Wharton Business Foundation Capstone Framework analysis

1. Business Foundation Capstone
Framework for Analysis
Ganesh Gavali
March 2017
Worxcycle

2. Situational Analysis

3. Entry with Worxcycle :
Describe the product or service you are developing a strategy for
• Snapdeal's opportunity to create customer lifetime value while
boosting with entry move to monopoly market.
• With this proposed service shoppers will be presented with
unique value proposition.
• Worxcycle is a machine used to wash laundry, such as clothing.
The term is mostly applied to machines that use water as
opposed to dry cleaning (which uses alternative cleaning fluids,
and is performed by specialist businesses) or ultrasonic
cleaners. Laundry detergent is frequently used to clean clothes,
and is sold in either powdered or liquid form. Product will be
with saddle, pedals, and some form of handlebars arranged as
on a bicycle, but used as exercise equipment rather than
transportation
• Bike Washing Machine combines a stationary bicycle and
washing machine, you can exercise while at the same time
simultaneously washing your clothes. When you ride this bike,
the pedaling motion causes the drum of the washing machine to
rotate, at the same time, the superfluous electricity is generated
which can be used to power the display screen or stored for
future use.
• Positioning Worxcycle that its capabilities provide the best
defense against the existing array of competitive forces
• Product offers washing cloth with exercise and saves electricity.
• Making available products more relevant to them would help in
getting their attention and ultimately the market share.

4. External Environment –
Social Trend
• E commerce space observed a growth rate of 34% (CAGR) between December 2015 and December 2016.
• Latest study by Internet and Mobile Association of India(IAMA) has projected the ecommerce market to hit 2.5 lakh
crore in 2016, an increase from 1.25 lakh crore in 2015.
• The current e-commerce structure in India is a race to define the industry and to be gold standard . The big player are
snapdeal, flipkart and Amazon.
• Mobile share will continue to grow over the coming year, accounting 65.3% of all retail ecommerce in 2016 and will
touch 80% by year 2020
(Source: http://thecyclingbug.co.uk/health-and-fitness/)

5. External Environment –
Economic Trend
• India has emerging middle class with increased purchasing power , creating a new customer base with more disposable
income.
• Most of people are concreated about wealth.
• Digitalization of India and Demonetization in year 2016 November, online market and cashless business has got
tremendous growth.
• The Reason Worxcycle is an eco friendly design of washing machine +Exercise Cycle, with an emphasis on ease of use.
• Positioning Worxcycle that its capabilities provide the best defense against the existing array of competitive forces
• Lack of time due to busy lifestyle for washing cloths and even for exercise.

6. External Environment –
Relevant economic trends
• India has Explosive internet growth, Rapid increase in telecom
market more people are getting access to internet specially in
online market and e-wallets.
• India's growth at 7.6% in 2015-16 fastest in five years
(source: http://economictimes.indiatimes.com)
• The GDP per Capita in India is equivalent to 14 percent of the
world's average. GDP per capita in India averaged 654.86 USD from
1960 until 2015, reaching an all time high of 1750.60 USD in 201
(Source:http://www.tradingeconomics.com/india/gdp-per-capita)
PM Narendra modi

7. External Environment –
Industry structure (entry/exit barriers)
Entry
Barriers
Monopoly Market
Logistics
infrastructure
Specialized work
force
Exit
Barriers
Loosing customer
loyalty
Market size and growth. India's e-commerce market
was worth about $3.9 billion in 2009, it went up to
$12.6 billion in 2013. In 2013, the e-retail segment
was worth US$2.3 billion. About 70% of India's e-
commerce market is travel related.
(Source : https://en.wikipedia.org/wiki/E-commerce_in_India)

8. External Environment –
Industry structure – Competition ,market shares
With a population of 1.25 billion that
includes a large young, mobile-first
generation many of whom share English as
a common language—plus an emerging
middle class, India presents significant
growth opportunities for retailers from
across the globe. Following the recent
news that the Indian government’s
Department of Industrial Policy and
Promotion would officially allow up to
100% foreign ownership of e-commerce
marketplaces, both web and brick-and-
mortar retailers operating there have
garnered some decisive new advantages.

