SR article

Strategy

Employees

Last years group suggested having around 10 employees to handle the oil production. However they assumed that the oil production would be much higher than it will actually be. With the current prototype we think that 5 employees should be enough to handle the production, as described in Table 3. Some tasks are also not very time-consuming or do not take place at the same moment, so we decided that for example the harvesting and the bottling can be done by the same person.

Screen Shot 2017-02-11 at 10.10.35.png

 

Production

Last years group made their calculation with the amount of lemongrass available as the limiting factor. With our current knowledge we know that the limiting factor won’t be the amount of lemongrass available, but the capacity of the distillation unit. The production with the current prototype can be seen in the previous part with the calculations (see ‘Revenue model’, page 27 onwards).

 

Price (discussed in the ‘Sales’ section of the initial business plan)

We agree with the model used for determining the price for the individual 2 and 10 ml bottles of lemongrass oil, which are 37 Rupees for the 2 ml bottle and 150 Rupees for the 10 ml bottle. However, we do not agree with the price for the batches of bottles. The batch size of 200 ml (either 100 bottles of 2 ml or 20 bottles of 10 ml) is good, but the price for the batches is not right in our opinion. Last year they had the idea to sell a batch for 2500 Rupees and the offer that every fifth batch is for free. We think this is discount on discount on discount. On the Internet 10 ml bottles of lemongrass oil are being sold for 300-400 Rupees, while our oil will be sold for 150 Rupees (10 ml bottle) or 185 Rupees (5 bottles of 2 ml) per 10 ml. We think this discount is more than enough, because our product is at least equal to the products sold on the Internet (if not better). We would plead to maintain this price also for the batches, thus 3000 Rupees for a batch of 10 ml bottles and 3700 Rupees for a batch of 2 ml bottles and not give the fifth batch for free deal.