Business Plan of CONTESSA INTERIOR

Executive Summary
Contessa is a basically furniture showroom. The name is known by some
geographical area people only in Colombo. It was the wood division of Link Engineering
since its incorporation in 1990. After the acquisition by Blue Ocean Group of Companies in
September 2013, The name Contessa is registered as the separate entity which is going to
function as a separate SBU under the umbrella Blue Ocean.
In future, Contessa will also be diversified into all type of interior work such as steel, glass,
partitioning decorations, curtaining, wooden and laminated flooring and imports and exports
of furniture also. In addition, it is also expecting to expand its wider hands all over the island
through establishing multiple show rooms in selected regions.
Over the years, Contessa has clearly identified a market for its interior solutions. With broad
innovative ideas, customer oriented service or products, and quality of service by the sales
force, Contessa seeks to build a strong market position by establishing its major Blue Ocean
strategy in its activities. It also concentrates on targeting high end residential customers,
commercial development projects, and mid range residential customer segment.

Objectives
To be the top interior decorator firm in the market.
Revenue to more than Rs One billion in the year ended 2018 December
Aims to have 60% sales from commercial developments and 40% from individual
customers over the years.
To have fifteen number of sales outlets all over the island within the targeted four
years.

Mission
To be the most innovative interior solution service provider in the market while enhancing
and ensuring the customer satisfaction.

Business Plan of CONTESSA INTERIOR

Start up and initiating business

Contessa as you all know was doing the business as s showroom since its incorporation.
Now, through the branding which is going to be done, it will break up the competition in the
market and establish the name as the most innovative interior service provider. As it is being
functioning as the division of Link Engineering, it will not need the start up costs or kind of
imitation cost. In order to take the significant business into the company its requiring funds
spending on advertising and selling at the initial stage.

Strategic Miles Stone

2014 - Opening first showroom
2015 Developing show rooms and increasing number of sales & Q/S staffs significantly
2016 Start Exporting Wooden products to multiple countries
2017 Achieving Rs. 450 millon turnover
2018 Achieving remarkable Rs.One billon turnover through increased sales & Q/S staff,
Island wide show rooms, exports, winning tenders, capturing corporate clientele through
branded image interior solutions.
2025 Targeting forty numbers of show rooms all over the Island.
2030 Listing in Colombo Stock Exchange at DiriSavi Board & Developing international
activities through establishing international branches

Business Plan of CONTESSA INTERIOR

Business Model & Plan (1.1)
Product

Target customers /
Segment

Product stage in
PLC

Pricing strategy

North & East region

Introductory

Premium pricing

Central

Growth

Absorption pricing

West & south

Matured market

Loss leadership

Innovative
CLEI Products
(www.clei.it)

Segmented high profile

customers (Eg: Blue
Ocean Customers)

Early Introductory

Price Skimming

Wooden products &

wooden crafting

Middle and high

residential customers

Stage between
Introductory &
Growth

Market oriented pricing

Melamine wardrobes &

computer tables

Retail sellers all over the

Island

Growth

Predatory pricing

Office partitions,
furniture, decorative
items & other interior

Contacting corporate
clientele all over the
island which are about
to renovate

Market oriented pricing

Following all tenders

(Through Q/S staff)

Loss leadership

Residential apartments

Highly growth

Market based pricing

Pantry cupboards
& Aluminium products

Registering / Tendering
for Office Interior work
& supplying furniture
Vanity Units, home
furniture & Bathroom
accessories

Marketing Communication
Issuing leaflets, targeting public
gathering events & functions.
News paper advertising
Issuing leaflets & newspaper
advertising
Newspaper advertising, email
flyers,
Hoardings (Eg: Sumsung Curved
TV intro in SL),
Promotional Video TV Ads,
heavy paper ads promtions
Issuing leaflets in public
gathering and newspaper ads
Issuing product profiles to retail
sellers and selling through them
by adding profit margin for them
Issuing Contessa Product
Profiles & Album, conducting
presentations, sending email
flyers
Issuing company profiles with
designed albums and the past
history with all activities.
Sending samples to apartment or
property developers and issuing
catalogues.

Business Plan of CONTESSA INTERIOR

Business Plan of CONTESSA INTERIOR

Production Strategy
1. CLEI imported innovative furniture items
At the initiation stage, we will import small quantity of the products from www.clei.it After
the importing, process reverse engineering will be done to find out the manufacturing process
and to find the solutions how to manufacture using the Srilankan raw materials. Specialized
manufacturing staff will be allocated for the reproduction.
2. All other manufacturing items
All production process will be done through the in house factory and outsourcing will also be
done by looking after the capability of factory and production ability per month. Based on the
sales, some of the production will also be outsourced considering the factory capability
during the production times.