9. Snapdeal
Communication
SEO
LinkedIn
Advertisin
g
Facebook
Advertising
Mailers
Google
AdWords
Brochures
SMS
Snapdeal
Worxcycle
Marathon
Fitness
Blogs
Trial
sessions
Social
Networking
External Environment –
Marketing Channel
YouTube
Advertising

10. Internal Environment –
Resources (Top management, Marketing, Production, Finance, research & development)
• With soft bank and other big name investors on board, Snapdeal has
actively added more experienced executives to its management team.
• Snapdeal carried out top level reshuffle in November 2016, leading
consolidation in some of company's key teams such as category
management, market development and brand alliance to align
workforce and bring in more synergy across different departments.
This new formed one team will be led by SVP Vishal Chadha.
• Snapdeal has acquired Gurugram based Marketing and
personalization sevice company TaergetingMantra to further enhance
the customer experience and compliment its existing capabilities.
• Snapdeal took massive rebranding exercise in September last year its
biggest repositioning since its inception in 2010. Snapdeal unveiled a
new logo, along with new tagline “Unbox Zindagi”.
• Chief executive, Kunal Bahl stressed that this rebranding is to be ready
for the next 100 million customers that are going to come online in
next 5 years.
1. http://techcircle.vccircle.com/2016/11/11/snapdeal-reorganises-top-management-structure/
2. http://economictimes.indiatimes.com/small-biz/startups/snapdeal-undertakes-major-brand-
overhaul-unveils-new-logo/articleshow/54281225.cms

11. Internal Environment –
Brand diagnosis
Snapdeal
Brand Positioning
• Snapdeal Calls Its New Positioning ‘Unbox Zindagi’, Tends to Cater To Consumer Aspirations
• Mission – “To create India's most impactful digital commerce ecosystem that crates life changing experience for
buyer and sellers “.
• High on operational excellence attribute ; now moving towards customers intimacy.
Pricing strategy
• The pricing strategy used by Snapdeal is to offer good value for money to consumers and remain highly
competitive in the market.
• With its six funding’s and various acquisitions, the company has created a brand name for itself. There are various
shopping sites on internet. To make itself special and exclusive the brand knew that it had to provide something
new and innovative to the customers. The one thing that a consumer likes is to save money as much as possible
on any deal. Snapdeal made its pricing policies around these thoughts by utilizing them for their benefits. It went
for direct tie-ups with various companies and hence was able to arrive at quite lower prices for the products.
• Goal is to be Cheapest price on market.
• Margins are by Sector and Supplier
http://techcircle.vccircle.com/2016/11/11/snapdeal-reorganises-top-management-structure/
http://economictimes.indiatimes.com/small-biz/startups/snapdeal-undertakes-major-brand-overhaul-
unveils-new-logo/articleshow/54281225.cms

12. Internal Environment –
Brand diagnosis
Distribution Strategy
• Consumers will have the option to buy online from Snapdeal
and get delivered from the neighborhood store or buy it directly
from the store through online guidance. Snapdeal will provide
technology and logistics for retailers who want to go Omni-
channel with the company
source:
http://economictimes.indiatimes.com/articleshow/47621463.cms?utm_source=contentofinterest&
utm_medium=text&utm_campaign=cppst
• Not to Carry inventory ; instead they are the connective tissue
for suppliers to reach customers indirectly
• “Snapdeal Fulfilled” Provides security of Prompt Delivery.
Promotion Strategy
• Snapdeal offers various deals and discounts to attract and
maintain its customer base. The purchase voucher is sent to the
consumer with the help of a confirmation through the SMS and
through an email. Either of this is shown, while taking the
delivery. Numerous companies advertise their products on
Snapdeal website, as it is an easy medium to do so.
• “Deals of Day” or a constant “always up to X% off”
• Experiment with novel promotion, such as celebrity outing and
their “shake” mobile Campaign.
• “Dil Ki Deal”

