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Transcript of Business Plan
MATEST products will replace current similar products bought from FORNEY MATERIALS TESTING and GILSON COMPANY, both are suppliers from the USA. Strong growth of material testing equipment market There have always been few companies in Venezuela that sell material testing equipment.
During the 80's, two strong competitors stood out among the rest: TECNOCONCRET, C.A, and Ingeniería de Control de Calidad (ICC). In the year 2000, after the government's introduction of a
currency exchange control policy, many importers
have been leaving the game and, since then,
only TECNOCONCRET, C.A. and ICC remain. There is no feasible way to determine market share, but information gathered through customers throughout the last three years indicate that currently TECNOCONCRET, holds a greater market share in the equipment sales market and ICC holds the upper hand in the service market (calibration and maintenance). Market Share Better discounts, cost reduction.
Simpler shipping process.
Better communication in technical matters.
Higher and longer credit line. The different segments are: A) Very basic concrete assessment:
no more than slump test equipment and moulds for concrete specimens. These are usually construction companies who have to make slump tests with each new concrete mix along with taking some specimens, which they'll later take to a third party lab for quality control. B) Concrete testing labs:
concrete compression machine, sieve shakers, sieves, balances among other, smaller, pieces of equipment. These are typically internal QA&QC laboratories and small third party laboratories. C) Asphalt testing labs:
Marshall testing machines, moulds and compaction hammers, centrifugal extractors, water baths and sieve shakers, sieves and balances, among others. Following the same explanation as the previous segment (B), this are either internal lab divisions or small third party labs meant for QA&QC. D) Multi Purpose Material testing labs: they operate with the equipment from all previous segments and also delve in soil testing. They tend to have higher end equipment, so as to stand out from the smaller labs. These are all third party labs, since concrete and asphalt producers do not invest so much in internal control. E) Non destructive testing: there are specialized pieces of equipment that is capable of testing certain properties in a non invasive way. They are costly pieces of equipment and are commonly handled all together by particular labs who specialize in these. Sales Information 1) Bargaining power of customers
Low- Only 2 companies in the market
2) Bargaining power of suppliers
High- Venezuelan market is small
3) Threats from new entrance
Low- Very difficult importing process and long time to build customer trust.
Medium- Although no substitutes exist, the use of this equipment in not thoroughly regulated, so a viable substitute would be simply not using any.
Low- Only one current rival, kept under check 1) Permission to import most items using the official exchange rate
2) Very well established in the industry
3) Customer service Since the year 2000, a very rigorous currency exchange control was put in place in Venezuela, which slowly, over the years, has been strangling importers and running them out of the business. Out of all the previous importers only two remain. The official procedure for international purchases is handled by the government; whenever the merchandise arrives in customs, the bank blocks the money from the purchaser's account and then, within a period of 4 to 5 months, pays the vendor. However, no vendor gives a credit line of 5 months. Because of this control process, current importers had to establish legal companies in the USA in order to intermediate the purchases between the vendors and Venezuela; this intermediate company is the one that must handle the long waiting periods between cash outflows and inflows. The other option, which is to acquire dollars through the "black market" is quite impractical, since it elevates costs to such levels that selling prices are extremely high; not to mention that it is illegal, forcing companies to employ "creative accounting".
TECNOCONCRET, C.A. has already managed to get permission to import a broader array of items using the official exchange rate than its competitor. Throughout the years, TECNOCONCRET, C.A.'s name has been linked to construction, its products have been used in minor and major constructions in Venezuela: houses, buildings, bridges, tunnels and dams, to name a few; every contractor, engineer and architect in the field is familiar with the name.As a consequence, TECNOCONCRET, C.A. has the privilege of being one of the first companies a customer thinks of when seeking products for the area.Additionally, TECNOCONCRET, C.A. has built a large database of customers, with contact and purchase information. TECNOCONCRET, C.A. has always stood out by offering a more personal purchasing experience for the customer; thorough assistance and an amiable demeanor on behalf of the sales force have always set it apart from the competition, making the customer feel comfortable and cared for.For every customer company, TECNOCONCRET, C.A. seeks to establish a pleasant, trustworthy relationship with the person in charge of ordering and authorizing the purchases of the desired equipment; depending on the size of the client, that person could be the owner (small companies) or the head of the engineering or material testing department (medium and large companies). The change from the American suppliers to MATEST will allow TECNOCONCRET, C.A to offer the same prices on products of similar to superior quality and decrease the costs, since MATEST offers a better distributor discount and the shipping charges are in the same level. T a r g e t e d S e g m e n t s •Product: the new products will replace other brand's products, in many cases bearing new technology; in other, being exactly the same.
•Promotion: The sales force will approach specific targets in the client companies, who have the power to request and authorize purchase, emphasizing the high points of MATEST products. An e-mail with the news will also be sent to the addresses in the customer database.
•Price: Due to the reduction in costs, prices will be able to remain on a par with the expected increase due to Venezuela's regular 30% inflation, despite the fact that 2013 is about to experience one much higher.
•Place: The distribution channel remains unaltered; at the offices, with a high telephone and e-mail information flow. After studying the market and analyzing the gathered information, several key questions are answered: The customer are very price sensitive. Though brand still plays a role. Customers are not specifically tied down to one brand, as long as the brand offered comes from a source that gives them a certain sense of security regarding the value of the products. they expect American or European made products. The trust that the customer has on the seller is a crucial factor. Customers require the assurance of after sales services and value and recognize good service. Questionnaire & Interviews In which order would you place the following factors when buying new equipment?
2) Manufacturer renown
3) After sale service
4) Degree of automation
5) Digital vs analog When it comes to replacing old equipment, will you necessarily seek the same brand?
YES: 13.33% NO: 86.67% Between american and european made equipment, do you favor one or the other?
YES: 13.33% NO: 86.67%
Do you know MATEST?
YES: 6.67% NO: 93.33%
MATEST sells up to five times more than FORNEY and GILSON, having a much broader international range. If offered the same after sale service, warranty and delivery conditions, would you be willing to acquire your next piece of equipment from MATEST, instead of from the previously known brands?
YES: 93.33% NO: 6.67% Jorge Canales
Gabriel Pérez Russo
Arman Shirani Who we are any Questions?