E-Business Proposal for Happy stationary
By
2018MS8123 Giridaran.A
Course: FIN 3234 – E-Business
Lecturer: Dr. Dillina Herath
Level II- Semester vi
29th September 2021
Department of Finance
Faculty of Management & Finance
University of Colombo
Table of Contents
Table of Contents ...........................................................................................................ii
List of figures ................................................................................................................ iv
List of tables ................................................................................................................... v
Executive summary....................................................................................................... vi
1.Introduction ................................................................................................................. 1
2. The management ........................................................................................................ 2
3. Company History ....................................................................................................... 4
4.Product Description .................................................................................................... 4
4.1 product / service features...................................................................................... 4
4.2 Product/ Service Benefits ..................................................................................... 5
5. Business opportunities ............................................................................................... 6
5.1 List of competitors ............................................................................................... 6
5.12 Stationary products ......................................................................................... 6
5.13 Printing & Photocopy services ....................................................................... 6
5.2 Potential sales figures ........................................................................................... 6
6.Competitor analysis .................................................................................................... 8
6.1 Introduction .......................................................................................................... 8
6.2 Rivalry Happy stationary will face in relation to its stationary products ............. 9
6.3 Rivalry Happy stationary will face in relation to its printing and photocopy
services. .................................................................................................................... 11
7.Research and development ....................................................................................... 12
8. Pricing ...................................................................................................................... 13
8.1 Price charging criteria ........................................................................................ 13
8.2 Methods of payments ......................................................................................... 13
9.Market analysis ......................................................................................................... 14
9.1 Porters’ five forces ............................................................................................. 14
9.11 Rivalry between existing competitors .......................................................... 14
9.12 Bargaining power of customer ..................................................................... 15
9.13 Bargaining power of suppliers ...................................................................... 15
9.14 The threat of new entrants ............................................................................ 15
9.14 The threat of substitutes ................................................................................ 15
9.2 Target market ..................................................................................................... 16
9.3Marketing plan and strategies ............................................................................. 16
9.4 Marketing mix .................................................................................................... 17
ii
9.41 Product .......................................................................................................... 17
9.42 Place.............................................................................................................. 17
9.43 Price .............................................................................................................. 17
9.44 Promotion ..................................................................................................... 17
10.Financial plan .......................................................................................................... 18
10.1 Incremental cashflows ...................................................................................... 18
10.2 NPV calculation ............................................................................................... 18
11.Conclusion .............................................................................................................. 20
References .................................................................................................................... 21
iii
List of figures
Figure 1: Structure of Happy stationary
2
Figure 2: New structure for the E. Business model
2
Figure 3: Positive Google reviews received by the rivals
9
Figure 4: Websites of the rivals
10
Figure 5: Social media presence of the rivals
10
Figure 6: Website and social media page of Unique Printers
11
iv
List of tables
.
Table 1: Sales figures before pandemic
7
Table 2: Sales figures after pandemic
7
Table 3: Forecasted Sales Revenue
7
Table 4: Rivals of Happy stationary
8
Table 5: Incremental cash flows
18
Table 6: NPV calculation
19
v
Executive summary
Adoption of E-business platforms has accelerated in Sri Lanka due to Covid -19 pandemic.
New normal, social distance and work from home culture has urged businesses to enter the
virtual business world.
Considering the prevailing situation, an E-business proposal has been made for Happy
stationary in Kotahena. It is a popular stationary shop which sells wide range of stationaries
and offers printing and photocopy services. Implementation of an E-Business platform to the
Happy stationary includes online ordering, payment, and delivery system. Customers can
make their orders through the website in a blink and payments can be conveniently made using
credit cards or debit cards. In addition, customers can also satisfy their printing and
photocopying needs through this platform. Plus, delivery at doorstep and cash at delivery
would increase customer gratification. Individuals who are responsible for the E business
platform will be tasked with managing the E business platform, getting the order ready,
arranging the delivery, and making sure orders are delivered at the right place, at the right time
and to the right customer.
This proposal outlines the products/ service features, anticipated benefits, potential sales
figures, rivals of Happy stationaries, level of competition in the market, pricing strategy,
elaborated market analysis, marketing plan, marketing strategies, marketing mix and financial
plan.
