Business Plan: Business Plan Outline: (for a Make Believe

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Business Plan Outline: (For a make believe product I evented called, VIVID)

The Company is into manufacturing and marketing of the wonder cream VIVID which has proven abilities to iron out facial wrinkles caused due to aging. The cream contains the active ingredient Retinol which is richly textured and quickly absorbed. This useful night cream works all the while a person is asleep so that while he/she gets up, he/she will feel firmer having a smoother healthier looking skin. Instead of just exfoliating the surface layer of the skin, VIVID's anti-wrinkle treatment releases pure and active Vitamin A below the surface of the skin, thereby reducing the signs of aging. Due to this, skin renews itself and the fine lines and wrinkles are noticeably reduced. VIVID is the only non-prescription Face cream available having proven properties to diminish fine lines and wrinkles. When applied regularly to the skin, it will build a smoother and rosier radiance. (Retinol Wrinkle Treatment)

The cream is designed to be applied to the hands as also to the face and is capable of being used by both the sexes to erase lines, reduce and remove wrinkles and to wipe out spots which appear due to aging. VIVID contains 600,000 IU Retinyl Palmitate per 2 ounce jar which is the strongest cream available. Coming to the functioning part, VIVID does not just exfoliate the surface layer of the skin similar to other OTC wrinkle treatment. It has Retinyl which is a Vitamin A derivate which occurs naturally within the body. During the initial months of use, the skin turns smoother as also softer. Following use of three months, brown spots vanish, fine lines around the mouth and eyes starts diminishing, and would disappear. VIVID's carefully formulated Retinol cream does not have the after effects of the prescription Retin-A. VIVID has been able to achieve this by only using pure and active Retinol -Vitamin A The cream also has 500 mg of soothing Vitamin E This cream is considered as 'hypoallergenic, non-comedogenic and also non-photo toxic'. (Retinol Wrinkle Treatment)

Marketing:

The product will be marketed to the baby boomers. Remarkable changes are happening as baby-boomers approach 'old age'. Majority of the baby boomers have crossed the age of 50 and when one widens the definition to take into account the 'war baby' cohort, in that case a lot of them are retired and awaiting Social Security. This generation has not imitated the earlier generation, but has been among the trendsetters. The members belonging to this group have an increased involvement rate in sporting activities. As a result, apart from experiencing the difficulties linked with aging, they will also experience a lot of sports related problems. Besides, the concept of 'looking one's age' does not appeal to a majority of numbers belonging to this demographic group, both male as well as female and their dependence on cosmetic products has already been exhibited. (B-111R Drugs & Cosmetics for Aging Baby Boomers: A Surging Market)

Financial Management:-

VIVID possess a number of competitive strengths that give a powerful platform for implementing its techniques for growth which is marked by attractive combination of its product and an effective means of distribution. The business model of VIVID is designed to provide the product of the highest quality. The product has a strong recognition of its brand and brand perception in its important markets. The company maintains a wide variety of cosmetics products and puts a major importance on development of product and innovation. Its pricing strategy is designed to reinforce the position of VIVID as a brand which provides luxury which is within reasonable means. The supply chain that concentrates on the quality of product and enhanced distribution, gives VIVID with an effective system for delivering its products as the company expands. The company has a strong financial base and proven high cash flow generation. (Oriflame Annual Report 2004)

The company benefits from a powerful financial base, consisting of strong cash flows, healthy margins and a variable cost base. In the opinion of Euromonitor, international sales of cosmetics products was 186 billion euros in the year 2004 showing an average growth rate of 5.0% for the 1997-2004 periods with especially strong growth in Eastern Europe growing at 8.4% yearly. Skin care constitutes the biggest category. They account for 67% of the total sector sales with skin care growing speedily compared to the industry average during the last seven years. VIVID's traditional strength in these areas permits the company to acquire considerable advantages from their underlying growth momentum. Skin care products are expected to influence the sector growth in the coming years. (Oriflame Annual Report 2004)

Operations:-

The year 2004 was an eventful year for VIVID. Armed with a group of extremely talented people and a supportive Board of Directors, VIVID transformed three independently operating businesses into a strong company focused into One VIVID, One Team, One Company. VIVID was recreated i.e. segmented into VIVID Aesthetics and VIVID Health. In order to accomplish the transition and execute the vision of the company, important executives were recruited into the management team and the company was strengthened with a number of crucial recruitments throughout the organization. Working in cohesive manner the employees created an entity, built entirely on performance, pride and accomplishment. Revenues grew by 6% in the year 2004 with significant contributions coming from each of the businesses. Sales in the facial aesthetics business grew 8% led by a robust performance from our market-leading RETINOL in the U.S. The RETINOL range of products will fill out cosmetic dermatology product line and put VIVID in a unique strategic position in the rapidly growing anti-wrinkle market. (Enhancing Lives) manufacturing consolidation program was initiated by us, which will produce efficiencies within the short- and long-term. Reviewing the income statement, apart from 9% strong sales growth, gross profit was continuously at 72% of the sales. In addition to that (i) Sales, general and administrative expense to support important marketing initiatives, build infrastructure. (ii) Expenses on Research and Development (R&D) were raised to support and enhance the advancing strategic product and developing pipeline. (iii) The effective rate of tax for 2004 was 16% which is a considerable decrease from 22% in the previous year 2003. This decrease showed enhanced management of foreign tax credits and increased levels of production from our lower tax jurisdiction production facilities in different locations.

Earnings per Share or EPS as calculated by the Generally Accepted Accounting Principles were $1.50, which is an increase of 55% compared to 2001 levels. Cash earnings per share that excluded $0.24 of special charges, $0.16 of charges connected to our manufacturing consolidation and $0.13 of amortization of intangibles and non-cash compensation were $2.03, which is an increase of 15% compared to 2003 levels. Steps was taken to improve the Balance Sheet by way of paying advance $25 million of term notes much before their scheduled maturity. Apart from lowering our total debt service obligation, the prepayment also made less the effective interest rate providing for interest expense in future. (Enhancing Lives)

Almost 7 in 10, within the 30 to 50-year age bracket believe that they appear younger compared to their real age and roughly two-thirds say that they have lesser signs of aging compared to other people of their age as per the fourth annual Wrinkle Report survey. In excess of 1,400 both men as well as women participated in the annual national survey, which was for the first time in its history was taken up on the Internet. Their aging clock is clicking, however in the minds of majority of the 30 to 50-year people the second hand has either halted from moving forward or is traveling very slowly. This age group fails to admit that about their physical appearance which is aging. Based on statistics, it is quite impossible in case of two in three people to appear younger compared to their real age to others. However, in the first Wrinkle Report published in 1996 the present age attitudes regarding individual appearance nearly show identically the same sentiments shown by 1200 baby-boomers of U.S.

The present 30 to 50-year-old, in comparison to three years back is less likely to think "people must permit nature to follow its course and not try to alter the way they appear, and they are more possible to believe that people should act in a manner that pleases them to reduce the signs of aging." (Who Looks Good For Their Age? We Do! Say 30 to 50-year-olds) It is seen that in comparison to men, women are more concerned to worry regarding a changing appearance as they advance in age, they have more possibility to be bothered by having wrinkles and/or brown spots and there is more possibility to consider looking for assistance from a dermatologist for facial ageing signals. (Who Looks Good For Their Age? We Do! Say 30 to 50-year-olds)

Conclusion:-

As compared to creams which sell for $90 or higher per ounce, it is the guarantee of VIVID that… [END OF PREVIEW]

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