13. Internal Environment –
Problem definition & Critical Factors
1. What are the factors within the organization that will help your proposal?
• Existing wide reach of Snapdeal across states.
• Robust logistic network and distribution network.
• Well established marketing team and strategy.
• Snapdeal’s brand value for sellers to enroll.
2. What are the factors within the organization that may hinder your proposal?
• Alternet product on ecommerce

14. • Bike Washing Machine combines a stationary bicycle and washing machine, you can exercise while at the same time
simultaneously washing your clothes. When you ride this bike, the pedaling motion causes the drum of the washing
machine to rotate, at the same time, the superfluous electricity is generated which can be used to power the display
screen or stored for future use.
• The Worxcycle replaces the front wheel with a washing drum
• When ridden, the pedaling motion causes the drum to rotate, churning your clothes
inside like a traditional washer
• A generator inside the worxcycle also creates electricity which can be used to power the
display screen
• Riding the bike for 10 minutes would wash the clothes before the water needed
to be drained and refilled before another 10 minute cycle rinsed the clothes
• It can also run on electricity
• Benefits :
• Fitness
• Washing
• Time saving
• Electricity saving
• Great for rural India
• Great for working India
• Great for studying India
About product :Worxcycle

15. Segmentation, Targeting &
Positioning

16. Market Analysis
Target audience
• Average Price of Fitness Cycle is Rs. 7000 .
• Average Price of washing Machine is Rs. 8500 .
• International Gym chains are rapidly entering in Indian market.
• Most of Housewives and working India From middle Class don’t like to spend time on washing cloths.
• Finding the time to exercise when you've got heaps of housework - and laundry - piling up can be difficult, but this piece
of gym kit means you've got no excuse not to work up a sweat.
• Bike Washing Machine combines a stationary bicycle and washing machine, you can exercise while at the same time
simultaneously washing your clothes. When you ride this bike, the pedaling motion causes the drum of the washing
machine to rotate, at the same time, the superfluous electricity is generated which can be used to power the display
screen or stored for future use.
• Daily 10 mins of cycling.
• Enhance your mood
• Great For joints
• Burns Fat Faster
• Gets your hurt pumping
• Tones your Legs
• When they buy ? – The market buys product when technology is newly born or when they find their need for it.
• Why they buy?- The market buys to take ownership over technology and satisfy their desire.

17. Market Segmentation
•People in the age group of 15-55 years.
•People who like to wash cloths and do exercise at
same time.
• People who fall in middle class.
Demography
• Indian urban and rural population.Geography
• People who want to try new product or services.
• Fitness and Time conscious people .
Psychographic

18. Market Targeting
Who is /are target customer
Source: https://www.google.co.in/search?q=cycle+workout+middle+class
Class Group
• India is fast on its way to becoming a large and globally
important consumer economy.
• Half of the country’s population of 1.2 billion are now middle
class
• Above age pyramid India’s working Population in 2016, with
arrows around target age group.
• The initial market is too broad for focusing marketing strategy.
The key dominating market share will be experimenting with
micro targeting in specific areas until its clear who the first
movers with influence on peers.
Age Group
• Total 1.252 billion population 65.9 %
fall into the 15-60 age group, Among that
62% of people are buying on Ecommerce
Platforms.
• Most of people want to save time to their
work simultaneously
(Source :https://www.statista.com › Industries › Internet ›
Demographics & Us)

19. Market Positioning
Proposed brand positioning
• SNAPDEAL
• With over 18 million members, Snapdeal.com is the shopping destination for millions of internet users across the
country. Snapdeal features the Best Deals on products and services at unbeatable prices. The company
philosophy is very simple “Dil KI Deal”. Snapdeal features a wide range of products across categories like Mobiles,
Electronics, Fashion accessories, Apparel, Sports, Books; and services like Restaurants, Spas & Entertainment
amongst others. Snapdeal has positioned itself to
• People who love to get discount
• People who want to try new products and service
• Internet savvy users
• Snapdeal is currently positioned as best advertising and discount platform in the online Indian market and for
consumers it acts as a low price online market
• Worxcycle
• Worxcycle has design and capabilities so that it positions itself as electricity saver and simultaneously do exercise
while washing cloths.
• People who wants to peruse value for money.
• People want something new which make their life easier.

