B.Tech Business Plan mena countries and europe

Develop a GRC strategy for Noqood Company
Prepared By: Ahmed Mohamed Mokhtar
Student ID: 22242021006
Table of contents
1. Executive Summary.........................................................................................................................................5
2. Company and Financing.................................................................................................................................6
2.1. Company Overview.................................................................................................................................6
2.2. Management Team..................................................................................................................................6
2.3. Required Funds........................................................................................................................................7
2.4. Mission Statement....................................................................................................................................7
2.5. Company History.....................................................................................................................................7
2.6. Location and Facilities.............................................................................................................................8
2.6.1. Stores locations.................................................................................................................................8
2.6.2. Facilities.............................................................................................................................................8
3. Products and services......................................................................................................................................8
3.1. Products.....................................................................................................................................................8
3.1.1. MDA...................................................................................................................................................8
3.1.2. SDA....................................................................................................................................................9
3.1.3. Air Conditioning..............................................................................................................................9
3.1.4. Electronics and IT products..........................................................................................................10
3.1.5. Mobiles and Tablets.......................................................................................................................10
3.2. Services....................................................................................................................................................10
3.3. Competitors............................................................................................................................................11

3.3.1. Competitors in the retail market..................................................................................................11
3.3.2. Competitors in the commercial market......................................................................................11
3.3.3. Competitors in the online retail market (Digital market)........................................................11
3.3.4. Competitors channels classification comparison......................................................................12
3.4. Sourcing and Fulfilment........................................................................................................................13
3.4.1. Sourcing...........................................................................................................................................13
3.4.2. Fulfilment........................................................................................................................................13
3.5. Technology..............................................................................................................................................14
3.5.1. Internal systems..............................................................................................................................14
3.5.2. External Systems............................................................................................................................14
3.6. Future Products and Services...............................................................................................................14
4. Customers and market analysis...................................................................................................................15
4.1. Market Overview...................................................................................................................................15
4.2. Market Needs..........................................................................................................................................15
4.3. Market Trends........................................................................................................................................17
4.4. Market Growth.......................................................................................................................................17
4.5. Industry Analysis...................................................................................................................................19
4.6. Key Customers.......................................................................................................................................23
5. Marketing and sales.......................................................................................................................................24
5.1. Overview.................................................................................................................................................24
5.2. Positioning..............................................................................................................................................26
5.3. Pricing......................................................................................................................................................27
5.4. Promotion................................................................................................................................................28
5.5. Distribution.............................................................................................................................................30
5.6. Product....................................................................................................................................................31
5.7. Competitiveness.....................................................................................................................................32
5.7.1. Cost leadership (main strategy):..................................................................................................32
5.7.2. Differentiation (complementary):................................................................................................33
6. Strategy and implementation.......................................................................................................................34
6.1. SWOT Analysis.......................................................................................................................................34
6.2. Tows analysis..........................................................................................................................................35
6.3. PESTEL Analysis....................................................................................................................................37
6.3.1. Political............................................................................................................................................37
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6.3.2. Economical......................................................................................................................................37
