INNOVATION MANAGEMENT

MPU3242
Generico Inc Business Plan
Prepared by:
Name No ID

Ariff Luqman bin Peter Lisut 62212220297

Farhana binti Muhammed Farish 62214220156

Mohamad Azamuddin Bin Syehran 62212119113

Muhammad As-siddiq Bin Mohd Rais 62213119651

Prepared for:

Dr Firdaus Hilmi Nadzri

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Section Business Plan of Generico INC Pages

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 Benchmarking for Generico INC business plan (Original) 3
SWOT analysis 5

Section 1 Executive Summary 6

Section 2 Business Description

A General description of business 8
B Industry Background 9
C Goals and potential of the business and milestones. (If any) 9
D Uniqueness of product or services 10

Section 3 Marketing
A Research and analysis 11
1 Target market (Customer) identified 12
2 Market size and trends 13
3 Estimated market share 14

Section 3 Marketing
B Marketing Plan 16
1 Marketing Strategy- Sales and distribution 18
2 Pricing 19
3 Advertising and promotion 21

Section 4 Operation
A Identify location
1 Advantages 23
2 Zoning 23
3 Taxes 24
B Approximately to suppliers 24
C Access to transportation 24

Section 5 Management
A Management team-key personnel 25
B Legal structure-Stock and employment agreement and ownership 27
C Board of director, advisors, and consultant 27

Section 6 Financial
A Financial forecast 28
1 Profit and loss 29
2 Cash Flows 32
3 Breakeven analysis 34
4 Cost Control 36
5 Budgeting plans 37

Section 7 Critical Risk

A Potential Problems 38
B Obstacles and risk 40
C Alternatives courses of action 42

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Benchmarking GENERICO INC (original business plan)

A well-written business plan is a valuable application that enables entrepreneurs

to set targets and monitor their progress as their company grows. When beginning a
new company, the first step should be to create a business plan. Business plans are
also critical for attracting investors because they will decide whether your company is on
the right track and worth investing in.

Based on the original business plan from GENERICO INC, we found that there
are several important elements to the business of the plan. For example, specific in
marketing plan and critical risk. Based on, the original plan business does not have
those elements. On the marketing element, this company has no marketing concept to
be applied to ensure business continuity. So, in business nature, a company that has
the right marketing strategy can attract customers to buy products produced by
Generico INC. It also serves to attract investors to invest in the company. The concept
of risk control, with the presence of this element, it helps the company to determine an
effective strategy to ensure that every possible risk can be controlled and have a
contingency plan. So, it will help the company from incurring huge losses because of
the incidents that occur as result of the risks involved.

Next, a complete business plan of importance to the company such as a

business plan is needed to obtain financing from lenders or investors. Lenders want to
know that they are investing in a long-lasting and growing business. It must provide
lenders with a roadmap outlining the steps you want to take as a business owner. Then,
cash flow forecasts will help you determine if your objectives are realistic. It also
identifies developments that could have a negative impact on the company's operations.
The sooner an organization detects potential problems, the sooner it can fix them. In
addition, business plan profit also aids in task prioritization. It can determine which
problems to tackle first by looking at the big picture of the market. A business plan will
also help you decide which tasks to tackle later.

In conclusion, traditional business plans are more common, it follows a standard

format and allow company to go into depth in each segment. Traditional plans usually
necessitate further effort up front. Lean startup business plans are less common, but the

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company follow the same framework. They concentrate on summarizing only the most
important aspects of company plan’s main elements. It can be made in as little as an
hour and are usually just one page long. Business plans may assist Generico Inc in
obtaining financing or attracting new business partners. Having one in place would give
investors trust that their money will be well spent. This business strategy can be used to
convince others that partnering with is a wise choice.

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SWOT Analysis (GENERICO INC) (Original Business Plan)

Strength Weakness
 There is a lot of competition.
 Have an outstanding sales team  There are no customer ties.
with in-depth knowledge of current  there are poor supplier relations
goods. and trust.
 Have a strong internal  There is a lack of funding.
communication channel.
 Have a solid geographical position
with high traffic feedback.
 Well-thought-out and active
marketing campaigns.
Opportunity Threats
 The item is in high demand.  There are several competitors in
 Gypsum goods are very common the industry selling similar
in manufacturing industry sector. products.
 Client being persistent for  Another publicity campaign by
GENERICO INC product contenders.
 A competitor is opening a new
store in a nearby neighborhood.
 Individuals' consumption plans and
the economy's decline.
 Penetration of the market

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Section 1: Executive Summary

Generico, Inc. was formed in April 1999 to develop, manufacture and market a
flexible product line of highly cost-effective assembly robots. Generico’s initial product,
the Automation 10 and Automation 20. It uses solar as an energy source and can have
eco-friendly solar storage technology. It has a positive effect on the industrial sector to
protect the environment from further pollution by substances that adversely affect the
environment. It specifically at printed circuit board manufacturers. In addition, it is one
that makes full use of the functions of robots in replacing human energy. It will help the
manufacturing sector and manufacturing processes to be more effective and efficient
while maintaining environmental sustainability around the world.

While automation has been increasing steadily in the business world over the last
decade, it has only been in the last few years that it has reached a tipping point.
Businesses have begun to shift to Robotic Process Automation (RPA) to increase
efficiency and minimize costs in recent years. The explanation for this is that technology
has progressed from basic computer automation to software "robots" that imitate the
behavior of a real human when conducting the similar task on a greater scale.
Generico’s focus is also to expand its business and products into the manufacturing
industry in Europe as in England.