Happy stationary as a business with no prior experience in virtual marketing, will be
employing attractive marketing strategies to entice customers. It will use Face book, Instagram
and maintain a blog under the name “All the stationary “to market them self and keep their
customers up to date about the new products and offers provided by them. This E. Business
platform will be extremely useful for all stationary users and people who prefer to use hard
copies. Customers can make their orders whenever and wherever they want. Since the project
has a positive NPV Happy stationary can undoubtedly step into the virtual business world.
vi
1.Introduction
Happy stationary is a stationary shop located in Colombo -13. It started its operations
in year 2015.It sells assortment of stationary products. In addition, they offer several
services such as printing and photocopying. Currently happy stationary is conducting
its business operations at its physical store and delivers the orders that it receive through
WhatsApp
Before pandemic Happy stationary was a very busy shop. In the surrounding areas of
Happy stationary there are several educational institutions. All students and teachers
who study and teach at these institutions buy stationaries from happy stationary.
Students even wait in a queue to print and take photocopies. Morning 7 AM to 8 AM
and evening 12 PM to 3PM were the peak hours of Happy stationary. Unfortunately,
the pandemic turned the tables and made happy stationary helpless. Even though the
firm generates income by delivering orders that it receive through WhatsApp, that is
not up to their previous sales levels. Plus, most of their stationary products are
remaining idle at happy stationary store. Until schools remain closed, the future of
Happy stationary will remain bleak.
Therefore, the best way to handle this uncertainty is making stationary items available
at an online platform as a E business. Creation of a well-functioning website is must
for Happy stationary. Creation of the website will be outsourced to ESSHVA TECHQ
(PVT) LTD. Advertising to the public will be done using social media platforms.
Therefore, in the short term, Happy stationary will focus on attracting more customers
and improving its sales and in the long run, it will focus on expanding its business in
more areas in Colombo through virtual ways.
1
2. The management
Role played by the management team is very crucial for a business. A good
management team will help to achieve business success and ensures that the growth of
the company will be sustained for a very long time. Poor management ends up in
business failure. Put simply, fate of a company is determined by its management team.
Happy stationary is owned and controlled solely by Mr. Jack. He and his family
members manage the business. Apart from them, a shop assistant, and a delivery boy
work in Happy stationary. Jack who is in his 50’s has an extensive experience in retail
management. He manages the financial aspects of the business. The shop assistant is
responsible for the printing and photocopying. In addition, he is also responsible for
dealing with customers who send their orders through WhatsApp. Customers are
requested to the send the PDFs of the materials they need to print via WhatsApp. After
printing them, shop assistant sends message to the customer. Therefore, customer can
go and collect the printed materials without waiting at the shop until the printing is
done. During lockdowns, Happy stationary scarcely receives stationary orders through
WhatsApp and printing orders made through WhatsApp are delivered at the doorstep.
Owner
Shop
assitant
Delivery
boy
Figure 1: Structure of Happy Stationary
2
Mr. Jack’s three daughters who have completed their higher education, have good ICT
skills. They will manage the E-Business platform and will support their father. One
more person will be appointed as a delivery boy. Mr. Jack’s daughters will be tasked
with managing the website and marketing.
Eldest daughter will be the system operator. She will take down all the orders and send
the orders to her sisters (Counter staffs). They will pack up all the stationaries’ ordered
in a brown paper bag and attach the printed bill on the bag. Mr. Jack will check the
items with the order list and pass it down to delivery staff with the delivery address.
Delivery staffs will deliver the package.
Shop assistant will be responsible for the printing and photocopying. He will clip the
papers in the right order and attach the bill with them.
Depending on the performance of the E business platform and customers’ demand new
staffs will be recruited. Age limit of the delivery staff will be between 20-28, should
possess a driving license and bike, should be familiar with the routes, one year
experience in delivery service would be an added advantage. They should also have
E.Business
good communication skills in English, Sinhala, and Tamil.
System operator
Counter staffs
Shop Assistant
Delivery staffs
Figure 2: New structure for the E. Business model.
3
3. Company History
Happy stationary is a stationary shop located in the heart of Kotahena. It is a one stop
solution for all stationery, copying and printing needs. It was started in year 2015 by
Mr. Jack using his personal fund two million. Business is managed by him and his
family members. Within a short time span it became a popular spot to buy stationaries
and to take photocopies and print. After the Covid -19 pandemic time, it started to
accept orders through WhatsApp. However, firm does not have an online presence to
expand their business.
