Footwear Business Proposal Free Essay Example

Republic How would you classify Its economic system? Indonesia Is the largest economy in Southeast Asia and a member of the 6-20 major economies What are the IN and the IN per capita APP? Indonesian estimated gross domestic product (nominal), as of 2010 was US$706. 73 billion with estimated nominal per capita GAP was US$3,01 5, and per capita GAP APP was US$4,394 Major natural resources: Indonesian natural resources include crude oil, natural gas, tin, copper, and gold. What major products are exported? The country’s major export commodities include oil and gas, electrical appliances, plywood, rubber, and textiles.

What are the major imports and from which countries? Indonesian major imports include machinery and equipment, chemicals, fuels, and foodstuffs. Name of the currency. Is it freely exchanged? Indonesian currency is in Rapid and Is freely exchanged. Executive Summary As the managers of the company we have evaluated the different business opportunities present here in Indonesia. As a result of crucial analysis and research, considering the availability of resources, and calculated expenses, we have come up with a business proposal to create a new line of footwear.

We believe that an establishment of our own line of product distribution, here In Indonesia, will prove to be highly profitable. Our plan Is to start a contract with manufacturing companies where we can mass produce this new line of athletic shoes, and distribute them to stores worldwide. This brand of shoes will be called “SOULS”. Indonesia has been listed as the top country for entrepreneurs to start a business, ahead of the United States, Canada, India and Australia, (Walker, 2011).

We will work with the best new technologies and have innovative creations to get Into the business and eventually eave a successful role model leaving behind footprints to follow on. In this case, I am referring to the globally known and established footwear company which we recognize as NIKKEI. Among other major companies, such as, REBOOK, IDEAS, and PUMA, NIKKEI also outsource its footwear manufacturing to Indonesia. Cost efficiency being the primary reason, these companies make a significant impression on their profit margins, leading to profitability and success.

Indonesia proves to be the favorite for the footwear based industries for many reasons; however, the biggest reason is the access to the natural resources available in the country. Indonesia ankhs among the top 2 countries in the world for the natural production of rubber. Nikkei, Ideas, Rebook, Puma, and now SOULS will play a major role in the economic growth of Indonesia while prospering as a footwear company. Although the companies listed earlier will serve as a preliminary guideline, we pay no less attention to the fact that they will be our biggest competitors.

Background Indonesia exports rubber and other relevant products to various countries, of which, China, Japan, Singapore and the US are the major importers. The US relinquished its title as the biggest importer to China in 2008. In 2008 China imported 457 thousand tetra tons, followed by the US with 394 thousand metric tons, Japan with 272 thousand metric tons and Singapore, which imported 100 thousand metric tons. (Rifle, 2010). ANARCHY (Association of Natural Rubber Producing Companies) is an international organization for countries that produce natural rubber.

According to ANARCHY, about 92% of the world’s natural rubber production is produced by a group of 1 1 countries. This group consists of (in no particular order) Indonesia, Malaysia, Cambodia, India, Sir Lankan, China, Papua New Guiana, Philippines, Thailand, Singapore, and Vietnam. This information is useful as to show the massive nutrition coming out of Indonesia, which is, 29% of the total 92%. It was only second to Thailand as it produced 34% of the global supply. Even while being the second leading producer of rubber, Indonesia has had their troubles in the productivity of the material.

The main producers of rubber in the country are small hold farmers who account for 70-80 percent, while the private and state owned companies contribute the rest of it. The small farm holders don’t have the best production technology and capability to produce at a high rate. As a result Indonesian production rate per hectare was the lowest amongst the main rubber reducing countries. Financial Plan After thorough research and calculations based on the precedents set by our major competitors, we have put together a financial plan analysis.

This analysis should act as a guide to understand the financial burdens of the project as well as the outlook of the potential company. As we decided to contract the manufacturing out to existing factories, we decrease our initial investment by a great amount, as we do not need to construct a plant. Based on the current market situations in Indonesia, the average cost of constructing a factory, which we avoided, would approximately be $300 – $400/ q. Meter. We also avoided the cost of all equipment, machinery, furniture, etc. , that would have more than doubled the initial investment.

As a company, we are well aware that a financial plan is the most crucial aspect for the success of any entity. The final decision is based on the conditions set by the numbers, and their outcomes. Since our projections are based merely on expectations, our figures will be revisited on a daily basis and edited to satisfy the ongoing revenues of the company. The most critical features of the financial obligations and expenditures are summarized below. Although we may not need a factory, we still require space for office purposes, paperwork, marketing, planning, and development, and other administrative needs.