Marketing Analysis

There is enough market for interior designing solution provider in Srilanka because of the
reason, the entire country in a huge developing phase after the end of the war.
Market for Contessa products is huge according to the governments development plan as
well as private sector development programmers. But, for implementing strategies and taking
business, Contessa hugely requires advertisement and branding.
Economical and political factor is major benefit for Contessa in the coming growth.
Addressable market
Contessa will strategically concentrate on corporate clients. But, in order to establish its
brand name under the household, it would serve to individual customers as well with
household items.
Segmentation
We have identified our market segment as follows:

Group of customers : It differs according to each and every product contessa offers
(please refer table 1.1)
Geography : Concentrates mainly based on Colombo area for interior works and other
regions for some other products (Please refer table 1.1)

Business Plan of CONTESSA INTERIOR

Prices : Our strategy would be based on the each product that we offer (Please refer
table 1.1)
Distribution channel : Place mix will be done through direct distribution methods.

Industry Analysis
Industry analysis is a vital part of the decision-making process in a business. A
comprehensive industry analysis helps to take an objective view of the underlying forces,
attractiveness, and success factors that determine the structure of the industry. Understanding
the business's operating environment in this way can help to formulate an effective strategy,
position the business for success, and make the most efficient use of the limited resources of
the small business. We are going to discuss the following sections in the industry analysis:

Industry analysis on interior solution providers.

The industry for total interior solution in Srilanka is very attractive as there is no heavy
competition to provide all interior services under one roof. But, there is lot of competitors in
the market to offer the same product Contessa manufacturing. Every competitor will be
producing only some of the products. Not all interior services. This will be major competitive
advantage for Contessa. But, prevailing competitors cant copy the CLEI products for some
time if Contessa is successful in manufacturing by using the time and potential Contessa can
make significant profit and huge market share easily.

Competition prevailing in the industry

Product

Competitor

Strategy to eradicate
competition

Pantry and home furniture

Moratuwa wooden

Innovation in furniture such

manufacturers, Singer

as fitting lights in Pantry,

Homes, Damro

Color
pricing

modifications,

Low

Business Plan of CONTESSA INTERIOR

Melamine wardrobes,

Piyestra, Damro

computer tables

Supply for local retailers

through

low

pricing

and

providing them innovative

catalogues
Aluminium and combined

Lanka Aluminium, Alumex Low pricing

products

and other local fabricators

Office furniture & partitions

All over the Island several Heavy

competitiors

advertising

for

creating strong brand name

Opportunity over the market

Based on the market and industry analysis, there is a strong demand for interior works all
over the Island. The weakness of the competitors will also be used as an additional feature in
order to capture the market via prevailing opportunities. For example.
Ramada Hotel
http://www.ft.lk/2014/07/16/ramada-colombo-soon-to-unveil-dazzling-new-lobby/
Dominos Pizza
http://www.island.lk/index.php?page_cat=article-details&page=articledetails&code_title=107811
Sampath Bank
http://www.sampath.lk/en/news/entry/sampath-bank-rajagiriya-branch-moves-to-a-newlocation
Subway
http://sundaytimes.lk/140727/magazine/subway-ready-to-open-in-colombo-107936.html

Business Plan of CONTESSA INTERIOR

Marketing Plan
Marketing plan for Contessa describes the future marketing plans of Contessa and the
strategies that will be used in the future in order to capture the target market. (Please Refer
table 1.1)
Target Customer strategy
The target customer strategy for Contessa is identified on customer needs in certain segments
and geographical areas. (Please refer 1.1)
Channel strategy
All the products will be directly supplied by the own transportation except the melamine
products which are going to be sold for customers through all over the Island retailers.
Branding strategy
At the initial stage Contessa will be carrying its family Blue Ocean Group under all
promotions in order to establish a strong brand name. After some period, it would start to do
all of its activities under its own name Contessa Pvt Ltd
As we are new to the market that we are expecting to capture (all over the Island), our brand
recognition or brand identity is less at the introduction stage of our product life cycle. But, we
believe that we can create brand loyalty within the next few years through the unique feature
of our product, comparing with the existing product in the market.
The values we expect to remain in the minds of our customers are superior quality and
innovation. Through marketing these values we will create identification for our product. The
essential skill required to create the brand strategy is the marketing skill which is a very
positive resource to our business. So the mix of their marketing skill with all the other
available resources will create a very strong pool to build the position of our business.