4.Product Description
4.1 product / service features
Happy stationary is a brick-and-mortar store. Therefore, a website will be introduced
to conduct the business through online. This will enable happy stationary to earn
income during lockdowns. After pandemic. Happy stationary can maintain their
presence on online as well as on-site
Website will be very handy and user friendly. A search option will be available for the
customers to identify the required product directly. On the website, products will be
displayed under different categories namely Books, Pens, Color products, other school
products, Office products, Highlighters and markers, paper products and other items.
These categories will be further subdivided in accordance with different types of
varieties available under each product. For example, Product book will be sub divided
into, A4 CR books, A4 CR drawing books, A4 CR science books and Notebooks. A4
CR books will be further classified into 200,400,40,80,120,160,200 pages square and
single rule books based on different brands. Price per unit will be displayed under the
name of the product. If a product is not available, it will be labeled as out of stock.
Enlarge option will be available for all the products to have the full view of the products.
Customers should specify the quantity they want and then click the add to cart option.
In the cart option, all the products chosen by the customer will be displayed along with
the total price.
As soon the final product list is validated by the customer, he or she will be asked to
provide the address. Happy stationary’s service will be limited to Colombo 13,
4
Colombo 14, and Colombo 15. Free delivery will be made for all orders above
1000.Customers can select either cash on deliver option or pay through credit/debit card
option.
If the customers want to obtain other services like printing or photocopying, they can
simply click on the services icon and specify their orders. To obtain the printing services
customers would be requested to just drag and drop the files needed to be printed and
specify the number of copies. To obtain photocopy services customers will be requested
to make a note on types of material needed to be photocopied like certificates, book
pages, documents etc. and specify the number of copies needed. Materials will be
collected from the customers at their doorstep and delivered within two hours.
4.2 Product/ Service Benefits
Building an E business platform is the only way out of the crisis caused by the
pandemic. Because of this endeavor, Happy stationary will reap endless benefits.
Happy Stationary can get back their lost customers, attract new customers and broaden
their customer base. Company can communicate with customers around the clock. New
products arrivals, seasonal offers, discounts can be communicated to the customers in
no time.
Happy stationary can market itself effectively. Campaigns can be conducted virtually
through the company website itself and through social media platforms. Happy
stationary does not need to print pamphlets, notices, and banners. Put simply, firm can
save large sum of money by opting to digital marketing tools.
Even when Happy stationary wants to expand its operations, it does not need to open
new stores in different areas. It can simply direct its attention to online business and
serve a larger number of customers without spending money on construction, rent,
maintenance and so on.
5
5. Business opportunities
5.1 List of competitors
5.12 Stationary products
1. Daraz.lk
2. Pothkade.lk
3. ProMate world.com
4. Atlas.lk
5.13 Printing & Photocopy services
1. Merit print
5.2 Potential sales figures
As per the discussion with Mr.John, before pandemic on average 200 customers visited
per day to purchase stationary items and obtained other services offered by Happy
stationary and their average bill was approximately Rs.250.00. Firm’s daily income was
50,000. On weekends their income was around 55,000. Accordingly, their monthly
income was 1440,000 except in the school vacation months like April, August, and
December.
After pandemic, company’s income level plunged. Daily income dropped to Rs.7500
and average monthly income is around Rs.225,000
With the introduction of online platform, the revenue in expected to soar by 40% in the
first year, 30 % in the second year, then 20% in the following years.
6
Table 1: Sales figures before pandemic
Average customers visit per day
200 customers
Average bill of one customer
Rs. 250.00
Average per day income
Rs. 50,000 (Rs 250.00*200)
Average monthly income
Rs.1500,000
Average yearly income
Rs.1500,000*9+590,000*3= 15,270,000
Table 2: Sales figures after pandemic
Average
customers
per 50 customer visits
visit
day/orders
10 printing orders (WhatsApp)
Average per day income
50*100+10*250= 7500
Average monthly income
7500*30=225,000
Average yearly income
225,000*12=2700,000
Table 3: Forecasted Sales Revenue
2021
2022
2023
2024
2025
2026
-
-
-
-
-
-
40%
30%
20%
20%
20%
-
3780,000
4914,000
5,896,800
7,076,160
8,491,392
Income for 2700,000
present year
Expected
growth rate
Forecasted
sales figures
Source: Author’s own contribution
7
6.Competitor analysis
6.1 Introduction
Happy stationary is predominantly engaged in selling stationaries. In addition to this, it
also offers printing and photocopy services. The below tables examine the rivalry that
Happy stationary might encounter in its virtual presence.
