Strategic Business Plan - Organic Agriculture Sector in India
Author Note
This business plan is prepared for International Business Strategy
Abstract
The proposed global business plan – Go Organic is based on production and marketing of organic agriculture inputs in the middle Gujarat region of India. Here the selected entry mode is partnership with a local organization of Gujarat – SRISTI Innovations. In the proposed global business plan, the basic activities like procurement, production, marketing, human resourcing, financing etc are planned thoroughly which in turn favors organic agricultural input business in the market of middle Gujarat. The favorable political, economical, socio – cultural and technological factors are also observed in favor of the proposed business with the application of PEST-C analysis and SMART technique. The evaluation of proposed business with Porter’s five force model and Value chain method also shows favorable future for Go Organic. Availability of cheap labor and cheap row material are also observed plus points in the mentioned business plan. The different challenges pertaining to marketing, production, human resource management, production, advertising etc are also showing the profitable future and duly support the proposed global business plan. The geographical and economical conditions of Gujarat are also positive for the initiated business plan. Along with the proposed business the future of export is also bright for organic agriculture input which is duly supported by government also. The product pricing, production planning, accounting and financial evaluation ultimately favors the global business of organic agricultural inputs in Gujarat state of India. The financial data pertaining to the profitability also show clear profit in future for the proposed global business plan.
Keywords: Global, Organic, PEST-C, SMART, Business, Plan
Table of Contents
INTRODUCTION 5
OBJECTIVE AND SCOPE OF PROPOSED BUSINESS PLAN 7
PESTEL ANALYSIS 8
DRIVERS OF GLOBALIZATION 9
SELECTED STRATEGIC ENTRY MODE 10
BUSINESS DESCRIPTION 11
VISION 11
EFFECT OF ECONOMICAL AND GEOGRAPHICAL INFLUENCES 12
POTENTIAL RISKS IN PROPOSED GLOBAL BUSINESS 12
INFLUENCE OF COMPETITORS ON PROPOSED GLOBAL BUSINESS 13
INFLUENCE OF INTERNET ON PROPOSED BUSINESS PLAN 13
MARKETING ISSUES RELATED WITH GLOBAL VENTURE 14
MARKET ANALYSIS OF PROPOSED GLOBAL BUSINESS 15
SWOT ANALYSIS 15
PORTER’S FIVE FORCE ANALYSIS 15
VALUE CHAIN ANALYSIS FOR THE PROPOSED BUSINESS PLAN 16
PRODUCT PROFILE 18
OVERVIEW OF MANAGEMENT AND ORGANIZATION 19
HUMAN RESOURCE PLANNING 21
FINANCE FEASIBILITY AND FORECASTS 21
EXIT STRATEGY 22
RECOMMENDATIONS 23
CONCLUSION 24
REFERENCES 25
FOOTNOTES 29
TABLES 30
TABLE: 1 COUNTRY WISE KEY SUCCESS FACTORS ANALYSIS 30
TABLE: 2 SIMPLE MULTI ATTRIBUTE RATING TECHNIQUE: (SMART) 31
TABLE: 3 COMPETITOR ANALYSES 32
TABLE: 4 CONSUMPTION OF PESTICIDES IN VARIOUS STATES DURING YEARS 2005-06 TO 2009 – 10 33
TABLE: 5 COSTING FOR 1000 LITERS OF ORGANIC PESTICIDES 34
FIGURE: 1 ORGANIZATIONAL STRUCTURE FOR BUSINESS PLAN 35
FIGURE: 2 PORTER’S FIVE FORCE INDUSTRY ANALYSIS 36
FIGURE: 3 SWOT ANALYSIS OF THE BUSINESS PLAN 37
FIGURE: 4 DISTRIBUTION NETWORKS 38
INTRODUCTION
Why Organic Farming?
Scientific agricultural research has given lots of gifts to the society and farming communities all over the world but indiscriminate use of harmful inorganic agro chemicals has resulted in unsustainable agriculture and higher cost of agricultural production. Organic farming is the best possible solution of this problem which can be defined as a kind of farming that prohibits the use of synthetic chemicals, maintains the natural relation and balance between fauna, flora and soil (Forge, 2001). Being sustainable agriculture, organic farming releases lesser amount of pollutant, consume less energy per area covered, improves fertility and physical condition of soil and produces less green houses gases than conventional farming. Economically it is 30 % to 50% costly to manage organic farming as compare to conventional one but in the last, consumers are ready to pay 10% to 50% for organic farm produces so the higher cost of production get adjusted at this point (Forge, 2001).
What is the proposed business venture?
Go Organic is a professional concept which supports organic farming over the conventional one. In the proposed venture, production of some of the inputs necessary for organic farming is planned to produce for market establishment. Here based on the previous experience of promoter of producing organic inputs the production of herbal pesticides is planned.
Why to choose India?
Based on the awareness about organic farming and products as well as other business related favorable parameters, India is selected as a targeted country for the proposed business. As per the data of 2011 out of total 1084266.01 hectare agricultural land, 0.6% land is under organic farming (Dynamic Data Table with Key Data from the FiBL - IFOAM Survey, 2013). In India, the National Project on Organic Farming is a prime important project in 10th five year plan which was provided 570.4 million rupees grant and will continue for 11th five year plan with 1010 million rupees grant (National Project on Organic Farming, 1999). There are many government agencies, farmers groups and NGOs active in India to promote organic farming and apart from this there are approximately 12000 organic certified farms under 210 projects which contribute 200,000 hectare land under organic cultivation. There are also lots of chances of organic food export market in India. (Orgnic Agriculture in India, n.d.).
OBJECTIVE AND SCOPE OF PROPOSED BUSINESS PLAN
Objective:
This business plan covers all issues as well as requirement to setting up a venture for production and marketing of organic agriculture inputs in India. The objective of this business plan is to serve any future aspirants who want to start organic inputs business in India. More solid objectives are as under:
To study the feasibility for setting up an organic agriculture input manufacturing unit in India.
Study of evaluation of the bare minimum requirements like machinery, row material required and place to implement the proposed plan.
Evaluation of marketing related aspects, pricing decision, advertising, sales promotion, distribution network, sales force design etc.
Managing human capital for the initial stage of starting the business, as managing the human resources in the initial time is a very crucial job.
Production planning and development plan for future growth.
Efficient planning of work force for maintaining profitability and sustainability.
Scope:
The proposed study would be helpful to know the market potential of the organic agriculture input for Indian market.
The proposed business plan will be helpful to identify necessary improvement for future expansion.
The study will also guide to set the initial price of the organic agricultural products in Indian condition.
The proposed plan will be helpful for other future aspirants to set up low cost organic inputs business.
PESTEL ANALYSIS OF INDIA (EXTERNAL FACTORS - OPPORTUNITIES AND THREATS) FOR THE PROPOSED BUSINESS PLAN
India
Political: India has two types of government, central government and state government. Due to combined help of central and state government to agriculture, agricultural community has produced 244.78 million tons of food grain in year 2011 (About Department of Agriculture and Cooperation, 2013). To start a business in India, legally it takes 57 to 61 days and expenditure of total Rupees 36920 to 39170 (US$ 595 to US $632) (Doing Business: India, 2013).
Economical: In the year 2012 the GDP growth rate in India was noted 3.2% with total GDP of $ 1.825 trillion (US$ 3900 per capita) (The World Fact Book: India, 2013). In total GDP, agriculture has contributed 17.4% share. Out of total labor force of India 53 % are employed in agriculture sector (The World Fact Book: India, 2013). Approximately 75 % people in India are associated with occupation of agriculture (Modern Agriculture in India, 2013). In the year 2011, total numbers of organic agriculture producers in India were noted by 547591.
Socio – Cultural: India has high collectivist, risk aversive and long term orientation based as well as high power distance oriented culture (The Hofstede Centre - India). India is doing progress in case of use of advanced technology in agriculture.
Technological: Especially in case advancement of technology in agriculture, the use of improved farm machinery and agricultural biotechnology has increased quantity and quality of farm produce in India (Modern Agriculture in India, 2013).
ANALYSIS ON THE BASIS OF THE TECHNIQUES USED SMART TECHNIQUE
To start a business in selected countries, the SMART model is the best tool to evaluate the most favorable country on the basis of the selected factors. SMART model provides freedom to the analyzer to incorporate the critical factors in the analysis and gives comparative results with other potential options so it is the best model. The result of attributes analyzed in table: 2, clearly shows that India is the most favorable country out of five host countries, to start the proposed business of organic agricultural input.
In table: 2 the selected key success factors are very much in relevance with the success of proposed business in the selected host countries. The selected factors like contribution of agriculture in total GDP, total labor force employed in agriculture sector, per capita GDP, total time and cost of starting a new business and the total numbers of organic agriculture producer are very much specific and are in tune with the proposed profession.
From the table: 1, we can clearly see that the agriculture contributes 17.4% to total GDP of India and provides employment to 53% labor force. So it is very clear that in India the future of agriculture is very bright because of more importance of agriculture in national GDP. The more labor engaged in the agriculture industry also indicates less vulnerability to failure in future. Apart from this the total numbers of organic agriculture producers 547591 are very significant among all the countries selected so it is a very much positive sign of future business.
Conclusion: From the overview of result and discussion based on PEST- C analysis and application of SMART technique, it is very clear that India is the most favorable country than the other host countries to do business of organic agricultural inputs. The high labor force employment in agriculture sector and high GDP contribution of agriculture will be supportive factor for the sustainable agriculture inputs business in India. Apart from this other favorable factors like government support and technological advancement in India will also be supportive for better future of agricultural inputs business in India.
DRIVERS OF GLOBALIZATION
Here in case of establishing organic agricultural input business in India, three major drivers of globalization play an important role for foreign investors. Let us check those drivers in detail.
Political Drivers:
In India political factor is very much in favor of organic agriculture and promotes such initiative on primary basis in their national agenda . With different national schemes like National Horticulture Mission (NHM), National Project on Organic Farming (NPOF), Rastriya Krishi Vikas Yogna (RKVY), Network Project on Organic Farming of Indian Council of Agricultural Research and Horticultural Mission for North East and Himalayan States (HMNEH), Indian government supports organic farming in India . By these kind of scheme central government of India provides support to the states to adopt and develop organic farming sector. So there is bright future of organic agriculture and also of organic agricultural inputs.