The internal analysis produced a positive result as well, Generico Inc will sell
Automation 10 and Automation 20 at prices that are higher than the average, as the
company will be introducing a premium pricing strategy. The primary promotional target
would be to increase awareness of the company's presence through online promotional
channels such as social media, e-mail marketing, and so on. According to the SWOT
review, which was performed by summarizing the information collected in the external
and internal analyses, the company's strengths and business prospects outnumber the
company's vulnerabilities and possible market risks. Risk management techniques are
developed in response to perceived weaknesses and potential threats.

Generico Inc is seeking paid-up capital $USD 5 million in funding from potential
investors. The funding will allow the organization to expand its product offering, execute
forceful deals and advertising plans, and establish a fundamental assembling office.

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The organization anticipates that the initial round will be sufficient to get it to
competitiveness and allow it to construct capital to the point that outside obligation
financing can be obtained to help promote growth.

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Section 2: Business Description

A. General description of business

Generico Inc is a manufacturing firm that produces products with the

concept of robotic functions and in long-term company research and
development (R&D), experts and engineers have upgraded Automation 10 and
Automation 20 products by adding solar functions as a source of energy to the
product instead of relying on entirely to electricity and manpower. In addition, the
Automation 10 products that Generico Inc offers are eco-firendly oriented
products to prospects. This is because the manufacturing sector is one of the
sectors that are the cause of the disruption of the global ecosystem. Here, it
promotes more environmentally friendly systems, cost reduction and fully robotic
systems without manpower.
The manufacturing industry intends to provide factory with custom and
predesigned robotic equipment for storing and retrieving products electronically
via a computer system. Companies will have more control over their goods in
storage if they use electronic equipment and computers to control manufacturing.
A robotics solution would allow manufacturing companies to reduce not only the
amount of missing or destroyed goods, but also the warehouse's staffing
requirements and labor intensity.
Finally, Automation 10 and Automation 20 design will create a consulting
and technical service to assist production managers in making sound business
decisions, in addition to the application design of robotic products. The
technological aspect of the service will help the built robotic applications, while
the consulting aspect of the service will provide manufacturers' owners and
management with optimization principles and automation advice. Generico also
intends to sell new parts, repair parts, and commissioning and qualification
documentation. The services department is expected to be a significant source of
revenue.

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B. Industry Background

The target market for Generico Inc is the small to medium-sized circuit
board manufacturers industry globally. Traditionally, these factories relied on
human labor to finish and least computerize system the products. Also, it
produced limited output rather than using Automation 10 and Automation 20.
These procedures have remained largely unchanged to the present day. The
most recent advancement in the industry has been the use of computers and
database systems for monitoring and control the quality of the circuit board. This
means that the industry is ripe for productivity improvements, with all the
available technologies to automate the manufacturing circuit board, storing,
stocking and retrieval system. Also, it can prevent from dump of defect circuit
board that can burden the company financially.

C. Goals and potential of the business and milestones.

Goal for the short term (Mission) is to increase the use of system robotics
in circuit board production companies with Automation 10 and Automation 20
products by 50% domestically and penetrate the European market as a measure
to promote the advancement of technology that has been pioneered by
developed countries. While Goal for the Long Term (Vision) is to be a pioneer in
products that prioritize the full use of Robotic Process Automation (RPA), high
security features and futuristic features. In addition, prioritize environmental
sustainability at the global level. It has great potential as a futuristic product and
according to technological advancement equivalent to the standards of
developed countries which mostly use RPA (Robotic Process Automation) and AI
(Artificial Intelligence).

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D. Uniqueness of Automation 10
The uniqueness of this product is that it uses solar energy sources as the
driving force for this model. Additionally, it has a solar power storage section for
maximum use of up to 10 hours. It saves a company's utility costs because solar
power is renewable energy and can be stored. In addition, it can maintain
environmental stability globally with the function of environmentally friendly
Automation 10 and Automation 20 technology.
Moreover, it has limited manpower where manpower is only used to key in
data into the system and the entire manufacturing makes full use of RPA
(Robotic Process Automation). It saves the cost of a company in staffing and
hired employees. Product quality is also monitored by AI (Artificial intelligence)
which is guided by global standards.

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SECTION 3: MARKETING

A. RESEARCH AND ANALYSIS

Based from our research, the manufacturing industry’s problems is that they have a
high labour cost, which measures the price of labour for a single unit of output, such as
a single product. As domestic labour costs continue to increase and the logistics of
foreign production become ever more burdensome, the demand for robotics solutions to
these problems becomes more and more evident. Which can result in increasing of
overhead cost and results in decreasing of productivity. Productivity is the efficiency
with which you generate output using certain inputs. The increase in labour cost may
also result in higher expenses compared to revenue. Unless if a business decrease
other expenses or increase their selling prices to increase their revenue, their profit will
absolutely decrease.

Next is finding and keeping labour. Hence the pandemic, it is a high risk to have so
many employees to work in the company due to the fact that they might not been able
to social distance as much due to their job scopes. Also, there is a widening gap
between jobs that need to be filled and the qualifying talent pool capable of filling them.
Jobs are evolving due to the impact of technology and automation, and manufacturing
companies need to address this while simultaneously solving today’s current employee
shortage.

What generic strives for in the industry is to reduce labour costs to help other
businesses who are struggling with keeping labour and maintain their relationship with
their previous customers by maintain closer communication with user. Which in this
case, producing a better and innovated product for B2B in particular, due to the fact that
customer retention is cheaper and much more influential than customer acquisition.
What Generico can do to innovate their current product, which is the Automaton 10 is to
ask for their previous customer’s feedbacks and listen to all of their customer’s
problems while they were using Automaton 10 and gather all information from their

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customer through surveys. By improving their customer relationship management,
Generico is able to find a way to innovate their product up to their customer’s
expectations. For example, their new product which is called Automation 20.

