Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
2012
Fanshawe college
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EXECUTIVE SUMMARY
This work is aimed at exporting Canadian diamonds to Belgium. The diamond is mined by Diavik diamond in Canada and will be exported through our Belgium partners Ajediam Ltd. Ajediam Ltd is a privately owned diamond company headquartered in Antwerp, Belgium. With more than 25 years experience and more than 10 distribution and sales channels, the company is a major player in the global diamond market and has been identified as a good partner in order to achieve our monthly sales target of 100 carats and annual sales of 1200 carats of diamond to Belgium. This sales target will be propelled by an initial investment capital of $10 million to enable us meet our strategic goals and objectives with products values ranging from .25 carats to 3 carats of diamond.
Belgium (Antwerp) accounts for more than 60% of the worlds diamond. It has 80% shares in world rough diamond supply and 50% share of world polished diamonds. It is a market with global business presence with over 1500 diamond companies and 4 specialized diamond banks and Antwerp is the most respected city in the diamond trade. Canadian diamonds are known for their high quality and they are certified by the Kimberley process which gives it a competitive and qualitative edge in the global market.
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Bruna Santarossa, Diamonds: Adding Lustre to the Canadian Economy (Statistics Canada)
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POLITICAL Stable Government and an active member of European Union (E.U) Belgium operates a federal parliamentary Democracy Legislations support an open market Tax exemption laws for foreign investors Legal protection on Intellectual property rights
ECONOMIC Low Inflation rate of less than 3% Belgium has a population of 10 million people and over 50% labour force. Ranked high in diamond market with over 27,000 people employed Belgium has a strong and developed banking system 3rd largest importer of diamond in the world It is the headquarters of E.U Institutions
SOCIAL A multi-cultural society with Flemish, French and German as the major languages Increased spending power of its population High regards for diamonds and pearls as a sign of social status Christianity is the major religion
TECHNOLOGICAL Highly developed telecommunication network Over 80% or 8 million of the population have ready access to phone and internet Belgium has 43 airports and good transport system High on research and development in diamond market
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Opportunities: Innovation of unique products. There is an increase in internet oriented consumers. Canadian diamonds have fragmented competition in European market. There is a huge services and product expansion. Demand for Canadian diamond market increasing in industry. Canadian diamonds have a demand for functional and stylish products. Online market Leverage of assets
Weakness: Canadian diamonds have a low market share. Growth management is not good. They have only limited experience in some diamond markets. Core competencies diverting attention of Canadian diamonds Internal controlling on some financial reporting. Different rates of loan outstanding
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Threats: Threat from external changes like politics, government and taxes etc. Fluctuations of the exchange rate Introduction of the new product by competitors Poor performance of retailers result in risk for Canadian diamonds There will be threat from economic slowdown Maturing products, categories or services Substitution of new products
1) At the end of the first year we are looking at having a sales of $30million worth of Canadian diamonds Objectives: Achieving this goal of first year sales will require an annual supply of 12000 carat of diamond The .25 carat and 1 carat will be the major focus of the sales as these are viewed as the preferred diamonds with larger market This will be broken down into 200 carat every 2 months for the first year. The sale of the colorless diamond will generate 40 % of the projected funds, while the fancy blue diamond, a much more premium brand will generate the other 60% within the first year.
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2) By the end of the first year we are looking to achieve a minimum of $6million Objectives: Much of the Belgium operations in this phase will be conducted by our partners who already have the distribution machinery in place. This will require minimal supervision from us thereby reducing our operational or overhead cost. This goal can be actualized through cost reduction and leveraging on the expertize of Ajediam Ltd, our Belgium partners.
3) At the end of the second year in business we will be focusing on increasing our net profit by 25% of $30million (the initial investment)
Objectives: The target sales for the second year will be increased to 1500 carat of diamond annually. With a steady growth in market sales our presence in Belgium will be increased and we intend to promote customer loyalty programs to reward existing customers and also get new distribution chains. We also plan to introduce the .50 carat Fancy blue diamond into our product portfolio for this market. This will help generate a new sales channel.