Market Drivers:
The market potential of India is also very high as India ranks among top ten countries for having organic farming and certification agencies. In last year 2012 – 13 the total area under organic certification was noted by 5.21 million hectare . So we can consider India as a promising place for organic agriculture input market.
Cost Drivers: In case of cost of producing organic inputs the raw material is abundant in nature of India so there no constraint of cost for procurement. Apart from this the labor is also cheaply available so the cost factor can be considered as favorable aspect for India.
Competitive Drivers:
There huge potential of organic export market in India. In the year 2012-13, 135 organic agriculture products in volume of 165262 MT including 4985 MT organic textile was exported from India, which realized US$ 374 million . These organic products are exported to EU, Canada, US, Switzerland, South Africa and South East Asian countries. The major agricultural products included in this are Soybean (41%), Cane Sugar (26%), Basmati Rice (5%), Cereals and Millets (4%), Tea (2%), Dry Fruits (1%) and Spices (1%) .
SELECTED STRATEGIC ENTRY MODE TO ENTER IN THE BUSINESS OF ORGANIC AGRICULTURE INPUTS IN INDIA
Acquiring subsidiary:
Here in case of entry mode for establishing the proposed business in India, the very efficient way is acquiring the existing unit which is running in lose or who is willing to sale off their unit. So we can acquire the existing subsidiary of any organic agro input unit.
Direct Entry/Investment mode:
Direct investment in the market is also an option available as an entry mode to enter in the market of India. There are different risk factors associated with direct entry or investment like lack of market trend, lack of information about procurement, marketing, production etc.
Franchising:
Franchising is also an option for entry in India but the total control will be there in the hand of the franchiser and there is no chance of developing the company’s own brand.
Partnership or Joint Venture:
Partnership is also a best option if there is any firm in same kind of business and willing to expand their business so we can join them as a partner. Here considering the situation, for the proposed plan of business the option of partnership with SRISTI Innovations1 will be best mode for entry in Indian market because the partner will have readymade market available with him.
BUSINESS DESCRIPTION
Go Organic is a B2C kind of business that deals in supply of organic agricultural inputs. By creating joint venture or partnership with potential partner, Go Organic will start procurement, production and marketing of organic agricultural inputs. After establishing in Gujarat, Go Organic is intended to expand in to other states of India. With deep rooting in the market of India, Go Organic willing to indulge in the business of exporting of organic agriculture products. The proposed future planning is based on following observed market trends,
Indian organic market is gaining importance in the field of organic agricultural production.
India has achieved considerable status in the field of organic agro food export.
Organic farm producers are increasing day by day and are highest in number.
There is increased awareness of organic food in the Indian people.
Traditional agriculture is converting at faster rate in India.
Vision
By providing environment friendly innocent organic agro inputs we want to serve farming community, society and Mother Nature which ultimately provides safer and sustainable agriculture as well as promising future. In the next decade we want to develop a large range of organic farming input/product which ultimately replaces the harmful chemical counterparts.
EFFECT OF ECONOMICAL AND GEOGRAPHICAL INFLUENCES
Economical Influences:
Economically Gujarat is one of a very rich state among all states of India. As per 2011 data, Gujarat stands fifth with GDP of 5131,730 million rupees . The farmers of Gujarat are also economically strong and technology driven so the selected area as a starting point is a very best start up for the proposed venture. Apart from this, Gujarat has better infrastructure facility and technological advancement for development of agriculture sector.
Geographical Influences:
Geographically Gujarat is situated at very Western part of India with tropical agro-climatic atmosphere. Gujarat has high fertile soil and good irrigation facilities which is a strong boost for better future for Go Organic to do the business of organic agricultural inputs. Apart this Gujarat has 1600 kilometer long sea shore and as per the record of 2011-12 total cargo handle by ports of Gujarat was noted 259 million tonnes . So if in future, the proposed business plans to import or export the organic agricultural goods then there are more chances of development.
POTENTIAL RISKS IN PROPOSED GLOBAL BUSINESS
Go Organic estimates the following kind of risk to their proposed business plan:
Financial Risk: Observing the ongoing trend in the market the following kind of risks are detected:
Too many players can enter in the emerging market and can spoil the pricing policy.
Revenue fluctuation because market depending totally on weather condition.
Recovery of revenue may fluctuate as the credit sale is huge in Indian agriculture market.
Marketing Risk:
Some time farmers go for the immediate effective remedy and may go for the inorganic input too.
In some area of Gujarat as well as India, farming is dependent on rainfall only so in such area the set back may occur.
Operational Risk:
Sometime row material may not be available as most of the row materials are nature based so shortage may occur.
If there is shortage of material and if there is high demand in that time then it could be an adverse situation.
INFLUENCE OF COMPETITORS ON PROPOSED GLOBAL BUSINESS
Based on the data presented in table: 4, five potential competitors are identified and their analysis is as under:
Darshan Biotech: It is an organization which is of low threat, focused on organic agro market, established with medium capitalization and has low reliability of products.
MaxeeMa Biotech: It is kind of high threat for Go Organic with organic agro market focus, medium capitalization and medium reliability.
Dristi Biotech Pvt. Ltd.: This is a potential threat, with organic agro market focus which possesses medium capitalization and medium reliability.
Scorpion Biotech Co.: This is a considerable threat, with organic agro market focus that possesses medium capitalization and medium reliability.
Sikko Industries Ltd.: This is a prime threat, focused in organic agro market and possesses high capitalization as well as high reliability.
There could be potential competition as robust competitors are present in the market, so strong marketing policy and strong product profile is necessary.
INFLUENCE OF INTERNET ON PROPOSED BUSINESS PLAN
Internet will be a best medium of communication between the members of organization. On internet we can update our dealers with our progress and communicate in a better way for marketing point of view. Go Organic can serve better their dealer network by means of internet as the two way communication between the organization’s staff and dealer will be faster and financial dealing will also be effective online. Because of internet even being in remote area staff can communicate easily with each other as marketing staff can update the marketing activities, production staff can update the production status and by this way organization can be handled without geographical barriers.
Internet will serve as best medium of communication between Go Organic and dealers as well as progressive farmers. By the means website design of Internet we can advertise as well as provide thorough information of our business to the interested counterparts. The internet will be a best medium to serve our customers as they can convey their need as well problems online and we can mitigate them at the soonest. Apart from this we can update ourselves with the published data of organic agricultural, available online and can plan accordingly. Today the progressive farmers are using internet in large proportion and after proper survey they select the accurate product for their farm utilization. So internet will be a kind of boon for our business for better growth and promotion.
MARKETING ISSUES RELATED WITH GLOBAL VENTURE
The selected marketing issues in case of propose global venture could be as under,
Language Barrier: Language barrier can be a major issue in the marketing but it can be overcome with the help of SRISTI Innovations. Being as a robust business partner SRISTI Innovations will help in product literature development, advertising, communication with dealers, employees and farmers.
Lack of knowledge of market trend: In this case the propose partner – SRISTI Innovation will be very much helpful to assess the prevailing market trends according to the ongoing business.
Deciding the marketing plan: As per the strategy selected, the surrounding districts will be approached first with one on one dealers contact. Apart from this method demonstration and farmers meeting will be the proposed future marketing plan.
Allocation of marketing staff in different geographical areas: As per the potentiality of the business observed in certain are more focused efforts will be delivered to the target market.
Market Acceptance of Products: To enter in the market with the proposed market acceptance of the product by market the role of SRISTI Innovations will be prime because with the ongoing trends, mind setup of customers and the products will be designed accordingly.
Future Marketing Expansion: Based on past and present performance of product, market trends and growth of organic market the future expansion will be decided.
MARKET ANALYSIS OF PROPOSED GLOBAL BUSINESS
SWOT Analysis: Evaluation of Strength, Weaknesses, Opportunities and Threats (graphically presented in figure: 3)
Strength: In partnership with SRISTI Innovations, Go Organic can harvest continuous management support from experts; can have support of thorough knowledge of product preparation, efficient organic product base and efficient infrastructure for production.
Weakness: Initial low budget can be a potential weakness. Apart from this low product range, untapped market area, lack of brand positioning and erratic demand of product can be a probable weakness.
Opportunities: Growing market, farmer’s movement towards organic farming, government support, high demand of varieties of product, low initial investment, big market and already unsatisfied demand of the market will be great opportunities for Go Organic.
Threats: The potential threats identified are high inorganic inputs using farmer segment, fierce competition, and fake product available in the market which diffuse the image of authentic organic products and slow effect of organic products.
PORTER’S FIVE FORCE MODEL FOR GLOBAL INDUSTRY ANALYSIS
(graphically presented in figure: 2)
Threat of New Entrants: There are moderate chances of new entrants as the proven and authentic technologies are limited in organic agriculture inputs. Even though low entry barrier, low initial capital investment and liberal government policies can attract potential new aspirants.
Threat of Substitute Products: Already present inorganic pesticides are a major threat and a big segment of farmers depending on inorganic pesticides is also a big threat for the proposed business. If timely products are not provided then there are more chances of farmer purchasing the inorganic agriculture inputs.
Bargaining Power of Suppliers: In this case bargaining power of suppliers is very less as the row material needed is abundantly available in the nature so we can avoid bargaining from the suppliers.
Bargaining Power of Customers: Here bargaining power of customers is very high because they want quick results and they can easily move on the other counterpart chemical pesticides easily. So Go Organic will have deal in such a manner that it can satisfy the customers with quick effective organic inputs.
Internal Rivalry: Already present rivals can retaliate with reduced price and can diffuse the market. Fierce competition can be faced to capture the limited market share for organic agriculture input demand. Apart from there is high exit barrier present as the larger part of market provides products on credit so recovery may get delayed or lost if any organization gets exit from the market.
VALUE CHAIN ANALYSIS FOR THE PROPOSED BUSINESS PLAN
Primary activities
Inbound logistics:
Includes the receiving the raw materials which are available naturally at moderate price and fresh in the quality as per the required standard.
