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The business plan of XYZ New Store will be placed to the board of directors for review, and approval on January 2011, and design its timeframe to go into operation within three months (90 working days) that counted April12 2011.As parent company Flex Mation has very strong credit line with several financial institutes, it will be less time consuming for the XYZ New Store to receive start up and working capital from bank.
On the other hand, the fixtures would comprise of Tool Holder, Adjustable Height Fixture, etc, whereas the frames would comprise of Peristaltic Pump Stand, Test Frame, and the guards would comprise of Cat Walk and Guard, ECOSAFE Machine Guard, and Mazak Stand.
In this context, with such a widely diversified product line, it is important for the store to build up popularity among its client in order to acquire a good market position in Blaine.
February 15 2011 as the initial activities would be started from the at once after the approval of board the site selection continues from January 16 to February15 2011.
From the second month of 2011 after the sanction of bank loan, XYZ New Store will make contract with the rented premises and start decoration and renovation.
Thus, several direct competitors of this industry are Shape Master, Terra Universal, Pentz Cast Solutions, and indirect competitors are Applied Industrial Technologies, Inc, Industrial Distribution Group, and MSC Industrial Direct Co.
However, Terra Universal is the direct competitor for the Electropolished Stainless Steel Work-In-Process (WIP) Racks, DARLEX Manufacturing’s wide range of aluminum extrusion profiles, Porter (2004) argued that market competition should assess by considering following five forces and these are – Figure 2: – Porter 5 forces model for XYZ New Store Source – Self generated from Porter (2004) The threats of new entrants are relatively low in this industry due to the presence of a number of obstacles to pierce the market; therefore, despite of a quite high international demand it is rather hard for the new comers to capture a large part of the market at first instance.
On the other hand, bank loan is the key factor to start new project, as the entrepreneurs would not be capable to start XYZ New Store without fund, as they would only invest 45% of the total capital involved.
In addition, bank loan is also a major issue to coordinate all the operational activities, human resources management, promotional activities, as well as marketing functions.
In addition, Flex Mation will invest 60% of its total starting capital to expand its operation in the US market.
As Flex Mation will expand its business by opening a new store, it will be easy for the company to generate profit from the first year of its operation.