commitment, finding the caliber of resources devoted to the alliance, linking of budgets

and resources with strategic priorities, measuring and rewarding alliance performance,

and assessing the performance and results of the alliance.

Alliance Termination: Alliance termination involves winding down the alliance, for

instance when its objectives have been met or cannot be met, or when a partner adjusts

priorities or re-allocates resources elsewhere.

The advantages of strategic alliance include:

1. Allowing each partner to concentrate on activities that best match their capabilities.

2. Learning from partners & developing competences that may be more widely exploited

elsewhere

14 | P a g e

http://en.wikipedia.org/wiki/Cooperationhttp://en.wikipedia.org/wiki/Collaborationhttp://en.wikipedia.org/wiki/Synergyhttp://en.wikipedia.org/wiki/Cooperationhttp://en.wikipedia.org/wiki/Collaborationhttp://en.wikipedia.org/wiki/Synergy

8/8/2019 Final 489

15/55

3. Adequacy a suitability of the resources & competencies of an organization for it to

survive.

There are four types of strategic alliances: joint venture, equity strategic alliance, non-equity

strategic alliance, and global strategic alliances.

Our newspaper will focus on No equity strategic alliance that is an alliance in which we will try

to develop a contractual-relationship with two or more firms to share some of their unique

resources and capabilities to create a competitive advantage.

Acquire to strengthen business position:

1. Developing a Divestiture Strategy

2. Availability of vast resources

3. Increasing Revenue from Possible Sources

4. creating market demand

5. Proper supply of raw materials

6. Effective and efficient marketing finance department

5. Market Overview

Potential Customer:Film Industry is a very prominent and well recognized sector in our country among different

classes of people. Our countrys people are much ethnocentric toward their own culture,

traditional values and norms. Thats why they more prioritize the own cultural related program

and Bengali film is one of the favorite TV program among all classes of people. The two third

people living in rural area who are mostly like to watch Bengali film. The rest of the people

reside in urban area who also watch such program. So, we can assume that our potential

customer is spread out in both rural and urban area.

Moreover, attracting a new customer is two times harder than keeping a good relationship with

the old customers. So companies always have to keep in mind that the customers need, which

will help us to some extent to shape our business strategies. Customer needs are basically derived

15 | P a g e

8/8/2019 Final 489

16/55

by the customers segment that we have targeted. As our Channel program is transmitted through

the Cable Network and Cable network is available in both rural and urban area so it would not be

a problem for local potential customer to watch our program. So, it would be a logical thinking

to consider mass customer rather than specific segment.

2 Size & Growth of the Market

Newspaper industry is not so small in Bangladesh, the growth rate is quite also high as the

number of newspapers, ways of use and types of offerings are increasing day by day.

Traditionally only two or three company newspapers were published before 1971, but now

a days lots of companies are coming in this industry. It got popularity because the world isglobalized and people want to know each and every information within a second.

The market demand of the newspaper in Dhaka city is high. At present days, many local

newspapers are published specially for Dhaka city.

The country has now 5.75% GDP growth and 270-dollar per capita income, which means higher

purchasing power and affordability of the people. Thus, we can expect that the growth rate of

both the industry and the business will be positive in future as well.

16 | P a g e

8/8/2019 Final 489

17/55

5.3 Strategic Group AnalysisStrategic group Analysis is used to determine:

Different competitive positions of companies in the industry

Intensity of rivalry within and between groups

Profit potential of various groups

Implications of competitive position

17 | P a g e

8/8/2019 Final 489

18/55

8/8/2019 Final 489

19/55

6. Overall Strategy6.1 Long term and short term

Overall Strategy:

19 | P a g e

8/8/2019 Final 489

20/55

We have some strategy plan for our newspaper. We build it in order to make our newspaper

capable to meet all existing and potential competitors; and whether it has succeeded or needs

replacement by a new strategy to meet changed circumstances, new technology, new

competitors, a new economic environment., or a new social, financial, or political environment,

to positively react with changes, taking proper steps whenever needs.

What does our strategy consist of are describing below:-

Short term strategy

Planned actions and initiatives to our competitive rival:

20 | P a g e

8/8/2019 Final 489

21/55

En route for a Newspaper company we will have to locate our planned actions and initiatives to

compete with our rival. For this first have to make available information, in order to endure and

prosper in the todays changing industry structure and competitive situation, newspaper

companies clearly require a viable competitive strategy. We have to make passable editions to

these vibrant changes and react quickly to create our competitive advantage.

At first increasing network capability. The information technology will enables us to

network more efficient and faster. Hence, we can reduce the total cost of distribution

when we have only one common distribution network, instead of separate networks for

our products or they can outsource their distribution activities to independent companies.

Increase companys image and loyalty that are related to the notion of reputation. We

will build up a reputation with a consistent policy, marketing and highly qualified

circulations. Newspaper companies offer circulations that are crucially depended on their

reputation and reliability.

Implementing TQM and Six Sigma for ever-increasing the efficiency in the production

process. High expenses to set up a production process increase the total expenses of

newspaper. For our newspaper if we apply TQM and Six Sigma it will increase quality

and as well as bring efficiency, which will after all reduce the cost because as a result we

will be able to produce more in minimum time.

Innovations in newspaper industry are an important source of scale and scope economics.

By innovating new pages and design we can raise our companys capability and beat

competitors.

