1 Rationale of selecting the business

1.1 Business idea

In the current market different flavours of ice-cream can be found. But when it comes to fruit
ice-creams, there are only a limited number of flavours. The existing flavours that can be found
are, strawberry, mango etc. Those flavours do not cover many flavours of fruits that are
available in Sri Lanka. Therefore, our idea is to introduce a range of ice-creams of different
fruit flavours that are not existing in the market.

The concern on healthy eating has been rapidly increasing over the society. Through this
context, we have gone through several product offerings which do contain artificial food
flavours. Here, we are considering on the ice cream manufacturing and its flavours. Basically,
most of the ice cream brands available in Sri Lankan market have been added artificial food
flavours rather than natural food flavours.

Therefore, our ideas have been brought forward to come up with ice cream, which contains
only real fruit flavours. So that, it is supposed to add nutritional value towards the core product
of ice cream rather than which have manufactured using artificial flavours. Moreover, we are
supposed to introduce the flavours which are not widely available in Sri Lanka, and very
essentially all of the flavours made out of real fruits. According to our market survey, there
will be demand for the identified flavoured namely Bael fruit (Bali), Banana, Pineapple and
Avocado. It is expected to record best demand for Avocado flavoured ice cream.

We differentiate our product with the existing ice cream by highlighting the nature of flavours
as to the real fruit (natural) flavours. Therefore, in a broader context, the potential market for
our product can be identified as the all who are health conscious. Even though, at the initial
stage, the target market for our product will be the university students who consume ice-cream.
Our ultimate business idea is to introduce an ice cream range, which contains real fruit flavours.

1
1.2 Feasibility study
1.2.1 Market feasibility
- Current Market Analysis
Ice-cream industry is a very popular and a profit making industry all over the world. At
present, we have some leading ice-cream producers in Sri Lanka. But they have focused
only on some flavours of ice-cream. The prevailing flavours such as mango, strawberry
and fruit and nut only covers a certain range of fruits that can be found in Sri Lanka.
Therefore, we are planning to introduce the other flavours of fruits that are not already
existing.

- Anticipated Future Market Potential

Consumers are always interested in trying out new and different products. People like
to taste different flavours from time to time. From a survey conducted by us, we found
out that out of 70 respondents 69 respondents were willing to try out the new flavours.
Therefore, we can anticipate that there will be a high demand for our product as people
are interested in trying out new flavours and also as our product contains real fruits with
a nutritious value as well.

- Potential Buyers
Our target market would be people who like to have ice-cream as a dessert or at any
other event. At the first stages our target market will be the university students who
consume ice-cream. We will be supplying the ice-creams to the university canteens and
cater to the crowd at universities. Therefore, at the initial stage we would focus on
catering to the demand arising from the university and gradually expand our focus on
wider markets by distributing them to super markets.

1.2.2 Operational feasibility

Sri Lanka is a country blessed with cultivable land and has an abundance of fruits throughout
the year. This ensures easy access to all the fruits we are planning to use in our product. Except
avocado all the other fruits can be found all throughout the year. And the team members are
able to do the manufacturing at this level so that can be done without the need of any paid
labour. As the product is a food product a food certification can be obtained to assure the quality
of the product.

2
1.2.3 Financial feasibility

This ice-cream is made out taking real fruits as a base. Therefore, to assure the quality and the
fact that real fruits are included, the cost of the product will be on par or a little higher than the
existing ice-cream products. And we would be pricing the product accordingly to make profits
out of the product. A collection is made with the contributions of the team members to
manufacture the product at the initial stage. As the demand for the product increases with time
we will be able to increase the supply at a larger scale.

3
2 Company overview
2.1 Introduction

“Fruitco” is a real fruit ice-cream that introduce an ice-cream range to the market in the flavours
of beli, avocado, banana, anoda and pineapple. The existing ice-cream brands are full of
artificial flavours and we are providing a solution for that through the introduction of our
product range “Fruitco” to the market. It is completely produced of real fruits and no sugars
which makes Fruitco a healthier option for the customers.

2.2 Legality of the company

Our company is a partnership of eleven members. The law governing partnerships in Sri Lanka
is the Partnership Act of 1890. The Sri Lankan Companies Act No.7 of 2007 limits the
maximum number of partners as twenty in a partnership. This company is consisted with eleven
members which is conforming with the act which means it is not necessary to register under
the Company Registrar.

Each partner invests in the company with an initial investment of Rs.5000. Therefore, it is
written as a document and signed by the members for future reference according to the section
18 of the Prevention of Frauds Ordinance No. 7 of 1840.

2.3 Vision

To be known as the only natural ice-cream brand in Sri Lanka while serving the customer with
the ultimate ice-cream experience.

2.4 Mission

To provide a range of quality products that exceed the desires of the customers by ensuring that
all the fruits are natural and healthy for the customer.

4
2.5 Business model

In order to understand the business model, we have used the business model canvas. This maps
out our business idea, allowing it to be understood, tested and improved.

