Table of Contents

Executive
summary......................................................................................................
....................4
How the proposed business solves the problem or fills the
need…………………………………6
Company
profile……………………………………………………………………
…………... 6
Vision statement
……………………………………………………………………………
…...7
Mission statement
……………………………………………………………………………
….8
Competitive advantage
…………………………………………………………………………..9
Business model
……………………………………………………………………………
……10
Sustainable competitive advantage
……………………………………………………………..11
Current status and requirements
…………………………………………………………………11
Management teams
…………………………………………………………………………….
..12
Company structure
……………………………………………………………………………
…15
Intellectual property
…………………………………………………………………………….
16
Industry analysis………………………………………….
…………………………………….. 17
SWOT analysis …………………………………….
……………………………………………19
PEST analysis
……………………………………………………………………………
……...20
Porters’ five forces model
………………………………………………………………………22
BCG
matrix……………………………………………………………………
………………... 24
Industry life
cycle………………………………………………………………………
………. 25
Target
market……………………………………………………………………
………………26
Competitive positioning…………………...
…………………………………………………… 27
Marketing plans………………………...
………………………………………………………. 28
Marketing mix……………………………..
…………………………………………………….30
Analysis of 5 Cs …………………………….
…………………………………………………..32
Operation plans ………………………….
………………………………………………………33
Availability of qualified labor pool ……….
…………………………………………………….35
Business partnerships
……………………………………………………………………………
35

2
Quality control
……………………………………………………………………………
……..36
Customer
support……………………………………………………………………
…………...37
Financial
projections………………………………………………………………
……………. 38
Detailed analysis of Dawn
………………………………………………………………………42
Acknowledgements
…………………………………………………………………………….
.45

3
Executive Summary

The Opportunity:
Entrepreneurs recognize the opportunity and then turn it into a
successful business. For any business to come into being there must be
an opportunity that the entrepreneur identifies and then capitalize upon
that opportunity. So, being an entrepreneur we identified opportunity
gap in the bread market because bread is available only in traditional
flavors and we have tried to differentiate ourselves by offering Cheese
bread.

Competitive Advantage:
Our main competitors are Dawn Bread & Bunny’s Bread. But they are
only providing the same traditional flavors of bread. Therefore, we have
a competitive edge over them. We will be providing good taste and best
quality bread.
The competitive advantage that we have is:
 Pioneer Advantage
 Price Control
 High Quality
 Low Cost
 Passion of management team

Business Model:
Business model is used to include all the activities that define how a firm
competes in the marketplace.

a) Core Competencies:
Core competency is important in short and long term. Our core
competency is that we are the first one to introduce Cheese bread in
the market. So, we have an edge over the competitors.

b) Strategic Assets:

4
 These are anything rare and valuable that a firm owns. Our brand,
patents and plant and equipment are our strategic assets.
c) Partnership Network:
We have formed partnership with Cakes & Bakes, Alfatah and some
other retailers as well. We have good relations with our suppliers.

d) Customer Interface:
Customers are the main stakeholders of the business and can make
the business a success or failure.
We have developed a feedback feature in our website which will
provide us the suggestions and customer feedback.

5
Target Market:
Our target market is huge as it contains people from middle income and
above, children, youngsters, hotels & restaurants. Our product is
generally for all categories of people having average and above income
and especially for children and youngsters who like Cheese.
The geographical location of the market will initially be Lahore which
consists of approximately 9 million people.

Management Team:
New venture relies heavily on its management team. The new venture
depends upon the team’s effort, abilities and skills. Every member of our
management team is very hard working and has the ability to face any
situation. They are well experienced and possess know-how on running
this project.

Business Needs:
A Business needs certain things in order to move forward, that may
include:
 Interest and passion of management and entire team
 Healthy finances
 Good marketing and advertising moves
 Observing the trends in market
 Keeping in view the customer’s choice & preferences
 Formulating and reviewing the strategies

Exit Strategy for investors:

Exit strategy for the investors that we have designed is that legal
documents of partnership will be signed by the partners & partnership
will not be resolve for 5 years. If someone wants to exit from the
business he can do so but there will be some restriction for the partner
that he will get his share of investment after 3 years. If some partner dies
automatically the partnership will be transferred to his family.

Source of Motivation:

6
This is an era of change where people demand new and unique things
and bread is something that everybody loves to eat. So to cater this need
we identified the Opportunity Gap and decided to start the new
business. The need of a new taste of bread is fulfilled by our product.

7
 Description of the business:

How the proposed business solves the problem or fills the need

The bread industry in Pakistan is flourishing very quickly and bread

products are gaining much popularity. Bread has been accepted a
popular substitute for nan, chappati, paratha.
The problem to be solved or the need to be filled is to bring a new taste
in bread as well as to serve the Cheese Lovers. For this we conducted a
small survey in which we asked the customers some questions.

Views
Questions Positive Negativ
e
Would you like to have new flavor of bread? 75% 25%
Do you like Cheese? 55% 45%
Are you satisfied with the same taste of 35% 65%
bread?
Is your bread healthy? 55% 45%
Do you take bread daily? 77% 23%

Company Profile

“Formage” was incorporated by Nimra Arshad, Rabail Fatima, Husnain

Khan, Bilal Haider, Aliza Zaidi and Muzamil. The idea came into being
in December 2009. We’re a Partnership owned company and take pride
in being able to offer the best and freshest bread in town. Although
Cheese bread is available in some fast food restaurants but it is not in the

8
market as is the simple or milky bread. This was first identified by us
and we started this company to serve the customers.