1. TARGET MARKET.

The domestic market for robotics spreads across five major and distinct industries. The
automotive industry has been by far the largest consumer of robotics products, using
them primarily in painting and welding operations. The other industries include foundry
and heavy manufacturing, aerospace and defence, electronic assembly, consumer
products, and other. While the automotive industry has shown the most impressive
growth in robotics applications to date, it is the electronics assembly market that will be
the growth sector of the future. This is the market which Generico will be addressing.

As the U.S. economy continues to move away from smokestack industries, it becomes
apparent that the exciting growth will occur in industry areas where substantially higher
value is added through both technical product design and state of the art production
methods. As clearly evident in the previous table, electronics (including aerospace),
automotive and consumer products will experience high growth. Generico’s target
market, then, is demand driven. The company’s products will fill an urgent and
dissatisfied need within the market. Generico’s Target customers are Stewart Industries,
Pace Computers, Board Technologies, Fullsiz Computer, Cantel, Informedics,
Northwest Digital, Fletcher Disks, Indiana Instruments, Davis Designs, Avitar Avconics
and Acme Electric.

For each prospective customer, Generico maintains an in-depth profile covering

products, labor force, capital equipment in use, operating statistics (as available), other
key decision makers, and other information as appropriate.

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2. MARKET SIZE AND TRENDS
As competitive pressures from both domestic and international sources continue to rise,
managers are being forced to closely scrutinize their product cost. The problems are
particularly acute in the electronics industry where volume production and heated
competition have resulted in extremely thin-margined commodity pricing. Industry
managers are now compelled to increase productivity, maintain or improve quality, and
reduce labor costs. Otherwise, they will suffer the same consequences U.S.
manufacturers of televisions did in the 1960’s and 1970’s, slowly wither away as a
result of foreign competition.

Many industrial experts, including Wanda Fleming of the Industrial Group, Inc. and
George Davis of McBan & Co., a major industry consultant, feel the competitive
realities facing U.S. manufacturers of electronic products will result in near-explosive
growth in the domestic assembly robotics market during the next decade. The reason
for the expected growth is that robotics address the competition head on by allowing
manufacturers to:

 Increase productivity while maintaining or improving quality

 Tie in with long-term strategies to out-perform foreign competitors
 Cost effectively utilize the innovations within the industry
 Reduce labour costs

Supporting the data above is the unavoidable fact that the growth rate of U.S. industrial
productivity in both heavy and light industries has decreased substantially over the
past decade. The year-to-year increase in 1986 was 4.2%. In 1998, it was .8%. The
most alarming aspect of the figures is that increases in foreign productivity have been
astronomical over the same period (Japan, for instance, went from 2.8% to 5.3%). At

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 the same time, U.S. producers of automobiles and electronic products have yielded a
substantial domestic market share to foreign competition as evidenced by the following
table.

3. COMPETITION

Currently, there is a wide spectrum of roughly 30 companies addressing the robotics

market. They range from the multibillion dollar MBI, Inc. to the four or five startups
concentrated on the West Coast. As Generico’s strategy is to address the light
manufacturing and electronics markets, this plan does not address manufacturers
focusing on other markets. In addition, Generico management is convinced that those
companies addressing the automobile and foundry industries (such as Muscle
Machines, Inc., Ergoarms Corp., Koniyoki Heavy Industries, and Veblen, Ltd.) do not
represent a competitive threat to the company. Approximately 20 manufacturers focus
on the same markets as Generico and shared the $320 million market in 1996 such as:

 Mississippi Micron
 Digitizer Corp.
 Robox, Inc.
 Manoforms Corp
 Smartarms, Inc.
4. ESTIMATED MARKET SHARE

Advances in machine learning and automation have resulted in the development of

Computer Numerical Control (CNC) systems. The CNC segment dominated the market
in 2019 with a market share of more than 80%. This can be attributed to the growing
need to reduce the operating costs, manpower, and errors in the components
manufactured in industries, such as aerospace & defence, and automotive, among
others. The rising levels of venture funding being received by companies developing
software for CNC machines bode well for the CNC segment. For instance, in June
2018, Cloud NC announced receiving funding worth USD 10 million from European

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venture capital firm Atomico. The funding allowed Cloud NC to boost the development
of its software that can potentially automate the programming of CNC milling machines.
Manufacturers are focusing aggressively on the latest technological advances in the
field of CNC software to enhance the connectivity between machines and operators
while improving flexibility within the shop floor, which is emerging as another notable
trend in the market.

The rise in demand for bulk manufacturing in industries, such as pharmaceuticals,

paper, and textiles, among others, is driving the growth of the conventional segment.
The increasing adoption of conventional systems, such as drills, saws, and bores,
among others, in the construction sector is also driving the growth of the segment.
Conventional machining typically costs less and is used for projects involving smaller
volumes. However, a looming lack of skilled labor is limiting the demand for
conventional systems.

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SECTION 3: MARKETING
B. MARKETING PLAN

Generico’s target markets are the domestic market for robotics spreads across
five major and distinct industries. The automotive industry has been by far the largest
consumer of robotics products, using them primarily in painting and welding operations.
The other industries include foundry and heavy manufacturing, aerospace and defence,
electronic assembly, consumer products, and other. While the automotive industry has
shown the most impressive growth in robotics applications to date, it is the electronics
assembly market that will be the growth sector of the future.

The objectives of this business plan are to save utility costs by using a solar
panel rather than having to use electricity to power up the Automaton 20. By using a
solar panel, businesses are able to save cost on not only utilities, but high labour cost
as well. Hence, the industries that needs automaton 20 are from the automotive and
heavy manufacturing, it will be an impressive growth for their business. Also, to shift
from using man power to using machines to decrease the labour costs and due to the
fact that a machine can get more work done faster and more efficiently compared to
manpower, while man can make only a few dozen pins in a day by himself, with the help
of machinery he can make thousands, that is what Generico is striving for in the
manufacturing industry.