Key partners Key activities Value propositions Customer relationship Customer segments

-Team members -Manufacturing -Healthy -Maintaining long term University of

(in production relationships with the Colombo
-Packaging -Real fruits
and raw material customer
-Undergraduates
supply) -Labeling -Low prices
-Understanding the desires
-MBA students
-Raw material -Distribution -High quality and needs of the customer
suppliers (once -Academic staff
the demand Key resources -Meeting the Channels
increases) customer needs -Non-academic staff

-Team members Direct marketing

-Location of -Word of mouth

production-
-Whatsapp status
Diulapitiya

-Group chats
-Equipment such as
beater and
-FB and messenger stories
refrigerator

Cost structure Revenue streams

-Equipment Selling price per cup-Rs. 50

-Wages

-Raw materials

-Fruits

-Plastic cups

5
2.6 Value proposition

“A healthy real fruit ice-cream experience at a considerable price.”

We provide a range of real fruit ice-creams at almost the same price as of our customers. But
how we stand out from them is by including real fruits in our product without simply opting
for artificial fruit flavours.

2.7 Team competences

The opportunity identified was put into execution with considering the competences of the
team members.

Name of the student Competency Role

Wijerathne M. M. K. S. Leadership skills, presentation Leader

skills, Ability to coordinate
people
Rathnayaka R. M. C. L. P Ability to coordinate with Secretary
people, sound knowledge in
project management
Pathirana B. A. P. D. S Financial management skills, Treasurer
Follows Business Level at the
ICASL
Anuradhika K. A. C Designing skills,Creativity, has Production planning
good knowledge and
experience of making the
product previously
Chanaka D. S. H Technical skills, creativity, Technology
designing skills
Dimanthika S. P. I Coordinate well with people, Customer relations
communication skills,
interpersonal skills

6
Ediriweera T. T Ability to work with and Human resources
coordinate with people,
interpersonal skills
Madhavi W. M. R Pays attention to little details, Quality assurance
has a sound knowledge about
SLS and quality requirements
of products
Pathirana K. P. D. D. M Ability to influence people, Marketing and
Good communicating skills, promotion
innovative

Tharuka S. H. D. J Financial management skills, Budgeting

experience in an audit firm,
follows business level at
ICASL
Wijerathna S. S. K Good networking with people, Supplier connections
supplier connections

7
3 Product and Service plan
3.1 Description about the product selected

Fruitco real fruit flavors ice cream is new product for Sri Lankan market. Our product is special
among the current flavored ice cream. Because we produce ice cream using real fruits. Current
ice cream flavors do not cover many flavors of fruits that are available in Sri Lanka. Therefor
we introduce a range of ice creams of different fruit flavors that are not existing in the market.
Fruico ice cream, which contains only real fruit flavors. So that, it is supposed to add nutrition
value toward the core product of ice cream rather than which have manufactured using artificial
flavors. We planned to introduce the flavors which are not available in Sri Lanka. We
producing ice cream using real fruits natural flavors namely Bael fruit (Beli), Pineapple,
Avocado, Banana and Anoda. We are supposed to differentiate our ice cream with the existing
ice cream by highlighting the nature of flavors as to the real fruit flavors.

Current context many people consider healthy eating products. Therefore we thinking our ice
cream product is great support to people for healthy eating. Because many existing ice creams
in Sri Lanka manufactured using artificial flavors.

3.2 Features of the product

Suppliers: At the initial stage we plan to take fruits from our group member’s houses.
Furthermore increasing our business we suppose to purchase fruits from Colombo Manin
Market. Also milkmaid and wiping cream we plan to purchase from super markets.

Product: Fruitco ice cream is targeted all of people they interest in changes of ice cream flavors.
Current market have limited flavored ice cream and artificial flavored. Therefore our product
is introduce Sri Lankan natural fruit flavors of ice cream.

Retail ventures: Initially we sell our product at university premises. We hope to sell our product
all faculty canteens. Next we hope to distribute our product through juice bars, restaurant in
Colombo region.

Internet ventures: We hope to advertise our product details through Whatsapp status and
Whatsapp massages among the university students.

8
3.3 Product strategy

Fruito ice cream which made using natural fruits. We will be provide healthy food product.
Current context all of ice cream products are manufactured by using artificial flavors. Also
these products have few flavors. We are produce range of ice cream which have different
flavors. That flavors are not existing in the Sri Lankan ice cream industry.

Our product is healthy product and it is create a new change for customer taste. We use our full
knowledge and experience to attract customers and distribute our ice cream among the people.
Also we use our adequate knowledge and experience to manage the cost and to improve the
product and manage future risk that may arise in the market.

3.4 Benefits of the product

- Good for healthy life

Our ice cream is healthy product, because we produce ice cream using real fruits. Artificial
flavors are very harmful to human body. Therefore, our product is support to healthy body.
Real fruits add nutritional value to the ice cream.

- Customer can consume fresh products

We don’t use preservatives to produce Fruitco ice cream. Therefore, customer can eat fresh
products.

- Range of ice cream

We produce range of ice cream which have different flavors. Existing market have few flavors
of ice cream such as Vanilla, Chocolate, Strawberry, Mango and Fruit and nut. But we produce
different fruit flavors existing Sri Lanka. Also we produce ice cream using fresh fruits.

9
4 Environment and industry analysis
4.1 Industry Analysis

An industry analysis is a tool which conducted reviewing the market factors in which the
product will be developed. The Porter’s five forces model is used to understand the competition
and potential profitability of relevant industry. It helps to identify threats and opportunities and
problems facing their business. Major factors that are analyzed through the model are suppliers
and buyers, the condition of competitors and the possibility of new market entrants.