We want to be the preferred choice in bread now and in the future. We

provide fresh bread with good taste and quality.

9
To provide superior and innovative products, quality management &
customized service by achieving consistency & reliability in all facets of
our business while promoting an atmosphere of mutual trust, respect,
honesty & integrity in a clean and comfortable environment.

Objectives:
 To develop new taste and gain customer trust.
 To establish links with key market personnel.
 To develop good relationships with distributors.
 To achieve high rate of return.
Core Values:
Our core values are:
 Customer Commitment
 Quality
 Integrity
 Teamwork
 Nutrition & Hygiene
Success Factors:

10
 Effective marketing campaigns.
 Strong management team.
 Focus on product quality.
 Reporting on key issues.
 Strong networks.

11
 Competitive Advantage
Our main competitors are Dawn Bread & Bunny’s Bread. But they are
only providing the same traditional flavors of bread. Therefore, we have
a competitive edge over them. We will be providing good taste and best
quality bread.
The competitive advantage that we have is:

Pioneer advantage:
We are introducing a new concept within the existing industry; the name
recognition will be a source of competitive advantage for us.

Price Control:
As we are the first one to introduce Cheese bread, we have control over
the price to set.

High Quality:
Our focus is on providing high quality product with an affordable price.
We cannot compromise on quality.

Low Cost:
We are operating at very low cost and the services provided by most of
our members are not charged or are charging us very low because of the
good relations and acquaintance.

Passion of management team:

12
Our management team is very much dedicated and passionate. We are
willing to work hard and with devotion.

13
 Description of Business Model

Business model is used to include all the activities that define how a firm
competes in the marketplace.
Attracting the customers is easy as compared to retaining them. As far as
business model of our company is concerned it is described as below:
Forecast the demand

Collect the ingredients from suppliers

Manufacturing the product

Whole sellers

Send it to the retailers

14
15
 Sustainable Competitive Advantage
A firm can gain sustainable competitive advantage by the combination
of a company’s core competencies and strategic assets achieved by
implementing a unique value-creating strategy.

Core Competencies:
Core competency is important in short and long term. Our core
competency is that we are the first one to introduce Cheese bread in the
market. As such we have an edge over the competitors.

Strategic Assets:
These are anything rare and valuable that a firm owns. Our brand,
patents and plant and equipment are our strategic assets.
Some other things that will help us in achieving sustainable competitive
advantage are:
 Making and reviewing the strategies.
 Strong and qualified board of directors.
 Marketing and advertising campaigns.
 Access to distribution channels.

Partnership Network:
We have formed partnership with Cakes & Bakes and some other
retailers as well. We have good relations with our suppliers.

Customer Interface:
Customers are the main stakeholders of the business and can make the
business a success or failure.
We have developed a feedback feature in our website which will provide
us the suggestions and customer feedback. By keeping in touch with the
customers we will be able to gain confidence of the customers.

Current Status and Requirements

Where the business stands today:

16
Our business is at initial and introductory stage. We have a long way to
go. We want to see ourselves ahead of our competitors. To reach the
growth stage we have to take every step carefully.
What the business need to move forward:
Business needs certain things in order to move forward, that may
include:
 Interest and passion of management and entire team
 Healthy finances
 Good marketing and advertising moves
 Observing the trends in market
 Keeping in view the customer’s choice & preferences
 Formulating and reviewing the strategies

17
 Management Team

For a new venture it is very important to have persons with required

skills and abilities. We are a team of five members and every one of us
is very dedicated, committed, and sincere towards this project. Our team
consists of:

Ms. Nimra Arshad (CEO)

Ms. Rabail Fatima (General Manager Finance)
Ms. Aliza Zaidi (General Manager Marketing)
Mr. Husnain Khan (General Manager HR)
Mr. Bilal Haider (General Manger R & D)
Mr. Muzamil Hussain (Operations Manager)

The details of the members are given below:

Management Experience:
Each member of our team has prior experience in the areas of concern.

18
1) Ms. Nimra Arshad
 Our CEO has done MBA from London and has been working in
food sector from the past
15 years. She also done hotel management course from
Singapore.
 Has a vast interest in this sector and has developed networks with
many people of
interest.
 Currently serving as food and beverages director in PC hotel.

2) Ms. Rabail Fatima

She is one of our directors and also serves as GM finance she looks after
all of our firm’s financial matters:
 Has served as a Finance manager in Avari Hotel for ten years.
 Has done her MBA with specialization in finance.
 Have many contacts in hotel and beverages sector.
 Possesses excellent capabilities and has knowledge of this
industry.

3) Ms Aliza Zaidi
She is serving as GM marketing as well one of members of board of
directors.
 Has done MBA with specialization in Marketing.
 Has an experience of working as marketing executive in
Nestle for seven years.
 Have necessary skills required for this field.

4) Mr Husnain Khan
He will be serving as GM Human Resource and member of board of
directors.
 He has been working as HR director in PC hotel for past ten years.
 Has done MBA from LUMS with majors in HR.
 He possesses the ability in how to deal with people and selecting
the right person for

19
 right job.
5) Mr. Bilal Haider
He will be our Manager R & D as well as serving as board of directors.
 Will perform R & D activities to keep pace with changing trends.

