Using the information provided, prepare an estimate of total market revenue and dave’s share of market revenue for the first year of operations

Using the information provided, prepare an estimate of total market revenue and Dave’s share of market revenue for the first year OŸ OD€TAfIOTIS.... What adjustments should Dave make to

CORPORATE MANAGEMENT

FINAL ASSIGNMENT Presented by

Nguyén Ngoc Quynh Nhu-21DH121316

Nguyễn Phú Quang-21DH121434

Trần Đoàn Minh Tiến-21DH123386

Submitted to Instructor Thach Bao Huynh as the final examination

HCMC, April 13th, 2024

Table of Contents

Question 1: Case Study SŠeÏ€ctIOH (L1 0 2011211211211 12110111111 11011111011 11111 1111151 1

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Question 1: Case Study Selection

To be able to thoroughly understand how a business operated, we have to learn with practice

Therefore, to be more successful when running a business, we need to understand the nature of a

business, practice to know the application, thereby we can expand our horizon and necessary skills to be more successful in business “Big D’s painting company” case is an ideal case for us

to study, we realized that Dave Valdon is a person who always put a great effort for his passion, with the knowledge and experience accumulated during his college years, he bases on this foundation to establish his own business Besides that we can observe that the construction industry and real estates are increasing rapidly as well as the growth of pain industry Additionally, economists assert that paint industry is extremely promising and productive due to

significant paint demand in the construction industry This industry has an age-old history and

stable growth rate, so the profit margin it always generates high Big D’s Painting company in this case has fewer competitors than other cases such as Pestite A, Pestite B and Katie’s custom Engraved Logos Therefore, we can see potential for competition and growth in the market To better understand how Dave operates his business, we have studied the following factors to gain more of his knowledge and experience

Business overview: Dave’s target customers is Maple Ridge and the surrounding areas of Pitt Meadows, Port Coquitlam and Coquitlam respectively

Market research:

Dave Valdon carried out a study of the number of households in four areas he targeted: Maple Ridge: 19,865

Based on the information provided, we determine that the total market revenue and Dave’s share

of market revenue during the first year of the company

1 Using the information provided, prepare an estimate of total market revenue and Dave’s

share of market revenue for the first year of operations

- From Table 1, we can estimate the total market revenue:

Total homes in the market area: 19,865+3,496+27,134 +15,828= $ 66,323

Demand in this area: 66,323 x 33 %= $21,887

- Seasonality: Dave should modify the amount of tasks because painting projects are expected to occur more often throughout particular seasons

- Competition: In order to determine whether there are any elements that could affect the number

of projects Dave is able to get, he has to look into and evaluate the local competition

- Market Trends: Dave has to keep up with any changes that occur in the home painting industry and modify the estimate appropriately

3 What adjustments or additions should be made to the information to be more accurate with the market share and projected income statement for first year of operations?

To provide accurate estimates and forecasts for his painting company, Dave had to collect additional data, do in-depth research, and evaluate the current state of the industry Those factors

are listed below:

- Need more data to forecast Dave's revenue market share and income statement

- Dave must take into account things like marketing goals, pricing strategies, and operating costs

- Dave must decide his pricing method, including whether to charge top prices for premium

services or lower costs to attract more customers

- Advertising activities: To advertise, sell services as well as attract customers, Dave has to spend

money on marketing and advertising activities

- Operating expenses: Dave must set aside money for supplies, labor, insurance, and any other appropriate fees that come with running the company

- By considering these factors and making the necessary adjustments, Dave will be in a better position to predict his market share and report his expected earnings

Question 2: Feasibility Analysis

1 Overview Company

ColorPaint is paints and coatings company, with an honor to be a part of the Industrial Materials group The company owns many famous brands, of which ColorCraft is always the paint brand trusted by users ColorCraft is one of the few Vietnamese paint brands certified "Green Brand"

by the SEC (Singapore Environment Council) ColorCraft remains to be an "Environmentally Friendly Brand" of the Vietnam Association of Industry and Environment

PaintHouse is a distribution system of water paint, registered in the Dong Nai province

“PaintHouse” exclusively provide ColorCraft, the products are always trusted by consumers, the

product also guaranteed quality and genuine produced directly from the manufacturing enterprise ColorCraft will suggest on the choice of interior paint color to appropriate the customer’s demand and the best customer service will be provided for consumers

2 Target Market and Trade Area

ColorPaint operates in more than 50 countries with more than 30,000 personnel worldwide Currently, the company decided to increase the influence not only in Ho Chi Minh city but also

in other provinces PaintHouse is established to become the distribution system of ColorPaint company, Painthouse is located in Tan Phu district, Dong Nai province with reasonable paint product prices from 300,000 VND or more The target customers of the ColorCraft brand are households wo need to construct or repair their houses and also many projects which are related

to construction

ColorCraft paint brand not only provides products in Tan Phu district but also neighboring areas

such as Dinh Quan district, 44 kilometers southwest of Tan Phu district, about 115 kilometers to the west, adjacent to Vinh Cuu district

3 Market Potential

Based on General Statistics Office of Dong Nai province in 2022, the population in Tan Phu

district is 154,224, Vinh Cuu is 169,147 people and Dinh Quan is 190,034 people The

estimation has been carried out that each household consists of 5 people, thereby the total of population of 3 districts are divided by 5 to estimate the number of households in these 3

districts

(154,224+ 169,147+190,034) = = 102,681 (household)