Generico’s goal in six months’ time is to process is to produce as many goods as

possible in the least expensive way possible and efficiently for their end users’
satisfaction to achieve customer loyalty and have their business to thrive all aspects and
having their feedbacks as Generico’s content to reach new prospect regarding their

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products and what it can benefit to other businesses. While in twelve months’ time is to
be the go to automation industry in all manufacturing business due to the fact that
automated systems can work round the clock without any stoppage. The main purpose
of automating an industrial plant was to increase productivity levels and reduce waste.
Moreover, automated processes replace manual labour which helps companies to save
on labour wages and benefits.

After having positive feedbacks from their customers, Generico will be able to
create content in their catalogue and show audience on how well their product works.
For example, to reach audiences on how to use their Automaton 20, Generico will make
a prototype and do a video on how to set up, how to use, what it can do to their
prospects business and benefit them and what to do if the machine is having issues to
guide their customers before they even ask questions on how to do so and post it on
YouTube for detailed explanation. Afterwards, Generico will send the link to their
prospects and customers emails as a marketing funnel which is an effective way to give
exposure to the audience.

The period of time that Generico will publish their content is three months due to
the fact that they already produced Automaton 10 twenty years ago, so they are not a
foreign nor a new company in the industry and most manufacturers industry already
recognizes what Generico is and what they do. By promoting their previous customer
about their new and innovated product, it will be easier to influence them to purchase a
new robotic device that can help with their business more than what Automaton 10 has
done. Generico will have to depend on mouth to mouth marketing and interview them to
let their prospects know that their product can really make a difference to their business.
Although Generico has only two products that they produced, the quality of Automaton
20 is immaculate, Generico will have to be consistent on posting content to achieve
sales and cover their business revenue.

As we all know, all of Generico’s customers are from the engineering sector,
manufacturing industry and aerospace industry such as NASA. What Generico can do

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to make sales is to send sales people to have a meeting with them to educate their
prospects about the Automaton 20 and even provide mini prototypes to show them what
it can do and how it can be beneficial to their company due to the fact that a company
as well known and immaculate as NASA will need this type of machine to grow
efficiently.

1. MARKETING STRATEGY

Generico’s marketing strategy encompasses an early stage focus on 15 to 30

major manufacturers of electronic products. Each target customer is known for its
innovative management, relatively high labor costs, and eroding market share over
recent years to foreign competitors. Product design will follow a stated objective of
addressing quality (as manifested in accuracy, simplicity, speed, and reliability),
innovation, service (second to none by Generico field service engineers, not outside
contractors), and price.

Generico management firmly believes that providing quality products is its first
and foremost task in achieving its targeted market share. Innovation and service are
actually subsets of quality and, as a result, substantial management attention will be
focused in those areas. To help foster innovation and to maintain close communication
with users, Generico has established a technical analysis group which will convene
monthly to discuss manufacturing needs. The group will be chaired by Generico’s
Director of Manufacturing, co-chaired by its Vice Presidents of Marketing and
Engineering and have five outside manufacturing members from Stewart Industries,
Pace Computers, Northwest Digital, Davis Designs, and Informedics. The group will
meet in Generico’s headquarters in Sequim, Oregon.

While Generico management feels that pricing will be the least important variable
in a purchase decision, the company will price its products at the middle of the market
approximately $40,000 per unit. Potential mid-range price hesitancy on the part of
customers will be met head on with specification sheets comparing Generico product
performance with competitors’ and on-site product demonstrations. Generico’s

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innovative designs result in greater flexibility with potentially lower manufacturing costs
than competitors’ products. This will allow the company to have standard margins above
the industry average in spite of mid-range pricing. Multiple unit order discounts of up to
13% will be available to quantity buyers (units purchased within a sixty-day period will
qualify for quantity discounts reduced by 25%).

It will be company policy to require a 15% cash deposit on all orders, with the
balance due within 45 days of installation. 16 Developing a Business Plan for Your
Rapidly Growing Business Generico’s standard warranty (full parts and labour) will be
90 days, the industry standard. The company’s service contract, however, will diverge
from the market substantially in that it will be priced on a tiered basis, depending on the
service contract period. Generico’s modular approach to product design, coupled with
the products’ engineering simplicity, will allow the company to guarantee maximum
down time of twelve hours to its customers. An innovative insurance policy, underwritten
by Boyd’s of Boston, will provide business interruption liability insurance in the amount
of $2 million per site per occurrence lasting in excess of the 12 hours.

2. PRICING
For Automaton 10, is a lightweight (125 lbs), high performance (up to 30 inches
per second at repetitive accuracy of 1/1000th of an inch), two servo-motor
robotics arm designed specifically for light electronic assembly applications. The
Automaton 10 operates on six separate axes, allowing it to be configured to
virtually any light assembly operations (competitive products are available with
six axis movement, but most existing installations are four and five axis
machines). The Automaton 10 has a maximum reach of seven feet, six inches
and a maximum load capacity of eight pounds, though at higher weights some
speed is sacrificed. The arm is controlled by two Cantel 11940 16-bit micro-
processors at each motor.

They, in turn, are controlled by a HAL personal computer with a minimum RAM
capacity of 512 kilobytes. While not necessary, fixed storage capacity of 10
megabytes is recommended for the PC controller. One of Generico’s strongest

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selling points is the flexibility of its proprietary resident software (written in
BASIC). The software is a plain English, menu-driven format allowing for rapid
adjustment of speed, pick and place loci (to within 1/1000th of an inch ideal for
circuit board stuffing), travel routes, interval timing, and product weight.