Action to diversify companys revenue base and enter into new business or industry:

For our newspaper we can take some initiatives to increase our revenue base:- Cutting cost through efficiency by implementing TQM and Six Sigma,

Structure coalition with the other leading media components.

Achieving high arrive at in marketing, promoting and advertisement.

Reducing advertising and media charges.

21 | P a g e

8/8/2019 Final 489

22/55

Effectual distribution channels that brings less expenses as well as efficiency and

decrease complexity.

Long term strategyWe have a plan to expand our newspaper company near future to other industry. Like if we are

success in newspaper industry then we will move for-

Radio

Book publication

Action to strength resource base for competitive capabilities:

Vast resource can make a company successful and effective. So we are trying to emphasize on it.For our newspaper in managing resource management we will includes certain criterias which

are as follows:

Human resource management (assign and hiring effective and efficient people for the

job, and also through head hunting)

Efficiency record

Technological know how

Injecting more on the R&D (innovation is the key to differentiation)

Define how to manage production, R&D, sales, marketing, and finance:

For managing production, R&D, sales, marketing, and finance we will take some initiatives they

are below:-

Recruiting people like marketing people only for marketing department, finance people

only for finance department.

We will arrange weekly and monthly supervision for their work.

Each department will be separate from each other but they will have strong

communication and exchange of information.

We will budget for each department.

Updating departments with changes.

Successful implementation of 3 layers of manager for maintaining each department.

22 | P a g e

8/8/2019 Final 489

23/55

Continuous research for making them up to date.

Alter geographic coverage:

To alter geographic coverage aw will make our newspaper with global standard. So To make our

newspaper with global standard we will incorporate the following strategy

We will make strategic alliance with some foreign newspapers to have better access for

news and provide better quality to the readers.

We will invest in R&D to improve so that our readers and advertisers are satisfied fully,

like new design for news paper to deliver interesting & relevant news in such a way that

engage the readers heads and hearts and make it possible for the advertiser to focus

particular segment they want to target.

We will provide wide variety of local & world news.

We will make our most circulation proposal begin and end in the newsroom. All

subdivision will be fully affianced in what's going on.

We will conduct researches to find out what readers want most and develop based on

that.

React to change:

Managers often make the mistake of assuming that once a change is started, that employees will

see that it is going to take place, and get on side. This is rarely the case. Because change causes

fear, a sense of loss of the familiar, etc. so we will try make our newspaper go away from it.

There are 2 reasons behind taking time to react with change. They are-

a) Understand the meaning of the change and

b) Commit to the change in a meaningful way.

It is very important to make capable our newspaper to go through stages in their attempts to cope

with changes.Some business reasons are responsible for change. They are below:-

sales development

new product development

new market development

23 | P a g e

8/8/2019 Final 489

24/55

business organization, shape, structure and processes development (eg, outsourcing, e-

business, etc)

tools, equipment, plant, logistics and supply-chain development

people, management and communications (capabilities and training) development

strategic partnerships and distribution routes development

international development

acquisitions and disposals

There are some steps for response to as soon as possible to cope up with changes. They are:

1. Increasing employee empowerment

2. Growing customer relationships

3. Escalating employee motivation

4. At all times involve and agree support from people within system (system = environment,

processes, culture, relationships, behaviors, etc., whether personal or organizational).

5. Understanding where the organization is at the moment.

6. Understanding where we want to be, when, why, and what the measures will be for

having got there.

7. Communicate, involve, enable and facilitate involvement from people, as early and

openly and as fully as is possible.

So finally this will be our overall strategy. We are expecting to work

according to this plan. However it will be subject to change because of

internal or external forces.

24 | P a g e

8/8/2019 Final 489

25/55

7. Company value chain analysis and

operational plan

The value chain a systematic approach to examining the development of competitive advantage.

In order to find out the source of competitive advantage we must do value chain analysis. The

organization is split into 'primary activities' and 'support activities.

Figure: Value Chain Analysis

(http://tutor2u.net/business/value chain analysis.htm)

Primary Activities

Our primary activities are importing our raw materials or outsource it from the local market, ,

designing paper, distribute it among the target customer; make sure the proper utilization of

human resources, keeping records of selling, purchasing, other costs as well as figuring out

profits and loss. Apart from all these the administration will look after and observe whether the

activities are functioning in the right direction. In addition, the administration is there to give

suggestions and restrictions or limitations.

Support Activities

25 | P a g e

http://tutor2u.net/business/value%20chain%20analysis.htmhttp://tutor2u.net/business/value%20chain%20analysis.htm

8/8/2019 Final 489

26/55

The support activities will ensure; professional communication among directors, superior quality

product, training staffs, research and development activities, additional facilities for customers.

Not only that but also supporting the overall activities and future development fall under support

activities.

Basically the value chain analysis refers as the addition on value into the product in each and

step of production. As a resultthe value chain analysis ofThe Daily Bangladesh is shown

as following:

Figure: The Daily Bangladeshs Value Chain Analysis

At the first stage of value chain analysis, The Daily Bangladeshwill gather information through

their reporters. After that we will add some different news of the outer world and will uniquely

design the newspaper. Then we publish it from our publication and we come out with the final

newspaper.

7.1 Existing Core CompetenciesCompetencies make a product or service differentiated. Same goes forThe Daily Bangladesh.

One of the key core competences is the product itself which provides superior quality paper,

uniquely designed newspaper with spectacular combinations as customers want or customized.