No need to store all the raw material, as few required to store, which are dry in nature.
No need to deploy the high technical staff to handle the raw materials.
Inventory control is too much necessary to manage the production as well as the supply of the finished products.
Operations:
Capacity of the production is mainly depended on the order placed and futuristic demand which can be fulfilling without any difficulties.
Production schedule is also dependent on the order placed and can be managed efficiently with the available facilities.
No need of the automation required in the production of the organic/herbal inputs as compare to the chemical one.
Labor force can be efficient deployed and their utilization is too easy.
We can improve the quality of the product by continuous value addition in it.
Outbound logistics:
Packing of the product is not so tedious job to handle, so can be handled easily.
Need to require the normal ware housing facilities to store the finished products and the other equipments.
Inventory management is an essential tool to manage the supply as per the placed orders and will be easily be managed by the available manpower.
Distribution of the product will be done by the local transport like mini truck or logistic services.
Marketing and Sales:
Sales forecasting will be depend mainly on the existing strength of the organic farmers community and will be efficiently forecasted from the next year, after the sale of the first lot marketed. The sales force will be the personnel associated in establishment of the company.
Pricing decision will be dependent on the prevailing price of the contemporary organic/herbal agro inputs.
Marketing strategy would be as per the situation and the awareness prevailing in certain farming area. The budget for the sales force will be decided as per the strategy of the marketing been decided by the upcoming demand.
Sales force management will be as per the budget available and the decision of the promoters based on the market demand and other conditions applied.
Services
The after sales services will be mainly dependent on the prevailing situation of the incurred sales as well as the performance of the organic/herbal product provided.
The special visits will be made to customers to enhance the awareness as well as to promote the products.
Secondary activities
Procurement:
To procure the row materials, naturally available vegetative foliage as well as sea algae will be collected after getting legal permission from the local government and the rest of the inputs will be purchased from the local vendors. Besides this the high cost equipments or infrastructure required initially will be tried to manage on the rental basis like boiling vessels, the office building or the laboratory services.
Business services which could be out sourced will be out sourced as and when required to cut the cost.
Vendor/supplier relation is an important aspect to manage the production process efficiently.
Technological Development:
The product to be launched is previously tested on different location of the Gujarat, India and the promising results were obtained. Further value addition will be done as per the performance in the market and the demand of the farmers.
After the success of the proposed products the chain of new products is in pipe line to be launched in the market.
Procedures and know how are well established with the promoters.
The quality parameters are pre decided with the expert associated with the product development and research activities.
Human Resource Management:
Production line staffing will be as per the order placed and the market demand faced by the promoters.
Recruiting and training activities of the employees will also be performed for marketing, production and procurement etc.
Wages and benefits of the employees will be managed as per the government rules applicable.
Firm Infrastructure:
Strategy and decision making will be as per the condition applied.
Finance and account services will be out sourced primarily for following cost cutting approach.
Government relations need to be polished timely to remain updated with new agricultural policies.
Public relations are also of equal importance to expand the business further and to manage the business profitably.
Product Profile
Current Products: Current product will be an organic pesticide which will control sucking pests like White fly, Thrips, Aphids and Jessids. It will be available in one liter packing.
Competitive advantage: The competitive advantage of this product is about its broad spectrum effect as it covers White fly, Thrips, Aphids and Jessids, where as other inorganic pesticides which covers only on or maximum two pests so in that case our product covers major sucking pest of agriculture.
Further product improvement and development plan: Based on the performance of presently targeted product we can plan future improvement in our existing as well as in line products. As per the opinion of farmers, Go Organic will improve the products accordingly.
Technology: In development of product improved technology is being used where as in production no high technology is being used.
Overview of Management and Organization
Organization: Organization is made up of three distinct divisions’ viz. procurement, production and marketing. The organization is a partnership firm so partners will decide the planning of production and other activities of business.
Production: Production will take place as per the demand generation of product. Here initially the production will be erratic because of the uneven market demand and initial stage of brand positioning.
Marketing: Marketing will be done in the central districts of Gujarat, surrounding the Gandhinagar district and gradually the coverage will increase based on product demand.
Research and Development: Research and Development activity will be carried out by SRISTI Innovations and they will develop new product as per market demand.
Finance: Finance will be incurred by both partners 50 – 50% and accordingly the profit will be shared among each other.
MARKETING ASPECTS
Pricing Strategies:
Here as shown in table: 5, cost of producing 1000 liters is 40000 rupees so the cost of one liter will be,
40000/1000 = Rupees 40/liter.
Considering other competitor’s same type of product’s price we will keep dealer price Rupees 160/- per liter and maximum retail price rupees 304 per liter for our product. Due to new product and for brand positioning we need to give higher margin to dealers. So dealer can get encouraged and can sale our products enthusiastically. Here we are dealing directly to dealer so the distributor channel will be removed for initial stage and we can pass on more commission to the dealers.
Production Decision:
We have capacity of producing 120000 liters per year but initially we will operate the unit at 10% capacity for the first year and projected plan is of increasing 10% every year. So we can get the market trend and accordingly we can plan the production process. Here based on the past experience of promoter this decision is taken. Initially we will target the districts of middle Gujarat and then expand gradually.
Promotion and Advertising
Initially we can set hoardings of our products at certain point from where maximum numbers of farmers are passing or we can choose place of that kind like Agriculture Produce Marketing Committee (APMC) or bus stand. Marketing and Distribution Network: (graphically presented in figure: 4)
We have set only one stage of distribution initially so the adjoining districts dealers will be satisfied. As soon as business develops we can approach the remotely located distributors also. We can have service of distributor after brand positioning of our product. Then we can pass some margin to distributors and some to dealers. The schematic diagram of initial distribution is shown in the following figure.
Human Resource Planning
There are main three areas, procurement, production and marketing - identified for recruiting human resources.
For marketing activity: Total marketing staff required: 4
Four technical people with basic knowledge of organic input are required. Here the technical staff being graduate or post graduate with agricultural science will be very much costly so BRS - Bachelor of Rural Science candidate will be more suitable as those expectations are lower and are available to be hired on less salary too.
For production activity: Total production staff required: 1 + 2 people + (12 people for packaging – as and when required)
One technical person with thorough knowledge of production process and two non technical people for labor work. Here the technical person should be more preferable who can handle quality control, able to train other people and manage packaging process. At the time of packaging twelve people will be required as and when need arise.
For procurement activity: Total procurement staff required: 1 person
The procurement person should be able to identify the vegetation required for production of certain type of organic pesticide. So the person with deep knowledge of locally available vegetation will be more suitable.
Finance Feasibility and Forecasts • Cash Budget and Working Capital: Here the working capital will be in form of loan from nationalized bank and 50% equal part of loan will be invested by the partners
• Investment Requirements: To start the proposed business around one million rupees required initially.
• Sources of Funds/Leveraging of Funds: The business plan targets around one million rupees loan from bank and around 5 lacs (half million) will be invested from their savings.
• Use of Funds: Fund will be utilized for procurement of raw materials, purchase of bottles, pamphlets, stickers and other required materials necessary to produce the product.
• Pro Forma Financial Statements: Here the financial statements like Cash flow, profit and loss account and Balance sheet shows considerable future profit from the proposed business.
• Break-Even Analysis: Here break even is achieved at the 667 units sold.
Exit Strategy
In case the proposed business plan fails due to certain reasons then the exit strategies are as under:
Going for public offering: As soon as the business grows the future agenda is to go for public which in turn will increase the fund as well as help in developing liquidity for the promoters.
Merger or acquisition: This is another option for the exit agenda, as other competitors are looking for our market share so if we offer merger with them then they will be very much ready to capture our created goodwill in the market.
RECOMMENDATIONS
Based on the above discussed global business plan the following are the recommendations:
There are tremendous chances of success of global business for organic agriculture inputs in India.
In India, Gujarat possesses high opportunities to start global business of organic inputs for agriculture.
Partnership will be the best option for entry in organic agriculture market of India.
In India, to start a global business of organic agriculture inputs it requires considerably less finance.
The profitability ratio of proposed global business is very high in India.
Indian organic agricultural inputs market is growing and there very less chance of failure if global business is dealing with robust products.
The factor of production like labor, land and row material are very cheap in Indian market for the global business of organic agriculture inputs.
CONCLUSION
India is the best destination to invest in the global business of organic agriculture inputs. The increased awareness of organic food in India duly supports the proposed venture of organic inputs for agriculture. Apart from this in future, the proposed global business can also enter in export business of organic agriculture produce. There are tremendous chances of global business development in Indian agriculture industry with organic agriculture inputs business.