Pricing strategy
All the products pricing will be done according to the market perception (Please refer 1.1)

Business Plan of CONTESSA INTERIOR

Internet Strategy
Our Corporate website (ww.contessa.lk) will be used for all promotional activities and
innovate us from the competition. In addition, time to time there will be a toolbar in mostly
viewed websites to familiarize the name. (Eg: ikman.lk; hitad.lk, srilanka equity forum,
etc)
Communication strategy
In times, Contessa will be doing guerilla marketing campaigns as well such as promotions
through school students by offering gifts and vouchers and through targeting the public at
unexpected places.
Example :
http://www.creativeguerrillamarketing.com/guerrilla-marketing/15-clever-bench-guerrillamarketing-examples/
Sales Strategy
All our products except the melamine cupboards will be sold by our own sales executives
through our show rooms. On the other hand, we will be selling some of our products through
retail stores where as 3-5% commission will be given for the retail sellers on their sales.

Business Plan of CONTESSA INTERIOR

Operation Plan
Production
All the products will be done through our moratuwa factory. But, considering the capability
of factory, some of the production will be also outsourced at times. In addition, based on the
success of business and production ability, Contessa will be expanding its production through
establishing some other factories as well.
Quality, Research & Development
There will be a team which is responsible for ensuring quality, cutting down factory cost and
innovating ideas in the factory production.
Other equipment
Based on the success of future business of Contessa, it will be expanding its machinery and
accessories such as purchasing its own chemical treatment plant, moisture reducing plant and
other machineries.

Development Plan & Strategy

The business is planning to serve with all type of interior works under one roof. At the initial
stage, it is depending on the product brochure, corporate website and the ability & skill of the
sales people majorly. After two years, Contessa will also develop its market for other
countries through exporting home furniture, and establishing some sales outlets in near
regions.
.

Business Plan of CONTESSA INTERIOR

Risks Faced by the Business

Although the business seems to be very attractive as every enterprise this also has its own
risks. So it is very important to first identify those risks and then try to implement plans to
mitigate those risks. This will help the firm to understand the reality and focus on those that
may have a critical impact on the success of the firm and not the ordinary operating risks
faced by any business. The natural tendency is to consider what may go wrong, but equally
important is what must go right. The major risks that the firm might face are explained in the
following part.
Competitors response, predatory pricing
There is huge domestic rivalry for furniture industry in Srilanka. But, as Contessa is dealing
with not only furniture but also all type of interior works, it is safer for some points. In
addition, contessa will also be giving quality assurance certificates for customers to ensure
the quality. Here the competitive advantage can be achieved through focus differentiation.
Financial
The company is also exposed to financial risk as even though it is supported by Link
Engineering. But, in order to do big promotional campaigns and participate in exhibitions,
Contessa needs to be waiting for capturing business significantly and required fund.
Macroeconomic changes
As Srilanka market is open economy and full freedom after the civil war, some of the foreign
companies also expanding their business to Srilanka which will be indirectly affect the
business activities of Contessa.
Government Law & Regulations
Even though current governments plan is supportive for growth of Contessa as it gives lot of
opportunities in the market for the development, in the near future, there will be presidential
election which is going to be held in order to re-elect Srilankas new president for next six
years. Uncertainty on the new government will have negative impact on growth of Contessa.

Business Plan of CONTESSA INTERIOR

Business Plan of CONTESSA INTERIOR

Financial Plan
Revenue / Sales
Cost of Sales
Gross Profit
Expenses
Advertising & Selling
Administrative
Operating Profit
Finance Cost
Profit/Loss Before Tax

Revenue Growth rate

Gross Profit
Operating profit
Net Earnings

FY 2015

FY 2016

FY 2017

FY 2018

72,577,827
61,691,153
10,886,674

178,992,313
152,143,466
26,848,847

441,433,003
375,218,053
66,214,950

1,088,667,402
925,367,292
163,300,110

3,467,597
3,944,801
3,474,276
1,518,480
1,955,796

7,035,194
7,005,373
12,808,280
4,681,498
8,126,782

14,648,320
13,518,631
38,047,999
8,434,714
29,613,285

29,152,506
26,645,148
107,502,456
16,307,456
91,195,000

Nil
15%
4.79%
2.69%

247%
15%
7.16%
4.54%

247%
15%
8.62%
6.71%

247%
15%
9.87%
8.38%

Business Plan of CONTESSA INTERIOR

Business Plan of CONTESSA INTERIOR

Contessa (Pvt) Ltd
for the quarter ended in 3 months

Budgeted Comprehensive Statement of Income (Rs)