However, a range of options is always ready for customers to pick their choices. Another

precious core competence is the effective human resources. It is indeed very efficient way to

execute the whole process. All the people who are working are quite efficient to pursue their jobs

effectively, efficiently and spontaneously. This effective human resource is going to formulate

our products different that no one can offer. Our human resources are going to ensure that all the

work will be done in the right way, on the right time and with pertinent completion in the end. If

they are not active then its really tough to come up with valid news.

26 | P a g e

Gather

Information

Design the

Newspaper

Final

Newspaper

Publish

8/8/2019 Final 489

27/55

7.2 Future Competencies

Though we are coming with an English newspaper, it is not a much familiar and most

importantly it is an emerging sector of our country. The competition is high among the

newspaper industry. As the competition is high in this sector so if we conduct our business withvery professional way and satisfy this areas people desire; then it is certain that we can capture

the target markets. Moreover our other desires to expand the business so if we actively do our

activities and duties in near future we will capture the leading position in this sector.

(http://tutor2u.net/business/strategy/future competencies.htm)

HoweverThe Daily Bangladesh can analyze its future competencies through the following

SWOT analysis:

Strength:

A company should be aware of its core capabilities and sources of

competitive advantages. Core capabilities are the critical skills and processes

that an organization executes so well that its reputation builds around it.

Convenience: It will provide independent and most update news

services at a single paper which will convenient the customers to get

their desirable things under one paper. Enthusiastic Management: It has some enthusiastic young

entrepreneur and they are committed to the business to make it very

profitable.

Quality products: its services will be superior to our competitors and

quality will be monitored strictly. It will not compromise anything with

quality.

Market segmentation: Its market demographic segmentation is much

broader

Easy and Faster delivery: Its delivery process is faster and customer

can get their dreamy paper easily because it will provide all the papers

from a different convenient locations.

27 | P a g e

http://tutor2u.net/business/strategy/future%20competencies.htmhttp://tutor2u.net/business/strategy/future%20competencies.htm

8/8/2019 Final 489

28/55

Superior creativity skills of the employees: Its service is quality assured

because its people are the best. Its attention to detail and honest

approach will earn customers trust and loyalty. Employees creativity

and experience will provide its customer with strategic solutions to

their marketing needs - no matter how demanding.

Promotional tool: Word of mouth - its reputation, brand and superior

quality will spread via its clients.

High quality, expedient and convenient service: To achieve the

planned sales turnover and to build up customer loyalty on a

consistent basis it provides quality, expedient and convenient service

to its customers. This will help to build up a long term relationship with

clients and develop a strong customer database.

Price: The pricing strategy is market driven and will have to be

competitive and affordable. Discounts can be offered for large orders

to the distributors.

Technology: using reliable computers, a printer and copier with

supporting features. Userfriendly software which are capable of

generating accurate monthly statements and generating brochures

and photo gallery.

Weakness:

In addition to knowing its strengths, an organization must recognize its

limitations. Whether limited by a poorly equipped production facility or a

sales force that merely quotes prices and delivery dates, a business that

acknowledge its weaknesses forces mangers to assess their processes and

systems.

New employees: It wants to diminish its operating cost and that is why

it will employ new employees who might not have previous experience

to work in this businesses.

High cost: due to high inflation the costs of the raw materials are

extremely high

28 | P a g e

8/8/2019 Final 489

29/55

Opportunities:

External and internal environments present both driving and restraining

forces. Opportunities may occur suddenly. With the past pace of

globalization and technology changes, what may initially present itself as anopportunity may become a threat if organizational responsiveness is too slow

or not well planned.

Extension of the services: In future it is expecting to increase its

offered products i.e. magazines etc.

Geographic Expansion: It has an opportunity to expand its business

geographically in future, like in all cities of Bangladesh.

Open market: The Daily Bangladesh will work within an open market and

has the scope of growing big in the short span of time depending on

how known its brand name is.

Market Expansion through diversification: Management ofThe Daily

Bangladesh gradually expands their firm by diversifying their services

offered in the near future.

Further promotion: It will educate people about its services through

leaflets describing its services and how it is different. It will promote

through electronic media and billboard.

Threats:

Threats are negative external environmental factors which influences an

organizations decision. External factors are not controlled by the

organization and to survive every organization needs to be very alert about

its threats and how they can overcome this problem. Organizations should

be proactive rather than reactive and should be aware of what are the

competitors moves and should take necessary action in advance to face

those moves.

Rivalry Competition: At first it faced competition with its established

competitors and after five years the competitive environment is very

stiff.

29 | P a g e

8/8/2019 Final 489

30/55

New Entrants: Seeing its business similar business may arrive which

might grind our profit.

Economic Fluctuation: Economic instability will lead the business into

chaos. And inflation, recession, depression, etc. will lead economic

downturn of the company.

Demand of the customer: In gift and flower section people demand are

changing day to day, so in future it is difficult to predict people

demand and satisfaction which is another threat for The Daily Bangladesh.