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Doing Business : South Africa. (2013). Retrieved from International Finance Corporation & The World Bank: http://www.doingbusiness.org/data/exploreeconomies/canada/starting-a-business
Doing Business : US. (2013). Retrieved from International Finance Corporation & The World Bank: http://www.doingbusiness.org/data/exploreeconomies/united-states/starting-a-business
Dynamic Data Table with Key Data from the FiBL - IFOAM Survey. (2013, February 28). Retrieved from Organic World: http://www.organic-world.net/statistics-data-tables-dynamic.html?&L=0
Farmers Perspective. (2013). Retrieved from Crop Life Canada: http://www.croplife.ca/plant-biotechnology/farmers-perspectives
Forge, F. (2001, February 19). Organic Farming in Canada: An Overview. Retrieved from Parliamentry Research Branch: http://publications.gc.ca/Collection-R/LoPBdP/BP/prb0029-e.htm#DEFINITION OF AND TRENDS IN CANADIAN ORGANIC FARMING
Government of South Africa. (2013, December 1). Retrieved from SouthAfrica.info: http://www.southafrica.info/about/government/gov.htm#.UpvikdJDuNA
Gujarat Meritime Board. (2013, December 9). Retrieved from Government of Gujarat: http://www.gmbports.org/showpage.aspx?contentid=1245
Kreuzer, K. (2013, September 4). India: Government Supports Organic Agriculture with Numbers of Programmes. Retrieved from Organic News Community: http://oneco.biofach.de/en/news/india-government-supports-organic-agriculture-with-a-number-of-programmes--focus--0b49f002-d518-4d89-a85b-192b078ffa03/
Modern Agriculture in India. (2013). Retrieved from Slideshare: http://www.slideshare.net/riyaraic2/modern-agriculture-in-india
National Program for Organic Production. (2013). Retrieved from APEDA: http://www.apeda.gov.in/apedawebsite/organic/Organic_Products.htm
National Project on Organic Farming. (1999). Retrieved from National Centre for Organic Farming: http://ncof.dacnet.nic.in/
Orgnic Agriculture in India. (n.d.). Retrieved from Research Institute of Organic Agriculture: http://orgprints.org/2768/1/eyhorn-2004-Organic_Agriculture_in_India.pdf
Pestel Analysis of China - Socio - cultural Factor . (2013). Retrieved from Slideshare: http://www.slideshare.net/SyedBehrozAliRizvi/pestel-analysis-of-china
Statistics of Pesticides. (n.d.). Retrieved from Government of India: http://ppqs.gov.in/IpmPesticides_Cont.htm
Technology Advances in Agricultural Production and Fertilization. (2013). Retrieved from International Fertilizer Development Center: http://www.ifdc.org/Training/2013-Training-Programs-(1)/Technology-Advances-in-Agricultural-Production-and/
The Hofstede Centre - India. (n.d.). Retrieved from http://geert-hofstede.com/india.html
The World Fact Book - South Africa. (2013). Retrieved from International Finance Corporation & The World Bank: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html
The World Fact Book - USA. (2013). Retrieved from Central Intelligence Agency: https://www.cia.gov/library/publications/the-world-factbook/geos/us.html
The World Fact Book : India. (2013). Retrieved from Central Intelligence Agency: https://www.cia.gov/library/publications/the-world-factbook/geos/in.html
The World Fact Book: Canada. (2013). Retrieved from Central Intelligence Agency: https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html
The World Factbook : China. (2013). Retrieved from Central Intelligence Agency: https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html
Top Ten State of India with Highest GDP. (n.d.). Retrieved from Mapsofindia.com: http://www.mapsofindia.com/top-ten/india-finance/gdp-shares.html
What is Intellectual Property? (2013). Retrieved from World Intellectual Property Organization: http://www.wipo.int/about-ip/en/
Why is Itellectual Property Important? (n.d.). Retrieved from STOPfacks.gov: http://www.stopfakes.gov/learn-about-ip/ip/importance
World Bank Research - Indian Agriculture. (2013). Retrieved from The World Bank: http://search.worldbank.org/all?qterm=Indian+Agriculture&title=&filetype=
World Bank Research - US Economy. (2013). Retrieved from The World Bank: http://search.worldbank.org/data?qterm=USA+economy&language=EN&format=
FOOTNOTES
1 SRISTI Innovations – It is a section - 25 company, which promotes grass-root knowledge based organic agriculture products and has strong base of research and development for organic agriculture pesticides, plant growth promoters and fungicides. It is a very much reliable partner for partnership or joint venture.
Source: http://www.sristiinnovations.com/
Tables
Table 1 Country wise key success factors- GDP contribution by agriculture, total labor force employed by agriculture sector, GDP per capita and total numbers of producers
Key Success Factor (Attribute)
India
China
Canada
USA
South Africa
GDP contribution by Agriculture (%)
17.4
10.1
1.7
1.1
2.6
Total labor force Employed by Agriculture sector (%)
53
34.8
2
0.7
9
GDP per capita (US$)
3900
9300
43400
50700
11600
Time duration and legal charges needed to start a new business
57 to 61 days
US$ 595 to US$ 632
33 days
US$ 123
5 days
US$ 471
4 days
US$ 750
32 to 35 days
US$ 17
Total numbers of organic producers (2001)
547591
0
3718
12941
167
Note: Source: https://www.cia.gov/library/publications/the-world-factbook/geos/in.html https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html https://www.cia.gov/library/publications/the-world-factbook/geos/us.html https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html http://www.organic-world.net/statistics-data-tables-dynamic.html?&L=0
Table: 2 - SIMPLE MULTI ATTRIBUTE RATING TECHNIQUE: (SMART)
Key Success Factor (Attribute)
Weighted value
India
China
Canada
USA
South Africa
Points
Weighted Points points Weighted Points
Points
Weighted Points
Points
Weighted Points
Points
Weighted Points
GDP contribution by Agriculture
30
8
240
7
210
5
150
4
120
5
150
Employment by Agriculture sector
30
9
70
8
240
6
180
5
150
7
210
GDP per capita
10
6
60
8
80
9
90
10
100
7
70
Time duration and legal charges needed to start a new business
10
6
60
7
70
9
90
9
90
7
70
Total organic agriculture producers
20
10
200
0
0
5
100
6
120
4
80
Total weighted value
100
830
600
610
580
580
In the above given tables the very left side column represents the attributes or key success factors on basis of which the analysis is done. The grade is based on the score given on the scale of 1 to 10. The 10 score indicates highly favorable and the 0 score indicates least favorable choice for the given attributes. By multiplying the allotted score with the given weight the final score is derived at the bottom. The score with the highest value shows the most favorable country to do business in it.
Table: 3 - COMPETITOR ANALYSIS:
Sr. No.
Competitor
Competitiveness
Check list
1
Darshan Biotech
Threat
Low
Focus
Organic agro market
Capitalization
Medium
Reliability
Low
2
Maxima Biotech
Threat
High
Focus
Organic agro market
Capitalization
Medium
Reliability
Medium
3
Dristi Biotech
Threat
High
Focus
Organic agro market
Capitalization
Medium
Reliability
Medium
4
Scorpion Biotech
Threat
High
Focus
Organic agro market
Capitalization
Medium
Reliability
Medium
5
Sikko Industries Ltd.
Threat
High
Focus
Organic agro market
Capitalization High
Reliability High
Source:
http://www.indiamart.com/darshan-bio-tech/organic-pesticide.html http://www.indiamart.com/maxeema-biotech/ http://www.indiamart.com/drishti-biotech-pvtltd/ http://scorpionbiotech.com/ http://www.sikkoindustries.net/
Table: 4 – Consumption of pesticides in various states during years 2005-06 to 2009 - 10
S.No.
States/UTs
2005-06
2006-07
2007-08
2008-09
2009-10
1.
Andhra Pradesh
1997
1394
1541
1381
1015
2.
Assam
165
165
158
150
19
3.
Arunachal Pradesh
2
17.10
16
10.00
10.0
4.
Bihar
875
890
870
915
828
5.
Chhattisgarh
450
550
570
270
205
6.
Gujarat
2700
2670
2660
2650
2750
7.
Goa
5
9
2.30
8.90
10.30
8.
Haryana
4560
4600
4390
4288
4070
9.
Himachal Pradesh
300
292
296
322
328
10.
Jammu & Kashmir
1433
829
1248
2679.27
1640
11.
Jharkhand
70
82
81
85
88.5
12.
Karnataka
1638
1362
1588
1675
1647
13.
Kerala
571
545
780
272.69
631
14.
Madhya Pradesh
787
957
696
663
645
15.
Maharashtra
3198
3193
3050
2400
4639
16.
Manipur
28
26
26
30.36
30.36
17.
Meghalaya
6
9
6
-
6.1
18.
Mizoram
25
40
44
44.25
39.05
19.
Nagaland
5
5
5
17.83
13.58
20.
Orissa
963
778
N/A
1155.75
1588
21.
Punjab
5610
5975
6080
5760
5810
22.
Rajasthan
1008
3567
3804
3333
3527
23.
Sikkim
No cons. As Organic State
2
6
2.68
4.22
24.
Tamil Nadu
2211
3940
2048
2317
2335
25.
Tripura
14
19
27
38.00
55
26.
Uttar Pradesh
6671
7414
7332
8968
9563
27.
Uttaranchal
141
207
270
221.10
222
28.
West Bengal
4250
3830
3945
4100
NA
29.
Andaman & Nicobar
3
N/A
N/A
6.24
14
30.
Chandigarh
0.78
N/A
N/A
-
NA
31.
Delhi
39
N/A
57
57
49
32. Dadra & Nagar Haveli
4
N/A
N/A
-
NA
33.
Daman & Diu
1
N/A
N/A
-
NA
34.
Lakshadweep
1
N/A
N/A
-
NA
35.
Pondicherry
41
40
41
39.00
39.29
Total (in round fig.)
39773
41515
43630
43860
41822
M.T. (Tech. Grade) Source: States/UTs (Zonal Conferences on Inputs)
Internet source: http://ppqs.gov.in/IpmPesticides_Cont.htm
Table: 5 – COSTING FOR 1000 LITERS OF ORGANIC PESTICIDES
COSTING FOR PREPARE 1000 LITERS ORGANIC PESTICIDE
Sr. No.
Particular
Cost(Rs.)