Our business idea is related to produce ice cream in different fruits flavour. Porter’s five forces
model is used to determine position of our company relative to other substitutes companies.

- Competitive rivalry

Within the ice cream industry there are many substitutes available for our product. Also there
are large number of ice cream shops existing in the current market place. Beside there are well
established loyal brands in the market. Such as Elephant House, Cargills Magic, Highland,
Palwatte and etc. Therefore, can be identified there is high level of competition for our product.

- Supplier power

Supplier bargaining power usually comes through competitive force. The power of the
suppliers in this industry is very feeble. An ice cream is produced with milk and fruits. There
are huge suppliers for milk and fruits. Therefore, it will be easy to choose a supplier and it is
also facilitates to mover from a new supplier due to the large number of it. Therefor we can
recognize suppliers do not have power for the bargaining over the companies.

- Bargaining power of buyers

The power of the buyers can either increase or decrease a firm’s profit. According to the
product we offer, the buyers are often a demanding a lot. They want to buy the best offerings
available by paying the minimum prices as possible. This puts a pressure on our product
profitability in the long run. In this industry there are lot of alternative product. Therefore,
consumer have more power to switch to that product. Because of that can be identified power
of buyers is high within this industry.

10
 - Threat of Substitutes

Here, the threats from substitutes are comparably high because ice cream which is easily
available anywhere in the market. and can have a threat by its substitutes. There are lot of
substitutes for ice cream as a dessert. Such as Yogurt, Fruits, Sweets (chocolate, caramel,),
Pudding, and etc. moreover Milk, Fresh drinks are also considered standard substitutes for our
product.

- Threats of new entrants

Entry into the market by small firms can be high and quick. But when a company wants to
established itself in this industry, there are lot of things to consider before doing so. In this
industry well established brand names for ice cream. As results there are many threats arise to
new comers. Therefore, they have hard time to get the customers. We are going to introduce
range of fruit flavor ice cream. Their ingredients easy to find and we use easy technology.
Therefore, new comers easy to enter into the market. We can identify threats of new entrants
is high for our product but also if we consider the giants of the industry we can also say that
smaller companies wouldn’t want to enter and face the competition.

4.2 Environment analysis

4.2.1 SWOT Analysis
Strengths

● There are different members in our groups with different backgrounds and various types
of abilities. So we can easily face the challenges by overcoming the barriers.
● According to the team members’ skills and ideas we can improve the product quality
and efficiency.
● Our product ranges have different flavours of the Ice cream.
● Availability of fruits at a low cost most of the time of the year.
● This fruits have various nutrients.
● The members have various connections and strengths that make the team resourceful.

Weaknesses

● We have fear of failure of innovation in the market.

● Team members have lack of experience on that project.
● We have to concern about more things since we prepare a food product.

11
Opportunities

● Ingredients of the product can be supplied easily.

● We can offer quality product to the customer with concessionary price to increase their
satisfaction.
● High customer base available in the market.
● People prefer to consume various flavours of Ice cream.
● People tend to consume more nutrients products.
● These flavours of Ice cream don’t exist in the market.

Threats

● Products can be easily imitated by rivals.

● Stronger brand names of potential competitors.
● Lack of the advance technology.
● There are high legal impacts to Ice cream because it’s directly affecting to consumer
health.
● It takes more time to change the consumer behaviour because they are already familiar
with the existing brands.

4.3 External environment analysis

- Political Environment

We plan to introduce new flavored of the ice cream it is not existing Sri Lanka.
Government is mostly concerned about the consumers’ protection. Therefore they
introduce many policies such as food certificates. Government always try to encourage
new entrepreneurs. Therefore they have a positive manipulation from the political
environment.

- Economic environment

We introduce new product to the economy. It will generate new jobs. If we start this
business in a large scale it may help in reducing unemployment level in Sri Lanka.
Before introducing a product we should consider about the ingredients prices of ice
cream, equipment prices, wages rates, substitute and complementary products in the
market.

12
 According to the analysis of this product, ice creams that are flavored in these fruits not
available in Sri Lanka. It will be a good opportunity for us. We should be more
considerate about our ingredient quality and suppliers.

- Social Environment

This product provides a new taste to the society. Therefore, we study about the current
market situation before launching our product. Current market has few flavors of the
ice cream. We producing various fruit flavors provide a new tasty and new experience
to the consumers.

- Technological Environment

We need some technological support to our product. Technology helps to produce

quality product to the consumers.

- Environmental environment

This product producing process may less harmful activities to the environment.
Container of the ice cream is a plastic container. It is one and only harmful thing to the
environment. But that container can be reused for domestic work.

- Legal environment

In the current situation we mostly think about the environmental protection and
consumer protection. Therefore, we have to adhere to some legal rules and regulations.
There are many rules and regulations in the Sri Lanka for food products Such as SLS,
ISO 22000, HACCP and etc.

13
5 Marketing plan
5.1 Customer Research
5.1.1 Customer Survey

Consumers are always interested in trying out new and different products. People like to taste
different flavours from time to time. From a survey conducted by us, we found out that out of
70 respondents 69 respondents were willing to try out the new flavours. Therefore, we can
anticipate that there will be a high demand for our product as people are interested in trying out
new flavours and also as our product contains real fruits with a nutritious value as well.