7.3 Product/ Service Overview

The demand for news are day-by-day increasing because of the globalized

world and people are likely to know everything around him/ her. Our

products has been described key products and service section (3.3)

7.4 Facilities

We will try to come up with the best facility that a customer can expect. We

are surely going to offer our valued customers with valued facilities. These offers simply make

their life soothing by getting all types of news within a newspaper. We pledge to do all the

convenient facilities for our customers. The esteemed facilities are; on-line news, different types

of version for different occasions, job offering in our office and also provide the information of

other job circulars. We are doing all these because our customers are special to us and we

consider that this is our responsibility give them the best offer which also look after to save their

time. All other regular utmost facilities will be provided there in our newspaper.

7.5 Equipment & Machinery

We decorated our office and outlet in a very creative way. We created our office such a way that

it always looks fresh, colorful and festive look. One of our partner experts in interior designing

and another one have effective managerial expertise. This attributes boost up qualitative

atmosphere in the business.

For office we have five chairs, five tables, computer and Stationary Items in each of the

room. All the rooms are expecting to have around 1200sq. feet.

30 | P a g e

8/8/2019 Final 489

31/55

Whole building will be central air-conditioned.

In recreation room, there will be a plasma TV, a sofa set and a coffee machine.

There will be individual department for each section i.e. HR, Finance, Marketing, IT,

etc.

Our office will also have a big freeze to keep some refreshment for the guests and

employees.

For documents, we need some fixed shelf.

Other decorating items office.

We also need 5truck or other stuffs for distribute the newspapers.

Lights, fan, paintings and creative posters for cool look.

7.6 Research & Development

All our enthusiastic directors are committed to their jobs and consistent product development.

Their devotion and thoughts towards the product are highly appreciable. Thats why; we always

have the eagerness to develop our product through research and development. We follow the

trend and have the plan to stick with the trend. If necessary, in the future well go for market

survey to get the current state of the market demand and well bring change in our paper

accordingly. We strongly believe that research and development is the sole way for

sustainability.

7.7 Quality Assurance

We assure the quality. Maintaining quality is our commitment towards our valued customers.

Therefore, 100 percent quality is assured. We wont comprise anything to our quality. As we say

we will be neutral and independent. It is very important while you are in newspaper business.

The customer who is loyal to us will take lots of decision base on our news. So if we dont keep

our quality best then we cant hold our brand value to them. On the other hand, our research and

development; is there for consistent quality development and for sustaining the quality

development.

8.Marketing Plan

31 | P a g e

8/8/2019 Final 489

32/55

Marketing strategies deal with the perspectives of markets to be served. Therefore, our marketing

strategy is primarily based on positioning of our product and service to a specific market

segment. Our primary target market is general people of Dhaka City .Our marketing strategies

reflect the ways to motivate the people of this specific area. Our venture needs a marketing plan

to capture the market. We are going to enter a current market rather not going to target a niche

market.

Brand Elements

Newspaper Name: The Daily Bangladesh

Mission: Work for the country and people with the pride of independence and patriotism to

educate them with the right knowledge and right news accurately and transparently.

Vision: Through editorial efficiency and innovations and world class practices we will

expand all over the country as the dominant figure in the newspaper industry.

8.1 Sales & Marketing

Sales and marketing is a very impotent part of the marketing plan of a business. In the newspaper

business sales and marketing is inter related to each other. We are only focusing B2C herebecause we are staying in the primary stage. The marketing strategy will blend both push and

pull strategy together.As we are new in this business, we will have to push first. After that when

we will have strong brand value then naturally it will turn into pull strategy.

The product flow in case of B2C selling is shown in the diagram below:

32 | P a g e

Production

The Daily

Bangladesh

Distributors

IndividualCustomers

8/8/2019 Final 489

33/55

8/8/2019 Final 489

34/55

Regional Dish channel

As we are just planning to cover Dhaka zone so we are expecting not to give that much adverting

through electronic media. However, we will give ad to some popular TV channels during

commercials. In terms of reaching our customer it will be effective as well. It will very cost

effective as well.S

Magazine advertising

Magazine advertisement can be used targeting a broader segment of customers. Though a bit

expensive, it can be used occasionally to generate awareness and increase sales. For this, we can

target magazine like which are very popular through all the class of people because as our target

market is the general people.

8.4 Customer Services

As we have told earlier, satisfying customers by providing what they want in a way in which the

profit would not be harmed is the key objective of our business. So, we would have to think

about attracting new customers and retaining them. If the customer service provided by us is

poor or not up to the mark, customers will not be willing to get product and services from us the

next time. Moreover we will have to come with true news as our customers will be dependent on

our news. However lots of loyal customers will take decisions base on our news.

Thus, in order to improve our customer satisfaction, the customer service must be excellent. To

achieve that, we can adopt the following strategies:

By providing Unbiased, truth and uniqueness in each and every news and events.

Employees should be trained to talk gently and politely with the people to make them

delighted not only satisfied while collecting the report.

By hiring efficient reporters, in order to make the report more attractive for the customers.

We will offer different types of news which will be attractive not like traditional in order to

attract customers mostly.

34 | P a g e

8/8/2019 Final 489

35/55

It should also start a program for evaluating customer service. Follow up registration cards or

a telephone call from the company is the basic ways that can get feedback from the customers

about the service. And we will also keep a message box outside the office to get the feedback.

However as soon as we start our website, we will get feedback all over the world through online

subscription.

The products and services should be developed by taking continuous feedback from the

customers regarding what they really want.

The vital objective of providing quality services is to meet customer expectations. The

venture should be committed to meet the needs and expectation of the customers.