Table 4: Rivals of Happy stationary
Competitor
Description
Atlas Axillia Co. (Pvt) Ltd
Largest local stationery and school supplies company. Altals has a
well-built E business platform- atlas.lk. Island wide delivery is made.
Offers attractive online promotions.
Daraz.lk
One of the finest online shopping sites in Sri Lanka. Offers wide
variety of products including stationaries. Products of all leading
stationary brands are showcased on their website. Daraz app offers
exclusive in-app discounts and features. Attractive discounts are
offered to the customers who purchase product through their app.
Lanka Traders
Has a well-established website called Pothkade..lk which is fully
dedicated for Stationary products. Firm responds to customer queries
immediately and ensures that the customers are feeling delighted.
PrintXcel(Pvt) Ltd
Has a well-established website-Promateworld.com. Has a very strong
brand value. Firm’s Promate brand is targeted at High-end customers.
It’s other two brands Mango and Rathna are affordable by everyone.
Offers best quality solution to all stationary needs during this
Pandemic period.
Other small retail stores
Small retail stores offer basic stationary products. Customers who live
nearby these shops purchase stationary products form these shops at a
very less price.
Source: Author’s own contribution
8
6.2 Rivalry Happy stationary will face in relation to its stationary
products
Happy stationary is a one stop solution for all stationary, printing, and photocopying
needs. Before the pandemic, the main reason behind the success of Happy stationary
was its location. It is in the middle of well-established schools like Good Shepherd
Convent, St Benedict’s convent, St. Lucia’s college Colombo, Kotahena government
girls’ school and so on. This shop is often referred as the Book shop near the school.
Even though, there are other small stationary shops in Kotahena, they are not very
popular. Therefore, Happy stationary was at the top of their game.
When it comes to Happy stationary’s virtual presence, it will face a tough competition
from the E Business platforms maintained by its rivals Atlas Axillia Co. (Pvt) Ltd,
Daraz.lk, Lanka Traders and PrintXcel (Pvt) Ltd. These platforms offer various
facilities to their customers. Especially they all offer island wide delivery and
maintain a separate hot line to answer customer queries. Plus, they actively market
themselves on social media platforms.
Figure 3: Positive Google reviews received by the rivals
9
Figure 4 Websites of the rivals
Figure 5 Social media presence of the rivals
10
In conclusion, to strengthen its market position and entice more customers, it is very
important for Happy stationary to create a strong online presence and actively market
itself on social media. It should offer dynamic, stylish, and vivid solutions to suit
every stationary need. Stationaries offered by Happy stationary should unleash a
person’s creative potential.
Ensuring finest service, speediest delivery, best customer care support is critical for
Happy stationary to survive and thrive.
6.3 Rivalry Happy stationary will face in relation to its printing and
photocopy services.
When it comes to the printing and photocopy services, the hardest competitor for Happy
stationary is Unique printers. They have an attractive Face book account where their
WhatsApp number is directly connected to their face book page. It also delivers the
printing orders.
There are many small photocopy shops in Kotahena, that offer printing and photocopy
services. However, they are not well-known, and customers often complain their
services are over-priced. Plus, they don’t have any virtual presence. Therefore, by
coming up with a well build E business platform, Happy stationary can easily outdo its
rivals.
Figure 6 Website and social media page of Unique Printers
11
7.Research and development
Research and development encompass all activities that a company carries out to
instigate and invent new products and services. Plus, this process helps to obtain new
knowledge which can be used to create cutting-edge technologies later.
R&D plays a critical role in the success of a business, and it enables the companies to
survive and thrive in this dynamic market. In other words, research and development is
a continuous and ongoing process of improvement. Which facilitate the enhancement
of existing products, process and services and creation of new products, services, and
efficient processes.