The results of the customer survey are drafted bellow on the customer preference for different
flavours;

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
Avacado Beal Fruit Pineapple Banana Anoda

5.1.2 Feedback from the potential customers

We were able to obtain feedback form few selected potential customers on “Fruitco”, real fruit
ice-cream. Their preferences on the different flours were in line with the results, which obtain
from the customer survey. Meantime, a suggestion has given for the new product as to come
up with a green package.

14
5.1.3 Mock demonstration of the concept

5.2 Target Customer Strategy

The customers for the “Fruitco”, real fruit ice-cream will be the ice-cream consumers, who are
expecting nutritional value rather than the core product. Customers are not thinking of
nutritional value of ice cream. But our efforts will able to highlight the importance of the
intended product. Merely, an ice cream is only satisfy the tasty requirements. The product is
go beyond the core usefulness of the product. Therefore, the customers will able to enjoy the
taste, while taking something nutritious.

Simply, the target customer strategy of Fruitco, real fruit ice-cream is to focus on the ability of
the Fruitco to add nutritional value towards the ice cream.

Our target market would be people who like to have ice-cream as a dessert or at any other
event. At the first stages our target market will be the university students who consume ice-
cream. We will be supplying the ice-creams to the university canteens and cater to the crowd
at universities.

Therefore, at the initial stage we would focus on catering to the demand arising from the
university and gradually expand our focus on wider markets by distributing them to super
markets. According to the survey conducted and the feedback form the potential customers, it
is expected for a positive a trend in buying decision of the Fruitco ice cream.

15
Meantime, the customer understanding on our product concept is at a considerably high level.
Since, 99% of the ice cream consumers are willing to purchase Fruitco ice cream and they
understood the importance of the product concept. The customer value addition from the real
fruit ice cream is greater than the floured fruit ice creams, which are available in the existing
market.

5.3 Channel Strategy

The following planned marketing channel strategies are supposed used for enhance the
awareness of the product and enhance the buying decision.

Social media marketing

Internal groups of Facebook, Instagram, WhatsApp and all other chat groups that are consisting
of university students can be used to promote the Fruitco ice cream. It is expected to display
WhatsApp flyers to make aware the availably of the product.

Direct marketing

Direct marketing can be one in conducting awareness stalls to make aware of the product, just
before make available the products the canteens.

Banner advertisements within university premises

It is expected to display banners of the Fruitco ice cream for the purpose of enhancing
awareness among the university students.

Promotional campaigns

For accelerate the sale, we can introduced promotional campaigns such as free issue for bulk
purchase. For an example buy 4 ad get 1 free.

5.4 Positioning

The Fruitco ice cream is able to position at the market, where healthy eating is targeting. The
concern on healthy eating has been rapidly increasing over the society. Therefore, the growing
demand for foods, which are adding nutritious value and eliminating or minimizing the
artificial ingredients usages is observed. Accordingly, Fruitco ice cream will lead for a unique
positioning in the competitive market for ice cream in near future, by highlighting the use of
real fruit flours.
16
5.5 Branding Strategy

None of ice cream brand in the market says as to nutritious, since those ice creams are
consisting of artificial flours. However, Fruitco ice cream is going to be a product which fully
manufactured using real fruits. The brand name, Fruitco itself send notification on the term
fruits. Moreover, the slogan of real frusut ice cream is used to create a unique brand image
towards Fruitco. Accordingly, the Fruitco brand leads a unique brand recognition among rest
of the ice cream brands.

The branding strategy of Fruitco ice cream is supposed to focuses on passion-based insights to
creative solutions. Further, growing concern on healthy eating can be addressed using the
branding strategy. Therefore, branding strategy of Fruitco ice cream can be considered as a
brand which creates a memorable brand experience.

The planned brand strategy is focusing on developing a brand personality for Fruitco. The
customer perception for Fruitco is expected developed with the attribute of healthy foods.

5.6 Pricing Strategy

According to the cost analysis, the selling price is set at 50 rupees for an 80ml ice cream cup.
The minimum price of the competitive brands for the same product (80ml ice cream cup) is 50
rupees. According to the customer survey, customer are willing to pay 50 rupees for an 80ml
ice cream cup. Since, the value addition of the product is greater than the product, which
manufactures with artificial flours.

Whipping cream 1000ml 4L of ice-cream

Milkmaid 800ml 4L of ice-cream
Size of the cup – 80ml

17
The pricing strategy should have to be covered the total cost of production, while maintaining
a decent profit margin.

5.7 Internet Strategy

As the internet strategies, our initially focus is only on social media campaigns such as groups
of Facebook, Instagram, WhatsApp and all other chat groups that are consisting of university
students. Because, at the first stages our target market will be the university students who
consume ice-cream and we are supposed to supply the ice-creams to the university canteens.
Therefore, social media is using as the internet strategies to promote Fruitco.

It is expected to develop a website with the enlargement of the business. So that, it can be used
to facilitate e-commerce using the web site.

5.8 Communication Strategy

The following communication strategy are supposed used for enhance the awareness of the
product and enhance the buying decision of potential customers. At the initial stage, our target
market will be the university students who consume ice-cream and we are supposed to supply
the ice-creams to the university canteens. Therefore, our communication strategy is focus only
on university students, and mostly limited within the university premises.