9. Human Resource Strategy & Planning

It is very important for any company to have a well-defined and apparent HR policy to run the

firm smoothly. It starts from recruitment and continues to turn off. All aspects are included here.

In one word, a company is nothing without an excellent HR. The Daily Bangladesh also has an

effective HR Policy that will support the company to conduct its operation efficiently which will

assist The Daily Bangladesh to achieve in the future.

35 | P a g e

8/8/2019 Final 489

36/55

Retaining best employees refers to keeping key employees who have accurate knowledge,

appropriate skills, proper education, efficient as well as effective and they consider the

organization as a part of their life will work hard for a long period of time and wants to be an

important part of the success of the organization. Retaining best employees is one of the primary

measures of the organizations development. Because it ensures customer satisfaction, product

sales, satisfied coworkers and reporting staff, effective succession planning and deeply imbedded

organizational knowledge and learning. It helps to overcome the problem of employee turnover

that can easily make a negative impact on whole organization as well as it is too expensive to

bear. An effective HR strategy and planning can retain the best employees for The Daily

Bangladesh.

(http://humanresources.about.com/od/retention/a/more_retention.htm )

9.1 Key Issues

The Daily Bangladeshs effective HR policy has several key issues those are described as

following:

Recruitment & Selection Process:

Recruitment is a process through which The Daily Bangladesh will able to recruit employees

that they need to construct their business in the market. To recruit efficient employees the

management ofThe Daily Bangladesh will pursue the following process:

36 | P a g e

Advertisement

Preliminary Selection

http://humanresources.about.com/od/retention/a/more_retention.htm%20http://humanresources.about.com/od/retention/a/more_retention.htm%20

8/8/2019 Final 489

37/55

Advertisement:

At the first stage of recruitment process we will conduct advertisement to search right candidates

both for office and reporters who will work to get the news from different locations. To search

efficient candidates we will give advertisement in different newspaper and job searching sites i.e.

BD jobs, prothom-alo jobs etc.

Preliminary Selection:

After getting all the application forms and applies the management of The Daily Bangladesh

will conduct preliminary selection. It will help the management of The Daily Bangladesh to

select the specific candidates who will appear for the interview session.

Interview:

The interview session will be conducted by the head of Human Resource of The Daily

Bangladesh. The written examination is very important and it is needed for required positions

available in The Daily Bangladesh. As a result only interview will be conducted to select the

right candidates for the required position in The Daily Bangladesh.

Final Selection & Appointment:

After conducting the interview the management of The Daily Bangladesh will finally select

candidates for each required jobs and will also give an appointment letter to the selected

candidates to ensure that he or she is now work for this newspaper.

Training Programs:

37 | P a g e

Interview

Final Selection &

Appointment

8/8/2019 Final 489

38/55

While recruiting employees for The Daily Bangladesh the management will ensure that they

have recruited the best candidates for the required position. As a result The Daily Bangladesh

will conduct a short training program only for three days for each employee in customer relation

management program to understand how to behave will general people both inside or outside the

office.

Compensation Package:

The employees in an organization are the most important resources. It is not only essential to hire

the very best employees but it is paramount that a company retains those employees. In this

buoyant job market skilled staff needs to be retained and there are several ways of ensuring this.

The Daily Bangladesh can motivate employees through giving compensation to them.

Employee benefits are those rewards that employees receive for being members of the

organization and for their positions in the organization that are usually not related to employees

performance.

()

The Daily Bangladesh will provide the following compensation packages for all employees:

Two festival bonus in every year

Performance bonus will be given to the employees.

9.2 Staff RequirementsThe Daily Bangladesh will have some specific staff requirements for all employees. The age

limit for employees will be in between 20 to 35 years. The educational qualification for

employees will be Bachelors degree for any reputed university. The employees also require the

following skills, knowledge as well as abilities to accomplish their tasks properly.

Those are as following:

Self-confidant, self-motivated

Dynamic and energetic

Proactive

38 | P a g e

http://www.accel-team.com/motivation/index.htmlhttp://www.accel-team.com/motivation/index.html

8/8/2019 Final 489

39/55

Smart

Patience towards customers

Decision making power

9.3Structure

Without a proper structure an organization cannot achieve success in the long run. Therefore The

Daily Bangladesh has its own corporate organogram which is given as following:

Figure: Structure of The Daily Bangladesh

The Daily Bangladesh has seven investors with equal contribution of investment as well as profit

sharing. But hierarchy will be different. Chairman and Managing director will be the decision

maker. He will listen to the all the other members, before taking the ultimate decisions. Editor

will be the ultimate decision maker of the newspaper. Under him there will be directors of all

respective departments. Computer operator and the reporter will be under creative design

director. Security guards, cleaners and other stuffs will be under HR directors.

39 | P a g e

Marketing

Director

Finance

Director

HR & Admin

Director

IT

Director

Creative

Design

Director

Reporters CleanerSecurity

Guard

Computer

Operator

Chairman

&

M.D

Editor

8/8/2019 Final 489

40/55

9.4 ExpectationsThe Daily Bangladesh sets standards to ensure paper quality, reliability, and customer

satisfaction response. Product quality itself is a wide criteria determinant for performance

standards. At this point of time it is a small organization and is more like a family. Thus the

expectation from each and every employee is very high.