20. Market Positioning
Communication objectives
RAISE BRAND AWARENESS
There are billions of brands in the world which is trying to attain public’s attention and business. And thus it is difficult
to get our voice heard, especially since we are new brand trying to compete against the technology markets. Brand
awareness will be imparted to the target audience under a series of marketing strategies and channels which involves
impressive guest content, mass advertising , social media focus and referral incentives.
GAIN NEW CUSTOMERS With Monopoly market .
We always thrive to discover new markets and segments for our product through regress marketing campaign thereby
building a strong relationship with our existing customers and getting new customers on board. We also believe in word
of mouth of our existing customers to attract new markets and customers. Through valuable customer marketing we
will be able to tap new areas and segments.
More competition Less Competition
Less concentration More concentration
Perfect Competition Monopolistic Competition Monopoly

21. Substitute Competitors
• WashingMachine Manufacturers
• ExerciseCycleManufacturers
• Maidforwashingclothes
• Washhouse
Pricing
Worxcycle = Rs 7,800 (120$)
Average price of Washing Machine = Rs 8,500 (131$)
Average price of Exercise Bike = Rs 7,000 (108$)
Customer support-
Snapdeal’s brand name and great customer service experience
Softer attributes
Suppliers Reputation- stands for purity and honesty in its products
Trustworthiness- The word ‘true’ indicates genuineness while the
word ‘elements’ refers to the high-quality components of the
products.
Esteem- Together, the brand stands for best quality products, which
are ‘elemental’ to good health

22. Blue Ocean Strategy–
• This market space is still unidentified. Its surprising but its true, given the current level is need of new product in
market, I think this innovation will be succeed.
• There are compotators available in the market, but they are of very low capacity and they are supremely expensive.
The strategy canvas clearly depicts its superiority among its top competitors.
BLUE OCEAN
STRATEGY

23. Operations Plan

24. Operations Plans –
• The flow of operations is similar to any other purchase made on Snapdeal website. Customer can visit the
website or Snapdeal application in mobile or tablet. They can place the order and check out paying the bill
amount. In order to curtail any other retailer buying in bulk and reselling in their stores, A maximum of product
can be purchased per customer.
• In the decision of management, we can tie up with LG and Samsung centers across India to address service
related problems. Snap deal promises to deliver the goods in maximum of 7 days.
• Snap deal’s customer relationship management will work to safeguard and address all customer queries and
enable them with a problem and query free purchase.

25. Operations Plans –
Quality
Being a exclusive brand of Snapdeal, quality would be a prime importance. Expertise of artisan will decide the
quality of product. Snapdeal will conduct training sessions and workshops to impart knowledge about current
trends in industry and machine advancements. These measures will ensure quality products and relevant
products.
Responsiveness
Continuous feedback and engaging customers for suggestions would give a competitive advantage by continuous
improvements.