1
Raw material
3000
2
Box
1600
3
Transport(to bring the raw materials)
2000
4
Bottle
17000
5
Label
1500
6
Labour
1000
7
Shrink bag
100
8
Packing charge
100
9
Fire wood
8000
10
Other transport(to supply product)
5000
11
Miscellaneous expenses
700
Total
40000
Figure: 1 ORGANIZATIONAL STRUCTURE FOR BUSINESS
Figure: 2 PORTER’S FIVE FORCE INDUSTRY ANALYSIS
Threat of new entrants Threat of substitute
Internal rivalry
Bargaining power Bargaining power of suppliers of customers
Figure: 3 SWOT ANALYSIS OF THE BUSINESS PLAN - GO ORGANIC
Figure: 4 DISTRIBUTION NETWORK
References: About Department of Agriculture and Cooperation. (2013, May 17). Retrieved from Ministry of Agriculture, Government of India: http://agricoop.nic.in/aboutus.html Agri Food: Past, Present and Future Report - South Africa Agriculture and Agri-Food Canada. (2013). Retrieved from Government of Canada: http://www.agr.gc.ca/eng/programs-and-services/agpal-program-and-service-finder/?id=1364218497997 Agriculture Technology Grows Food for Africa Data - Canada. (2013). Retrieved from The World Bank: http://data.worldbank.org/country/canada Doing Business : Canada Doing Business : China. (2013). Retrieved from International Finance Corporation & The World Bank: http://www.doingbusiness.org/data/exploreeconomies/china/starting-a-business Doing Business : India Doing Business : South Africa. (2013). Retrieved from International Finance Corporation & The World Bank: http://www.doingbusiness.org/data/exploreeconomies/canada/starting-a-business Doing Business : US Dynamic Data Table with Key Data from the FiBL - IFOAM Survey. (2013, February 28). Retrieved from Organic World: http://www.organic-world.net/statistics-data-tables-dynamic.html?&L=0 Farmers Perspective Gujarat Meritime Board. (2013, December 9). Retrieved from Government of Gujarat: http://www.gmbports.org/showpage.aspx?contentid=1245 Kreuzer, K Modern Agriculture in India. (2013). Retrieved from Slideshare: http://www.slideshare.net/riyaraic2/modern-agriculture-in-india National Program for Organic Production National Project on Organic Farming. (1999). Retrieved from National Centre for Organic Farming: http://ncof.dacnet.nic.in/ Orgnic Agriculture in India Pestel Analysis of China - Socio - cultural Factor . (2013). Retrieved from Slideshare: http://www.slideshare.net/SyedBehrozAliRizvi/pestel-analysis-of-china Statistics of Pesticides The World Fact Book - South Africa. (2013). Retrieved from International Finance Corporation & The World Bank: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html The World Fact Book - USA The World Fact Book : India. (2013). Retrieved from Central Intelligence Agency: https://www.cia.gov/library/publications/the-world-factbook/geos/in.html The World Fact Book: Canada The World Factbook : China. (2013). Retrieved from Central Intelligence Agency: https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html Top Ten State of India with Highest GDP What is Intellectual Property? (2013). Retrieved from World Intellectual Property Organization: http://www.wipo.int/about-ip/en/ Why is Itellectual Property Important? (n.d.) World Bank Research - Indian Agriculture. (2013). Retrieved from The World Bank: http://search.worldbank.org/all?qterm=Indian+Agriculture&title=&filetype= World Bank Research - US Economy Total numbers of organic producers (2001) 547591
This business plan is prepared for International Business Strategy
Abstract
The proposed global business plan – Go Organic is based on production and marketing of organic agriculture inputs in the middle Gujarat region of India. Here the selected entry mode is partnership with a local organization of Gujarat – SRISTI Innovations. In the proposed global business plan, the basic activities like procurement, production, marketing, human resourcing, financing etc are planned thoroughly which in turn favors organic agricultural input business in the market of middle Gujarat. The favorable political, economical, socio – cultural and technological factors are also observed in favor of the proposed business with the application of PEST-C analysis and SMART technique. The evaluation of proposed business with Porter’s five force model and Value chain method also shows favorable future for Go Organic. Availability of cheap labor and cheap row material are also observed plus points in the mentioned business plan. The different challenges pertaining to marketing, production, human resource management, production, advertising etc are also showing the profitable future and duly support the proposed global business plan. The geographical and economical conditions of Gujarat are also positive for the initiated business plan. Along with the proposed business the future of export is also bright for organic agriculture input which is duly supported by government also. The product pricing, production planning, accounting and financial evaluation ultimately favors the global business of organic agricultural inputs in Gujarat state of India. The financial data pertaining to the profitability also show clear profit in future for the proposed global business plan.
Keywords: Global, Organic, PEST-C, SMART, Business, Plan
Table of Contents
INTRODUCTION 5
OBJECTIVE AND SCOPE OF PROPOSED BUSINESS PLAN 7
PESTEL ANALYSIS 8
DRIVERS OF GLOBALIZATION 9
SELECTED STRATEGIC ENTRY MODE 10
BUSINESS DESCRIPTION 11
VISION 11
EFFECT OF ECONOMICAL AND GEOGRAPHICAL INFLUENCES 12
POTENTIAL RISKS IN PROPOSED GLOBAL BUSINESS 12
INFLUENCE OF COMPETITORS ON PROPOSED GLOBAL BUSINESS 13
INFLUENCE OF INTERNET ON PROPOSED BUSINESS PLAN 13
MARKETING ISSUES RELATED WITH GLOBAL VENTURE 14
MARKET ANALYSIS OF PROPOSED GLOBAL BUSINESS 15
SWOT ANALYSIS 15
PORTER’S FIVE FORCE ANALYSIS 15
VALUE CHAIN ANALYSIS FOR THE PROPOSED BUSINESS PLAN 16
PRODUCT PROFILE 18
OVERVIEW OF MANAGEMENT AND ORGANIZATION 19
HUMAN RESOURCE PLANNING 21
FINANCE FEASIBILITY AND FORECASTS 21
EXIT STRATEGY 22
RECOMMENDATIONS 23
CONCLUSION 24
REFERENCES 25
FOOTNOTES 29
TABLES 30
TABLE: 1 COUNTRY WISE KEY SUCCESS FACTORS ANALYSIS 30
TABLE: 2 SIMPLE MULTI ATTRIBUTE RATING TECHNIQUE: (SMART) 31
TABLE: 3 COMPETITOR ANALYSES 32
TABLE: 4 CONSUMPTION OF PESTICIDES IN VARIOUS STATES DURING YEARS 2005-06 TO 2009 – 10 33
TABLE: 5 COSTING FOR 1000 LITERS OF ORGANIC PESTICIDES 34
FIGURE: 1 ORGANIZATIONAL STRUCTURE FOR BUSINESS PLAN 35
FIGURE: 2 PORTER’S FIVE FORCE INDUSTRY ANALYSIS 36
FIGURE: 3 SWOT ANALYSIS OF THE BUSINESS PLAN 37
FIGURE: 4 DISTRIBUTION NETWORKS 38
INTRODUCTION
Why Organic Farming?
Scientific agricultural research has given lots of gifts to the society and farming communities all over the world but indiscriminate use of harmful inorganic agro chemicals has resulted in unsustainable agriculture and higher cost of agricultural production. Organic farming is the best possible solution of this problem which can be defined as a kind of farming that prohibits the use of synthetic chemicals, maintains the natural relation and balance between fauna, flora and soil (Forge, 2001). Being sustainable agriculture, organic farming releases lesser amount of pollutant, consume less energy per area covered, improves fertility and physical condition of soil and produces less green houses gases than conventional farming. Economically it is 30 % to 50% costly to manage organic farming as compare to conventional one but in the last, consumers are ready to pay 10% to 50% for organic farm produces so the higher cost of production get adjusted at this point (Forge, 2001).
What is the proposed business venture?
Go Organic is a professional concept which supports organic farming over the conventional one. In the proposed venture, production of some of the inputs necessary for organic farming is planned to produce for market establishment. Here based on the previous experience of promoter of producing organic inputs the production of herbal pesticides is planned.
Why to choose India?
Based on the awareness about organic farming and products as well as other business related favorable parameters, India is selected as a targeted country for the proposed business. As per the data of 2011 out of total 1084266.01 hectare agricultural land, 0.6% land is under organic farming (Dynamic Data Table with Key Data from the FiBL - IFOAM Survey, 2013). In India, the National Project on Organic Farming is a prime important project in 10th five year plan which was provided 570.4 million rupees grant and will continue for 11th five year plan with 1010 million rupees grant (National Project on Organic Farming, 1999). There are many government agencies, farmers groups and NGOs active in India to promote organic farming and apart from this there are approximately 12000 organic certified farms under 210 projects which contribute 200,000 hectare land under organic cultivation. There are also lots of chances of organic food export market in India. (Orgnic Agriculture in India, n.d.).
OBJECTIVE AND SCOPE OF PROPOSED BUSINESS PLAN
Objective:
This business plan covers all issues as well as requirement to setting up a venture for production and marketing of organic agriculture inputs in India. The objective of this business plan is to serve any future aspirants who want to start organic inputs business in India. More solid objectives are as under:
To study the feasibility for setting up an organic agriculture input manufacturing unit in India.
Study of evaluation of the bare minimum requirements like machinery, row material required and place to implement the proposed plan.
Evaluation of marketing related aspects, pricing decision, advertising, sales promotion, distribution network, sales force design etc.
Managing human capital for the initial stage of starting the business, as managing the human resources in the initial time is a very crucial job.
Production planning and development plan for future growth.
Efficient planning of work force for maintaining profitability and sustainability.
Scope:
The proposed study would be helpful to know the market potential of the organic agriculture input for Indian market.
The proposed business plan will be helpful to identify necessary improvement for future expansion.
The study will also guide to set the initial price of the organic agricultural products in Indian condition.
The proposed plan will be helpful for other future aspirants to set up low cost organic inputs business.
PESTEL ANALYSIS OF INDIA (EXTERNAL FACTORS - OPPORTUNITIES AND THREATS) FOR THE PROPOSED BUSINESS PLAN
India
Political: India has two types of government, central government and state government. Due to combined help of central and state government to agriculture, agricultural community has produced 244.78 million tons of food grain in year 2011 (About Department of Agriculture and Cooperation, 2013). To start a business in India, legally it takes 57 to 61 days and expenditure of total Rupees 36920 to 39170 (US$ 595 to US $632) (Doing Business: India, 2013).
Economical: In the year 2012 the GDP growth rate in India was noted 3.2% with total GDP of $ 1.825 trillion (US$ 3900 per capita) (The World Fact Book: India, 2013). In total GDP, agriculture has contributed 17.4% share. Out of total labor force of India 53 % are employed in agriculture sector (The World Fact Book: India, 2013). Approximately 75 % people in India are associated with occupation of agriculture (Modern Agriculture in India, 2013). In the year 2011, total numbers of organic agriculture producers in India were noted by 547591.
Socio – Cultural: India has high collectivist, risk aversive and long term orientation based as well as high power distance oriented culture (The Hofstede Centre - India). India is doing progress in case of use of advanced technology in agriculture.
Technological: Especially in case advancement of technology in agriculture, the use of improved farm machinery and agricultural biotechnology has increased quantity and quality of farm produce in India (Modern Agriculture in India, 2013).