6) Mr. Muzamil Hussian

 He is our Operations Manager
 He will take care of all activities that are taking place within or
outside the organization
 Has done MBA from Lums.

Management Ability:
Every member of our management team is very hard working and has
the ability to face any situation. They are well experienced and possess
know-how on running this project. They can turn this project in a great
success.

Technical Expertise:
The technical expertises required in our company are:
 IT expert
 Food quality supervisor

Board of Directors
The board of directors comprises of:
Ms. Nimra Arshad Chairman
Ms. Rabail Fatima Director
Mr. Aliza Zaidi Director
Mr. Husnain Khan Director
Mr. Bilal Haider Director
Mr. Muzamil Hussain Director

Board of Advisers
A board of adviser provides direction and advice regarding the business.
Mr. Mian Mansha (Finance advisor)

20
Mr. Ehsan Ullah (Operational advisor)
Mr. Zubair Anwar (Marketing advisor)

Key Professional Service Providers

Law Firm:
Our firm has hired the services of Syed Zeeshan Aslam Bukhari who is
an advocate of high court. He will look after all the legal matters of our
company. He provided his services in registering our firm, its logo and
any new idea generated by our firm. He will also provide us help in any
other problem faced by the company.
Address:
Advocate High Court
Office: 13 Fan Road, Old Punjab Bar Council, 2nd floor, Lahore
Cell # 0300-4651682
Accounting Firm:
Our company has assigned the task to Wajid Ali Shah who is also
providing his services as DGM at Habib Bank Ltd. He has experience of
more than 20 years in this field. He will be helping us in maintaining our
accounts and any other financial or audit matter.
Address:
DGM
MBA (FIN.), L.L.B., DAIBP
Habib Bank Limited
102-103 Upper Mall, Lahore
Business Consultants:
Pakistan Business Consulting Pakistan will provide us consultancy
services and provide professional and expert advice. They will conduct
in-depth analysis on behalf of our company.

21
 Company Structure

CEO
CEO
Ms.AMNA
Ms. AMNA
ANJUM
ANJUM

Boardof
Board of
Directors
Directors

44Members
Members

Marketing
Marketing Manager
Finance
Finance HRManager
HR Manager Manager
Manager
Manager Manager
Manager RR&
&DD

MS.HIRA
MS.HIRA MS.NOOR
MS.NOOR MS.HUMERA
MS.HUMERA MS.UZMA
MS.UZMA
ZAHID
ZAHID

Middle
Middle Treasurer
Treasurer Controller
Controller Middle
Middle
Manager
Manager Manager
Manager
Mr.Fiaz
Mr. Fiaz
Mr.Sufian
Mr. SufianUllah
Ullah Ahmed
Ahmed Mr.Isthiaq
Mr. Isthiaq Mr.Ali
Mr. AliAhmad
Ahmad

Advertising&
& Intellectual Property Trainingand
Training and
Advertising
Promotion Compensation
Compensation
Promotion
Officer dept
dept
Patents,Officer
trademarks and copyrights applied for or approved:
Mr.AD
ADSahi
Sahi Miss.Anum
Miss. Anum
Mr.

22
We have applied for registration of our company and logo. By doing so
no one can copy it.
Our Company logo is

Website Address:
www.formagefoods.com

Address of our Factory:

40, Industrial Estate,
Kot Lakhpat,
Lahore
Tel. : 92-42-111-111-999
Fax : 92-42-5121308

23
 Industry Analysis
Industry analysis is to be conducted in order to focus on potential of the
industry. It is very important to work on this area before starting any
business. Different aspects are taken into account such as size of
industry, industry attractiveness, and profitability in long run etc.
Industry Trends:
The trend in the bread industry has been almost similar from last many
years as no innovation or change has taken place. If change has been
made then it is only to a very small extent. Therefore, our product has
the potential to bring innovation and change in taste in bread industry.
The most common types of breads available in the market are:
1) Plain bread
2) Milky bread
3) Bran bread
These breads are available in different sizes such as small, medium,
large.
People are always looking for something new and our bread will cater to
their need.
Social Trend: Social trend is very much in our favor because bread is
used by majority of people including elders and kids, in breakfast. They
want convenience and ease that bread can easily provide as well as a
tasty flavor.
Economic Trend: People are willing to spend money on necessities and
food items. As our bread is not that much expensive so it can be
purchased easily.
Studying industry trends is one of the first steps in conducting a market
analysis. It helps to identify opportunities and threats in the industry that
may affect profitability.

24
Studies on consumer eating and drinking patterns are available from
various sources. Such studies report recent changes and trends in
consumer attitudes and behaviours.

The following are some of the sources of industry trends data:

 Industry publications
 Consumer patterns
 Industry groups
 Bread Associations

25
Industry Size:
Size of bread industry is very large as there are many different bread
producers in the country which produce the regular bread in the country
but few of them are producing it on large scale and have major market
share the rest of the bread industry consist of small bread makers which
usually don’t even have a name for their product. These small bakers
usually operate in small villages and bread made by these small
producers is not even up to the standard maintained by branded bread
producers.
The major bread players in the market are:
1. Dawn Bread
2. Bunny’s Bread
3. Vita Bread
4. Gourmet
5. Cakes and Bakes
6. Local bakery breads

Industry Attractiveness:
The bread industry in Pakistan has seen many changes in the last twenty-
five years. It has emerged as a small-scale bakery processing industry to
numerous industrial bread making units all over Pakistan. The bread
industry in Pakistan is flourishing very quickly and bread products are
gaining much popularity. Bread has been accepted as a popular
substitute of rice, naan, chappati, paratha.