26. Financial Plan

27. Financial Plan –
Capex and Depreciation:
Year
Project Assumptions 0(F2017) 1 2 3 4 5
Annual Growth Rate 7.00%
Captital Expenditures & PP&E Information
Initial Investment (fixed Cost , $mil) 180.00
Future Investment (%of initial investment) 10.0%
Future Investment (Annual Growth) 10.7% 10.0% 9.3% 8.6%
PP&E liquidation Value 50.0% 50.0% 50.0% 50.0% 50.0% 50.0%
PP&E Life for depreciation (Year) 5.00 5 5 5 5 5
Year
Capital Expenditure Forecasts 0 1 2 3 4 5
Project CapEx 180.0 18.0 19.9 21.9 23.9 26.0
Accumulated CapEx 180.0 198.0 217.9 239.8 263.8 289.8
Depriciation 36 39.6 43.59 47.97 52.75
Book Value of CapEx 69.9
Accumulated
CapEx-
Accumulated
Depreciation
Liquidation Value (LV) 34.9
book value of
CapEx *
Liquidation %
After tax proceeds from assets sales 41.9
LV-(LV-
Book)*Tax
rate
Net Project CapEx 180.0 18.0 19.9 21.9 23.9 -15.9

28. Financial Plan –
Working Capital:
Year
Project Assumptions 0(F2017) 1 2 3 4 5
Working Capital Assumptions
Cash Requirements
% of SG&A 1.00% 1% 1% 1% 1% 1%
% R&D Expenditure 10.00% 10% 10% 10% 10% 10%
Inventory
Inventory Days (365*Inventory / COGS) 15.00 15.00 15.00 15.00 15.00 15.00
Excess Inventory Liquidation value (% of inventory cost) 25%
Account Receivable
Days recivable (365 *account receivalble / Sales) 10.00 10.00 10.00 10.00 10.00 10.00
Account Payable
Days Payable (365 *accounts payable / COGS) 20.00 20.00 20.00 20.00 20.00 20.00
Year
Working Capital Forecast 0 1 2 3 4 5
Cash Requirements - SG&A Funding 0.10 0.10 0.10 0.11 0.11
Cash Requirements - R&D Funding 2.0 2.0 2.0 2.0 2.0
Cash 2.1 2.1 2.1 2.1 2.1
Ineventory 3.3 4.5 6.4 8.9 13.0
inventory*co
gs/365
Account Receivable 7.4 10.0 14.3 19.7 28.8
account
receivable*sa
les/365
Account Payable 4.4 6.0 8.6 11.8 17.3
accounts
payable*cogs
/365
Net Working Capital 0 8.4 10.6 14.2 18.8 26.6
Recovered NWC at end of Project 3.2
25%inventor
y liquidation
rate
Change in NWC 8.4 2.2 3.6 4.6 -35.72

29. Financial Plan –
Income Statement (Assumption) The initial price for Worxcycle is 120$ = 7800 Rupees
Year
Project Assumptions 0(F2017) 1 2 3 4 5
Market Growth Rate 7%
Revenue Forecasts
Market Forecasts
Initial Market Size (units,million) 15.00
Market Growth Rate 20% 21% 22.9% 24.5%
Market Size (units,million) ESTIMATE 15.0 18.0 21.9 26.9 33.4
(Actual Market Size , Units Mil) 1.0 2.0 3.0 4.0 5.0
Market Share
Initial Market Share 15.00%
Market Share Annual Growth Rate 16.05% 17.17% 18.38% 19.66%
Market Share 2.25 2.889 3.75275322 4.934902758 6.57407612
Pricing Strategy
Initial Unit Price ($/Unit) 120.00
Annual Price Increases ($/Unit) 5% 10% 5% 10%
Unit Price ($/unit) 120.00 126 138.6 145.53 160.083

30. Financial Plan –
Income Statement (Continued)
Year
Operating Expenses 0(F2017) 1 2 3 4 5
COGS
COGS/Sales(%Sales) 30.00% 30% 30% 30% 30% 30%
SG&A
1% of 2017 Company SG&A ($mil) 10.00
SG&A Expense Growth Rate 2.00% 2.00% 2.00% 2.00%
R&D
R&D Upfront($mil) 150.00
r&D for Versioning ($mil) 20.00 20.00 20.00 20.00 20.00
Taxes
Tax Rate (2017 Total Taxes/Pre-tax Inc) 30.00% 30% 30% 30% 30% 30%
Year
Incremental Earning Forecasts 0(F2017) 1 2 3 4 5
Sales 270 364.0 520.1 718.2 1052.4
COGS 81 109.2 156.0 215.5 315.7
Gross Profit 0 189 254.8 364.1 502.7 736.7
SG&A 10.00 10.2 10.4 10.6 10.8
R&D 150.00 20.00 20.00 20.00 20.00 20.00
EBITDA -150.0 159.0 224.6 333.7 472.1 705.9
Depreciation 36.00 39.60 43.59 47.97 52.75
EBIT -150.0 123.0 185.0 290.1 424.1 653.1
Taxes 0 36.9 55.50294 87.03087522 127.2433295 195.9
NOPAT -150.0 86.1 129.5 203.1 296.9 457.2