ANALYSIS ON THE BASIS OF THE TECHNIQUES USED SMART TECHNIQUE
To start a business in selected countries, the SMART model is the best tool to evaluate the most favorable country on the basis of the selected factors. SMART model provides freedom to the analyzer to incorporate the critical factors in the analysis and gives comparative results with other potential options so it is the best model. The result of attributes analyzed in table: 2, clearly shows that India is the most favorable country out of five host countries, to start the proposed business of organic agricultural input.
In table: 2 the selected key success factors are very much in relevance with the success of proposed business in the selected host countries. The selected factors like contribution of agriculture in total GDP, total labor force employed in agriculture sector, per capita GDP, total time and cost of starting a new business and the total numbers of organic agriculture producer are very much specific and are in tune with the proposed profession.
From the table: 1, we can clearly see that the agriculture contributes 17.4% to total GDP of India and provides employment to 53% labor force. So it is very clear that in India the future of agriculture is very bright because of more importance of agriculture in national GDP. The more labor engaged in the agriculture industry also indicates less vulnerability to failure in future. Apart from this the total numbers of organic agriculture producers 547591 are very significant among all the countries selected so it is a very much positive sign of future business.
Conclusion: From the overview of result and discussion based on PEST- C analysis and application of SMART technique, it is very clear that India is the most favorable country than the other host countries to do business of organic agricultural inputs. The high labor force employment in agriculture sector and high GDP contribution of agriculture will be supportive factor for the sustainable agriculture inputs business in India. Apart from this other favorable factors like government support and technological advancement in India will also be supportive for better future of agricultural inputs business in India.
DRIVERS OF GLOBALIZATION
Here in case of establishing organic agricultural input business in India, three major drivers of globalization play an important role for foreign investors. Let us check those drivers in detail.
Political Drivers:
In India political factor is very much in favor of organic agriculture and promotes such initiative on primary basis in their national agenda . With different national schemes like National Horticulture Mission (NHM), National Project on Organic Farming (NPOF), Rastriya Krishi Vikas Yogna (RKVY), Network Project on Organic Farming of Indian Council of Agricultural Research and Horticultural Mission for North East and Himalayan States (HMNEH), Indian government supports organic farming in India . By these kind of scheme central government of India provides support to the states to adopt and develop organic farming sector. So there is bright future of organic agriculture and also of organic agricultural inputs.
Market Drivers:
The market potential of India is also very high as India ranks among top ten countries for having organic farming and certification agencies. In last year 2012 – 13 the total area under organic certification was noted by 5.21 million hectare . So we can consider India as a promising place for organic agriculture input market.
Cost Drivers: In case of cost of producing organic inputs the raw material is abundant in nature of India so there no constraint of cost for procurement. Apart from this the labor is also cheaply available so the cost factor can be considered as favorable aspect for India.
Competitive Drivers:
There huge potential of organic export market in India. In the year 2012-13, 135 organic agriculture products in volume of 165262 MT including 4985 MT organic textile was exported from India, which realized US$ 374 million . These organic products are exported to EU, Canada, US, Switzerland, South Africa and South East Asian countries. The major agricultural products included in this are Soybean (41%), Cane Sugar (26%), Basmati Rice (5%), Cereals and Millets (4%), Tea (2%), Dry Fruits (1%) and Spices (1%) .
SELECTED STRATEGIC ENTRY MODE TO ENTER IN THE BUSINESS OF ORGANIC AGRICULTURE INPUTS IN INDIA
Acquiring subsidiary:
Here in case of entry mode for establishing the proposed business in India, the very efficient way is acquiring the existing unit which is running in lose or who is willing to sale off their unit. So we can acquire the existing subsidiary of any organic agro input unit.
Direct Entry/Investment mode:
Direct investment in the market is also an option available as an entry mode to enter in the market of India. There are different risk factors associated with direct entry or investment like lack of market trend, lack of information about procurement, marketing, production etc.
Franchising:
Franchising is also an option for entry in India but the total control will be there in the hand of the franchiser and there is no chance of developing the company’s own brand.
Partnership or Joint Venture:
Partnership is also a best option if there is any firm in same kind of business and willing to expand their business so we can join them as a partner. Here considering the situation, for the proposed plan of business the option of partnership with SRISTI Innovations1 will be best mode for entry in Indian market because the partner will have readymade market available with him.
BUSINESS DESCRIPTION
Go Organic is a B2C kind of business that deals in supply of organic agricultural inputs. By creating joint venture or partnership with potential partner, Go Organic will start procurement, production and marketing of organic agricultural inputs. After establishing in Gujarat, Go Organic is intended to expand in to other states of India. With deep rooting in the market of India, Go Organic willing to indulge in the business of exporting of organic agriculture products. The proposed future planning is based on following observed market trends,
Indian organic market is gaining importance in the field of organic agricultural production.
India has achieved considerable status in the field of organic agro food export.
Organic farm producers are increasing day by day and are highest in number.
There is increased awareness of organic food in the Indian people.
Traditional agriculture is converting at faster rate in India.
Vision
By providing environment friendly innocent organic agro inputs we want to serve farming community, society and Mother Nature which ultimately provides safer and sustainable agriculture as well as promising future. In the next decade we want to develop a large range of organic farming input/product which ultimately replaces the harmful chemical counterparts.
EFFECT OF ECONOMICAL AND GEOGRAPHICAL INFLUENCES
Economical Influences:
Economically Gujarat is one of a very rich state among all states of India. As per 2011 data, Gujarat stands fifth with GDP of 5131,730 million rupees . The farmers of Gujarat are also economically strong and technology driven so the selected area as a starting point is a very best start up for the proposed venture. Apart from this, Gujarat has better infrastructure facility and technological advancement for development of agriculture sector.
Geographical Influences:
Geographically Gujarat is situated at very Western part of India with tropical agro-climatic atmosphere. Gujarat has high fertile soil and good irrigation facilities which is a strong boost for better future for Go Organic to do the business of organic agricultural inputs. Apart this Gujarat has 1600 kilometer long sea shore and as per the record of 2011-12 total cargo handle by ports of Gujarat was noted 259 million tonnes . So if in future, the proposed business plans to import or export the organic agricultural goods then there are more chances of development.
POTENTIAL RISKS IN PROPOSED GLOBAL BUSINESS
Go Organic estimates the following kind of risk to their proposed business plan:
Financial Risk: Observing the ongoing trend in the market the following kind of risks are detected:
Too many players can enter in the emerging market and can spoil the pricing policy.
Revenue fluctuation because market depending totally on weather condition.
Recovery of revenue may fluctuate as the credit sale is huge in Indian agriculture market.
Marketing Risk:
Some time farmers go for the immediate effective remedy and may go for the inorganic input too.
In some area of Gujarat as well as India, farming is dependent on rainfall only so in such area the set back may occur.
Operational Risk:
Sometime row material may not be available as most of the row materials are nature based so shortage may occur.
If there is shortage of material and if there is high demand in that time then it could be an adverse situation.
INFLUENCE OF COMPETITORS ON PROPOSED GLOBAL BUSINESS
Based on the data presented in table: 4, five potential competitors are identified and their analysis is as under:
Darshan Biotech: It is an organization which is of low threat, focused on organic agro market, established with medium capitalization and has low reliability of products.
MaxeeMa Biotech: It is kind of high threat for Go Organic with organic agro market focus, medium capitalization and medium reliability.
Dristi Biotech Pvt. Ltd.: This is a potential threat, with organic agro market focus which possesses medium capitalization and medium reliability.
Scorpion Biotech Co.: This is a considerable threat, with organic agro market focus that possesses medium capitalization and medium reliability.
Sikko Industries Ltd.: This is a prime threat, focused in organic agro market and possesses high capitalization as well as high reliability.
There could be potential competition as robust competitors are present in the market, so strong marketing policy and strong product profile is necessary.
INFLUENCE OF INTERNET ON PROPOSED BUSINESS PLAN
Internet will be a best medium of communication between the members of organization. On internet we can update our dealers with our progress and communicate in a better way for marketing point of view. Go Organic can serve better their dealer network by means of internet as the two way communication between the organization’s staff and dealer will be faster and financial dealing will also be effective online. Because of internet even being in remote area staff can communicate easily with each other as marketing staff can update the marketing activities, production staff can update the production status and by this way organization can be handled without geographical barriers.
Internet will serve as best medium of communication between Go Organic and dealers as well as progressive farmers. By the means website design of Internet we can advertise as well as provide thorough information of our business to the interested counterparts. The internet will be a best medium to serve our customers as they can convey their need as well problems online and we can mitigate them at the soonest. Apart from this we can update ourselves with the published data of organic agricultural, available online and can plan accordingly. Today the progressive farmers are using internet in large proportion and after proper survey they select the accurate product for their farm utilization. So internet will be a kind of boon for our business for better growth and promotion.
MARKETING ISSUES RELATED WITH GLOBAL VENTURE
The selected marketing issues in case of propose global venture could be as under,
Language Barrier: Language barrier can be a major issue in the marketing but it can be overcome with the help of SRISTI Innovations. Being as a robust business partner SRISTI Innovations will help in product literature development, advertising, communication with dealers, employees and farmers.
Lack of knowledge of market trend: In this case the propose partner – SRISTI Innovation will be very much helpful to assess the prevailing market trends according to the ongoing business.
Deciding the marketing plan: As per the strategy selected, the surrounding districts will be approached first with one on one dealers contact. Apart from this method demonstration and farmers meeting will be the proposed future marketing plan.
Allocation of marketing staff in different geographical areas: As per the potentiality of the business observed in certain are more focused efforts will be delivered to the target market.
Market Acceptance of Products: To enter in the market with the proposed market acceptance of the product by market the role of SRISTI Innovations will be prime because with the ongoing trends, mind setup of customers and the products will be designed accordingly.
Future Marketing Expansion: Based on past and present performance of product, market trends and growth of organic market the future expansion will be decided.
MARKET ANALYSIS OF PROPOSED GLOBAL BUSINESS
SWOT Analysis: Evaluation of Strength, Weaknesses, Opportunities and Threats (graphically presented in figure: 3)
Strength: In partnership with SRISTI Innovations, Go Organic can harvest continuous management support from experts; can have support of thorough knowledge of product preparation, efficient organic product base and efficient infrastructure for production.
