Myanmar’s foreign exchange market

1. Business Profile

            

1. Business name and Idea

            The business idea revolves around starting a fragrance brand specializing in selling exquisite perfumes. 

            The business name shall be Bidayah, and its mantra shall be the fragrance of life.

1. Business Activity 

            Bidayah perfumes are set to be a fragrance company dealing with the production of cosmetic perfumes. The business is set to produce branded perfumes that it will be selling to its customers.

1. Ownership structure

            The business ownership structure is a partnership comprised of three partners (Zheng & 郑嘉吟,2017). The partners will be responsible for financing the projects, overseeing the general running of the business activities, and later they will be sharing the profits earned from the enterprise based on their share’s contribution ratios.

            The partnership ownership structure will benefit the business as it will help minimize the taxes paid by the business to the federal government and hell in the contributions towards the realization of the initial capitals.

            However, the partners are well aware of the disadvantages of the partnership ownership structure, such as disputes in sharing of proceeds from the enterprise and decision making. However, the partners have resolved to be making decisions based on a majority basis, and the profits will be shared according to their share’s contribution ratios.

1. Entry strategy 

            The business is set to enter the competitive cosmetic industry at the start of January 2022. The business is set to enter the market using the direct financing entry strategy, where it shall receive financing from the partners to start the new business from scratch.

1. Business location 

            The business is set to establish its headquarters and the make branch in Al Ahmadi in Kuwait. This is because they are densely populated and thus will offer access to many consumers to our different branded perfumes. In addition, the area provides a friendly lease building period of more than five years.

1. Legal Requirement

            In conformity to Kuwait’s laws and regulations about setting up business in Kuwait, the business shall be registered with the MinistryMinistry of commerce and industry in Kuwait (Marson & Ferris, 2020). This action will aid the business in obtaining business approval to do business in the Kuwait Emir and further aid in providing a legal license to do business.

            The business shall also seek an agency agreement that will aid in promoting our products in Kuwait by our selected Kuwaiti nationals. 

            Lastly, we shall register the brand’s trademark with the MinistryMinistry of commerce with the trademark controls department.

1. Business Objectives

The following objectives shall guide the business.

1. Maintain or increase the profits at a 10% annual rate.
2. Produce and Supply quality perfumes.
3. Maximize the outputs.
4. Continuous creation of customers.
5. The motivation of innovative ideas.
6. Marketing
7. Environmental trends
8. Demographic factors

            The largest consumers of perfume products in Kuwait are women in terms of gender. The age ranges, however, range between 18 and 34 years old.

1. Sociocultural factors

      The fragrance market is heavily influenced by science and innovation. As a result, the company will be deeply concerned about the color and h smell of the fragrance by incorporating science and innovations that will be attractive to our consumers.

1. Technological factors

      Technological factors will also be incorporated to improve the quality of the raw materials and throughout the production process. It will also play a vital role in the business’s efficiency by saving and the production process affordable through cutting costs.

1. Regulatory factors 

      The company shall also avail a perfume sample for sniffing and safety regulatory trial purposes.

1. Natural factors

      The company will major in producing perfume fragrances from naturally existing raw materials.

1. Industry Conditions

            The company falls under cosmetics and personal care items.

                        Industry conditions shall be broadly categorized into the demand and supply conditions.

1. Demand conditions

• The young generation between the ages of 18-34. 
• Women 
• The current Kuwaiti market is worth USD 123.8 million.

1. Supply conditions

• The market has been segmented into Arabic, French, and Other perfumes.
• The supply targe will be mainly focused on the current market.
• There is a possibility of entry barriers such as patents protection and customer loyalty.

1. Products production matrix

Product range	Year 1	Year 2	Year 3
Product A	5%	10%	12%
Product B	5%	6%	10%
Total	10%	16%	22%

 

1. Competitors

            The industry has strong competition, which can be attributed to the extensive market worth between $ 113 million and $ 196 million, with each company trying to have a dominant market share.

Some of the fiercest competitors include;

• Enter 
• Tatera 
• Bakhaa 
• Almarshoud.

1. Target customers

            The primary target customers are Kuwaiti nationals.

            The market, in addition, has been segmented into gender and age. In terms of gender, the company targets mainly women, and in terms of age, the company mainly targets the younger generation aged between 18-24 years old.

1. Marketing strategies

            The company intends to employ various marketing strategies to succeed in the competitive market and gain a significant market share. Some of the strategies include;

1. Use of appealing smell and packaging colors for the products.
2. Use of price skimming strategy to sell their products.
3. Use intensive distribution strategy of the perfume products 
4. Branding of the product using the company’s logo.
5. Use promotional mixes such as advertising, publicity, networking, personal selling and customer service, and public relations to promote the product.

            The company will also develop a competitive advantage over its main competitors by producing perfumes of better quality than their competitors and reasonably lower prices.

