Team 3 members:
Natthapon Kongcamboot,
Primana Punnakitikashem,
Shuai-Lin Liu,
Wan-Ching Lo
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Introduction
 Giant Manufacturing Co. Ltd. is a Taiwanese bicycle
manufacturer which bills itself as the world's largest
bicycle manufacturer.
 Giant is a well known high-quality bike manufacturer
in the industry.
Giant firm designs to construct a novel multifunctional bicycle within 5 years
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Executive Summary
 We are a developed company.
 We understand the company and product
requirements
 We have a valid marketing plan that defines the
marketing strategy used to meet customers’ need.
 We have a solid production plan that will produce
300,ooo D-WIN bicycle units in one year.
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Executive Summary
 We have vast understanding of our scheduling,
resource, and staffing requirements.
 We have an understanding of the risk and
opportunities.
 We have a sound financial plan that includes the
selling price: 600 USD and NPV ≥ 0
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Outline of Presentation
Introduction
• Objectives
• Marketing Strategy
Resource and
Personnel
• Mind Mapping
Schedule
Budget
• WBS
• Operating Cost
• Cost of Goods Sale
Risk Assessment
• Implementation Risk
• Operations Risk
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Objectives
 Build a hybrid bicycle with more variable speed in
order to meet more people’s need.
- Give the better choice of the hybrid bicycle.
- Capacity of getting high-price quality in the lower
price.
- Appeal new customers; draw existing customers
back.
To Attract more and more customers by the improved
technology and quality.
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Marketing Strategy
Top 10 U.S. Cities of Bicycle user
City
Percentage (%)
1
Portland
3.5
2
Minneapolis
2.4
3
Seattle
2.3
4
Tucson
2.2
5
San Francisco
1.8
6
Sacramento
1.8
7
Washington DC
1.7
8
Oakland
1.5
9
Honolulu
1.4
10
Denver
1.4
Focus on top 10 U.S. Cities in the start-up period.
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Marketing Strategy
Age Distribution of Bicycle user
Age group
Average Miles
ridden over one year
Ratio (%)
16-25
2174
19.4
26-35
2323
28.8
36-45
2423
22.2
46-55
2171
19.1
56-65
2496
8.7
65-82
3207
1.8
Our Target
The age target is focused from 16 to 55 years old
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Personnel Concept
• Headquarter : Giant California
• Size: 500 labors
• Working hours: Mon-Fri 8.00AM-5.00PM
• Employees
- need full-time employees and local area people
- need experience or skill person for our staffs
such as project manager, supervisor and
head of engineer
• Training
- has 2-3 weeks to train new labors
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Personnel Concept
• Benefits
- annual employee award may be offered as
recognition for outstanding work performance
• Payments
- project manager is responsible for the salary
- payment will be paid on the last Friday of
every month
• Miscellaneous
- it is project manager’s responsibility to obtain
and post all federal and state labor law posters
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Giant
Non-Manufacturing Cost
Manufacturing Cost
Marketing
Assembly Parts
G&A
In-House and Outsourcing
Revenue
Maintenance
Utility
Supply Chain System
Transportation
Supplies
Vehicles
Inventory
Fuel
Staff &
Benefit
Labor
Mind mapping shows the needs and costs of resources
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Implementation Schedule
Phase
Task name
Start
Finish
Duration
Phase 1
Marketing
Planning
November
1, 2010
March 23,
2011
92 days
Phase 2
Process
Planning
March 24,
2011
May 20,
2011
42 days
Phase 3
Project
Definition
May 23,
2011
August 5,
2011
53 days
Phase 4
Implementation
August 8,
2011
July 20,
2012
237 days
Phase 5
Production
July 23,
2012
April 30,
2014
435 days
Phase 6
Customer
Support
July 23,
2012
October
30, 2015
803 days
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14
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Budget
Budget is basically determined by
1. Operating Cost
2. Cost of Goods Sold
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1. Operating Cost
1.1 Manufacturing Cost
1.1.1 Raw Material & Assembly Parts
1.1.2 Labor (wage, cost/hour)
1.1.3 Manufacturing Cost
1.2 Non-Manufacturing Cost
1.2.1 Marketing Cost
1.2.2 General and Administration
1.2.3 Staff & Benefit
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Manufacturing Cost
1.1.1 Raw Material and Assembly Part
- In-house
- Outsourcing
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Raw Material Continue
The bicycle component are from both in-house and outsourcing.