26
 Swot Analysis:
SWOT analysis is an important tool for auditing the overall strategic
position of a business and its environment.

Strengths:
 First mover advantage
 Strong management team

27
  Financial health
 Huge market potential
 Brand name and image
Weaknesses:
 Availability of skilled labour
 Distribution problems
 Health factor
Opportunities:
 Changing consumer tastes
 Demand for new flavour
 Growing bread industry
 Catering to health conscious people
Threats:
 Strong competition in industry
 Economic changes
 Political instability
 Unstable prices
Macro Environment (PEST Analysis):

The scanning of macro environment is important when starting a new

business. It is also known as PEST Analysis.

Political Factors:

28
Political and regulatory changes are very important to consider for any
industry. They can pose a threat to the industry. As we are in bread
industry, so any change in policies, rules & regulations as well as law
and order situation can serve as a threat to the industry.
Economic Factors:
Economic forces of any country can affect the availability, production
and distribution of resources among competing users. So economic
factors play a mediocre role in bread industry. Income and level of
saving, inflation etc. can play a vital role in affecting the industry from
economic point of view.
Social Factors:
Social factors include desires, needs, attitudes, culture and values of a
society. These factors can effect adversely or positively the bread
industry because every area of country has different likings and
disliking, culture and behaviour. So we have to keep in mind these social
factors before starting this business.
Technological Factors:
As we know that the world has become a Global Village due to
technological advancements. As such the importance of technology
cannot be ignored. We have to utilize modern technological equipment
to compete in the market.

29
30
 Porter’s Five Forces Model:

Mainly following factors can influence industry environment of our

product:

Threats of new entrants: (High)

The growing industry is like a magnet for others and bread industry as it
is growing very fast has a threat of new entrants. We have created some
barriers to entry to minimize this threat:
1. Product Differentiation:
We are manufacturing a new flavour of bread which is not available in
the market.

31
2. First Mover Advantage:
As the idea of Cheese flavoured bread is initiated by us so we are having
the advantage of first mover.
3. Management Team:
Our management team is very skilled and experienced and have a good
knowledge of this industry.
Rivalry among existing firms: (High)
Rivalry among the firms who are already in the market is high. The main
players in the market are:
1. Dawn Bread
2. Bunny’s Bread
3. Vita Bread
4. Gourmet
5. Cakes and Bakes
Threat of Substitutes: (High)
At present there is no direct substitute for our bread because we are the
first ones to introduce Cheese bread. The indirect substitutes are milky
or plain breads available but we will make sure that our quality and price
attract people towards our bread. Still the threat of substitute is high
because of other alternative breads available.
Bargaining Power of buyer: (Low)
Bargaining power of buyer is low as the price of our product is already
very competitive and is fixed and our product is different from our
competitors.
Bargaining Power of suppliers: (Low)

32
Bargaining power of suppliers is low in this industry as raw material is
easily available and there are lots of suppliers.

33
 Attractiveness Of Breads Industry Using Five Forces Model

Low Medium High

Threat of substitute 
Threat of new entrants 
Rivalry among existing firms 
Bargaining power of suppliers 
Bargaining power of customers 

BCG Matrix:

As we are a start-up firm so we have placed ourselves in Question mark

because we are in introduction stage and we have to make aware the
people about our product.

34
Industrial Life Cycle:

35
 Target Market
Target Market is the limited group of individuals that a firm goes after or
tries to appeal to.
Description:
Our target market is huge as it contains people from middle income and
above, children, youngsters, hotels & restaurants.
Geographic:
The geographical location of the market will initially be Lahore which
consists of approximately 9 million people.
Demographics:
The demographic of the market is approximately 51% male 49% female.
Psychographics:
Our product is generally for all categories of people having average and
above income and especially for children and youngsters who like
Cheese.

36
 Competitive Position within target market

Competitor Analysis:
A competitor analysis is a detailed analysis of a firm’s competition.
Competitive Analysis Grid:
It is a tool for organizing information a firm collects about its competitors.

Name Dawn Bunny’s Vita Gourme Cakes

Bread Bread Bread t Bread And
Bakes

Unique
Product 
Brand
Name

Recognitio
n
Access to
distributio

n channels
Quality Of
Product


Price 
Marketing
Support

Quality of
Customer

37
service 

The result shows that Dawn bread has competitive advantage over its
rivals in many of the areas. This will help us to plan and design our
strategies accordingly. This will also help us in developing the
marketing plan.

Marketing Plan

A marketing plan is a written document that details the necessary

actions to achieve one or more marketing objectives. It can be for a
product or service, a brand, or a product line. Marketing plans cover
between one and five years.

Marketing objectives:
 To make the consumer aware about the product.
 To promote the sales.
 Maintain the growth.
 Revise the strategies.

38
Product Feasibility and Strategy:
Product feasibility is an assessment of overall appeal of the product
being proposed. Before launching any product, a firm should be
confident that what customers want and that the product will have an
adequate market.

Product Strategy:
We have adopted differentiation strategy as we are presented bread in a
new and innovative way. Our target market is broad and we are serving
it in a different way.