Every employee will be carefully hired according to the demand of the post so that there is no

need of replacing the hired employee again and again. This will ensure that there is no system

loss and no reduce hiring cost of the employee and maintain the efficiency and effectiveness of

the organization. Finally, dedication and hard work is expected from every level of employees

for the successful outcome of the organizational objectives and accomplishing the goal.

10 Risk Analysis

Foreseeable Risk

As in the market lots of established newspapers companies are already in the market. so

it is tuff to do business in this industry until distinctive competencies can be made.

As, the niche market we are concentrating on is attractive enough with a emerging

segment of affluent customers, the existing competitors may also come to this area with

their new outlets.

As, the products are perishable, sale less than forecast can lead to loss.

Increasing import tax is a big threat to us. It may decrease our profitability in the long

run.

Unpredictable political situation of the country is another threat to our business. Political

instability has always hampered business of all types in Bangladesh. Sudden strike of

newspaper agencies, suppliers distributors can hamper the flow of the business.

Unforeseeable Barriers

A sudden change in government policy about tax rate on paper industry and national

and international barriers of such products from other countries can hamper the

operation.

40 | P a g e

8/8/2019 Final 489

41/55

The natural calamities may suddenly take place and that will hinder the operation.

Economic downturn can hamper the production of newspapers.

Change in customers perception, lack of distinctive competencies will be an ultimate

risk in order to do business for the long run.

Market risk

Public demand for product may change drastically over the time. In addition to that, different

external environmental causes like political and legal issues may results in highly risky market

situation. For example, increasing inflation and fluctuating exchange rate can increase the cost of

the company. Though, we expect the demand for these products will increase step by step

because the market is realizing more value in these things as a result of education, developedmentality, increased buying power and improved taste. These intuitions regarding the market

indicate that there are lots of risks associated.

Operational risk

The Company has only a few employees. Thus, the firm will be solely dependant on these

employees. The absence of the employees will create problem and hamper sound operations

drastically.

Credit Risk

Initially the company will need money to finance for raw materials, outlet, equipments and

vehicle. This money is expected to finance by taking loans from the bank and from our funds. So

if we encounter loss it will be tough for the company to pay back its debts.

Liquidity Risk

According to our long term vision, we will expand our market by opening new outlets. As, in the

initial stage, our profit will not be much, to launch new outlets the company may have to take

additional loan from the banks. However, a substantial portion of asset of the company will be

pledged for bank loan. This may force the company into a short-term liquidity crisis.

41 | P a g e

8/8/2019 Final 489

42/55

Startup Investments

Land and

11.1 Financial Management PlanNewspaper business is not a new concept from the aspect of Bangladesh. locations, but our

competitive advantage is uniqueness , fight for the truth and low price compare to other

newspapers . That is why we need expert manpower to make the decoration unconventional to

differentiate the product as well as the importing country from where we can import at a

significant lower price and deliver them to the customers at a relatively lower price by

maintaining the quality.

As the new entrants in this market we need to be very cautious about the quality of newspapers

different promotions, price and also the advertising expenditure which are needed to boost up

sales.

11.1 Assumptions

The financing plan to accomplish the companys strategies, structure and functions is discussed

here. In our financial plan we are going to discuss about

42 | P a g e

8/8/2019 Final 489

43/55

Machineries

Vehicles

We will build our facility in Savar Industrial area as it is easy to transport to Dhaka and cost of

land is low there. We will buy a land for 1 core and build our facility, warehouse and office

there. In total the construction work will take 2 cores.

We will buy our machines from China. Their high tech machines will enable us to make better

quality products and mass rate. We will buy 4 printing machine of which will take about BDT 4

crore (including assembly), along with additional some other machines that will take an

additional of BDT 2 core.

We will buy 5 trucks (2nd hand) for regular delivery purpose. It will cost us around 1core.

In total our initial investment will be 15 crore

Initial Investment

Land 10,000,000

Machinery 60,000,000

Factory 20,000,000

Vehicle 10,000,000

Total Plant cost 90,000,000

Fixed Cost 100,000,000

43 | P a g e

8/8/2019 Final 489

44/55

Sources of financing

Pro-Forma Income Statement

Depreciation

Net Working

Capital

500,00,000

Initial

Investment

150,000,000

11.2 Financial Plan

The initial spending will be part financed by the partners and part by long term loan. The

7partners will provide 1 crore each (7crore) which is 47% of the investment and the rest 8 crorewill be loaned from DBBL bank for 13% interest rate.

We are projecting

that our initial sales will be of 8 crore in the first year and it will grow at the rate of 13% each

year. We assume our variable expenditure will be around 70% of our sales value. The fixed cost

will contain all the fixed salaries, fixed utility costs etc.

All the fixed assets except land will have straight line depreciation. The expected life time of

fixed assets are given below:

Machinery 35 yr

44 | P a g e

Financing

Debt 47% 70,000,000

Equity 53% 80,000,000

Total 150,000,000

8/8/2019 Final 489

45/55

Interest Expense

Tax

Pro-Forma Income

Factory and warehouse 35 yr

Office 35 yr

Vehicle 15 yr

The yearly depreciation expense will be BDT2952382

We will incur interest expense of BDT 1,920,000 each year. We will exclude the interest

expense each year from the EBIT. Because this is a new plant we will get tax waiver for the first

five year.