Revenue / Sales
Cost of Sales
Gross Profit
Expenses
Advertising & Selling
Administrative
Operating Profit
Finance Cost
Profit/Loss Before Tax

No. of Sales executives

Avg.Sales per salesman
Factory labourers
Production per labourer
Number of showrooms in Island

Buying Treatment machinery on lease

Buying heavy vehicles on lease
Diversifying

31-Dec-14
10,000,000
8,500,000
1,500,000

600,000
700,000
200,000
200,000

1
10,000,000
25
400,000
1

31-Mar-15
12,531,631
10,651,887
1,879,745

30-Ju-2015
15,704,178
13,348,551
2,355,627

30-Sep-15
19,679,897
16,727,912
2,951,985

31-Dec-15
24,662,121
20,962,803
3,699,318

31-Mar-16
30,905,660
26,269,811
4,635,849

30-Ju-2016
38,729,833
32,920,358
5,809,475

30-Sep-16
48,534,799
41,254,579
7,280,220

672,000
798,000
409,745
409,745

752,640
909,720
693,267
450,000
243,267

842,957
1,037,081
1,071,947
504,000
567,947

1,200,000
1,200,000
1,299,318
564,480
734,838

1,344,000
1,368,000
1,923,849
632,218
1,291,631

1,505,280
1,559,520
2,744,675
1,200,000
1,544,675

1,685,914
1,777,853
3,816,453
1,344,000
2,472,453

2
6,265,816
32
400,000
2

4
3,926,045
40
400,000
2

6
3,279,983
44
450,000
4

8
3,082,765
55
450,000
4

10
3,090,566
62
500,000
5

13
2,979,218
78
500,000
6

16
3,033,425
88
550,000
6

on 30 June 2015
30-Jan-16
Electronic items
Wooden flooring

Imports from CLEI

Tiles & Granite
Curtaining
Glass work
Laminated flooring

30-Aug-16
Steel & S/S Fabrication

Business Plan of CONTESSA INTERIOR

31-Dec-16
60,822,020
51,698,717
9,123,303

31-Mar-17
76,219,912
64,786,925
11,432,987

30-Ju-2017
95,515,983
81,188,586
14,327,397

30-Sep-17
119,697,107
101,742,541
17,954,566

31-Dec-17
150,000,000
127,500,000
22,500,000

31-Mar-18
187,974,468
159,778,298
28,196,170

30-Ju-2018
235,562,671
200,228,270
35,334,401

30-Sep-18
295,198,451
250,918,684
44,279,768

31-Dec-18
369,931,812
314,442,040
55,489,772

2,500,000
2,300,000
4,323,303
1,505,280
2,818,023

2,800,000
2,622,000
6,010,987
1,685,914
4,325,073

3,136,000
2,989,080
8,202,317
2,000,000
6,202,317

3,512,320
3,407,551
11,034,695
2,240,000
8,794,695

5,200,000
4,500,000
12,800,000
2,508,800
10,291,200

5,824,000
5,130,000
17,242,170
2,809,856
14,432,314

6,522,880
5,848,200
22,963,321
4,000,000
18,963,321

7,305,626
6,666,948
30,307,194
4,480,000
25,827,194

9,500,000
9,000,000
36,989,772
5,017,600
31,972,172

20
3,041,101
110
550,000
8

25
3,048,796
127
600,000
8

31
3,081,161
162
600,000
10

39
3,069,157
185
650,000
13

49
3,061,224
232
650,000
13

30-Jul-17
30-Nov-17

61
3,081,549
270
700,000
13

77
3,059,255
338
700,000
15

96
3,074,984
400
750,000
15

120
3,082,765
490
750,000
15

Business Plan of CONTESSA INTERIOR

Pantry Cupboards
Office Interior
Aluminium products
Other wooden items
Wooden flooring
Laminated Wooden
Marbles & Granite
Glass work
CLEI products
Curtaining & Carpets
Steel & S/S Fabrication
Electronic items
Gross Revenue