Concept Testing:
The purpose of concept testing is to test the idea that an entrepreneur
thinks is compelling. It helps to estimate the potential market share the
product might command.
The objective is to emerge from the concept test with a product that is
refined to the point that it satisfies a defined need and the prospective

39
customers have said that they like and they may be willing to buy.
We developed a questionnaire and checked the customer response:
1) Are you satisfied with the same old taste of bread?
a) Yes 45%
b) No 55%
2) Would you like to have new flavor of bread?
a) Yes 70%
b) No 30%
3) Do you like Cheese?
a) Yes 78%
b) No 22%
4) Do you take bread regularly?
a) Yes 70%
b) No 30%
5) Would you buy Cheese bread?
a) Yes 65%
b) No 35%

Usability Testing:
It requires that users of a product perform certain tasks in order to
measure the product’s ease of use and the user’s perception of the
experience.
For usability testing, we developed sample breads and distributed it to

40
people in areas like Gulberg, Model Town, Johar Town. This helped us
for a quick feedback.
Expected Market Share:
Based on our surveys and interviews with the people, we expect to gain
some market share within some period of time. As 55% of the results
were positive.

Marketing Mix
Marketing Mix is the combination of four P’s; Product, Price, Place,
Promotion.

Product:
Our product is new and innovative. We will make sure that our bread is
available to the customers and it will provide the desired result to the
end-user. Our product is different and this will help us to keep us ahead
of the competitors. The marketing effort in this regard will be focused on
taste, quality and hygienic factor.
Price:
41
Price plays a vital role in our market because of many factors. People are
very conscious about price. Initially we are launching our bread in two
sizes; small & large. We divided the size in categories on the basis of
different income level and family sizes so people of average category
can easily purchase our product.
The price of small size pack will be Rs. 25 and large size will be of Rs.
48. These prices are at par with our competitors.
Place (Distribution):
We have started our business in initially in Lahore so that we can
conveniently manage the operations and different activities of the
business. “Double Roti” will be acting as a distribution channel to retail
stores initially in Lahore. Our website will also help us in getting order
directly from customers as well as it will provide us feedback. We will
also be placing our product in renowned bakeries.
Promotion:
The promotional plan to be adopted by Formage has some key
objectives. First of all to establish the brand image in the eyes of the
customers. To make the customer aware about the product is an
important task. Promotion of Formage will mainly involve above-the-
line promotion techniques including advertising in newspaper, hoarding
campaigns, brochures, internet promotion and to a more limited extent;
television.
The purpose of promotional techniques is to gain the market share of
existing bread companies.
Hoarding Campaigns

Sr Location Size 1Month Light

# Rates Status
  LAHORE      
1 Ferozpur road near qaddafi 60x20 216,667 Without
42
 stadium Light
2 Sherpao bridge facing 60x20 433,333 Without
Shami chowk Light
3 Main boulavard New 60x20 333,333 Without
garden town Light

TV Channels

1:00 pm-6:00 4Fridays (1 Spot) & 4 Saturdays

Hum TV pm (1 Spot) & 4Sundays (1 Spot)
6:00pm-8:00pm 4Fridays (1 Spot) & 4 Saturdays
City 42 (1 Spot) & 4Sundays (1 Spot)

Moreover, one of our team members has links with different newspapers
so we can give advertisement in newspaper at minimum rate. We will
also advertise through cable channels. The rates will be from Rs. 8000-
10,000 per month.

Analysis of 5 Cs
Competitors
Our main competitors are Dawn, Bunny’s, Marygold, etc. But if we
consider the competitors for this particular product, we don’t really have
any competitor because no other bread company provides cheese
flavoured bread. For this reason we also have a competitive advantage in
the bread industry.
Collaborators
Formage supplies its product to Alfatah , Cakes and Bakes, whom we
43
have set business deals with. They also benefit from selling our product
because it is innovative and unavailable any where else. So it will
increase their customer life time equity. For the raw material we are
having partnership with some suppliers.
Channel
We try our best to make our product available all the time to our
consumers. We ourselves are our whole sellers and our retailers are lots
of bakeries, convenient stores, etc. Consumers can also purchase our
product from the factory, or place an order on our website. So we also
have direct channel of distribution. www.formagefoods.com is our
official site.
Customers
Our corporate customers include restaurants, hotels, etc. Peeru’s Café
and Espresso are some restaurants that serve our product regularly. We
are negotiating with Shaheen Airlines to serve our product. This will be
settled soon. Our domestic consumers are people of average income and
above.
Context

Inflation:
Today, due to increased governmental regulations when flour prices are
sky high bread is being accepted as a popular substitute for Nan,
chapattis, parathas.
Economic Environment
In the economic context it is going to be an inexpensive ready-to-eat
delight for all the cheese lovers.
Social/Cultural environment
The health-conscious social trends are encouraging the society to move
out of the usual biryani burger calorie-laden combinations and explore
cheese bread a viable snack & lunch time option.

