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Paws Extention Plan

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Dog chews from paws are going to be manufactured and packaged in Nepal. We are going to export our product directly through local distributors. The internet is another way we are going to introduce and sell our products in Hungary.

Ecommerce platforms will be handled by giants like Amazon and Alibaba. Our products will be sent through shipping companies through air or waterways to Germany. From there cargo trains to Hungary are the cheapest way for our product to reach Hungary.

Internal Factors

  1. Firm size- Paws is a small to medium sized dog chew manufacturer. It requires skilled labor and precision for production. It requires limited resources that are abundant in Nepal. It is easy to make and does not require much start-up capital.
  2. International Experience- Dog chew is a very old product and has been sent all around the globe as churpi. Paws have already entered the Indian market and are now aiming to enter Europe. Apart from that dog chew is already big in the US with increasing demands. The Global reach of Dog chews will be a useful experience for paws to go to Hungary.

External Factors

  1. Country risk- Risk related to exporting dog chew in Hungary is significantly low because of the demand and stable political conditions. It has proper laws and regulations to protect both domestic and foreign investments. The reasonable price and nutritional values make paws risk free product for Hungary.
  2. Market size and Growth: The dog chew market is huge worldwide and medium in Nepal. In Nepal households prefer to give their dogs home cooked meals which makes is harder for Paws to compete with. Whereas: people abroad lack time to cook meals for their dogs thus, opting for store bought pet food. There is a huge market for Dog food which has been stable for a long time. The increase in the disposal income of people has created for demand for nutritional food for dogs. Creating a brand name in Hungary should be easy because of its small size of 10 million people.

Desired mode characteristics

  1. Risk taking- Paws is a sole trader and the limited resources and required makes this less risky business. Also, the alternative of producing Ghee while making dog chew is another cost benefit Paws has.
  2. Control- The environment while manufacturing dog chews should be controlled and the method should be specific thus requiring skilled labor. The process requires supervision and time.
  3. Flexibility- This industry is very flexible as dog chew can be made for dogs and similar process can be used to make Churpi a Nepali candy. Also the fatty milk can be used to make ghee a Nepali butter.Exporting from here to Germany through shipping company is going to be expensive as even though it will be less of a hassle we will have to give them a commission as well as the transportation cost. The time taken to reach the product or the condition in which we are transporting will not be an issue because of the type of the dog chew. Dog chew is durable and lasts for a very long time. There is no risk of the products getting spoilt or damaged due to the duration of delivery process.

Rent charge for an office space in Hungary is going to be expensive for us as the average rent cost in Hungary is 243% higher than in Nepal. We are going to have a warehouse with a small office in the outskirts of Budapest to reduce cost. As Hungarians prefer face to face business deals having an office there will be very profitable for us. This will allow us even to socialize with the businesses beforehand. The online distributing is going to be easier as the online platforms can easily pickup our product from our warehouse rather than us shipping it after odder. Since our plan is also to sell online, goods will also be delivered on time since we are nearer to the market compared to sending goods all the way from Kathmandu. We can also understand the locals better this way and can sell our products accordingly.

We will need to allocate cost for a local delivery truck to transport goods through local distributors. We will need a few employees including a supervisor to look after everything. We will need to higher some local people as well as send expatriates from Nepal to initially build market for our product. Other expenses include: telephone, electricity, water, furniture’s and computers. We are going to advertise our product in the International pet fares and competitions which will cost us as we need to open a stall there.

Firstly online sales that have been boosting recently especially on dog food in Hungary is going to be good source of income. Online platforms will allow us to have a very wide reach with very limited costs. The delivery and transportation costs of goods ordered in online platforms will be covered by them and will save us more money.

Another major source of income will obviously be the distribution we will be doing to retailers in Hungary. This will be a more stable source as we will get paid for putting our product on their selves and selling it will be their job.

Strengths

  1. The unique selling point of Paws is being the first company to use churpi as dog chew. This will help us come into the market gap.
  2. It is fully organic and nutritious with no added preservatives.
  3. Dog chew is long lasting and durable it is durable and lasts for a very long time. During low sales or other issues there is no chance of our product going bad and being wasted.
  4. The political stability in Hungary and the location being at the center of Europe will help Paws grow without barriers.

Weaknesses

  1. Paws will have difficulties creating peoples trusts as it is difficult to build trust in Hungary. Also it will have a hard time competing with establish brands like pedigree and this will make it hard for Paws to switch customer loyalty from these existing brands.
  2. Since Paws is new in the Hungarian market it will not profit initially. Paws needs to spend a good amount of time creating network and building trusts for its business.

Opportunities

  1. The growth in the national disposable income and awareness for healthy nutritious food for pets can be an opening for paws to thrive in the market.
  2. The IT sector and internet users are huge in Hungary. The number of people using online channels to buy products is also very high. Penetrating the ecommerce market will be an excellent opportunity for Paws.
  3. Hungarian government’s favorable tax systems that welcomes FDI is also a advantage for Paws.

Threats

  1. As we relying on a middle man to deliver our products there could be a lot of issues regarding delays and payments. If the Dog chews are not provided to the customers when demanded we will lose potential and existing customers.
  2. The different substitutes from Europe and well known existing brands are the competitors who could affect our sales.
  3. Due to the ease and low cost of producing Dog Chew other competitors from Nepal may emerge and try to compete in the international market.

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Paws extention plan. (2018, December 03). GradesFixer. Retrieved October 23, 2020, from https://gradesfixer.com/free-essay-examples/paws-extention-plan/
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