Weakness: Initial low budget can be a potential weakness. Apart from this low product range, untapped market area, lack of brand positioning and erratic demand of product can be a probable weakness.
Opportunities: Growing market, farmer’s movement towards organic farming, government support, high demand of varieties of product, low initial investment, big market and already unsatisfied demand of the market will be great opportunities for Go Organic.
Threats: The potential threats identified are high inorganic inputs using farmer segment, fierce competition, and fake product available in the market which diffuse the image of authentic organic products and slow effect of organic products.
PORTER’S FIVE FORCE MODEL FOR GLOBAL INDUSTRY ANALYSIS
(graphically presented in figure: 2)
Threat of New Entrants: There are moderate chances of new entrants as the proven and authentic technologies are limited in organic agriculture inputs. Even though low entry barrier, low initial capital investment and liberal government policies can attract potential new aspirants.
Threat of Substitute Products: Already present inorganic pesticides are a major threat and a big segment of farmers depending on inorganic pesticides is also a big threat for the proposed business. If timely products are not provided then there are more chances of farmer purchasing the inorganic agriculture inputs.
Bargaining Power of Suppliers: In this case bargaining power of suppliers is very less as the row material needed is abundantly available in the nature so we can avoid bargaining from the suppliers.
Bargaining Power of Customers: Here bargaining power of customers is very high because they want quick results and they can easily move on the other counterpart chemical pesticides easily. So Go Organic will have deal in such a manner that it can satisfy the customers with quick effective organic inputs.
Internal Rivalry: Already present rivals can retaliate with reduced price and can diffuse the market. Fierce competition can be faced to capture the limited market share for organic agriculture input demand. Apart from there is high exit barrier present as the larger part of market provides products on credit so recovery may get delayed or lost if any organization gets exit from the market.
VALUE CHAIN ANALYSIS FOR THE PROPOSED BUSINESS PLAN
Primary activities
Inbound logistics:
Includes the receiving the raw materials which are available naturally at moderate price and fresh in the quality as per the required standard.
No need to store all the raw material, as few required to store, which are dry in nature.
No need to deploy the high technical staff to handle the raw materials.
Inventory control is too much necessary to manage the production as well as the supply of the finished products.
Operations:
Capacity of the production is mainly depended on the order placed and futuristic demand which can be fulfilling without any difficulties.
Production schedule is also dependent on the order placed and can be managed efficiently with the available facilities.
No need of the automation required in the production of the organic/herbal inputs as compare to the chemical one.
Labor force can be efficient deployed and their utilization is too easy.
We can improve the quality of the product by continuous value addition in it.
Outbound logistics:
Packing of the product is not so tedious job to handle, so can be handled easily.
Need to require the normal ware housing facilities to store the finished products and the other equipments.
Inventory management is an essential tool to manage the supply as per the placed orders and will be easily be managed by the available manpower.
Distribution of the product will be done by the local transport like mini truck or logistic services.
Marketing and Sales:
Sales forecasting will be depend mainly on the existing strength of the organic farmers community and will be efficiently forecasted from the next year, after the sale of the first lot marketed. The sales force will be the personnel associated in establishment of the company.
Pricing decision will be dependent on the prevailing price of the contemporary organic/herbal agro inputs.
Marketing strategy would be as per the situation and the awareness prevailing in certain farming area. The budget for the sales force will be decided as per the strategy of the marketing been decided by the upcoming demand.
Sales force management will be as per the budget available and the decision of the promoters based on the market demand and other conditions applied.
Services
The after sales services will be mainly dependent on the prevailing situation of the incurred sales as well as the performance of the organic/herbal product provided.
The special visits will be made to customers to enhance the awareness as well as to promote the products.
Secondary activities
Procurement:
To procure the row materials, naturally available vegetative foliage as well as sea algae will be collected after getting legal permission from the local government and the rest of the inputs will be purchased from the local vendors. Besides this the high cost equipments or infrastructure required initially will be tried to manage on the rental basis like boiling vessels, the office building or the laboratory services.
Business services which could be out sourced will be out sourced as and when required to cut the cost.
Vendor/supplier relation is an important aspect to manage the production process efficiently.
Technological Development:
The product to be launched is previously tested on different location of the Gujarat, India and the promising results were obtained. Further value addition will be done as per the performance in the market and the demand of the farmers.
After the success of the proposed products the chain of new products is in pipe line to be launched in the market.
Procedures and know how are well established with the promoters.
The quality parameters are pre decided with the expert associated with the product development and research activities.
Human Resource Management:
Production line staffing will be as per the order placed and the market demand faced by the promoters.
Recruiting and training activities of the employees will also be performed for marketing, production and procurement etc.
Wages and benefits of the employees will be managed as per the government rules applicable.
Firm Infrastructure:
Strategy and decision making will be as per the condition applied.
Finance and account services will be out sourced primarily for following cost cutting approach.
Government relations need to be polished timely to remain updated with new agricultural policies.
Public relations are also of equal importance to expand the business further and to manage the business profitably.
Product Profile
Current Products: Current product will be an organic pesticide which will control sucking pests like White fly, Thrips, Aphids and Jessids. It will be available in one liter packing.
Competitive advantage: The competitive advantage of this product is about its broad spectrum effect as it covers White fly, Thrips, Aphids and Jessids, where as other inorganic pesticides which covers only on or maximum two pests so in that case our product covers major sucking pest of agriculture.
Further product improvement and development plan: Based on the performance of presently targeted product we can plan future improvement in our existing as well as in line products. As per the opinion of farmers, Go Organic will improve the products accordingly.
Technology: In development of product improved technology is being used where as in production no high technology is being used.
Overview of Management and Organization
Organization: Organization is made up of three distinct divisions’ viz. procurement, production and marketing. The organization is a partnership firm so partners will decide the planning of production and other activities of business.
Production: Production will take place as per the demand generation of product. Here initially the production will be erratic because of the uneven market demand and initial stage of brand positioning.
Marketing: Marketing will be done in the central districts of Gujarat, surrounding the Gandhinagar district and gradually the coverage will increase based on product demand.
Research and Development: Research and Development activity will be carried out by SRISTI Innovations and they will develop new product as per market demand.
Finance: Finance will be incurred by both partners 50 – 50% and accordingly the profit will be shared among each other.
MARKETING ASPECTS
Pricing Strategies:
Here as shown in table: 5, cost of producing 1000 liters is 40000 rupees so the cost of one liter will be,
40000/1000 = Rupees 40/liter.
Considering other competitor’s same type of product’s price we will keep dealer price Rupees 160/- per liter and maximum retail price rupees 304 per liter for our product. Due to new product and for brand positioning we need to give higher margin to dealers. So dealer can get encouraged and can sale our products enthusiastically. Here we are dealing directly to dealer so the distributor channel will be removed for initial stage and we can pass on more commission to the dealers.
Production Decision:
We have capacity of producing 120000 liters per year but initially we will operate the unit at 10% capacity for the first year and projected plan is of increasing 10% every year. So we can get the market trend and accordingly we can plan the production process. Here based on the past experience of promoter this decision is taken. Initially we will target the districts of middle Gujarat and then expand gradually.
Promotion and Advertising
Initially we can set hoardings of our products at certain point from where maximum numbers of farmers are passing or we can choose place of that kind like Agriculture Produce Marketing Committee (APMC) or bus stand. Marketing and Distribution Network: (graphically presented in figure: 4)
We have set only one stage of distribution initially so the adjoining districts dealers will be satisfied. As soon as business develops we can approach the remotely located distributors also. We can have service of distributor after brand positioning of our product. Then we can pass some margin to distributors and some to dealers. The schematic diagram of initial distribution is shown in the following figure.
Human Resource Planning
There are main three areas, procurement, production and marketing - identified for recruiting human resources.
For marketing activity: Total marketing staff required: 4
Four technical people with basic knowledge of organic input are required. Here the technical staff being graduate or post graduate with agricultural science will be very much costly so BRS - Bachelor of Rural Science candidate will be more suitable as those expectations are lower and are available to be hired on less salary too.
For production activity: Total production staff required: 1 + 2 people + (12 people for packaging – as and when required)
One technical person with thorough knowledge of production process and two non technical people for labor work. Here the technical person should be more preferable who can handle quality control, able to train other people and manage packaging process. At the time of packaging twelve people will be required as and when need arise.
For procurement activity: Total procurement staff required: 1 person
The procurement person should be able to identify the vegetation required for production of certain type of organic pesticide. So the person with deep knowledge of locally available vegetation will be more suitable.
Finance Feasibility and Forecasts • Cash Budget and Working Capital: Here the working capital will be in form of loan from nationalized bank and 50% equal part of loan will be invested by the partners
• Investment Requirements: To start the proposed business around one million rupees required initially.
• Sources of Funds/Leveraging of Funds: The business plan targets around one million rupees loan from bank and around 5 lacs (half million) will be invested from their savings.
• Use of Funds: Fund will be utilized for procurement of raw materials, purchase of bottles, pamphlets, stickers and other required materials necessary to produce the product.
• Pro Forma Financial Statements: Here the financial statements like Cash flow, profit and loss account and Balance sheet shows considerable future profit from the proposed business.
• Break-Even Analysis: Here break even is achieved at the 667 units sold.
Exit Strategy
In case the proposed business plan fails due to certain reasons then the exit strategies are as under:
Going for public offering: As soon as the business grows the future agenda is to go for public which in turn will increase the fund as well as help in developing liquidity for the promoters.
Merger or acquisition: This is another option for the exit agenda, as other competitors are looking for our market share so if we offer merger with them then they will be very much ready to capture our created goodwill in the market.
RECOMMENDATIONS
Based on the above discussed global business plan the following are the recommendations:
There are tremendous chances of success of global business for organic agriculture inputs in India.
In India, Gujarat possesses high opportunities to start global business of organic inputs for agriculture.
Partnership will be the best option for entry in organic agriculture market of India.
In India, to start a global business of organic agriculture inputs it requires considerably less finance.