When it comes to the Happy stationary, currently it only uses WhatsApp and a hotline
number to deal with its customers. However, these mediums are not sufficient to reach
and serve maximum number of customers.
As a budding business, it is quite impossible for Happy stationary to have a dedicated
R&D team or R&D department. Nevertheless, Mr. John and his daughters should
understand the importance of research and development. They should put their fullest
effort to develop the official website and plan how they are going to make their website
one of a kind.
To build that wow factor, happy stationary should pay attention to customer touch
points. Understanding every touch point will enable to offer better customer experience.
This understanding can be also used to develop customer journey maps. Since
competitors of Happy stationary are far more focused on the product range and the
discounts they offer, this kind of an effort will pave the way for Happy stationary to
achieve competitive advantage over its rivals.
12
8. Pricing
An appropriate pricing strategy is critical for Happy stationary to gain competitive
advantage via its online platform.
Happy stationary is currently charging moderate prices for its stationary products,
printing, and photocopying services.
Following this new endeavor, Happy stationary will be employing a penetration pricing
strategy to entice more customers and grow its customer base. Charging lower prices
coupled with good quality products will help Happy stationary to outshine its rivals.
8.1 Price charging criteria
In its new venture, Happy stationary will charge low prices for its products and
services. Plus, will offer attractive discounts. Though an additional fee would be
charged for the delivery service based on the customer’s total bill and the distance he
or she lives away from Happy stationary.
Price will be charged considering the following criteria
a) To be delivered, the order value should be no less than Rs 300
b) Free delivery will be made for all orders above 1000
c) 5% of the total bill charged as delivery fee if the total bill is from Rs.300-Rs.1000.00
d) All orders will be delivered within two hours. (Except photocopying)
e) Materials needed to photocopied will be collected from the customer’s location
within one hour and the materials and photocopied documents will be delivered to
customers within two hours.
8.2 Methods of payments
Customers can select either cash on deliver option or pay through credit/debit card
option
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9.Market analysis
In the present situation, on one hand, customers are facing difficulties in satisfying their
stationary, printing, and photocopying needs without waiting. On the other hand, due
to prolonged lockdowns, travel restrictions and closure of schools until further notice,
Happy stationary is facing a period of hardship. Entering the virtual world is the only
way out of the dilemma that Happy stationary is facing. E business platform will give
a hand to happy stationary to keep its business up and running. By using the platform
offered by the Happy stationary, customers can place their orders in a flash. Customers
and potential buyers can be provided with extensive information which will help them
to make their order in an efficient way than offline purchases.
9.1 Porters’ five forces
9.11 Rivalry between existing competitors
When it comes to competition regarding the Happy stationary’s stationary business, it
is facing an intensive competition. Even though the opponents of Happy stationary
have well -established websites and have a strong brand value, customers living in
Colombo- 13 and near areas must wait around 4 to 5 days to get the ordered products.
Since Happy stationary’s service is limited to Colombo 13, Colombo 14, and
Colombo 15 (Target market is small) orders will be delivered at the customers’
doorstep within two hours. Put simply, customers in these areas can satisfy their
stationary needs instantly.
Stationary products offered by some of the small retail stores are often frowned upon
by the users who expect good quality stationary products. For example, the exercise
books they sell are yellow tinted, dusted, damaged and so on. Further, they only sell
basic stationary products like pen, pencil, and books. Customers can’t expect varieties
from these retail stores.
Happy stationary is very popular among school students, their parents, and teachers,
therefore a well-functioning website will attract all these parties substantially. Since,
the target market is modest, delivery service of Happy stationaries will be very
effective.
14
In relation to the printing services, the challenger of the Happy stationary is Unique
printers. Presently, there are offering their services in an efficient manner by using
Whats App and Face Book. However, it does not have a website that works splendidly
Therefore, by offering a superior service through its well performing website, Happy
stationary can easily outperform its rival.
9.12 Bargaining power of customer
Bargaining power of the customers are very high, because there are several ways for
the customers to obtain stationary products. Therefore, customers play a critical role in
the pricing of the products. In relation to printing and photocopying services bargaining
power of the customers are very moderate during pandemic periods. Since, printing and
photocopy services are offered by limited shops.