4) In the next five years we are looking at setting up a good business environment and having a regular supply of the finest diamonds in Belgium through a highly organized chain of offices in all the major diamond centers. Objective: By establishing 1 office in Antwerp, it will ensure that we have enough workforce and market presence to sustain the projected growth rate.
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To actualize our goals and objectives our marketing and distribution plan will be directed at a cost effective and result oriented partnership arrangements. Given the nature of the diamond market as a highly controlled market segment, we have decided to enter the Belgium market through a partnership/distribution pact with an established diamond dealer with local presence and global knowledge. Ajediam Ltd is our partner of choice with more than 25 years of market experience in the diamond trade. It is headquartered at the world diamond Centre in Antwerp Belgium. The company is committed to processing high quality rough diamonds to fabulous jewelry, while ensuring that all industry standards are maintained with the customer satisfaction of paramount interest to Ajediam Ltd. Having a good distribution network, good logistics and a firm and increasing customer base, Ajediam is a firm with local presence and a recognized player in the global diamond market. This expertise will be leveraged upon in terms of transportation and security of the rough diamonds from Canada to Belgium, as they already have an existing transport and logistics partner for the transportation of its rough and polished diamonds globally (from us and end user alike) while also possessing a good array of potential distributors to increase the chains in the near future.
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This functional goals can help Canadian Diamond company to implement all the effective strategies which would improves the sale revenue. The main goal of the sale department is to determine all the possible business achievement of milestones and send notifications to other functional department to work accordingly with them. The goal of the Canadian diamond sales is $30 million in the one year by the end of 2013. Sales department main objective is to generate the sale revenue at the point of regular intervals of the business. Firstly, Canadian Diamonds sale department will focus on short term sales target in Belgium. Secondly, sale department work hard to achieve the short term sales to long term sales to actual position in the Belgium Diamond market. Some of the key important goals of the sales department are follows: Sales department will be checking all sales revenue at the regular business intervals and informing about present situation about Diamond market to other functional departments in each and every month. Motivating and educating sales staff about diamonds qualities and characteristics. Selecting a high level sales team in a particular period, to improve sale revenue. Analyzing the competitors sales data at the present position in the market, and implement their strategies in our business to improve sales. Setting up original sales targets and working hard to achieve those sales targets. Training the sales staff on key sales techniques, skills and attitudes in three weeks of time.
This functional department goal is to be recruiting the best skilled employees to perform the business activities in all the functional departments of the organization. The human resource department will always train and motivate employees in Canadian Diamond Company, it will help to achieve desired sales target in Belgium diamond market. This will help Canadian diamonds to reach its sale target of $30 million in a one year. The main goal of this department
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The management of our logistics comes into place when we need to talk about the inventory system and the transportation system. The transportation system for our product will be the use of transport contractors. The logistics and inventory department will ensure the following in order to achieve the business goals and objectives They will ensure that on the arrival of the diamonds, the Belgium transport firm will declare the goods at the customs department in the airport after which the dealer will be notified Adherence to regulations and strict compliance to standards Ensure the smooth operations and enforce work ethics. Laise with our Belgium partners for easy transfer of goods Develop proper procedures for daily operations and monthly assessment
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Financial planning is vital in the diamond business. This is the department charged with the responsibility to reduce cost and monitor the financial trends of the market and it will be responsible for guiding the business into viable investment and determine what the best option will be. This will ensure that the business remains profitable and maintain a good financial relationship with the banking and financial institutions that are involved within the market. Below are the major functions of this department
Developing profit maximization strategies to achieve the business goals. Determine a financial plan and making funds available for the business by assessing the best sources of funds either through shareholders, banks, investors or other means. Cost estimation of all businesses Preparation of balance sheets Performing accounts audit biannually Keeping proper records of the cash flow statement monthly Analyzing and monitoring the financial activities of the business on a monthly basis
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Our entry strategy into the Belgium market will be partnership with Ajediam ltd, a privately owned diamond company in Belgium with over 10 distribution channels and sales outlet within the country. Using this strategy will be the most cost effective way to gain access to the Belgium market and also a less risky way to do business particularly in Antwerp. The market presence of the partners will ensure that our diamond gets accepted and easily sold across an already existing customer base. Once the brand is established within the market other strategies can be added such as sales offices to boost local presence and increased distribution network. Ajediam Ltd already has an existing transport system with a 25years experience that allows for the safe transportation of diamonds to users around the globe, thus the transportation of the diamonds to Belgium will be done in alliance with our partners Ajediam Ltd. This will ensure that the cost of transportation is kept at bay and the fact that the Canadian diamonds exported are high quality and certified by the Kimberley process, our diamonds will meet the necessary market standards and remain attractive to our prospective customers. This entry strategy also places us in a better position to deal with issues such as intellectual property rights and expropriation risk. By leveraging on the business expertise and infrastructures of our partners we can determine the demand for Canadian diamonds and work to increase demand to meet our goals and objectives before taking further decisions to invest directly into the market.
