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BUSINESS PLAN FOR

DELIVERY
MARKETPLACE















Submitted by,

Adarsh G
Erika Kerketta
Nikhila M











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Table of Contents


Table of Contents 2
The Business 3
Business Description
Services
Management Plan

Operations and Development Plan 3

Risk/Opportunity Analysis 4

Porters five forces analysis 5

Marketing Plan 6
The Market
Market Research
Marketing Strategy

Financial Plan 8
Appendix 10




















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THE BUSINESS

Business Description

The business is the Express delivery service. It is delivery all kind of
products from local merchants to its customers. This is a relatively new
business area and is in its nascent stage. Grofer, delhivery, etc are already
providing express courier services. The present outlook of the industry is
optimistic and so are the future prospects.

Product/Service
Our services include delivery of letters, couriers, food, groceries,
medicines etc., from local merchants/vendors to their customers. The
orders will be taken via phone and online.

Management

The organization would be a corporation which would follow traditional
hierarchical structure with the top management responsible to overall
direction of the corp.

OPERATIONS PLAN

Statement of Long-term and Short-term Goals

Our goal is to provide fast and efficient delivery services to customers
with minimal error rate.

The business would first start from the Delhi/NCR region. In the long run
we aspire to expand our services geographically.

Process Description

Orders for our service are received through calls or online. The process
includes receiving the order to deliver a particular product, collecting the
product from the sources, delivering at the specified destination and
finally confirming the delivery to the client.
Critical factors in the delivery of our service are accuracy and speed. We
promise to deliver our services in a time range of 1 to 3 hours.



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Equipment

In the initial stages delivery of products from one location to another
within a city, in a time range of 1hour to 3hours is by motorcycles which
are quicker and economical than the 4 wheelers. With the increase in the
scale of operations, other modes of transportation will be explored.

Business will be acquired by approaching the target segment indicated
above and deals would be struck with them for long period of time like 3
months. The required assets/resources will have to be acquired which
would require capital expenditure to the tune of about Rs. 50,000 per
vehicle (3*50000=150000).

Delivery boys would be hired as required (as shown in the financial plan).
A central office would be maintained for administrative purposes.
Operating research techniques/some software may be used for optimal
planning of the routes.

Risk/Opportunity Analysis

Business Risks
Some of the major risks facing our development include
Timing risk and potential delays in the market
Risk of loss due to damage or pilferage

These risks manifest themselves into lower amounts of product delivered
leading to higher costs and lower profits.

Opportunities

Time is the most valued thing for most customers
Also large number of people without mobility prefer getting their products
delivered giving us a chance to serve them.












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The porters 5 forces analysis for the industry is as below:


Threat of new entrants: high (low entry barrier)
Supplier bargaining power: low (huge fleet can be used to
bargain effectively by the firm)
Buyers bargaining power: low (very few players in this space)
Threat of substitutes: low (as the service is provided intra-city
and no other means for transporting/delivering than vehicles used
to deliver)
Inter-firm competitive rivalry: low as the industry is in nascent
stage and not many competitors.

THE MARKETING PLAN

The Market

LOW
Inter-firm
competitive
rivalry
HIGH
Threat of new
entrants
LOW
Supplier
bargaining
power
LOW
Threat of
substitutes
LOW
Buyers
bargaining
power
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The market segment is the business as well as the household (local
resident) class of Delhi. The segments have been growing every year.
The major market segments include:
Business class (constitute 80%)
o Pharmacies
o Restaurants
o Hospitals
o Grocery stores
The local residents (remaining 20%)

Competition

We compete directly with Grofers. Grofers is a delivery service provider
delivering products from local merchants to their customers. They provide
logistics solutions in Delhi/NCR by allowing merchants to make same day
deliveries within 60minutes and are currently operating with 50+ clients
and 500+ deliveries a day.

Market Research

Market research by CRISIL suggests this market can witness CAGR of
17% in the coming years.

MARKETING STRATEGY

Marketing Objective
In time, we plan to capture 70% share of the market.

Position
We will position our services as affordable, safe and very quick. Most of
the businesses today are providing home delivery services and hence
giving us an opportunity to capture that market.

Market Potential
Grofers, a company already in this space, makes 500 deliveries per day for
a population of 1.9 million of Gurgaon. Extrapolating, for a population of
25 million (Delhi), the market may be around 6500 deliveries per day.

If we try to divide up the market in terms of individuals and businesses,
the assumption being made is that 80% constituted by business class. If it
is assumed that each business on an average ships 10/day, then around 520
clients would be present.

If we charge a sum of Rs.5000 from each client, the clients would be
(0.8*6500/10) 520. The size of market would be 520*5000=26
lakh/month.
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The CRISIL report estimates a growth of 17%CAGR for this industry
from 2011-2014. We may safely assume the same to be growth rate for the
foreseeable future.

If we target restaurant, pharmacy, grocery and other such small business
which may contribute 70% of the revenue, then the addressable market
would be 1820000 per month. This is the estimation of profits assuming
large scale of operations covering entire Delhi region.


































FINANCIAL PLAN

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Considering target market to be 4 restaurants, the following
financials can be arrived at.


REVENUE



No of restaurants

4


No of deliveries PER RESTAURANT per week

100


No of deliveries per day per restaurant 100/7 14.2857143


Total No of deliveries per day 14.2857143*4 57.1428571


Total deliveries/week 100*4 400


Total /month 400*4 1600


Fee per restaurant per month

10,000


Total revenue 10,000*4 40000


Cost



Average distance covered per delivery (km)

4


Total distance covered per month (km) 2*1600 6400


No of working hours per day

6


time per delivery @ 15 km/hour (in min)

20


No of deliveries per day 6*60/20 18





No of vehicles required

3


No of delivery boys

3


Salary of delivery boy

15873.0159


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Assumption of mileage (km/liter)

70


Fuel needed in liters per vehicle 6400/70 91.4285714


Cost of petrol/liter

72


total cost for petrol 91.4285714*72 6582.85714


Maintenance costs/month

1587.30159


Total costs

24043.1746


Profit

15956.8254


Profit margin

40%






























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APPENDIX
Questionnaire for market study:
Questionnaire:
1) What is the current Error rate?
2) What is the Service Cost or the Cost per delivery?
3) What is the Maintenance cost?
4) How many employees/delivery boys are employed to carry out the business?
5) What is your Target Market?
6) How many deliveries per day are performed?
7) What is the average time of delivery
8) What is the medium of transportation?
9) What are the difficulties or major issues they are facing?
10) What is the salary given to each delivery boy?
11) What is the selection process and qualifications required for the workers?
12) What is the total distance covered (in kms) per day?
14) Are you using any software/technology to find out the optimum path/route to the destination to minimize
the costs?
15) Total man hours spent per day (on the road)?
16) What is the maximum distance covered? (1-2 kms or more)
17) Do you use credit card machine for payment?
18) Do you use any technology to track the delivery?
19) What is the marketing budget?

Costing related Questionnaire:
1) Overview of the Organization ,structure, product, process
2) Process map and activities of each part of value chain
3) Costs at each part of the value chain
4) Classify costs into fixed, variable, direct, indirect, prime, period
5) Describe the present costing and pricing system