9.13 Bargaining power of suppliers
Materials needed for the stationary shop are obtained from Packsco Ceylon (Pvt) Ltd,
PrintXcel(Pvt) Ltd, AP Enterprises ( Pvt) and Atlas Axillia Co. ( Pvt) Ltd. Therefore,
the bargaining power of the suppliers is high here.
9.14 The threat of new entrants
The threat of new entrants is substantial. Nowadays, with low initial investment any
business can enter the online market. Especially, the present pandemic situation has
urged many businesses to go online. In addition to this, customers prefer to shop from
home, therefore they are opting to the business that provide better online service.
9.14 The threat of substitutes
The threat of substitutes is low because Happy stationary offers stationary products,
printing, and photocopying needs. However, due to the increased use of Portable
Document Format (PDF), Digital Signature Software and Electronic Record Filling
nowadays there is a less demand for printing and photocopying services. But still, there
are a considerable number of people who prefer to use hard copies than soft copies.
Therefore, Happy stationary can successfully target them.
15
9.2 Target market
Happy stationary is a stationary shop which predominantly focuses on stationary users,
who expect variety and newness in the stationary products they use. Though, their
products, printing & photocopy services are targeted at all types of individuals
regardless of their level of income.
9.3Marketing plan and strategies
Devising appropriate marketing strategies is one of the crucial tasks that a business
should perform. Performance of e-business depends on the marketing plan. A welldrafted marketing plan plays an important role in the success of an E-business. Business
should understand the importance of devising appropriate E Business strategies. Simply
building a well-established website is not sufficient. Businesses should precisely
understand, whom they are targeting and how can they create value for them.
Businesses should clearly communicate all the features available on their E business
platform, encourage customers to use those options and maximize their gratification.
Other than the website, Happy stationary will be using Facebook and Instagram, to
promote their products and services among customers. Memories people shared with
Happy stationary before pandemic like students standing in front of Happy stationary,
busy roads, will be highlighted on the posts with the tag line “Back to the glory days”.
In other words, Happy stationary will make all the customers visit their website by
making them feel nostalgic. In addition to this, social media will be used by the Happy
stationary to get feedback from the customers. Through this, Happy stationary can have
clear idea about what customer likes and dislikes about their service and step up their
game.
Happy stationary will also start a blog under the name “All the stationery”. New pens,
notebooks and pencils and other latest stationary tools will be reviewed in this blog.
Customers will find this as an excellent way to see and read about the tools they use
every day. It will give Happy stationary an opportunity to create content, to show off
what it offers and promote its business. Through this Happy stationary, can share up to
date content with their existing and potential customers. Happy stationary will be also
using Search Engine optimization digital marketing strategy. Using the key words in
the content will move Happy stationary’s website higher in the search results. It’s very
16
important for the Happy stationary to ensure that the website is frequently updated with
rich and relevant content.
9.4 Marketing mix
9.41 Product
Happy stationary sells stationary products and offers printing and photocopy services.
Inside the Happy stationary shop, within a limited space, maximum numbers of
products are stored and displayed. Books, pens, and other products are neatly arranged
on glass shelves. Stationary items like file covers, file bags and files are arranged neatly
in a transparent cover. On valentine’s day, Childers’s day, and teacher’s day they sell
beautiful cards, roses, and ornaments. During Vesak they sell colorful face masks. Plus,
during Christmas and New year seasons they sell fireworks. Happy stationary will make
these seasonal products available on their website and share happy moments with
customers.
9.42 Place
Happy stationary is in Kotahena. The objectives of Happy stationary are to reach more
customers, maximize revenue and expand their business. To do this, opting to virtual
platform is the best option. Once the website is built, Happy stationary will
continuously upgrade it and make the order process even more convenient. Even if
Happy stationary wants to expand its presence physically, it can decide the locations by
focusing on the revenue generated from different delivery areas.
9.43 Price
The objectives of Happy stationary are to reach more customers, maximize revenue and
expand its business. To achieve these objectives, Happy stationary will charge less
prices for its offering. These prices will help Happy stationary to expand its market
share in its targeted areas. Delivery charges of the company will be also less compared
to the competitors.