44
 Operation Plans
It is the plan that how the product will be manufactured. As we are
dealing in bread industry, we have introduced a baking unit and also
hired qualified and well experienced labour from different areas, and are
manufacturing bakery items in our baking unit.
Method of production:

We are manufacturing our Cheese bread in the same method like the
other manufacturer but with innovation that we add melted cheese
during the mixing of raw material and also the cheese flavor that makes
our bread not only different but also delicious.
a) Scaling (Measuring)
b) Mixing
c) Baking
d) Cooling
e) Storing
Scaling:
All ingredients must be weighed accurately. Special care should be taken
when measuring spices and other ingredients used in small quantities.
Mixing:
Mixing has three main purposes:
 The mixing of raw material.

 Adding melted cheese and cheese flavor.

Baking:
Now were ready to bake the dough. Several important things happen
during this process. Oven spring is the rapid rise in the oven due to the
production and expansion of trapped gases as a result of the ovens heat.
The yeast is very active at first, but stops acting when the temperature
45
reaches 140F. Then, coagulation of proteins and gelatinization of
starches occurs, so the dough holds shape,. and finally browning occurs.
Oven Temperatures and Baking Times: When the proper temperature is
used, the process works so that the inside of the dough becomes
completely baked while the crust achieves the desired color at the same
time. Larger pieces are baked at a lower temperature for a longer time
than smaller rolls.
Cooling:
After baking, bread must be removed from the pans and placed on a rack
to cool. This allows the excess moisture and alcohol that was created
during fermentation to escape. Smaller rolls may be left on their baking
sheets.
Storing:
Bread cooled once stored for 2 hours after packing and within 4 hours
can be shifted to distributor’s rack.
Recipe of Cheese Bread:
Makes one 8-inch loaf and one long French loaf
This cheese bread can be baked either in a standard loaf pan or as a long
French loaf to be served. Both are so good that we suggest you make one
of each, saving the pan loaf for sandwiches.
2/3 cup water1/3 cup butter, softened, 2 eggs, 3 tablespoons sugar, 1
teaspoon salt, 3 cups flour,
1 envelope yeast, 1 cup grated Cheddar cheese
Put the yeast in a large bowl and pour 1/2 cup of the warm water over
it. After a minute stir with your finger to make sure the yeast is
dissolved. Mix the remaining 1-1/4 cups water with the salt and pour it
over the dissolved yeast. Stir in the flour, a cup at a time, and when the
dough becomes hard to stir, turn it out onto a floured work surface. Let
the dough rest while you clean out the bowl. Scrape up the dough and
knead it for 10 minutes, adding more white flour as necessary, until it

46
is smooth and elastic. Rub the cleaned bowl lightly with soft butter or
vegetable oil and return the dough to it, turning to coat. Cover with
plastic wrap and let rise until almost tripled in size, 2 to 3 hours. Punch
the risen dough down and turn it out onto the floured surface. Spread it
out and sprinkle the cheese all over. Then roll the dough up and knead
it just long enough to incorporate the cheese into the dough. Grease an
8-inch loaf pan. Using about two-thirds of the dough, form a loaf and
place it in the greased pan. Roll the remaining dough into a 10 to 12
inch long loaf and place on a baking sheet sprinkled with cornmeal.
Cover each loaf with a kitchen towel and let rise until doubled in size-
about 45 minutes. After the bread has risen for 30 minutes, preheat the
oven to 450 degrees F. Place the loaves in the oven. Remove the
French loaf after 18 to 20 minutes, when the top is golden. Turn down
the heat to 350 degrees and let the pan loaf bake for another 10
minutes. Cool on racks.

Availability of Qualified Labor Pool

Qualified labor and employees are the backbone of any organization. If

the labor is skilled and highly motivated then the success of organization
is for sure. Our people are our assets.
We know very well the importance of HR aspect. We are having Miss
Sehrish Pervaiz as or HR manager. She selects and looks after the labor
pool in order to ensure the success of our bread. All the people in bread
manufacturing process are expert in their work.
Our chief chef Mr. Akbar Sohail is very experienced person as he has
been in food processing from last 10 years. He is having a degree in
cakes and bread baking. Formerly he was working as chief chef at Avari
hotel.
Our material mixer Mr. Zahid Khan is also very good at his work and
takes care of mixing the material in equal proportion.

47
Processing officer looks after the whole manufacturing process and
finally bread is packed under the supervision of packaging experts. They
look after the hygienic and quality maintenance factors.

Employee Motivation:
To keep running the business ways should be developed to retain the
employees. Incentives should be given so that they perform even better.
Compensation and reward system is an important tool to motivate
employees.
For employee motivations following points are kept in mind:
 Provide a positive work environment.
 Make the employees feel as part of the organization.
 Appreciate the work of the labor.
 Provide training and development to increase performance.
 Give rewards and incentives.

Business Partnerships

Types of business partnerships:

Formage is currently having partnership with Cakes & Bakes. It is a
famous bakery and we are a part of it. They will be one of our major
customers as well.
For the raw material we are having partnership with some suppliers who
will be providing us material at a reasonable price.
Purpose of business partnerships:
The primary purpose of partnership is that we are a new entrepreneurial
firm. As such we are not having sufficient resources needed for a
business. These partnerships will help us in gaining access to the market
and result in cost saving also.

48
Quality plays a key role in success or failure of any product or service.
We will not compromise on the matter of quality. People are very health
conscious nowadays. To assure that quality is maintained we will be
having quality control check by Mr. Bilal who is also our manager R &
D.
Fresh material will be used and cleanliness of plant & machinery along
with labors be focused upon. As a new firm we are emphasizing on
quality to fulfill the quality assurance requirements of ISO 9001 and ISO
9002.
The followings points are to be considered for total quality:
 Process related philosophy
 Customer satisfaction
 Customer focus
 Top management commitment
 Continuous improvement
 Employees support and involvement
49
  Feedback

Customer Support
Gaining customer support depends on how well they perceive the
product to be. How a firm interacts with its customers is first to be
decided.

