Business Plan: Global Business Plan Hybrid Plane

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Global Business Plan Hybrid Plane

Financial Viability

AKJRT Inc. is planning to launch a global venture, centered in Japan, which involves introducing innovative hybrid planes for passenger and freight transport. AKJRT Inc. believes that the venture has immense viability considering the fact that the non-renewable energy resources around the world are rapidly depleting and are getting more and more expensive with the passage of time. This has made transportation particularly air travel very expensive for most people. AKJRT Inc.'s hybrid planes focus on providing low cost passenger and freight transport facilities to not only Japanese people but also people around the world. Since there is negligible competition in the industry currently, AKJRT Inc. expects to enjoy a monopolistic existence therefore there will be little pressure on the company for decision making pertaining to pricing due to weaker influence of demand forces. Therefore the major decisive factor that will impact the firm's pricing strategy is going to be the costs. Being the first of its kind project, the major cost pressures will come due to extensive research and development. The key factors that can implicate the financial viability of hybrid aircrafts are discussed as follows.

Costs pertaining to technology and manufacturing of aircraft.

Costs pertaining to safety and security measures of the aircraft (this includes insurance).

Research and Development costs in order to bring in constant innovation and keep future competition away.

Purchase, construction and maintenance of factory premises.

Employee recruitment and training costs.

Legal costs where applicable.

Given the increasing popularity of luxurious aircrafts such as Airbus A -- 380, the margin of incorporating luxury, which includes on flight amenities.

The maximum distance that the aircraft can travel in one flight.

The number of passengers / freight that the aircraft can hold.

The expected life (number of flight hours) for one air craft.

Costs pertaining to routine maintenance

Marketing costs, which include convincing mainstream international airlines such as American Airlines, Air France, Emirates, British Airways and Japan Airlines to include these hybrid planes in their fleet.

Interest expenses payable for loans.

Economic factors such as fluctuations in exchange rates, interest rates and inflation rates.

In order to maintain the financial viability of the hybrid aircrafts, it is important that AKJRT Inc. keeps the overall business activity as cost efficient as possible, that costs must be minimum while revenues must be maximum. This can be done by cutting down on wastages and ensuring quality assurance and total quality management practices. While some costs such as research and development cannot be compromised upon, therefore AJKRT Inc. will have to look out into other areas for cost cutting. A potential cost cutting area can be keeping interest expense low.

Exchange Rate Risks

Considering the fact that AKJRT Inc. will be operating in a global environment across transnational boundaries, AKJRT Inc. might face eminent exchange rate risks. The current international… [END OF PREVIEW]

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