Based on the figures related the needs of each household, 5 to 10 years is a figure that a

household will need to build or repair a house However, in some cases that related to

unpredicted events which cause peeling wall paint, water seepage or fading too quickly, this can make households using our products or services quickly:

102,681 x 5%=5,134.05( household ) Currently, PaintHouse own many types of different capacities and prices ranging from

300,000VND to 7,000,000VND Moreover, customers not only choose ColorCraft paint but also

other paints from ColorPaint company Therefore, average each household or construction contractor will spend about 5,000,000VND per paint purchase, estimated Market Potential is as

follows:

Market Potential=5,134 x 5,000,000 =25,670,250,000 VND

4, Market Share

ColorCraft paint products decided to choose Tan Phu district in Dong Nai province to operate a paint store According to references on dailyviet.vn, there are 6 paint distributions in Tan Phu district, Dinh Quan and Vinh Cuu have 8 and | paint distributions in order:

1 Market arket Share Share = ———~-=0,0625 6,25% (1415) 6

Compared to the total population of 513,405 people The figure shows the potential growth in this area Moreover, Dong Nai province is considered as a major economic zone, thereby the number of industrial zones increase significantly along with the airport which is constructed in

Long Thanh, this is an extremely lucrative market for paint industry

https://daily viet vn/dai-ly-son-nuoc-tai-dong-nai.html?page=1

5 Projected Income

PaintHouse retailer’s sales revenue in 2024 is estimated based on the product of market potential

and market share as below:

benefits

taxes

Advertising 48,131,719 79,417,336 131,038,604 | 203,109,837 | 304,664,755 Repairs and 24,000,000 28,800,000 34,560,000 41,472,000 49,766,400

maintenance

Licenses 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 Utilities 60,000,000 63,000,000 66,150,000 69,457,500 72,930,375 Insurance 106,764,000 112,102,200 117,707,310 123,592,676 129,772,309 Office 58,000,000 58,000,000 58,000,000 58,000,000 58,000,000

Equipment

Depreciation 11,600,000 11,600,000 11,600,000 11,600,000 11,600,000 Total expenses | 894,583,531 984,464,427 | 1,110,844,984 | 1,274,190,070 | 1,489,872,751 EBT 68,050,844 603,882,292 | 1,509,927,102 | 2,788,006,663 | 4,603,422,349 Income taxes 13,610,169 120,776,458 | 301,985,420 557601333 | 920,684,470 Income after 54,440,675 483,105,834 | 1,207,941,682 | 2,230,405,331 | 3,682,737,879

PaintHouse has been established for 5 years and sill operating till this day in Tan Phu district as well as neighboring districts Dinh Quan and Vinh Cuu PaintHouse possessed certain relationships and market share in Dong Nai province Expected revenue of PaintHouse in 2024 is 1,604,390,625VND

Because of the peak of the economic recession According to predictions of economists around the world, in the last 6 months of 2024 the economy will gradually recover and housing construction projects will appear more Beside that people will have a desire to repaint their

house at the end of the year In Tan Phu, Dinh Quan and Vinh Cuu districts, the market share of

PaintHouse still considered high, due to the number of competitors are not many (only 15 competitors in three districts) Therefore, PaintHouse expects that total revenue of 20225 will increase at 65% and remain unchanged it in the following years

In one year, PaintHouse has to pay expenses such as rental costs, employee salaries and benefits,

advertising costs, repair and maintenance costs, utility costs, insurance and depreciation costs as follows:

Table 2 - Operation Fees

Repair and Maintenance 2,000,000 VND/month Light bulbs, air conditioners

and costs related to facilities

41,000,000 VND/ month + Direct Manager, Accountant,

Employees 2% of total revenue Sales, Procurement, Warehouse

staff

Advertising 3% of total revenue website Facebook and company

200 square meters space at

Rent 5,000,000 VND/month | 3°76 Phu Thang Hamlet, Phu Trung Commune, Tan Phu

district, Dong Nai province Utility 5,000,000 VND/ month Electricity and water fees Insurance 21.7% of total salary Social Insurance

License 2,000,000 VND/ year Business license

Tables, chairs, light bulbs, Depreciation 58,000,000VND/ 5 years doors, air conditioners,

computers

Table 3 - Sale Plans

¢ Product: ColorCraft outdoor primer

¢ Feature:

+ Increases sticking between wall and color coating

+ Increases resistance to peeling and alkalinity

¢ Feature: Painted film be more durable and effective

¢ Coverage: 180m2 to 200m2 / 1 layer

® Coverage: 70m2 of wall f/

2 finishing coats

¢ Packaging: 5L,15L 2.437.000 VND

Promotion promrams for customers

Purchase three 15 Liter buckets (internal or external) recetved one 1 kg wall putty and paint kits

Purchase five 5 liter buckets received one 1 liter bucket (optional)

Contractors and investors:

Purchase amount over 7 million VND will

grant gold membership card which will be

discounted 8% for next orders

Purchase amount over 15 million VND will

be considered as a platinum member ship, 13 discounts will be applied in platinum card for

next orders

Purchase amount over 30 million VND will

be granted a diamond membership card, this

card will discount 18% for next orders

the day to day and Marketing or

strategic operation of | Human resources all roles operation to _| is required