18
Social media marketing

Internal groups of Facebook, Instagram, WhatsApp and all other chat groups that are consisting
of university students can be used to promote the Fruitco ice cream. It is expected to display
WhatsApp flyers to make aware the availably of the product.

Banner advertisements within university premises

It is expected to display banners of the Fruitco ice cream for the purpose of enhancing
awareness among the university students.

5.9 Sales Strategy

The concern on healthy eating has been rapidly increasing over the society. Therefore, the
growing demand for foods, which are adding nutritious value and eliminating or minimizing
the artificial ingredients usages is observed. Accordingly, Fruitco ice cream will lead for a
unique sales strategy in the competitive market for ice cream in near future, by highlighting the
use of real fruit flours. Meanwhile, the target customers are university students, who have a
right understanding on the product concern. Therefore, the sales strategy is supposed to
successful in the market.

19
6 Operations plan
6.1 Production process

Initially we had to do the production at Dinesh’s home it is located in the diwulapitiya. We

selected his house because they have retail and wholesale shop. They have a freezer also. The
ice-cream will be made based on three main ingredients. They are heavy whipping cream, fresh
fruits and sweet condensed milk. The speciality of the ingredients of our product when
compared with other leading brands is that we are not adding any sugars separately. Those
ingredients will form the base of the product and 100% natural and real fruits are combined to
bring out different flavours in the ice-cream.

Value chain and networking with external parties

Value chain elements are very important to plan the business. The value chain activites can be
divided into two types; primary activities and support activities.

● Inbound logistic is where purchased inputs such as whipping cream, fruits, sweet
condensed milk, cups etc. inbound logistics is important to keep contact with external
companies such as suppliers and delivery agent.

20
 ● Once the required materials have been collected internally, operation can convert the
inputs in to the products. The operation activities associated with transforming inputs
into the final product form.
● Outbound logistics is after the produce ice cream delivered right away or has to be
stored for a while. The outbound logistics are collecting, storing and physically
distributing to buyers. For this we are planning to start up partnership mainly targeting
the university students.
● Activities associated with marketing and sales are job of marketers and sales agent in
our organization to make sure that potential customers are aware of the FRUITCO ice
cream.
● Procurement is a support activity. It refers to the purchasing inputs used in the firm’s
value chain. Purchased inputs include raw material and as well as assets such as
machinery, equipment etc.

6.2 Human resource plan

Human resource management integrate with all of functions. Human resource is the most
crucial resource to enhance the capabilities.

According to FRUITCO’s success of the business should be depending on our team. All our
team members are undergraduates of management and finance stream. They all have sound
knowledge about good management and it is an advantage for our business.

Our team is consisting with 11 members including 5 boys and 6 girls. Our tasks are dividing
with them. Our main task is manufacturing Ice cream. Even though majority is girls, the boys
are supporting as much as well. We divided our members with considering their different
management skills. Main production team comprises of four members and other seven
members are handling marketing and other management activities basically. Not only that we
have well Real world business experienced members in our team and their knowledge is very
useful for planning cost cutting and quality maintaining. FRUITCO’s marketing people have
creative marketing and innovative distribution advertising ideas. It helps us achieve our
business goal of winning a larger percentage of the available market.

21
And also our financing members are playing important role in the business. They are
responsible for preparing books of accounts, preparing budgets, maintaining funds. And also
they have seeking to ways to find more funds for expand the business.

We discussed with the team about different fruit flavours and come to conclusion. And also
we divide financing team, marketing team and administrative team.

Our marketing team mainly focuses promotion campaigns about our product. They are
planning good marketing plan to position our product on the customers mind.

Administrative team mainly doing admin tasks such as create documents, letters, collect details
from others and control the member’s tasks.

At this initial stage FRUITCO’s has not any other human resource other than team members.
But in future we will plan expand the business with recruiting people for production process.
And also we have enough knowledge to training them ourselves.

6.3 Research and development

Market survey

Market survey is a tool to get feedback from the target customer. Due to this market survey we
can understand customers’ characteristics, preferences and expectations etc. This market
survey can be categorized under the market research process. This research and development
is now become an important function. Before start a business we did the market survey. We
ask some question from our target market. According to market survey we identified customer
preferences about our fruit flavours. Following chart is ultimate result of the market survey.

22
 60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
Avacado Beal Fruit Pineapple Banana Anoda

6.4 Material Cost

The fruits required to manufacture the product are, banana, pineapple, bael fruit (beli), avocado
and anoda. These fruits can be obtained from all around Sri Lanka. All the fruits except
pineapple can be sourced from the team members houses at the initial level. Bael fruit, avocado,
banana and anoda will be provided by group members as they have access to those fruits free
of charge at their home premises to satisfy the demand at this level. When the demand increases
we can consider buying those fruits as well from the market. When it comes to banana and
pineapples we are planning to buy fresh fruits from Pettah in bulks so that we can reduce the
costs up to a certain extent.

If the fruits are bought from outside the prices of them would be as follows per kilogram.

Item Unit Price

Banana I kg 120.00

Avacado I kg 130.00

Pineapple I kg 70.00

Bael Fruit I kg 200.00

Anoda I kg 150.00

23
Other than the fruits, the main ingredients used are, heavy whipping cream and condensed milk.
Whipping cream and condensed milk can be easily obtained from super markets.