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Marketing
Product: Canadian Diamond Diamonds are largely considered to be the most valuable gem in the world (not by actual value; high quality rubies can often be worth more) but rather their value comes from demand and the cultural value placed on them. Dating back to ancient Greece diamonds (and diamond jewellery) have been a symbol of love; ancients believed they were hardened drops of dew, splinters from the stars or crystallized lightening. There is little branding needed to sell diamonds; they are a brand all their own. Canadian diamonds are clean certified and are very high quality; this gives Canadian diamonds a competitive edge in the diamond market. What sets Canadian diamonds apart from the plentiful competition is the quality associated with Canadian diamonds. Canada has an excellent certification process; this ensures that the diamonds are conflict free and they come with a laser inscribed number which can in most cases be traced back to the mine which they originated from. All of these factors set Canadian diamonds apart from the competition and give then a special niche in the diamond market. Canadian diamonds, because of their high quality and certification, can be sold in many international markets Promotion: The promotion method to be used for our services would be the use of Diamond exhibition advertisement through various medium, television, and internet. The company will be in attendance in different trade shows to display our products The segmentation strategy would be to aim the sale of diamonds at men (women tend to look more than they actually purchase) this can be done through promotions, sales and deals during holiday seasons. However, it is generally women who the jewelry is being purchased for, so our products will be marketed to women through the internet and other advertising mediums. We
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investment Marketing Promoting advertisement expenses Transportation Shipping and other $500,000 CAD and $200,000 CAD
transportation costs Bank charges Bank transactions and other $20,000 CAD bank fees Business License Starting business licensing $5000 CAD
Partnership expenses
$2 million CAD
Other expenses
$100,000 CAD
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1st year sales estimations: The Canadian company, at the end of the first year estimated sales would be $30 million. The prices below is all in Canadian dollars (CAD) Types Diamonds .25 carat 500 monthly 1 carat 250 monthly 2 carat 100 monthly 3 carat 50 monthly units 18000 per unit 50*18000=$900,000 $10,800,000 units 6000 per unit 100*6000=$600,000 $7,200,000 units 2500 per unit 250*2500=$625,000 $7,500,000 units $600 per unit 500*600= $300,000 $3,600,000 of Breakdown Estimated Monthly estimate Annual Total
Total
$29,100,000
Justification of pricing: As Belgium people are more interested in buying diamonds. I think Canadian diamonds will reach there expectation by following factors: Canadian diamonds are best in quality Breakdown of the prices for each carat is so reasonable for Belgium people The high rate carat quality attract people by breakdown of low prices Assuming rich people can buy good quality diamonds for their wealthy status
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Encyclopedia of the Nations, Belgium International Trade The Heritage Foundation, 2010 Index of Economic Freedom http://www.heritage.org/index/Country/Belgium (Retrieved on October 27, 2010) 4 European Commission, Intellectual Property http://ec.europa.eu/youreurope/business/competing-throughinnovation/protecting-intellectual-property/belgium/index_en.htm (Retrieved on October 26, 2010) 5 Encyclopedia of the Nations, Belgium Foreign Investment http://www.nationsencyclopedia.com /Europe/Belgium-FOREIGN-INVESTMENT.html (Retrieved on October 26,2010) 6 The World Trade Organization, Trade- Related Aspects of Intellectual Property Rights http://www.wto.org/english/tratop_e/trips_e/trips_e.htm (Retrieved on October 27, 2010)