31-Dec-14
3,000,000
4,500,000
1,500,000
1,000,000
10,000,000

31-Mar-15 30-Ju-2015
3,000,000
4,004,178
4,500,000
5,000,000
2,000,000
2,500,000
1,431,631
1,400,000
1,000,000
1,500,000
700,000
600,000
600,000
12,531,631

15,704,178

30-Sep-15
4,079,897
6,000,000
2,800,000
1,800,000
1,800,000
700,000
1,200,000
300,000
1,000,000
19,679,897

31-Dec-15
4,062,121
7,700,000
3,200,000
2,400,000
2,000,000
1,000,000
800,000
300,000
1,650,000
350,000
1,200,000
24,662,121

31-Mar-16
4,505,660
9,200,000
4,500,000
2,900,000
2,500,000
1,300,000
950,000
350,000
2,800,000
400,000
1,500,000
30,905,660

30-Ju-2016
4,913,333
11,224,000
5,600,000
3,335,000
3,075,000
1,625,000
1,064,000
395,500
4,116,000
492,000
1,000,000
1,890,000
38,729,833

Business Plan of CONTESSA INTERIOR

30-Sep-16
5,600,719
14,000,000
6,800,000
4,000,000
3,967,000
2,100,000
1,400,000
480,000
6,050,520
605,160
1,150,000
2,381,400

31-Dec-16
6,021,610
17,080,000
8,324,000
4,850,000
4,879,410
2,850,000
1,850,000
665,000
8,970,000
850,000
1,282,000
3,200,000

31-Mar-17
6,322,691
20,837,600
9,822,320
5,577,500
6,001,674
3,562,500
2,072,000
751,450
14,810,117
1,045,500
1,384,560
4,032,000

30-Ju-2017
6,639,803
25,421,872
11,590,338
6,414,125
7,382,059
4,453,125
2,320,640
849,139
22,583,273
1,285,965
1,495,325
5,080,320

48,534,799

60,822,020

76,219,912

95,515,983

30-Sep-17
6,971,793
31,014,684
13,676,598
7,376,244
9,079,933
5,566,406
2,599,117
959,527
32,854,914
1,581,737
1,614,951
6,401,203
119,697,107

31-Dec-17
7,320,383
37,837,914
16,138,386
8,482,680
11,168,318
6,958,008
2,911,011
1,084,265
46,343,836
1,945,536
1,744,147
8,065,516
150,000,000

31-Mar-18
7,686,402
46,162,255
19,043,296
9,755,082
13,737,031
8,697,510
3,260,332
1,225,219
63,968,102
2,393,010
1,883,679
10,162,550
187,974,468

30-Ju-2018
8,070,722
56,317,952
22,471,089
11,218,345
16,896,548
10,871,887
3,651,572
1,384,498
86,897,471
2,943,402
2,034,373
12,804,813
235,562,671

30-Sep-18
8,474,258
68,707,901
26,515,885
12,901,096
20,782,754
13,589,859
4,089,761
1,564,483
116,620,883
3,620,385
2,197,123
16,134,065

31-Dec-18
8,897,971
83,823,639
31,288,744
14,836,261
25,562,787
16,987,324
4,580,532
1,767,865
155,031,802
4,453,073
2,372,893
20,328,922

295,198,451

369,931,812

Business Plan of CONTESSA INTERIOR

Gap Analysis
Revenue
Rs.1 Billon

Expected Growth

Market Development North, east & other part of Srilanka

Product Development CLEI products, Vanity Units
Diversification Steel fabrication, wooden flooring, wall papers

Rs.36 Million

Current Growth

Business Plan of CONTESSA INTERIOR

SWOT Analysis
Strengths
Availability of product catalogues
Financially supported by Link Engineering
Strong brand name in Colombo suburbs
Initial distribution is done by the company
Customer service by experienced sales staff
Creative staff dedicated to develop strategic direction
Experienced and high skilled factory labourers
Existence of well experienced 3D interiors
Weakness
Absence of technically brilliant cost accountant
Slow production
Poor access to supply management
Possibility for negative cash flows
Bargaining power of company is relatively low since we are in introductory stage
Inexperience about the interior market for current sales staff
Not sufficient sales & Q/S staff for undertaking customer handling.
Opportunities
There are several development programs all over the Island after the war.
Positive Government regulations
Access to all distribution channels
Wider market in the whole Island which we can target
Threats
Changing taste of customers in terms of Interior market
Technological advances in furniture interior
Substitute products always available in the market

Business Plan of CONTESSA INTERIOR

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