Automaton 10 will be priced at $40,000 per unit. The unit price is ex-factory, less
shipping, and includes resident software, the HAL PC controller, and one-day
installation and training. Complete documentation and an easy-to-read user’s
manual are also in the package.

As for Automaton 20, Generico’s intentions are to develop a full line of robotics
products to meet market needs in light manufacturing industries. To that end,
designs are in process for the company’s second product, the Automaton 20, a
two arm robotics assembler. The Automaton 20 will function in a similar fashion
as the Automaton 10, but with two six-axis arms which will allow more detailed
assembly tasks to be performed (screwing, unscrewing, spot soldering, etc.).
Generico expects to be production-ready with the Automaton 20 by the beginning
of the fourth quarter of year one.

Generico’s remaining product on the drawing board is expected to be an add-on

to existing robotics products vision capability. Using a proven laser-based light
source, and artificial intelligence software, the company is hopeful of having
robotics vision market-ready by the first quarter of year three. Since the
company’s marketing strategy encompasses innovation as a major component,
future product development will be of key concern to management. In the first
three years, substantial resources will go into research and development. As the
company revenues grow, management expects to commit from 7% to 13%
annually to product development.

Automaton 20 will be priced at $50,000 - $60,000 per unit. The unit price is ex-
factory, less shipping, and includes resident software, the HAL PC controller, and

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 one-day installation and training. Complete documentation and an easy-to-read
user’s manual are also in the package.

3. ADVERTISING AND PROMOTION

As said before, it is best if Generico uses current customers, providing that satisfactory
levels are reached in terms of service, will likely favour to resume using their services.
Cost, resource, consistency and predictability are some of the reasons why is that
because they understand what Generico is and how much potential they can offer to
their business. Besides, it will also cost Generico’s organisation a lot less to win more
business from current customers and their importance within their business should not
go unnoticed.

Next is referrals. Word of mouth marketing is considered one of the strongest forms of
marketing for B2B organisations. Good news spreads and if an organisation needs to
purchase or outsource services it can use word of mouth marketing to aid the
procurement process or bypass it entirely. Referrals account for a large amount of
today's B2B sales for manufacturers who tend to stay within a small circle of existing
relationships for a trusted recommendation.

Hence, partnerships are similar to referrals in that they exist within a community of B2B
professionals who often know of each other. However, they are very different by their
nature, referrals tend to be a one-way recommendation of an organisation's service and
a partnership is formed for mutual benefits between two organisations. In other
instances, both organisations might need to provide a combined service and will look to

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work together or even work together to acquire a new client. Partnerships are highly
effective within a B2B context and require consideration. Generico will be shooting
video contents to showcase their current partnerships that include behind the scenes
snippets along with testimonials, demonstrations and educational content to show other
organisations what it's like to work with them.

Lastly, whilst Generico is looking at promoting business processes to other businesses,

they will also take into consideration how the B2B buyer or procurement executive
thinks and makes his or her decisions are promoting their message directly to other
marketing professionals, an emotional appeal may not go down well and a straight-to-
the-point approach may be better suited.

Some of the considerations that Generico will look at as factors which the B2B buyer
will factor as added-value incentives into the decision-making process:

 Access to information.

 Personalised and bespoke solutions.

 Speed and efficiency of delivery.

 Quality and expertise.

 Reliability or manufacturing process and machinery.

 Readily available support.

 Opportunity for a long term partnership and relationship.

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Section 4: Operation

A. Identify location.

A.1 Advantages
Generico Inc. chose India as the manufacturing site of Automation 10 and
Automation 20 is because it has among the countries with a high human
population of 1.1 billion. It leads to many skilled and unskilled workers. In
addition, employee wages are also among the cheapest in the world. Next, the
quality of work from India has a good reputation as compared to in China. It gives
advantages to Generico Inc. to maintain a reputation for quality control that
conforms to global standards. India also has many employees who are proficient
in English and facilitate business processes in the future.
In India, has Silicon Valley that can be used as a potential customer for
the domestic market for Generico Inc. There, too, it can exchange new
understandings about technology and provide opportunities for potential
customers in Silicon Valley to try Automation 10 and Automation 20. It will
provide exposure to the 2 products for potential customers globally with feedback
and testimonials from Silicon Valley in India.

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 Finally, India is close to Asean countries that are rich in cheap raw
materials. So, it will help Generico to save some cost compared to being based
in a European country. Here, it gives a financial advantage to Generico and
allows it to focus on research and development (R&D) future products.

A.2 Zoning
In India, Special Economic Zones (SEZ) have been developed with the
goal of attracting Foreign Direct Investment (FDI). A Special Economic Zone may
be formed jointly or jointly and severally by the Central Government, State
Governments, or any other individual involved in the manufacturing of goods,
according to the SEZ Act 2005. A foreign company may also establish a SEZ in
India. So, it will benefited towards Generico Inc as an foreign business in India.
A.3 Taxes
A.3 Taxes
Companies in India are taxed on their revenue based on their residency
status. A business with a residential status in India is taxed on its global income,
whether earned in India or elsewhere, while a non-resident company is taxed
only on income obtained, accumulated, or arisen in India. Foreign corporations
with a Permanent Establishment (PE) or a Branch/Project Office in India are
subject to the higher basic rate of 40%.

B. Approximately to suppliers
Generico Inc strategy in finding suppliers is started by prioritizing domestic
suppliers and the company also has an advantage due to the dumping of
suppliers in india and resources. In addition, Generico also facilitates suppliers to
order stock according to manufacturing requirements according to customer
demand. So, the inventory at Generico can be organized well, there is no
dumping of unused stock as well as facilitating the transportation of suppliers to
bring the product to the place of manufacture of the product. This strategy is also
used for suppliers outside India so that the operations of both parties can be
carried out systematically.