Whipping cream

1000ml – Rs. 976

Milkmaid

800ml – Rs. 450

Cups with the label

1 cup – Rs. 4.50

6.5 Other equipment

At the initial stage we used mainly beater and refrigerator. This refrigerator owned by our team
member. We planned buy this equipment after expand the business.

24
7 Development plan
In the current market different flavours of ice-cream can be found. But when it comes to fruit
ice-creams, there are only a limited number of flavours. The existing flavours that can be found
are, strawberry, mango etc. We consider about the different type of flavours which we use to
produce Ice-Cream such as Banana, Avocado, Pineapple, Bael Fruit and Anoda.

The ice-cream will be made based on two main ingredients. They are, heavy whipping cream
and sweet condensed milk. The specialty of the ingredients of our product when compared with
other leading brands is that we are not adding any sugars separately. Those ingredients will
form the base of the product and 100% natural and real fruits are combined to bring out
different flavours in the ice-cream.

In the current situation we mostly think about the environmental protection and consumer
protection. There are many rules and regulations in the Sri Lanka for food products Such as
SLS, ISO 22000, HACCP and etc. We are plan to get the food safe certificate from The
Industrial Technology Institute in Sri Lanka in the initial stage of the product. This is mainly
effected to the marketing campaign of the project.

However, after developing an innovative Ice-Cream under the brand name of Fruitco our team
wanted to ensure whether our product idea was a successful one or not by measuring the toxic
level of the product. For that we have implemented several research and development
processes.

7.1 Initial Product Development

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7.2 Promotion Campaigns

This is our logo of Fruitco product. We use this logo to do the marketing campaign to introduce
the product to the customer. According to our business plan at the initial stage of the product
our main target market is University students, staffs and MBA students. Therefor we plan to
do our main marketing campaign through the social media such as Whatsapp groups, Viber
groups and Facebook pages. Main purpose of the social media campaign is touch our planed

target market easily.

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8 Management plan
With combination of diversified knowledge team member was formed a partnership for
business idea of a range of ice-creams of different fruit flavors that are not existing in the
market. When it comes to team members, all members effect equal contribution towards the
new business idea of different fruit flavors ice-creams. Then main strength of business is
human capital of team who are having highly motivated diversified knowledge about
management and business through studying in University of Colombo in Management and
Finance faculty in the Management and Organization Studies Department and engaging various
kind of professional education. So, all partners of team are considered as employees of the
business. With requirement of initial operation of business was collected Rs 5000.00 as initial
contribution for commencing activities of business.

8.1 Team member competencies

There are eleven members in our group and according to our business idea, its success should
be depending on our team. All our team members are undergraduates of Management and
Finance stream. They all have sound knowledge about good management it is and advantage
for our business.

We divided our members with considering their different management skills. Main production
team comprises of four members and others are handling finance, accounting and marketing
activities basically. Not only that we have well real world business experienced members in
our team and their knowledge is very useful for planning cost cutting and quality maintaining.
Our marketing people have creative marketing and innovative distribution advertising ideas.

And also our financing members are playing significant role in the business. They are
responsible for preparing books of accounts, preparing budgets, maintaining funds. And also
they seeking to ways to find more funds for expand the business.

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We can illustrate that according to this way.

Contribution area Registration Number Name of the members

Finance 2015/MS/7003 Wijerathne M.M.K.S

2015/MS/6830 Pathirana B.A.P.D.S

Accounting 2015/MS/6624 Chanaka D.S.H

2015/MS/6952 Tharuka S.H.D.J

Marketing 2015/MS/6832 Pathirana K.P.D.D.M

2015/MS/6656 Dimanthika S.P.I

2015/MS/7001 Wijerathna S.S.K

Production 2015/MS/6664 Ediriweera T.T

2015/MS/6778 Madhavi W.M.R

2015/MS/6604 Anurudhika K.A.C

2015/MS/6881 Rathnayaka R.M.C.L.P

At this initial stage we have not any other human resource other than team members. But in
future we will plan expand the business with recruiting people for production process. And also
we have enough knowledge to training them ourselves.

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9 Competitive advantage
In today every business in the world virtually are born into competition. It is well known that
competition in any kind of industry is constant and it has become growing concept. The
companies are forced to find ways to separate themselves from their near peer rivals. Therefore,
the organizations try to keep the greats resources as their workforce for creating competitive
advantages.

The concern on an ice cream industry is a very popular and a profit making industry all over
the world. Therefore, we came up with idea as a introducing rang of ice cream of different fruit
flavors that are not existing in the current market. In ice cream industries generate sustainable
competitive advantages due to human, physical and financial assets we have.

When it comes to human resource our business is a partnership of eleven members which will
helps us to come up with the better solution with different skill and capabilities of team
members rather than a sole possession. Our members are specialized in Management and
Organization Studies and partly qualified in chartered accounting. Moreover, our team
members have sound knowledge and skill about leadership, communication and some of them
fluent in preparing food items.

The concern on healthy eating has been rapidly increasing over the society. Therefore, people
tend to consume more nutrients products. According that our ideas have been brought forward
to come up with ice cream which contains only real fruit flavors. So that, it is supposed to add
nutritional value towards the core product of ice cream rather than which have manufactured
using artificial flavors. And also our product brand name familiar with our product. Those
aspects will be very much useful to attract the attention of the customers.