Customer Support Strategies:

“Formage” is partnering with Cakes & Bakes because it is known to the
people. People will find our product reliable and try it. This will be of
great help to us.
The purpose behind this is that we are the start up firm and we need
experienced and trained salespersons who know how to deal with
customers. We want to gain customer support. Once the customers begin
to recognize our brand, it will be easy for us to carry on.
In addition to this, we have developed a feedback feature in our website
which will provide us the suggestions and customer feedback.

Customer Support Obligations:

50
Bread is mostly used in morning time so it is our obligation that we
supply bread on time to retail stores. To make sure on-time delivery we
have an efficient transportation and distribution system.

51
 Overview of Financial Projections 

Formage (Pvt) Limited

Pro-forma Income Statement (Projection)

Amount PKR ‘000

Notes 2009 2010 2011

Sales 10 3620 5600 7559

Cost of Goods Sold 11 1200 1856 2505
2420 3744 5054
Gross Profit 12

Operating Expenses: 10 - -
Legal Expenses 1,000 600 400
Marketing Expense 360 401 420
Salaries expense 58 52 47
Depreciation (10%) 120 133 138
Rent 300 395 450
Utilities
Total Expenses
1848 1581 1445

Operating Profit
572 2163 3609
Less: Tax (15%)
86 324 541
Net Profit 486 1839 3068

Annexed notes are essential part of these statements.

52
 Formage (Pvt) Limited
Cash Flow Statement

Amount PKR ‘000

Cash Flow from Operations
2009 2010 2011
Net Profit 486 1839 3068
Add adjustment for non cash
expense: 58 52 47
Depreciation
Working Capital Adjustment: (179) (324) (596)
(Increase) / Decrease in Inventory 57 38 40
Increase / (Decrease) in Accounts 15 (5) -
payable
Increase / (Decrease) in Rent payable 437 1600 2559

Cash flow from operations ... (1)

(1324) 0 0
Cash Flow from Investing (1200) 0 0
Activities
Furniture & Fixture (2524) 0 0
Short-Term Investments
5,000 0 0
Cash flow from investing 0 (500) (1000)
Activities ...(2)
Cash Flow from Financing 5,000 (500) (1000)
Activities
Shares Issued 2913 1100 1559
Dividend Paid
2913 4013
53
Cash flow from financing 4013 5572
activities ...(3)

Net Cash Flow (1+2+3)

Opening Balance
Balance C/f

Annexed notes are essential part of these statements.

Formage (Pvt) Limited

Balance Sheet (Projection)

Assets
Amount in PKR ‘000
Notes 2009 2010 2011
Fixed Assets:
Furniture & Fixture 1 355 302 550
Plant and Machinery 2 575 572 746
Current Assets:
Inventory 3 600 924 1520
Advances & Prepayments 4 30 34 40
Short-term investment 5 1200 1200 1200
Cash 2913 4013 5,572
Total 5673 7,045 9,628
Liabilities & Equities
Current Liabilities:
Accounts Payable 6 157 195 235
Rent payable & Other 7 30 25 -
54
payables
Equity:
Issued subscribed and paid
up capital (50,000 shares par 5,000 5,000 5,000
value @ Rs.100/- each share)
Accumulated Profit 486 2,325 5,393
Dividend paid 8 (500) (1000)

9
Total 5673 7,045 9,628
Annexed notes are essential part of these statements.
Notes to the Financial Statements:

1. Furniture & Fixture is the fixed assets and being depreciated at

10%p.a. Using straight line method on diminishing balance.

2. Company is purchasing its equipment and machinery from Data

Mechanics by using Bootstrapping.

3. Company is importing its product from china and its lead time is
fifteen days so company maintain an adequate stock to meet the
demand of the customers.

4. It represents merely 10% of the total sales.

[
5. Company has excess cash in hand and to get the benefit of idol cash it
has invested it in short term deposits in various bank @ 10%.

55
6. It takes 15 days to receive raw material from Fazal Flour Mills and
company get a supplier credit of 30 days that represents the accounts
payable.

7. Rent is payable on 5th of each month so stands liability in balance

sheet of the company.

8. Company issued 50,000 shares @Rs. 100/- each par value.

9. Company issued cash dividend of 10% in year 2010 and will issue
another cash dividend of
20% in year 2011.

10. Sale is the product of quantity and sale price. Company will increase
the sale price of its
Product after successful response in initial years.

11. COGS is the purchase price of material, labour and FOH.

12. Difference between the sale and CGS is known as CGS.

56
 Detailed Analysis of Dawn

Bread Industry in Pakistan

The bread industry in Pakistan has seen many changes in the last twenty-
five years. It has emerged as a small-scale bakery processing industry to
numerous industrial bread making units all over Pakistan. The bread
industry in Pakistan is flourishing very quickly and bread products are
gaining much popularity. Bread has been accepted as a popular
substitute of rice, naan, chappati, paratha. Currently, 5% of the total
population of Pakistan consumes packaged bread. The major factors for
such a low percentage of people consuming bread are mostly
economical and cultural. Pakistani diet consists of many substitutes for
bread, which are cheaper and preferred over bread by a majority of the
population.
The political scenario as well as the legal scenario is not posing any
threat to the bread industry is growth apart from the price restrictions,
which actually fixed by negotiations between the government of Sindh
and the committee of bread-making companies. The government is very
enthusiastic about industrialization in the country and wants the foreign
sector and private sector to take part in it. So any move towards
industrialization and standardization is being encouraged, which ideally
suits the existing as well as new comers in the packaged goods industry.

