MARKET STUDY FOR ENTERNING INTO A NEW FOOD PRODUCT LINE DEVELOPMENT PHASE-BAMBOO SHOOTS

Abstract

Conducting a feasibility study need not be difficult or expensive, but the most important aspects should all be taken into account to ensure that potential problems are addressed. In this report, the following questions that can be answered by a feasibility study are addressed: · is there a demand for the produce? (Find out the characteristics required of the product and the size and value of the market) · who else is producing similar products? (Determine the number and type of competitors) · what is needed to make the product? (Find the availability and cost of staff, equipment, services, raw materials, ingredients and packaging) · what is the cost of producing a product? (Calculate the capital costs of getting started and the operating costs of production) · what is the likely profit? (Calculate the difference between the expected income from sales to an estimated share of the market and the costs of production) Each of these aspects should be looked at in turn. When all the information has been gathered and analysed, it would be possible to make a decision on whether the proposed investment in the business is worthwhile or whether the producer's money could be better spent doing something else. The same considerations should be taken into account when an existing entrepreneur wishes to diversify production or make a new product. The advantages of writing down the results of the feasibility study are as follows: the findings can be set out in a clear and logical way, so that potential lenders can understand the business and its likely risks/advantages. the document helps the entrepreneur to clarify and focus his/her ideas. it is reference material that can be used to plan long term development of the business. the plan can be regularly consulted and updated as a guide to the business development. mistakes can be made on paper rather than in the operation of the business. when the plan shows that a successful business is possible, it makes the entrepreneur feel more confident about success. it helps the entrepreneur to decide how much money is needed and if properly prepared, it gives the loan agency confidence that their money will be repaid. Most lenders have little understanding of fruit and vegetable processing and the entrepreneur should therefore write the business plan in a simple way, avoiding jargon and technical language as much as possible. If lenders can understand what is involved in the business, they are more likely to approve a loan. Feasibility of Bamboo Shoots vi It is important to include as much detail as possible and if necessary do thorough research first. It is also important to look outwards from the business to judge what competitors will do and how the business will develop to become sustainable. It is also important to remember that the business plan is a working document that should be used as a framework to guide the development of a business. To do this it should be regularly updated. However, it often happens that an entrepreneur pays an adviser or consultant to prepare a business plan but then does not understand the contents, or having read it once, puts it away on a shelf never to be seen again. In the following parts of this report, the above aspects are described in a systematic way, as should be done in a feasibility study, starting with 'The Market'. Overview of Bamboo Bamboo is endowed with several features such as fast growth, high total biomass production, low input costs and a capacity to provide yield in 4-5 years. It can provide steady annual returns for over 30 years and has the potential to be the raw material for a variety of industries. It is emerging to be a viable crop. In India, bamboo, which is traditionally considered the `poor man's wood', and labelled as `green gold' is being considered a major export item by the centre for the global market, valued at about Rs 50,000 crore. The annual turnover of the bamboo sector in the country is estimated to be around Rs 2,500 crore. Bamboo cultivation can also play a major role in stabilisation of the environmental problems. Deforestation, followed by increased carbon dioxide emission, is one of the major concerns of environmentalists. The cultivation of bamboo as a wood substitute helps to offset depletion of the rain forest. Its rapid growth ensures an effective reconstruction of damaged eco systems as bamboo generates 30 per cent more oxygen than other trees.