Cost advantage of a company occur when business can manufacture a product at a lower cost.
Namely Sri Lanka is a country blessed with the cultivable land and has an abundance of fruits
throughout the year. Therefore, we can easy access to all the fruits which are planning to use
in our product. Moreover, we are able to reduce product cost by contributing our team members
to manufacture our product at this level. So that, can be done without the need of any paid
labour.

All things considered we believe above factors will act as barriers for other potential
competitors and will lead ice cream industries to generate a sustainable competitive advantages.

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10 Risk Analysis
Risk analysis is the more important and essential thin for any business or organization. There
is no any organization which is free from risk. Any type of business either stable or unstable,
large or small business environment should have to face risk. Therefore, our new product of
Fruitco ice-cream already attach with some sort of risk also.

- Positioning risk

Positioning risk is the major risk for any type of business. When we position our business we
want to think more about the place and consumer convenience to reach the product. If we fail
to position our business in a compatible place it may cause a high risk for our solvency. In the
initial stage we chose the faculty canteens as our main seller. There are highly preferable brand
exists in the market already. Therefore, we have higher risk in the market when selecting the
vendors for our product. Since our target market is university students and MBA student we
can mitigate our positioning risk by choosing the faculty canteen.

- Market risk and business risk

Market risk is the risk that the market will not accept our product or service after we launched
it. This is a very real risk because there are so many ice cream products that consumers are able
to choose from that they tend to have a strong indifference towards new products. According
to the market risk and business risk our main risk is selected market is very small. When
considering the country as a whole this segmentation is very small. Our target market is
university student and MBA student of the University of Colombo in the initial stage. Those
consumers already adapt to their own favorable taste under the various type of ice cream range.
Therefore, we have serious problem for the survivability of the business.

- Health and safety risk

Health and safety risk also directly affect for our product. Our product is a food item and it
easily can be used for eat as dessert. Therefore, we should want to ensure the health and safety
of our product. In the stage of initiation, we don’t have specialization knowledge as the
scientist. Therefore, our consumers may be get confuse about our product safety because we
are new brand and new people for the market. To mitigate this risk, we get relevant food
certifications for ensure our product safety.

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 - Climate risk

Climate change is the major risk for our product. We use the natural fruits as our main
ingredient for our new product. Avocados, Banana, Beal, and Pineapple are the fruits that we
used for our ice cream. We have high risk about to how to found out those fruits in the off
season. Avocado and Pineapple are the fruits that we can find in some months in the year.
Therefore, climate risk is highly affected for our product.

- Compliance risk

Compliance risk also highly influence for new product. We are the new entrance to the market
place and we should want to identify and learn many legal penalties and laws according to the
business field. In the stage of initial we have minimum capital to develop our product and face
the any failure conditions. In accordance with the industry laws and regulation we should want
to follow best practices through the whole business process. There for compliance risk is also
major risk for us. To face that risk, we follow the relevant rules and regulations for our
business.

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11 Financial plan
We have made a financial plan forecasting for the first three years.

11.1 Revenue

Gross profit margin

 We keep Rs. 7 from Bael fruit ice cream, Rs. 4 from Avacado ice cream, Rs. 13
from Pineapple ice cream, Rs. 12 from Banana ice cream, and Rs. 9.50 from
Anoda ice cream as gross profit.
 We can gain economies of scale from our suppliers when purchasing huge
volume of raw materials to the production.
 We expect to buy fruits from rural areas and from that we can reduce our cost.
 We plan to minimize material wastage from direct supervision.

11.2 Cost Analysis

Ice cream Wipin Fruit Packaging Other Total Selling Gross

Name cream & cost per cost per production cost per price per profit
Milkmaid unit unit overhead unit unit per unit
per unit cost per
unit

Avacado 19.50 13 4.50 9 46 50 4

Beli 19.50 10 4.50 9 43 50 7

Pineapple 19.50 4 4.50 9 37 50 13

Anoda 19.50 7.50 4.50 9 40.50 50 9.50

Banana 19.50 5 4.50 9 38 50 12

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11.3 Income statement (3 year projection)

2019/2020 2020/2021 2021/2022

Revenue 1,260,000 1,574,950 1,968,600

Cost of revenue (1,061,763.5) (1,327,163.5) (1,658,884.5)

Gross Profit 198,236.5 247,786.5 309,715.5

Operating expenses

Sales and Marketing (25,000) (23,000) (20,000)

Administration (10,000) (12,000) (13,000)

Net Profit 163,236.5 212,786.5 276,715.5

WORKINGS

Revenue 2019/2020

Market demand Price per Expected Sales Expected

(According to unit (Units) Sales (Rs)
survey)