9.44 Promotion
17
Presently, Happy stationary has zero social media presence. Therefore, Happy
stationary will focus on social media marketing, search engine marketing and blogging
to promote its business. Nowadays millennials are so much into social media
advertisements. Therefore, using social medias in a competitive way will undoubtedly
add more profits to Happy stationary. Further Happy stationary will provide attractive
offers and discounts to encourage customers to use the website.
10.Financial plan
In this section financial of the proposed E-business platform for Happy stationary will
be examined, to shed light on the positive impact of the investment in this new
venture for the potential investors.
10.1 Incremental cashflows
Table 5: incremental cash flows
Year
2021
2022 E
2023 E
2024 E
2025 E
2026 E
Sales
2,700,000 3,780,000 4,914,000 5,896,800 7,076,160 8,491,392
Cost of
2,295,000 3,213,000 4,176,900 5,012,280 6,014,736 7,217,683.2
sales
405,000
567000
737,100
884,520
1,061,424 1,273,708.8
Admin cost
81,000
113,400
147,420
176,904
212,284.8 254,741.76
Selling &
40,000
40,000
40,000
40,000
40,000
40,000
-
-
-
-
-
-
284,000
413,600
549,680
136,904
172,284.8 214,741.76
Gross
profit
distribution
Finance
cost
Net profit
10.2 NPV calculation
Following table portrays the NPV of calculation of the Happy stationary for the
proposed E-business plan. The assumed discounting factor of the project is 10%. The
period covered is 5 years with a notion of 40% increase is possible in sales revenue in
18
first year, 30% increase in the second year and 20% increase in the forthcoming years
Table 6: NPV calculation
Year
2022
2023
2024
2025
2026
Increase in
sales
1,080,000
2,214,000
3,196,800
4,376,160
5,791,392
Increase in
cost of sales
(918,000)
(1881,900)
(2,312,280)
(3,719,736)
(4,922,683.2)
Increase in
admin cost
(32400)
(66,420)
(95,904)
(131284.8)
(173,741.176)
Increase in
selling and
distribution
(40,000)
(40,000)
(40,000)
(40,000)
(40,000)
(618,400)
89,600
225,680
748,616
485,139.2
654,967.624
Discount
factor
(10%)
1
0.909
0.826
0.751
0.683
0.621
Present
value
(618,400)
81,446.4
186,411.68
562,210.616
331,350.0736
406,734.8945
Initial
investment
2021
(618,400)
Description
Amount
NPV from the year 2022 to2026
1,568,153.664
Initial outlay
618,400.000
NPV
949,753.6641
Source: Author’s own contribution
Since the projected NPV of the E-Business platform for Prisca Super is 949,753.6641
investors who are investing in this project will yield a positive NPV for their
investment.
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11.Conclusion
Happy stationary is located at the heart of Kotahena. There are several schools and
educational institutions near Happy stationary. Therefore, many people come to buy
stationaries, print, and take photocopies. However, the pandemic changed everything
upside down.
Therefore, it would be extremely beneficial for Happy stationary to launch an E.
Business platform where customers can simply buy stationary products, make their
printing, and photocopy orders in few clicks. Customers don’t need to worry about
fulfilling their stationary, printing, and photocopying needs during lockdown and travel
restriction times. Those needs will be instantly gratified by Happy stationary through
its E business platform.
According to the forecasted values, conclusions can be reached that the launch of the
online platform will boost sales and improve profitability. Plus, social media
advertising will improve the customer awareness and customer base. Thus, it is very
critical for the Happy stationary to constantly upgrade their online platform and make
sure it is user friendly, free from information security threats and efficient.
Due to the Covid-19 pandemic, digital adoption has taken a quantum leap. Customers
have moved significantly toward online channels. Businesses have responded in turn.
Therefore, embarking on an online platform will ensure the upgrowth of Happy
stationary.
20
References
Chaffey, D. (2009). E-Business and E-Commerce Management Strategies. Edinburgh
Gate: Pearson.
Mckinsey&Company . (2020, september 5). our insights . Retrieved from
Mckinsey&Company : https://www.mckinsey.com/businessfunctions/strategy-and-corporate-finance/our-insights/
.
(20
09).
EBusi
nes
s
and
ECo
mm
erce
Ma
nag
em
ent
Stra
tegi
es.
Edi
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