The profitability ratio of proposed global business is very high in India.
Indian organic agricultural inputs market is growing and there very less chance of failure if global business is dealing with robust products.
The factor of production like labor, land and row material are very cheap in Indian market for the global business of organic agriculture inputs.
CONCLUSION
India is the best destination to invest in the global business of organic agriculture inputs. The increased awareness of organic food in India duly supports the proposed venture of organic inputs for agriculture. Apart from this in future, the proposed global business can also enter in export business of organic agriculture produce. There are tremendous chances of global business development in Indian agriculture industry with organic agriculture inputs business.
References
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FOOTNOTES
1 SRISTI Innovations – It is a section - 25 company, which promotes grass-root knowledge based organic agriculture products and has strong base of research and development for organic agriculture pesticides, plant growth promoters and fungicides. It is a very much reliable partner for partnership or joint venture.
Source: http://www.sristiinnovations.com/
Tables
Table 1 Country wise key success factors- GDP contribution by agriculture, total labor force employed by agriculture sector, GDP per capita and total numbers of producers
Key Success Factor (Attribute)
India
China
Canada
USA
South Africa
GDP contribution by Agriculture (%)
17.4
10.1
1.7
1.1
2.6
Total labor force Employed by Agriculture sector (%)
53
34.8
2
0.7
9
GDP per capita (US$)
3900
9300
43400
50700
11600
Time duration and legal charges needed to start a new business
57 to 61 days
US$ 595 to US$ 632
33 days
US$ 123
5 days
US$ 471
4 days
US$ 750
32 to 35 days
US$ 17
Total numbers of organic producers (2001)
547591
0
3718
12941
167
Note: Source: https://www.cia.gov/library/publications/the-world-factbook/geos/in.html https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html https://www.cia.gov/library/publications/the-world-factbook/geos/us.html https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html http://www.organic-world.net/statistics-data-tables-dynamic.html?&L=0
Table: 2 - SIMPLE MULTI ATTRIBUTE RATING TECHNIQUE: (SMART)
Key Success Factor (Attribute)
Weighted value
India
China
Canada
USA
South Africa
Points
Weighted Points points Weighted Points
Points
Weighted Points
Points
Weighted Points
Points
Weighted Points
GDP contribution by Agriculture
30
8
240
7
210
5
150
4
120
5
150
Employment by Agriculture sector
30
9
70
8
240
6
180
5
150
7
210
GDP per capita
10
6
60
8
80
9
90
10
100
7
70
Time duration and legal charges needed to start a new business
10
6
60
7
70
9
90
9
90
7
70
Total organic agriculture producers
20
10
200
0
0
5
100
6
120
4
80
Total weighted value
100
830
600
610
580
580
In the above given tables the very left side column represents the attributes or key success factors on basis of which the analysis is done. The grade is based on the score given on the scale of 1 to 10. The 10 score indicates highly favorable and the 0 score indicates least favorable choice for the given attributes. By multiplying the allotted score with the given weight the final score is derived at the bottom. The score with the highest value shows the most favorable country to do business in it.
Table: 3 - COMPETITOR ANALYSIS:
Sr. No.
Competitor
Competitiveness
Check list
1
Darshan Biotech
Threat
Low
Focus
Organic agro market
Capitalization
Medium
Reliability
Low
2
Maxima Biotech
Threat
High
Focus
Organic agro market
Capitalization
Medium
Reliability
Medium
3
Dristi Biotech
Threat
High
Focus
Organic agro market
Capitalization
Medium
Reliability
Medium
4
Scorpion Biotech
Threat
High
Focus
Organic agro market
Capitalization
Medium
Reliability
Medium
5
Sikko Industries Ltd.
Threat
High
Focus
Organic agro market
Capitalization High
Reliability High
Source:
http://www.indiamart.com/darshan-bio-tech/organic-pesticide.html http://www.indiamart.com/maxeema-biotech/ http://www.indiamart.com/drishti-biotech-pvtltd/ http://scorpionbiotech.com/ http://www.sikkoindustries.net/
Table: 4 – Consumption of pesticides in various states during years 2005-06 to 2009 - 10
S.No.
States/UTs
2005-06
2006-07
2007-08
2008-09
2009-10
1.
Andhra Pradesh
1997
1394
1541
1381
1015
2.
Assam
165
165
158
150
19
3.
Arunachal Pradesh
2
17.10
16
10.00
10.0
4.
Bihar
875
890
870
915
828
5.
Chhattisgarh
450
550
570
270
205
6.
Gujarat
2700
2670
2660
2650
2750
7.
Goa
5
9
2.30
8.90
10.30
8.
Haryana
4560
4600
4390
4288
4070
9.
Himachal Pradesh
300
292
296
322
328
10.
Jammu & Kashmir
1433
829
1248
2679.27
1640
11.
Jharkhand
70
82
81
85
88.5
12.
Karnataka
1638
1362
1588
1675
1647
13.
Kerala
571
545
780
272.69
631
14.
Madhya Pradesh
787
957
696
663
645
15.
Maharashtra
3198
3193
3050
2400
4639
16.
Manipur
28
26
26
30.36
30.36
17.
Meghalaya
6
9
6
-
6.1
18.
Mizoram
25
40
44
44.25
39.05
19.
Nagaland
5
5
5
17.83
13.58
20.
Orissa
963
778
N/A
1155.75
1588
21.
Punjab
5610
5975
6080
5760
5810
22.
Rajasthan
1008
3567
3804
3333
3527
23.
Sikkim
No cons. As Organic State
2
6
2.68
4.22
24.
Tamil Nadu
2211
3940
2048
2317
2335
25.
Tripura
14
19
27
38.00
55
26.
Uttar Pradesh
6671
7414
7332
8968
9563
27.
Uttaranchal
141
207
270
221.10
222
28.
West Bengal
4250
3830
3945
4100
NA
29.
Andaman & Nicobar
3
N/A
N/A
6.24
14
30.
Chandigarh
0.78
N/A
N/A
-
NA
31.
Delhi
39
N/A
57
57
49
32. Dadra & Nagar Haveli
4
N/A
N/A
-
NA
33.
Daman & Diu
1
N/A
N/A
-
NA
34.
Lakshadweep
1
N/A
N/A
-
NA
35.
Pondicherry
41
40
41
39.00
39.29
Total (in round fig.)
39773
41515
43630
43860
41822
M.T. (Tech. Grade) Source: States/UTs (Zonal Conferences on Inputs)
Internet source: http://ppqs.gov.in/IpmPesticides_Cont.htm
Table: 5 – COSTING FOR 1000 LITERS OF ORGANIC PESTICIDES
COSTING FOR PREPARE 1000 LITERS ORGANIC PESTICIDE
Sr. No.
Particular
Cost(Rs.)
1
Raw material
3000
2
Box
1600
3
Transport(to bring the raw materials)
2000
4
Bottle
17000
5
Label
1500
6
Labour
1000
7
Shrink bag
100
8
Packing charge
100
9
Fire wood
8000
10
Other transport(to supply product)
5000
11
Miscellaneous expenses
700
Total
40000
Figure: 1 ORGANIZATIONAL STRUCTURE FOR BUSINESS
Figure: 2 PORTER’S FIVE FORCE INDUSTRY ANALYSIS
Threat of new entrants Threat of substitute
Internal rivalry
Bargaining power Bargaining power of suppliers of customers
Figure: 3 SWOT ANALYSIS OF THE BUSINESS PLAN - GO ORGANIC
Figure: 4 DISTRIBUTION NETWORK
References: About Department of Agriculture and Cooperation. (2013, May 17). Retrieved from Ministry of Agriculture, Government of India: http://agricoop.nic.in/aboutus.html Agri Food: Past, Present and Future Report - South Africa Agriculture and Agri-Food Canada. (2013). Retrieved from Government of Canada: http://www.agr.gc.ca/eng/programs-and-services/agpal-program-and-service-finder/?id=1364218497997 Agriculture Technology Grows Food for Africa Data - Canada. (2013). Retrieved from The World Bank: http://data.worldbank.org/country/canada Doing Business : Canada Doing Business : China. (2013). Retrieved from International Finance Corporation & The World Bank: http://www.doingbusiness.org/data/exploreeconomies/china/starting-a-business Doing Business : India Doing Business : South Africa. (2013). Retrieved from International Finance Corporation & The World Bank: http://www.doingbusiness.org/data/exploreeconomies/canada/starting-a-business Doing Business : US Dynamic Data Table with Key Data from the FiBL - IFOAM Survey. (2013, February 28). Retrieved from Organic World: http://www.organic-world.net/statistics-data-tables-dynamic.html?&L=0 Farmers Perspective Gujarat Meritime Board. (2013, December 9). Retrieved from Government of Gujarat: http://www.gmbports.org/showpage.aspx?contentid=1245 Kreuzer, K Modern Agriculture in India. (2013). Retrieved from Slideshare: http://www.slideshare.net/riyaraic2/modern-agriculture-in-india National Program for Organic Production National Project on Organic Farming. (1999). Retrieved from National Centre for Organic Farming: http://ncof.dacnet.nic.in/ Orgnic Agriculture in India Pestel Analysis of China - Socio - cultural Factor . (2013). Retrieved from Slideshare: http://www.slideshare.net/SyedBehrozAliRizvi/pestel-analysis-of-china Statistics of Pesticides The World Fact Book - South Africa. (2013). Retrieved from International Finance Corporation & The World Bank: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html The World Fact Book - USA The World Fact Book : India. (2013). Retrieved from Central Intelligence Agency: https://www.cia.gov/library/publications/the-world-factbook/geos/in.html The World Fact Book: Canada The World Factbook : China. (2013). Retrieved from Central Intelligence Agency: https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html Top Ten State of India with Highest GDP What is Intellectual Property? (2013). Retrieved from World Intellectual Property Organization: http://www.wipo.int/about-ip/en/ Why is Itellectual Property Important? (n.d.) World Bank Research - Indian Agriculture. (2013). Retrieved from The World Bank: http://search.worldbank.org/all?qterm=Indian+Agriculture&title=&filetype= World Bank Research - US Economy Total numbers of organic producers (2001) 547591
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