31. Financial Plan –
Free cash flow Forecasts and Valuation of Business:
Year
Free Cash Flow Forecast 0(F2017) 1 2 3 4 5
NOPAT (Unlevered Net Income, EBIAT) -150.00 86.10 129.51 203.07 296.90 457.17
Depreciation 36.00 39.60 43.59 47.97 52.75
Capital Expenditure 180.00 18.00 19.93 21.91 23.94 -15.92
Changes in NWC 8.39 2.19 3.64 4.61 -35.72
Free Cash Flows -330.00 95.71 146.99 221.11 316.32 561.56
Free Cash Flows *
Cost Of Capital 10%
Year
Net Present Value 0(F2017) 1 2 3 4 5
Free Cash Flow -330.0 95.7 147.0 221.1 316.3 561.6
Discount Factor (Discount Rate 10%) 1.0 0.9 0.8 0.8 0.7 0.6
PV of Free Cash Flow -330.0 87.0 121.5 166.1 216.0 348.7
NPV 609.3

32. Integration & Evaluation

33. Timetable of Activities
A schedule or a timetable, as a basic time management tool, consists of a list of times at which possible tasks, events, or actions
are intended to take place, or of a sequences of event in the chronological order in which such things are intended to take place.
The process of creating a schedule - deciding how to order these tasks and how to commit resources between the variety of
possible tasks

34. Evaluation
Success Scenario
Success scenarios:
The product may be a hit when many customers buy as per the demand forecast and the budget becomes actual
in terms of finance. The budget of finance should become close to actual, moreover success will be established when it
becomes favorable in terms of Cost accounting.
• Success through profits which eventually leads to future investment in expanding industries and creating foundation across
the globe
• Exploring a positive trend in market in theupcoming years at a growing rate of 12 %
Measurement Criteria:
1.Reliablity: The product becomes reliable and there is no defect in terms of user’s expectations.
2.Feedback: Survey must be used to gather data of the success of the product.
3.Market: The Market forces in terms of parity and differentiation of the product, unlike competitors. As our product is new
invention.
Data Processing:
Data analytics and analysis of such data as to be used to ascertain the customer’s behavioral aspects in terms to
using the product. How likely the customers recommends the product to others need to be known for the success of the
product.

35. Evaluation
Failure Scenario
Failure Scenarios:
• When Snapdeal rolls out Worxcycle , it is great strategy of Snap deal in attacking its direct online competitor Amazon ,
washing machine & exercise cycle sellers . There’s a huge chance that competitors brings up a strategy to defend by
promotional offers like discounts, buy one get one free. It may also copy the idea and invest more in R&D to create a new
innovation in the field.
• There is a chance of failure when Snap deal fails to deliver the product on time and also the damage in transit would affect
the product’s sale. Snap deal must take much care towards channel of distribution and safeguard the product.
• Traditional people may not be convinced and continue to follow old ideas of washing cloths and exercise cycle.
• Working with a small team can lead to the misconception that these people are going to stick with you forever. If those
workers are especially integral to your business or especially close to you, that feeling only intensifies. Then, when one of
your star employees or co-founders leaves, you suddenly feel that the entire company is failing
• Work on different marketing strategies to gain audience, Find out obstacle within the company by conducting internal
surveys and solve them.

36. Thank You