To achieve this, the company shall implement;

• Cost leadership.
• Product differentiation
• Defensive strategies 
• Strategic alliances.

1. Market controls.

            The company will be conducting annual effectiveness of the marketing strategy report with the report being based on the key performance indicators of; 

• Profitability controls
•  Efficiency controls
•  Strategic controls
• Annual plan controls (Marson & Ferris, 2020).

            In addition, the above control measures shall be implemented using the;

• Command approach
•  Change approach
•  Consensus approach
• Cultural approaches.

                    

1. Production
2. Production capacity

                    The company is set to start producing the different perfume brands on a large-scale basis. The production projections per day are at 1500 liters, 9500 liters weekly, and about 280000 on a monthly basis. To achieve this target, the company has budgeted on the automation of our extracting and refining machinery, enhancing efficiency in the production process.

1. Output levels

                    The company’s total production output levels on a daily basis is a minimum of 1250 liters which will be packaged into different quantity packages ranging from 50mls,100mls, 250mls, 500mls, and 1-liter perfumes.

                    On a weekly basis, we are targeting a production output level of a minimum of 8,000 liters which will later translate to a monthly projection of over 250,000 liters of different perfume fragrances from our brand. By the end of the year, we are targeting to have produced over 1.2 million liters of perfume into the market.

1. Production method

                    The company will make use of the mass customization production method. This production method will use the advanced technology that we will invest in to produce a mass of fragrances that conform to the customers’ specifications and preferences. Each perfume brand will undergo seven distinct stages, which will ensure the quality is added to the product to have an end product that meets our production criteria. The seven stages will include;

• Steaming Stage 
• Distillation Stage 
• Solvent Extractions Stage 
• Enfleurage Stage
• Maceration Stage
• Expression Stages.

         Following the above-staged production stages, the final products shall be packaged into different quantity packages ready for delivery to our various consumers.

1. Production quality controls

                    The production process will be subjected to four different quality control stages, each at a specific stage of production (Holmlund, 2007). These stages will be as follows;

 

1. Pre-Production Inspection (PPI) 

        This quality control stage will be conducted before the production process has been initiated. It will entail the assessment of the quality and quantity of the raw materials and the various product components and verifying if they conform to the product’s specifications.

1. During Production Inspection (DPI)

        This will be the second quality control stage, whose inspection will be conducted during production. This, in turn, shall aid in ensuring that the production process strictly conforms to product specifications and adherence to the safety protocols. It will also aid in identifying product deviations and initiating their corrections.

1. Pre-shipment inspection (PSI)

                    The third quality control stage is the pre-shipment stage. This stage will involve the quality of the goods before they can be shipped to their rightful consumers. Under this stage, the quality assurance team shall undertake inspections to ascertain that the products align with specific customers’ specifications. It will involve the selection of randomized samples, which will further be selected and inspected for any defects against the relevant standards and production procedures.

1. Container loading/loading supervision (LS) 

                    The fourth quality assurance control will entail the c0ontainer loading and unloading inspections to ensure that the products are correctly loaded and unloaded as they await their rightful consumers. This process will be professionally handled to ensure that the products are correctly handled and arrive safely to their destinations.

This step shall involve the following processes;

• Evaluation of the shipping container condition.
• Verifying the product information
• Verification of the quantities.
• Verification of compliance with the packaging.

1.  Piece-by-piece Inspections.

        In addition to the four stages of controls, the piece-by-piece inspection shall also be incorporated to ensure the range of variables has been me into specifications.

 

1. Purchasing
2. Suppliers

            The company shall procure various materials needed for the production process from different supplies based on a tender system. The suppliers will be locally sourced as a part of the company’s corporate social responsibility and from various parts of the country. The matters supplies shall be handled by the department of procurements and supply chains under the administrative department.

1. Purchasing policies 

The following rules and policies shall guide the purchasing process.

• The supplies advanced to the company shall be paid every month.
• The supply of services such as cleaning shall be done on a tendering system where the best bidder shall be awarded the tender.
• 33.3% of the raw materials shall be sourced from the immediate community as a part of CSR.

 

 

1. Purchasing controls

            To have an effective purchasing process, the company shall institute and maintain its approved supplier list (ASL) (Nardone et al., 2016). This will aid in the improvement of the quality of the services by identifying the suppliers who have a better understanding of the company’s needs.

1. Personnel
2. Management details

            The company shall also have a robust and industrious human resource managed by a human resource manager who will report directly to the director of administrations. The human resource will be categorized according to individual competence in the performance of skills under the company’s different departments. 

1. Organization structure 

            The company intends to have the marketing, production, quality assurance, human resource, accounting, procurement, supply chains, and security departments. Each department will be headed by a director with who supervisors will assist. 