We will get a 5 years tax holiday and will start paying after 6 years of operation.

11.3 Income Statement

yr1 yr2 yr3 yr4 yr5

Sales 80,000,000 90,400,000 102,152,00

0

115,431,76

0

130,437,7

89

COGS -40,600,000 -45,878,000 -51,842,140 -

58,581,618

-

66,197,22

8

45 | P a g e

8/8/2019 Final 489

46/55

Statement of Retained

Gross Profit 39,400,000 44,522,000 50,309,860 56,850,142 64,240,56

1

Fixed cost -2,224,000 -2,220,000 -3,036,000 -3,036,000 -

4,436,000

Depreciation -2,952,382 -2,952,382 -2,952,382 -2,952,382 -

2,952,382

EBIT 36,923,618 39,349,618 44,321,478 50,861,760 56,852,17

9

Interest -1,920,000 -1,920,000 -1,920,000 -1,920,000 -

1,920,000

EBT 35,003,618 37,429,618 42,401,478 48,941,760 54,932,17

9

Tax 13,126,356 14,036,106 15,900,554 18,353,160 20,599,56

7

Net Income 21,877,262 23,393,512 26,500,924 30,588,600 34,332,61

2

Since there will be no engagement with security market so the net income will be retained as the

ultimate income for the business. Hence, there will be no dividend paid by the company.

Opening retain

earning

0 35,003,61

8

58,397,13

0

84,898,05

4

115,4866

54

Net income 21,877,26

2

23,393,51

2

26,500,92

4

30,588,60

0

34,332,61

2

Less dividends 0 0 0 0 0

46 | P a g e

8/8/2019 Final 489

47/55

Cash Flow Statement and Firm Value

Ending retain

earning

21,877,26

2

58,397,13

0

84,898,05

4

115,4866

54

149,819,2

66

11.4 Cash Flow Statement

The table below shows the calculation of free cash flow and firm value. Although we have a

negative cash flow in the initial investment stage, we have a positive cash flow from the first

year. Because our pro-forma income statement is for 5 years only we have to calculate the

terminal value of cash flow by assuming the free cash flow of 5th year as constant.

To find the firm value we need to discount all the free cash flows to present value at the rate of

WACC of 14%. If we add the PVs of FCFs we find our firms value which is BDT

152,490,889 and our NPV is BDT 25,681,320 (firm value initial investment).

II yr1 yr2 yr3 yr4 yr5

EBIT 21,877,2

62

23,393,5

12

26,500,9

24

30,588,60

0

34,332,6

12

Depreciation 2,952,38

2

2,952,38

2

2,952,38

2

2,952,382 2,952,38

2

Total

operating

cash flow

24,829,6

44

26,345,8

94

29,453,3

06

33,540,98

2

37,284,9

94

Cash flow from Investment

activities

Tangible Asset

acquired

100,000,0

00

0 0 0 0 0

Tangible asset 0 0 0 0 0 0

47 | P a g e

8/8/2019 Final 489

48/55

Pro-Forma Balance

Current Assets

Disposed

Investment in

Short Term

asset

Total Cash flow from

Investing Activities

0 0 0 0 0

Cash flow from

Financing

activities

Accounts

receivable

0

-13,560,0

00

-

15,322,8

00

-

17,314,76

4

-

19,565,6

68

11.5 Balance Sheet

Cash and Cash like assets: We will hold some liquid cash every year and after 5 th year if we

have cash above 6 core we will invest it in expanding our capacity of production.

Inventory:

48 | P a g e

8/8/2019 Final 489

49/55

Current

Pro-Forma Balance

For the daily production we have to hold paper as raw materials in our factory as a result we will

need to hold buffer inventory of newsprint for 20% of Cost of Goods Sold.

Accounts Receivable:

At first year we wont be giving any credit sales option. But from 2nd year on ward we will give

credit sales of 15% of total sales revenue

Prepayments:

From 2nd year onward we will pay some of the utility expense in advance in form of

prepayments.

Accounts payable:

We will make contract with our supplier to buy 75% of the cost of goods sold at credit since

well take supply from our known source.

yr1 yr2 yr3 yr4 yr5

Current asset

Cash 776,000 2,720,400 13,514,688 22,065,611 40,227,280

Accounts

Receivable

0 13,560,000 15,322,800 17,314,764 19,565,668

Inventory 8,120,000 9,175,600 10,368,428 11,716,924 13,239,447

Prepayment 0 27,290,500 63,367,549 108,424,91

7

150,086,08

9

49 | P a g e

8/8/2019 Final 489

50/55

Total current

asset

8,896,000 52,746,50

0

102,573,4

65

159,522,2

16

223,118,4

84

Fixed asset

Land 10,000,00

0

10,000,00

0

10,000,00

0

10,000,00

0

10,000,00

0

Plant and vehicle 90,000,000 87,047,618 84,095,236 81,142,854 78,190,472

New Instruments and Fix 0

Accumulate

depreciation

-2,952,382 -2,952,382 -2,952,382 -2,952,382 -2,952,382

Total fixedasset

97,047,618

94,095,236

91,142,854

88,190,472

85,238,090

Total asset 105,943,6

18

146,841,7

36

193,716,3

19

247,712,6

88

308,356,5

74

Current liability

Account Payable 30,450,000 34,408,500 38,881,605 43,936,214 49,647,921

Long term liability 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000

Short term notes

payable

490,

000

0 0

0

Owners equity

Common share 0

0

0 0 0

Retain earnings 21,877,262 58,397,130 84,898,054 115,486654 149,819,26

50 | P a g e

8/8/2019 Final 489

51/55

Weighted Average Cost of

Cash Flow Statement and Firm Value

6

Total Owners

equity

21,877,262 58,397,130 84,898,054 115,486654 149,819,26

6

Total liability

and Owners

equity

92,817,26

2

132,805,6

30

163,779,6

59

199,422,8

68

239,467,1

87

Long term liability:

The bank loan that we will take will fall under the long term liability.