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References: Canadian Diamond News | Canadian Diamonds by The Hallmark of Quality. (n.d.). Canadian Diamonds by The Hallmark of Quality. Retrieved from
http://www.hallmarkofquality.ca/category/canadian-diamond-news Canadian Diamonds & Diamonds in Canada. (n.d.). Retrieved from http://www.canadiandiamonds-wholesale.com/ Canadian Diamonds | Blue Nile. (n.d.). Engagement Rings, Diamonds, Wedding Rings and Fine Jewelry at Blue Nile. Retrieved from http://www.bluenile.com/ca/canadian-
diamonds?gclid=COvKu-P3q7MCFYQ7MgodP0QADQ&click_id=754367618 Wholesale Canadian Diamonds, Engagement Rings, GIA and AGS ideal cut Certified Diamonds, Wedding Bands, Platinum Jewelry direct from Diamond Broker. (n.d.). Retrieved from http://canadadiamonds.com/ Antwerp diamonds, Diamond Engagement Rings Buy wholesale in Antwerp World Diamond Center. (n.d.). Retrieved from http://www.ajediam.com/ Diamond prices, compare actual value of diamonds. (n.d.). Antwerp diamonds, Diamond Engagement Rings Buy wholesale in Antwerp World Diamond Center. Retrieved from http://www.ajediam.com/Diamonds_Prices_Diamonds_Ratings.html Loose, Solitaire Diamonds Buy diamonds wholesale loose Antwerp World Diamond Center. (n.d.). Antwerp diamonds, Diamond Engagement Rings Buy wholesale in Antwerp World Diamond Center. Retrieved from http://www.ajediam.com/loose_diamonds.html The Diavik Diamond Mine - Home page. (n.d.). Retrieved from http://www.diavik.ca/ Diamond Price Guide. (n.d.). Diamond Buying Guide : Learn About Purchasing Diamonds. Retrieved from http://www.thediamondbuyingguide.com/diamondpriceguide.html The Diavik Diamond Mine - Our operations. (n.d.). The Diavik Diamond Mine - Home page. Retrieved from http://www.diavik.ca/index_ouroperations.asp The Diavik Diamond Mine - Our product. (n.d.). The Diavik Diamond Mine - Home page. Retrieved from http://www.diavik.ca/ENG/ouroperations/index_ourproduct.asp
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http://canadadiamonds.com/diamond_company_information.htm Canadian Diamonds & Diamonds in Canada. (n.d.). Retrieved from http://www.canadiandiamonds-wholesale.com/ Customer Testimonials - Canada Diamonds - Wholesale Canadian Diamonds Brokers. (n.d.).Wholesale Canadian Diamonds, Engagement Rings, GIA and AGS ideal cut Certified Diamonds, Wedding Bands, Platinum Jewelry direct from Diamond Broker. Retrieved from http://canadadiamonds.com/customer_feedback.htm How Canada Diamonds offers such Incredibly Low diamond prices. (n.d.). Wholesale Canadian Diamonds, Engagement Rings, GIA and AGS ideal cut Certified Diamonds, Wedding Bands, Platinum Jewelry direct from Diamond Broker. Retrieved from
http://canadadiamonds.com/low_diamond_prices.htm http://globaledge.msu.edu/Countries/Belgium/statistics Bruna Santarossa, Diamonds: Adding Lustre to the Canadian Economy (Statistics Canada) http://www.conflictdiamonds.com/pages/report/2.html http://www.belgium.be/en/about_belgium/government/communities/ Parker, Philip M., The 2009 World Market Forecasts for Imported Worked Diamonds Excluding Industrial Diamonds (Icon Group Ltd, 2009) http://globaledge.msu.edu/Countries/Belgium/economy
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http://www.diamonds.net/News/NewsItem.aspx?ArticleID=41670&ArticleTitle=Canadian+Diamonds
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http://m.diamonds.net/news-article.aspx?id=40363&s=11
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http://www.nrcan.gc.ca/minerals-metals/business-market/canadian-minerals-yearbook/2008review/commodity-reviews/3495
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