            The marketing, procurement and supply chains and accounting departments shall be under the financing docket, which a manager will lead. The production and the security docket shall be under the administrative docket also led by a manager. The administrative and financing managers shall both be answerable to the company chief executive officer. The overall organ of the company’s authority shall be the board of directors, who will be oversighting the operations of the company and ensuring that its operations conform with the expected ethical framework.

1. Staffing strategies

The company shall employ various staffing strategies, which will include the;

1. Academic staffing model where it shall hire the talented employees and groom them for the company’s future.
2. It shall also employ the long terms and short-term employees to meet the company’s human resources needs as the company may be requiring (Cron, 2006).
3. Professional advisers

            The advisory roles shall solely be by the board of directors’ responsibility, whose opinion shall be held supreme.

1. Personnel controls

        The company expects its employees to carry themselves with dignity, decorum, and ethics. In addition, the company is expecting an intrinsically motivated workforce who will be client-oriented, ethical, morally upright, and honest.

        In the event of any disciplinary issue from an employee, a disciplinary committee comprising the director administration as the chair, head of human resources heads of departments, and employees’ representatives shall be formed and handled to handle the matter. The committee’s resolutions shall then be presented to the board of directors, who will settle on the concussion of the matter. 

1. Financing
2. Personal financial position 

            The partners, board of directors, and the company employees will be required to submit a wealth declaration form with the head of the human resource department. The personal financial position shall be inclusive of the assessment owned, liabilities, and individual net worth.

1. Establishment costs

 

            The company intends to start the business enterprise with an injection of 50,000 Kuwaiti Dinar. This startup capital shall be inclusive of the establishment of cost shall be inclusive of the following sets of costs;

1. Opening stocks

      The company intends to open up the business with a net worth of 26,000 Kuwaiti Dinar.

1. The purchasing and setting up of the headquarters shall take 10,000 Kuwaiti dinars.
2. Business name registration 500 Kuwait dinar.
3. Incorporation into a company 600 Kuwaiti Dinar
4. Operation licenses 900 Kuwaiti dinar
5. Tools and equipment. 12,000 Kuwaiti dinar.
6. Borrowing requirements 

            When the company shall require financial aid sourced from an external lender, the company shall require the board of directors to decide on the suitable loan terms and conditions, which shall be later assented to by the three partners who will act as the signatories. 

1. Financial forecast

            The company targets to make a minimum of 40% of the total initial investment in the first year of operation. The returns are later expected to rise by 25% in each quarter of a financial year. The company predicts a total turnover of over 40,000 per financial year in the next five years.

1. Financial records

            The accounting department is solely responsible for keeping the company’s financial records. The departmental head of accounting is answerable to the manager’s financing docket.

1. Business insurance

            The company shall also subscribe to business insurance policies to protect from unforeseen risks. The company shall subscribe to four business insurance plans.

1. General liability insurance

This insurance will cover the business against any unforeseen accident, injuries, or claims of negligence that may follow a legal tassel.

1. Product liability insurance

This will cover the company from the liability of defective products.

1. Professional liability accounts 

This type of insurance will cover the business against malpractice claims and errors, especially to the customers.

1. Commercial property insurance

This insurance policy will be subscribed to cover the company’s assets for physical damage.

1. Financial controls

            The company shall be in strict conformity with the financial rules and regulations that governs companies in Kuwait. To achieve this, the company shall have an internal auditing section under the department of accounts that will verify the company’s financial documents. In addition, it will procure the services of an external auditor twice annually to verify the same.

            The company shall also keep accurate and well detailed financial records which shall be inclusive of;

1. The balance sheets.
2. Income statements
3. Cash flow statements.

 

Reference list

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Holmlund, M. (2007). Suggesting and comparing different scopes on quality management: Production, service, relationship, and network. Total Quality Management & Business Excellence, 18(8), 847-859. https://doi.org/10.1080/14783360701350466

IntroBooks. (2018). Business finance.

Kubo, K. (2018). Introductory chapter: Myanmar’s foreign exchange market—Controls, reforms, and informal market. Myanmar’s Foreign Exchange Market, 1-22. https://doi.org/10.1007/978-981-13-1789-7_1

Marson, J., & Ferris, K. (2020). 14. Legal requirements when establishing a business enterprise. Business Law, 349-378. https://doi.org/10.1093/he/9780198849957.003.0014

Nardone, V., Raucci, D., & Santone, A. (2016). Model-checking to support action controls in the purchasing process. 2016 IEEE 25th International Conference on Enabling Technologies: Infrastructure for Collaborative Enterprises (WETICE). https://doi.org/10.1109/wetice.2016.52

Tielmann, V. (2010). Market entry strategies. GRIN Verlag.

ZHENG, J., & 郑嘉吟. (2017). Ownership structure and company performance: The case of listed real estate companies in Mainland China.