Owners equity:

It is the net of the equity of common stock and the retain earnings.

\

In calculating WACC we will consider the weights based on initial investment of the operation

of our plant. Our cost of debt will be the straight interest rate of bank minus the tax rate which is

8%-2% = 6%. We will calculate the cost of equity by using the growth rate model. We assumed

that the growth rate of dividend will be 10%. And at present our value for share will be the tk

100. So cost of capital will be 12%. Our weight for debt and equity will be 40% and 60%. In

total the WACC will be 9.44%.

WACC = % of equity * cost of equity + % of debt * cost of debt

(47%*0.15) + (53%*0.13)

=14%

51 | P a g e

8/8/2019 Final 489

52/55

The table below shows the calculation of free cash flow and firm value. Although we have a

negative cash flow in the initial investment stage, we have a positive cash flow from the first

year. Because our pro-forma income statement is for 5 years only we have to calculate theterminal value of cash flow by assuming the free cash flow of 5th year as constant..

To find the firm value we need to discount all the free cash flows to present value at the rate of

WACC of 14%. If we add the PVs of FCFs we find our firms value which is BDT

152,490,889 and our NPV is BDT 2,490,889 (firm value initial investment).

II yr1 yr2 yr3 yr4 yr5

EBIT 21,877,262

23,393,512

26,500,924

30,588,600

34,332,612

Depreciation 2,952,38

2

2,952,38

2

2,952,38

2

2,952,382 2,952,38

2

Total

operating

cash flow

24,829,6

44

26,345,8

94

29,453,3

06

33,540,98

2

37,284,9

94

Cash flow from Investment

activities

Tangible Asset

acquired

100,000,0

00

0 0 0 0 0

Tangible asset

Disposed

0 0 0 0 0 0

Investment in

Short Term

asset

Total Cash flow from

Investing Activities

0 0 0 0 0

52 | P a g e

8/8/2019 Final 489

53/55

Break Even Point

Cash flow from

Financing

activities

Accounts

receivable

0

-8,560,00

0

-

8,322,800

-9,314,764 -

9,565,668

Accounts

payable

14,120,0

00

17,094,4

00

17,185,7

28

19,408,01

5

22,776,9

77

Dividends paid 0 0 0 0 0

Total Cash flow from

Financing activities

8,120,00

0

-

4,465,60

0

-

5,137,07

2

-5,906,749 -

6,788,69

1

fcf -

150,000,00

0

32,949,6

44

34,880,2

94

38,316,2

34

43,634,23

3

50,496,3

03

pvof fcf at

WACC(14%)

-

150,000,00

0

28,903,1

96

30,596,7

49

33,610,7

31

38,275,64

2

44,295,0

02

CF of 5 years 175,681,32

0

NPV 25,681,320

11.6 Capital Budgeting Techniques

53 | P a g e

8/8/2019 Final 489

54/55

Payback

Break-even

point

whole per unit

Units 201,385

Sales 73,693,0

29

366

Variable cost -

51,585,1

21

-256

Initial fixed cost 84,000,0

00

Break-even point 765,172unit

Discounted cash flow= 46076000+35916400+40216788= 122209188

Discounted Payback period= 3+ (150000000-122209188)/45987393

= 3.6 years.

So the payback period is 3.6years.

12 Long-term Sustainability

54 | P a g e

8/8/2019 Final 489

55/55

After discussing the strategic plan form various aspects, it can be expected that The Daily

Bangladesh will be able to sustain in the long run because of its ability of offering more value

for the money spent by the customers by providing them with a neutral and update news

accompanied with superior service within convenient reach. In long run the newspaper can even

be offered at a more competitive price. As we will grow and increase our sale by expanding our

business throughout the country, and also will open a web portal where international customers

can have access as well. . The existing and future competencies of our skilled HR will be the key

to survival of the company in the long run. Another reason behind this expectation is our strategy

of capitalizing on the customers. Our employees will be instructed to try to build long term

relationship with the customers, which will help us to have advantage of once a customer,

always a customer. As a result, hopefully the customers will stick to the company for repeat

purchases over long period of time helping the company to exist in the market for long.

Therefore we will be able to create a trustworthy brand name in the market and step towards our

before stated vision of spreading all over the country through several offices at convenient

locations.

13 Conclusions

After analyzing all the aspects of the business, it can be concluded that the business has high

potentiality to survive and even grow further. However, the success of the business will be

mainly subject to the ability of our marketing troop to attract the customers and position the

newspaper as a renowned and trust worthy brand and our HR to offer superior value to the

customers from all the aspects as a high end consumer product. Though, the success and growth

of the venture can be hindered by the barriers and risks associated, we look forward to

experience a greater interest of the people about using ability of saying truth in their life.