Avacado 32.5% 50 8,190 409,500

Beli 26.7% 50 6,727 336,350

Pineapple 10.6% 50 2,674 133,700

Anoda 12.2% 50 3,073 153,650

Banana 18.0% 50 4,536 226,800

Total 25,200 1,260,000

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Revenue 2020/2021

Annual Price per Expected Sales Expected

increment of unit (Units) Sales (Rs)
sales

Avacado 25% 50 10,237 511,850

Beli 25% 50 8,409 420,450

Pineapple 25% 50 3,342 167,100

Anoda 25% 50 3,841 192050

Banana 25% 50 5,670 283,500

Total 31,499 1,574,950

Revenue 2021/2022

Annual Price per Expected Sales Expected

increment of unit (Units) Sales (Rs)
sales

Avacado 25% 50 12,796 639,800

Beli 25% 50 10,511 525,550

Pineapple 25% 50 4,177 208,850

Anoda 25% 50 4,801 240,050

Banana 25% 50 7,087 354,350

Total 39,372 1,968,600

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Cost of revenue (2019/2020)

Sales units Cost per unit Total Cost of sales

Avacado 8,190 46 376,740

Beli 6,727 43 289,261

Pineapple 2,674 37 98,938

Anoda 3,073 40.50 124,456.5

Banana 4,536 38 172,368

Total 25,200 1,061,763.5

Cost of Revenue (2020/2021)

Sales units Cost per unit Total Cost of sales

Avacado 10,237 46 470,902

Beli 8,409 43 361,587

Pineapple 3,342 37 123,654

Anoda 3,841 40.50 155,560.5

Banana 5,670 38 215,460

Total 31,499 1,327,163.5

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Cost of revenue (2021/2022)

Sales units Cost per unit Total Cost of sales

Avacado 12,796 46 588,616

Beli 10,511 43 451,973

Pineapple 4,177 37 154,549

Anoda 4,801 40.50 194,440.5

Banana 7,087 38 269,306

Total 39,372 1,658,884.5

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11.4 Balance Sheet (3 year projection)

Assets 2019/2020 2020/2021 2021/2022

Non-Current Assets

Property and equipment 115,700 108,400 101,100

Current Assets

Cash 100,000 96,023 399,738.5

Inventories 177,536.5 500,000 453,000

Total Assets 393,236.5 596,023 852,738.5

Liabilities and Shareholder’s

Equity

Equity 200,000 200,000 200,000

Retained Earnings 163,236.5 376,023 652,738.5

Long Term Liability 25,000 20,000 -

Short Term Liability 5,000 - -

Total Liabilities and Equity 393,236.5 596,023 852,738.5

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WORKINGS

Property and equipment (2019/2020)

Item Cost

Blender 15,000

Deep-Freezer 100,000

Beater 8,000

Total 123,000

Depreciation (straight line method)

Item depreciation

Blender 15,000/10 = 1,500

Deep-Freezer 100,000/20 = 5,000

Beater 8,000/10 = 800

Total 7,300

Book value of PPE (2019/2020)

Item cost

Cost(2019/2020) 123,000

Accumulative Depreciation 7,300

Total 115,700

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Book value of PPE (2020/2021)

Item Cost

Carried forward cost(2019/2020) 123,000

Accumulative Depreciation 14,600

Total 108,400

Property and equipment (2021/2022)

Item Cost

Carried forward cost(2020/2021) 123,000

Accumulative Depreciation 21,900

Total 101,100

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12 Funding plan
Developing the funding plan is a very important tool when we are supposed to start a new
business or an organization. The funding plan show how an organization raise funds from
different sources for a new business. We can understand what the sources of funding are and
who the fund providers are. It may be a easier for some of these sources to make contribution
rather than to provide money.

So we also develop a funding plan to get some Information or an idea of our fund raising
process. The funding plan help to resource allocation to production process of business.

When we develop a funding plan we have to forecast future funds needs and have to find
multiple fund raise sources to match with future needs.

For our organization we forecast a budget for small time duration and raise funds for process
we undertake through this time period.

12.1 Working capital funding and management.

Working capital is very important to carry on business day today activities in short tern other
than long term activities. If businesses unable to manage the working capital break down the
business processes therefor we have to pay more attention on working capital management.
Working capital management is to ensure that a firm is able to continue its operations and that
it has sufficient ability to satisfy both upcoming debt and expenses.

In our ice-cream business, we have to purchase raw materials, producing ice-cream. Storing,
packaging and delivering are the daily processes cover these expenses we have to manage good
working capital funding.

12.2 Sources and uses of the funds

There are many sources for raising funds. We can organize an events, collect from team
members, grants from different providers and some sponsorship are the sources of raising
funds. In our businesses initially we put a collection from team members for start initially stage
of our business. After business will improve we supposed to take some loans for further
activities. There are ten members in our groups we collect 5000 rupees from each team
members.

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We suppose to invest more than 55000 rupees for our initial investment to our business. We
think it is more sufficient to take our products to the market.

Already we request some providers to ask some funds and we think may be can collect in future
and we already discussed to implement a small event to raise funds.

We suppose to expense this our initial investment for purchase raw materials (fruits and
ingredients), Advertising, packaging and delivery. We use our own location to carry out our
business and our own vehicle to deliver our products to customers'. Therefore, we can eliminate
fixed cost and move funds for working capital.

12.3 Offers for the funds providers

We suppose to grant some benefits to our fund providers. We give the freedom to our all team
members to feel the taste of our ice cream products while they are producing. And we like to
say our providers who are willing to join with us, we will give package of ice cream for every
month and we hope to provide our ice cream products to discount price.

By using all the above mentioned financial, marketing, operational, development and other
plans we hope to develop our product further and achieve our long term vision.

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