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Labor (wage, cost/hour)
 500 Labors
 24/7 Operation
 3 shifts/day
 Wage including fringe before tax= $13.8/hour
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1.1.3 Manufacturing Cost
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1.2 Non-Manufacturing Cost
1.2.1 Marketing Cost
Assuming the website and customer information have
already existed and share them w/t the Giant
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1.2.2 General & Administration
 G&A cost are mainly about rental, utility, insurance,
and land tax.
 Located in CA
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1.2.3 Staff & Benefit
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2. Cost of Goods Sold
2.1 Inventory and Warehouse Operating Cost
2.2 Transportation
2.3 Cost of goods sold
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2.1 Inventory and Warehouse
Operating Cost
Assumption
 10000 sq-ft of warehouse size
 Holding cost per sq-ft is $300 a month
 Overall holding cost is determined by 65% of warehouse space
 Some labors are available for the D-Win project
 The Giant provides inventory system to D-Win project such as
tracing and tracking system.
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2.1 Inventory and Warehouse
Operating Cost
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2.2 Transportation Cost
 In need of 35 trucks ($30,000 each)
 35 truck drivers
 $3,500 per person
Assumption
The Giant can provide some trucks and truck drivers
to the D-Win Project.
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2.3 Cost of Goods Sold
Cost of goods sold is based on;
In the first year;
1. 1,000 bicycle retailers around U.S.
2. Bicycles stocked in Warehouse.
Assumption
1. Cost of goods sold will increase 15% in from year 3 to year 4
and decreased by 20% in year 5 (cost of goods sold
corresponds with sale).
2. 50 % of finish goods will be shipped to customers around
the US
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2.3 Cost of Goods Sold
 Thus, cost of goods sold in the first year of
production(year 3) is $24,000,000.
Year
Year 1
Year 2
Year 3
Year 4
Year 5
Cost of Goods Sold
(in thousand)
0
0
24,000
27,600
22,080
Start-Up Cost Requirement
 Overhead start-up cost is determined by summing up of
start-up cost in each section.
Task
Start-Up Cost
One Time Paid
Total
7,445,000
Revenue & Profit of D-Win
Sale Estimated Assumption
 20,000 bicycles is the monthly minimum
sale(240,000/year).
 Earning first revenue after starting producing in year 3.
 Sale will grow 15% in year 3 and year 4; then turn down
20% in year 5.
Year
Amount of
Sale
Total Revenue
(in thousand)
Year 1 Year 2
Year 3
Year 4
Year 5
0
0
240,000
276,000
220,800
0
0
144,000
165,600
132,480
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Profit
 30% of tax income.
 Borrow 25,000,000 from bank and will pay back
the debt in 15 years by constant interest payment.
 12% of acceptable rate of return.
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Profit
The sum of NPV in 5 year is $34977552 ≥ 0. Thus D-Win project
is acceptable.
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Implementation Risks
 Financial Risk
a. Budget: another fund supports uncertain expenses
b. Sale: over or under estimation of products
c. Property: the expenses of breaking the lease of office
or warehouse
 Building-Out
a. Size of Warehouse: warehouse space or transportation
routes
b. Size of Structure: add additional machines will cost
money to redesign the layout
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Implementation Risks
 Government
a. Failed Inspection: not pass the government’s
inspection
b. Unexpected Change in Policies: the change of
policies may increase budget to reach
government’s regulations
 Personnel
a. Key Person Loss: sick, injury, resignation or fire,
death
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Operation Risks
 Financial Risk
a. Insufficient Capital: financial standing
b. Property Losses: accidental and criminal damage
c. Taxation: accounting mistakes
 Legal Risk
a. Employees are discriminated by others
b. Retailers increase the price without permission
c. The layout of the retail stores is unsafe
 Economy Risk
Booming, Recession, Depression
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Operation Risks
 Personnel Risk
a. Personnel Losses: move to others companies
b. Business Ethic: embezzlement and theft
c. Education: skills and knowledge
d. Performance: inefficient and careless
 Suppliers Risk
a. Provide Giant’s components to its competitors
b. Delay Giant’s products
 Competition Risk
a. Competitors: imitation
b. Retailers: cooperate with competitors
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