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 C. Access to transportation
Generico Inc will use sea, land, and air methods as trasportation to deliver
products to end customers. Suitable land methods are used to deliver products to
domestic customers and surrounding areas. The use of water method for
customers who receive a higher charge in receiving the product faster than sea
and land. Meanwhile, the sea route is for customers who are in different regions
and pay a minimum rate on transportation fees. It is late rather than the road and
air methods. Road services will be provided by Generico Inc. Meanwhile, sea
and air routes will be done by companies that partner with Generico Inc in
delivery services.

Section 5: MANAGEMENT

A. Management Team

Vincent Losciallo, 43, is the Chairman and Chief Executive Officer of the company. In
1990, he co-founded MIME, Inc., a robotics manufacturer. He grew the company to $39
million in revenue by 1997 and sold it to Major Motors, Inc. the same year as Chief
Operating Officer. Losciallo will be in charge of the company's affairs overall but will
focus on distribution and operations for the first two years. On an interim basis, he will
be in charge of the chief financial officer's duties.

Vice President, Stephen Daniels, and Harold Ginjeans. Each of them organized each
functional area which is Marketing and Engineering.

Stephen Daniels, 36, is a former Divisional Director of Marketing at Massepequa, Inc.,

where he was in charge of developing sales plans for a $35,000 to $75,000 capital
equipment product range. Sales rose at a compound annual growth rate of 23 percent
to $175 million over his seven-year term. Daniels will be in charge of the company's

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overall business strategy, including branding, distribution, advertisement, and internal
contact with finance, engineering, and manufacturing.

Harold Ginjeans, 40, a former Chief Design Engineer at MIME, Inc., where he was
responsible for the launch of four main devices, including the MIME EME, is now a
member of the Engineering department. Ginjeans will be in charge of all product
creation (hardware and software), as well as developing development PERT maps,
staffing the engineering department in the first year, and overseeing the design and
specification processes.

George Forrester, 39, Director of Manufacturing with Acme, Inc. for seventeen years,
resulting in the position of Vice President of Manufacturing. Forrester oversaw the
construction of one of the country's first assembly robotics factories. Forrester will be in
charge of building Generico's assembly activities, as well as negotiating subcontracts
and retaining partnerships with subcontractors. Additionally, Forrester will chair the
potential users of Generico products.

Priscilla Sproviero, 30, Controller, former Reed Hawick Senior Consulting Manager
Additional audit, and accounting expertise with a Big 5 accounting company for a total of
seven years. Both accounting and financial management processes will be set up by
Sproviero.

Daniels will serve as Director of Sales for a three to six-month transitional period. The
corporation has interviewed four applicants for the vacancy but has yet to find a suitable
fit. Management is conducting the quest largely through connections in the industry. If
the vacancy is not filled by the end of month two, a sales and marketing-focused
management recruiter will be retained to conduct the search. As noted, Losciallo will
serve as interim Chief Financial Officer until that position is filled.

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 B. Legal Structure

Generico's officers and staff would be given equity shares in the firm. There are
currently no foreign buyers. The below is a breakdown on who owns what:

Vincent Losciallo 45%

Stephen Daniels 14%
Harold Ginjeans 14%
George Forrester 14%
Pirscilla Sproviero 8%
Other employees 5%

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 C. Board of Director, Advisors and Consultant

A board of directors is a body of people who are chosen to represent shareholders. If

Generico Inc. has no investors, the Board of Director no need to point out in the
business plan.

The larger a company becomes, the more care it requires, and the more problems that
must be addressed precisely and correctly in order for it to continue to thrive. As a
result, for a variety of causes, the need for a Board of Advisors & Consultant grows.
Importance of Board of Advisors & Consultant are for business development and a good
backup system.

Section 6: FINANCIAL
A. Financial Forecast

The administration believes that the $2.5 million in underlying funding would be
sufficient to get the company up and running. Receivables and stock finance from
business bank outlets are expected to be available in the second quarter of year two.
The company expects to be able to maintain a profit margin of 40 percent, which is
higher than the industry average of 33-36 percent. Generico will have a key concern net
wage of about 9% to 11% of offers starting in the third year.

Assumptions underlying financial projections:

 Founders contribute $70,000 cash to Generico in month one (accomplished).

 Founders defer salaries and out-of-pocket expenses of $42,500 indefinitely
(accomplished).
 Depreciation is calculated on all fixed and capital assets assuming five-year lives
and straight-line computation.
 Receivables are 30 days in duration (industry standard is 30 days).

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  Payables are 30 days (industry standard is 50-60 days), do not begin until month
thirteen, and equal only 50% of inventory costs during the period (trade support
is expected much sooner).
 Inventories turn an average of seven times per year (on top of a fixed base of
$40,000).
 Salaries through month 18 are approximately 50% to 75% of industry standard
(higher at lower personnel levels in the company).
 Interest is earned at 8% per annum.
 Interest is paid at 13% per annum.
 Cash purchases are the sum of the previous period’s payable, 50% of inventory
purchases for the period, and current period capital acquisitions.
 Minimum cash on hand is $20,000 (under bank line when cash flow is negative
for the period).

Detailed budgets underling the financials are available for further review and discussion.