Dawn Bread

Dawn Bread a name that has come to signify quality and freshness in
bread products. A success story that was written by a
family that is committed to honest to goodness
enterprise and concerned with the prosperity of the
country. The enterprise, which made a humble
beginning in late 1981, has, within a decade, grown to
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capture 35% of the consolidated market share of all bread products in
the country, a fact that speaks volumes about the credibility of the
company and its products.

Prior to the establishment of Dawn Bread, the largest producer of bread

products was the public sector. However, this sector could not cope with
the demands of the consumer and this when, perceiving a change in the
eating habits of Pakistanis, Dawn Bread was envisioned.

Beginning with the plant in Karachi, commissioned in October 1981,

Dawn Bread built-up a reputation for freshness, quality and taste.
Creating awareness plus a demand for bread products, the second plant
was commissioned in Islamabad in January 1985. Nothing succeeds like
success, so next came the plant in Hyderabad in January 1987, a year
that was to also witness the establishment of another plant at Lahore, in
November 1987. In 1989 we established the plant at Multan. After
consolidating this expansion, the sixth plant was commissioned at
Faisalabad in February 1992. Now the customers can find Dawn’s
quality and freshness from the southern tip of Pakistan to the Northern
city of Peshawar.

CSR
Taking a responsible place in society, the company is committed to the
uplift and development of the society as a whole, and participates in
sports and social welfare activities. Dawn also sponsors charity shows
like puppet shows and on TV.

Market Share
The market share of Dawn in the bread market ranges 60-65 %.

Products offered by Dawn Bread

Multigrain bread, Bran bread, Milky bread, White bread

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Distribution in Pakistan

Dawn group's distribution network comprises of over two hundred

company system spread all over Pakistan. On a daily basis, they
distribute to over a 10,000 retail outlets. This makes them one of the
largest distribution networks for any product in Pakistan. They distribute
in almost all the major metropolitan areas, secondary metropolitan areas
as well as the rural parts of the country. Their network has been in the
business of touching each of our 10,000 retail customers on a daily basis
for the past twenty years.

Nutritional Value
The plain white bread was one of the first products to be introduced in
the Pakistani market by Dawn; the nutritional value of two slices of this
bread is equal to five slices of Gourmet’s bread (in terms of calories,
weight and vitamins)

Target Market
The target market of Dawn Bread is the Upper class, Upper middle class
& the middle class and is ranked “Number 1” in the market. Their
competitors include Bunnies, Marigold, and Morgan.

Strengths
Dawn Bread considers their biggest strength to be the customer loyalty
of 25 years. For purpose of standardization, the company associated
itself with FMBRA of United Kingdom in 1990 to bring itself in line
with international standards of production, technology, machinery and
formulation now, all the Dawn Bread plants boast of the latest
machinery used in the bread-making process. They are managed by
senior food technologists with decades of experience, while those
manning the machinery are provided on the job training in congenial

59
working conditions and ensure high quality of bread. A food inspector
regularly visits the baking unit and production is monitored at all levels.

60
Dawn bread caters
All Pearl Continental Hotels in Pakistan are provided cross on and
Danish pastries made by Dawn Bread. The cakes used in the new cake
ice cream of Walls are provided by Dawn. The muffins served in
Subway are made by the Dawn Company.

Marketing Activities
Dawn initiated heavy marketing campaigns
after the launch of its bread but from one
and a half year as new products were being
introduced and expansion was in order,
Dawn had to constrain its marketing
activities due to limited budget and
recession. Their main emphasis is on “in-store” activities. Dawn focuses
on direct communication with customers & believes that advertisements
consume a lot of budget therefore Promotions are done in magazines,
events and in collaboration with other companies like McDonalds and
Blue band.

They provide free gifts to consumers; they have Dawn’s branded Suzuki
vans which move from street to street daily, each van is assigned 40-45
shops. Dawn also sponsors shows in Alhamra for marketing.
When Dawn launches a new product it is tested by direct consumer
surveys, the trial markets include the major outlets like HKB, Y-block
DHA, METRO, Hyper Star as they cater Dawn’s target markets. A small
scale production is done and provided at the above mentioned outlets, if
the product is not accepted by the consumers it is withdrawn.
The bread life of Dawn bread is from 48 to 72 hours, after which they
take back the bread from the shops which is then used for feeding
chickens etc.

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 Acknowledgements

We are grateful to ALLAH ALMIGHTY, for enabling us to fulfill

this tiring, but interesting job for the completion of our report.

The present project is submitted to Mr. Ali Rehman. We express

our deep sense of indebtedness for his valuable advices and
encouragement and for giving us very useful information that helped us
a lot in completing this project.

We also want to pay a bundle of thanks to each and every person

who has put indeed effort to make this project possible. It is also our
duty to pay thanks to our parents for the moral and financial support.

All Formage Members

62