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1. Profit and loss

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32
33
2. Cash Flow

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35
 3. Breakeven analysis

Generico Inc.
Year 1 Cost-Volume-Profit (CVP) Analysis

Total Per Unit

Sales (17 units) $ 680,000 $ 40,000
Less: Variable costs $ (398,000) $ (23,412)
Contribution Margin $ 282,000 $ 16,588
Less: Fixed costs $ (1,425,975)
Net income $ (1,009,269)

Contribution margin ratio 41%

Variable expense ratio 59%

Break-even point 86

What-if analysis for target profit

Target profit $ 7,000,000
# of units needed 508

Margin of safety ($2,758,570)

Degree of operating leverage (DOL) -0.279410147

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Generico Inc.
Year 2 Cost-Volume-Profit (CVP) Analysis

Total Per Unit

Sales (204 units) $ 8,160,000 $ 40,000
Less: Variable costs $ (4,278,800) $ (20,975)
Contribution Margin $ 3,881,200 $ 19,025
Less: Fixed costs $ (3,448,577)
Net income $ 440,314

Contribution margin ratio 48%

Variable expense ratio 52%

Break-even point 181

What-if analysis for target profit

Target profit $ 7,000,000
# of units needed 549

Margin of safety $909,378

Degree of operating leverage (DOL) 8.814618659

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 4. Cost Control
The management and supervision of the corporate organization is therefore basically a
managerial and supervisory role. The measures required to ensure that the entity's finances and
activities are based on achieving defined priorities, targets, and strategies are referred to as
control. Continuous control alerts to future incidents, allowing emergencies to be avoided. It also
ensures that the quality and quantities of production are consistent, as well as providing
management with reliable data on employee results. Management compares real results to
predetermined expectations and takes corrective steps where deviations from the standards are
found.

Control costs in the following ways:

 Cut costs by cutting purchases that do not add value to the industry or marketing efforts,
identifying lower-cost vendors, lowering labor and benefit costs if doing so doesn't
jeopardize your company's productivity or viability, and conserving and recycling for cost
savings and environmental gain.

 Reduce the cost of sales by putting retailer orders out to fair auction, bargaining for
better pricing and conditions, signing contracts for lower-cost bulk transactions, and
optimizing product formats and manufacturing processes to cut costs.

 Eliminate unprofitable customers by assisting them in finding companies that will best
meet their needs, enabling you to concentrate on others that contribute to your
company's bottom line.

 Reduce uncollected revenue by requiring upfront payment and enforcing stricter lending
rules, charging interest on past-due accounts, and terminating connections with
consumers that owe the company more than they return.

Cost-cutting helps you achieve a higher profit margin, which is the amount of sales income that
makes it to the company's bottom line as profit. As part of your business model summary,
provide your estimated profit margin.

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 5. Budgeting Plans

GENERICO INC YEAR 1 Business Startup Costs

FUNDING Estimated Actual Over/(Under)
Investor Funding {4 2 }

Vincent Losciallo 520,000 514,000 (6,000)

Stephen Daniels 520,000 514,000 (6,000)
Harold Ginjeans 520,000 514,000 (6,000)
Priscilla Sproveiro 520,000 514,000 (6,000)
George Forrester 520,000 514,000 (6,000)
Total Investment 2,600,000 2,570,000 (30,000)

Loans
Bank Loan 1 - - -
Bank Loan 2 - - -
Non Bank Loan 1 - - -
Total Loans - - -
Other Funding
Accruals 43,000 42,500 (500)
Other
Total Other Funding 43,000 42,500 (500)

Total FUNDING 2,643,000 2,612,500 (30,500)

COSTS Estimated Actual Under/(Over)

Fixed Costs
Marketing 400,000 360,933 39,067
Finance and Administration 120,000 117,252 2,748
Engineering/ R&D 800,000 776,493 23,507
Manufacturing 180,000 171,297 8,703
Total Fixed Costs 1,500,000 1,425,975 74,025

Average Monthly Costs

Advertising (print, broadcast and Internet) 800 790 10
Business Insurance 2,000 1,500 500
Business Vehicle Insurance 500 450 50
Employee Salaries and Commissions 60,000 62,300 (2,300)
Inventory, raw materials, parts 20,000 19,830 170
Miscellaneous Expenses 1,500 1,750 (250)
Owner Salary 25,000 24,000 1,000
Postage/Shipping Costs 800 800 -
Security System Monthly Payment 2,000 1,800 200
Supplies 5,000 4,360 640
Telephone 500 486 14
Total Average Monthly Costs 118,124 118,081 43
x Number of Months 6
Total Monthly Costs 708,744 708,486 258

Total COSTS 2,208,744 2,134,461 74,283

SURPLUS/(DEFICIT) 434,256 478,039 43,783

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Section 7: Critical Risk
A. Potential problem
In every industry there are potential problem that need to be faced regardless of
economic or social point of view. This puts pressure on the industry to continue to earn
revenue from each of their earnings. Although it can be said that the obstacles faced
are a sign that the industry continues to grow and progress. But everyone in the industry
needs to wisely organize steps to overcome an obstacle so as not to fall into the valley
of failure. What is a potential problem today is something that can be expected or
something that cannot be expected. This requires everyone's preparation to deal with it.

Everyone, especially in Generico, finds uncertainty in defining a business.

Uncertainty will certainly affect the way the organization in the company is governed,
especially in the next 10 years. Uncertainty faces business every day in the form of the
global economy, volatile money markets, regulatory changes and uncertainty about how
new technologies will affect business. Uncertainty can lead to short -term focus, which
prevents businesses from investing in the future. Business experts like Forbes, believe
that planning a strategy over the next five years with the right long -term strategy is the
best medicine for uncertain times.

Besides, technology is constantly evolving, every business must adapt to the

ever -present needs of customers. Over the years there have been major advances in
cloud services, data management and IT services. Still, with all of these options,
determining the right path for a business can be daunting. This is because one of the
problems that Generico may face is with investing in new technology. Businesses
potentially fail because choosing the wrong technology can cause the business to incur
losses.

In addition, increased selection and competition is also one of the potential risks.
Maintaining this Generico name is a much more complicated matter these days. This is
because, there is helping to start an online store, for example, to get business cards
and marketing materials, all at very affordable prices. The ease of starting a business
creates a much wider level of competition. To find a different business for each product
sold and a new business that focuses on one item and spends all their time and
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concentrates on being the best at one thing, is very easy. Increased overall selection
and more focused solutions will make it difficult for businesses of all sizes to retain
customers who can change their suppliers in one go. It is a battle of perception, focus,
and marketing to continue to be a leading manufacturer.

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 B. Obstacles and risk.
Starting a business can be obstacle and risky, and there needs to be a degree of
awareness by businesses of these challenges as well as risks involved. Knowing what
they are, will allow for a degree of planning in order to mitigate as many as possible.
Software development clearly poses the most formidable obstacle to Generico. To
mitigate this exposure, the development process has been divided into segments for
simultaneous development. Each segment will be the responsibility of a specified
design engineer. A project engineer will be responsible for the overall coordination of
the development. He, in turn, will report to the vice president of engineering. The target
date for software completion is three months from funding.

In general, Generico faces various risks in its business each year. This with
increasing trade protectionism, foreign instability, currency exposure, and other
business risks endemic to foreign production causes the installation of robotic products
to become increasingly difficult. However, the existence of this risk increases the value
of a product in the future. Indirectly Generico can improve the business stability and
balance of the company.

Moreover, in growing the business in Generico repeatedly failed in IT management

and business leaders. Generico sees the bigger picture, but sometimes they don’t work
with IT to make sure they can achieve their goals without technology blocking it.
Organizational actions will be different if business and technology plans are aligned,
and organizations are able to scale without limitations. For example, if Generico plans to
grow significantly over the next three years and IT is in good shape, the infrastructure
implemented for current risks may be different to be able to accommodate long -term
growth.

In addition, one of the barriers and risks in generico is competition. This is because,
competition is a risk factor that affects entrepreneurs. While there is little healthy
competition for businesses, some forms of competition become so intense that business
owners must resign, or even close completely. It is known that Generico management
has developed a complete file on openly traded competition but has had difficulty in
gathering information related to non -traded companies. Conversations with end users
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of competing products, product brochures, industry publications, and trade associations
have been the main source of intelligence of the last group of companies.

Next the obstacles and risks that occur today are covid-19 pandemics. There is no
denying that the covid-19 pandemic has affected all organizations and businesses in the
world. Generico is no exception to be affected by this covid-19 pandemic. This has
affected the sale of the company and Generico had to take steps to further streamline
the business. However, the existence of online sales methods nowadays has made it
easier for Generico in marketing and finding new customers around the world. This may
take a greater amount of capital but yields decent results in the long run.

In the final analysis, it is important to realize that there are no risk-free opportunities,
and we must have the courage and perseverance to make decisions and then manage
risks - including complete failure. If a person is not willing to accept the possibility of
failure, he or she cannot try a new business.

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 C. Alternative courses of action
Alternative Courses of Action: In our project, making the decision in this area will
add/cut some points to the surrounding environment, such as the economics,
transportation. Etc. The Stakeholders' decision will be made to choose the best
alternative that could meet all or part of their missions from the following alternatives:

Cost reduction:

Focus on cost reduction. When the financial situation of the organization is in a dire
state, reducing the company’s complexity, streamlining processes, postponing
investments, reducing stock levels, cutting back on travel and accommodation
expenses and refraining from extensions of temporary employment contracts can
achieve a significant decrease in the costs and increase the financial capacity of the
organization fast. However, there are drawbacks. While cost reduction is a positive step
to develop and grow a company in the long run, it can cause negative vibrations
throughout the company. Employees can make mistakes by reducing costs throughout
the company. Sometimes Cost Reduction involves process changes and not every time
the change is good. Such changes can be harmful sometimes and cause additional
losses instead of gains and improvements.

Forecasting.

Economic and market trends is critical to economic climate change. Having the
ability to predict very important trends can make the difference between struggling to
survive and being able to grow and develop. The ever -changing industry landscape is
opening new opportunities, and financial institutions are looking to the near term to drive
profitability and growth through sustainable innovation. Technological solutions enable
this wave of innovation to meet new customer expectations, increase transparency,
meet regulatory requirements, and remain competitive. However, Forecasting involves a
lot of data collection, data organization, and coordination. Companies typically use a
group of responsible demand planners to make forecasts. But to do it well, demand
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planners need a lot of input from the sales and marketing teams. In addition, it is not
uncommon for the process to be manual and labour intensive, so it takes a lot of time.
Fortunately, if you have the right technology, this is a problem.

Focus on increasing revenue and margins.

Streamline the sales process, pay more attention to pricing, focus on a smaller,
higher -quality product range, and strengthen relationships with customers, increasing
revenue and margins. This is seen to be better because using profit margins as a
benchmark, companies have a basis for formulating their pricing strategies. By
comparing their current profit margins with past norms or industry norms, companies
may need to raise their profit margins or be able to tolerate lower profit margins by
raising or lowering their selling prices. Without using profit margins, companies must
find other ways to measure price changes to reflect their potential impact on profits.
However, Profit margin alone can't determine a company's total profit level without
accounting for total sales volume. Companies may have a high profit margin but low
sales volume, leading to a relatively low total profit. If the high profit margin comes from
higher price rather than lower costs, sales volume may decrease over time. On the
other hand, companies may have a low profit margin but high sales volume, resulting in
a relatively high total profit. If the low profit margin comes from lower price rather than
higher costs, sales volume may increase over time.

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Automation 10 Model

Automation 20 Model

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