6.3.3. Technology......................................................................................................................................37
6.3.4. Social................................................................................................................................................37
6.4. Product Portfolio Analysis....................................................................................................................38
Sequence...........................................................................................................................................................38
6.5. McKinsey 7S Model...............................................................................................................................40
6.5.1. Strategy............................................................................................................................................40
6.5.2. Structure..........................................................................................................................................40
6.5.3. Systems............................................................................................................................................40
6.5.4. Shared Value...................................................................................................................................40
6.5.5. Staff...................................................................................................................................................41
6.5.6. Style..................................................................................................................................................41
6.5.7. Skill...................................................................................................................................................41
6.6. Competitive Edge...................................................................................................................................42
7. Financial plan, statements and sales forecast.............................................................................................43
7.1. Financial statements and forecast........................................................................................................43
7.2. Financial Analysis..................................................................................................................................47
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1. Executive Summary
Noqood Holding, headquartered in Cairo, Egypt, was founded by a team of
seasoned experts in the Financial and Technology industries, with the main
objective of offering smart, personalized, and tech-enabled financial solutions to
end-users. Bringing the best of both the Business and Technology worlds, we
bootstrapped our way into becoming a leader in the Egyptian Fintech space,
providing 4+ services to diversify customers’ portfolios and positioning
ourselves as a hub for unique financial innovations and top-notch calibers. We
started as a team of 3 co-founders, and now we have grown into a family of 200+
members!
The Egyptian markets has attractive opportunities to be capitalized upon,
including a growing population, the development of new cities and new
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locations and the preference of consumers to deal with organized and
sophisticated branches and payment methods and channels. B.Tech can
accordingly capitalize on this. B.Tech additionally aims to enhance its research
and development process and enhance its operations, such as expanding its
online purchases as they recently developing their website platform. B.Tech tries
to balance cost leadership by studying the potential of manufacturing products
in Egypt, thus reducing costs associated with importing foreign products at a
foreign currency. Diversification is another strategy followed by B.Tech as it has
several business channels, branches, installments, online sales, and producing its
own brands. B.Tech has recently made a TOWS matrix to help them implement
and catch the market opportunities.
From a financial point of view, B.Tech had a highly leveraged position. The
recent acquisition made to B.Tech would balance the high leverage with
additional weight for equity. This would further inject cash in the firm, this
would enable the firm to enhance its working capital and improve its sales
volume and inventory. This joint venture will enhance the credit rating for
B.Tech, allowing it to borrow at lower costs (Bank of England will support the
leverage cost for B.Tech). The total asset turnover is thus expected to increase
from 1.24 to 1.3 by 2020, and the total asset turnover will increase from 0.41 to
0.5, thus allowing the firm to generate more sales for each 1 EGP of assets it has.
This will further affect the liquidity position where the current ratio is expected
to increase from 1.1 to 1.16 by 2020. This indicates that the company will have
favorable prospects in the future, and major growth potential.
2. Company and Financing
2.1. Company Overview
With more than 3000 employees, B.Tech stands as the largest specialized retail
and trade network nationwide, bringing state-of-the-art household appliances,
consumer electronics, mobile, and IT products and services to Egyptian
customers everywhere.
In addition to the unparalleled chain of accessible, fully owned retail outlets,
B.Tech offers its assistance to consumers in every governorate, city, and town in
Egypt through a large network of dealers and service centers.
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The company started to do backward integration by assembly and
manufacturing of ULTRA TVs.
B.Tech is starting a new chapter of its success story after its 20th anniversary
with 3000 employees and more than 70 branches, in 23 governorates and 28
Egyptian cities.
2.2. Management Team
The top management hierarchy is as follows
The management strategy and style continue to purse aggressive expansion and
accusation for the foreseeable future.
2.3. Required Funds
From a financial point of view, B.Tech had a highly leveraged position. The
recent acquisition made to B.Tech would balance the high leverage with
additional weight for equity. This would further inject cash in the firm, this
would enable the firm to enhance its working capital and improve its sales
volume and inventory. This joint venture will enhance the credit rating for
B.Tech, allowing it to borrow at lower costs (Bank of England will support the
leverage cost for B.Tech). The total asset turnover is thus expected to increase
from 1.24 to 1.3 by 2020, and the total asset turnover will increase from 0.41 to
0.5, thus allowing the firm to generate more sales for each 1 EGP of assets it has.
This will further affect the liquidity position where the current ratio is expected
to increase from 1.1 to 1.16 by 2020. This indicates that the company will have
favorable prospects in the future, and major growth potential.
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Mahmoud
Abl Hakim
Chairman Of The Board
Ahmed
Mohamed Khairy
Board Member
Seif ElDeen Saad
Board Member
Zeyad Mohamed
Wafek
Board Member

2.4. Mission Statement
Our mission to be the most preferred home appliances retail store in Egypt
Introducing convenient and advanced solution provided by professional
competencies. B.tech goal is to provide the broadest selection of products with a
competitive prices.
B.Tech main objectives are
 Creating and lunching a new “Made in Egypt” brand with international
standards and high quality products to fill the existing market gaps in
different categories.
 Overcome new governmental importation restrictions and hard currency
issues.
 Open new branches, reach and engage with new consumer segments (B
and C) class.
 Expand marketing channels in the B2B business.
2.5. Company History
B.Tech was established in 1997 with three retail branches. By 2015 B.Tech opened
its 63rd branch in the governorate of Alexandria, marking the 11th in that city,
becoming the largest nationwide retailer for consumer electronics, household
appliances, mobile and information technology products, serving our customers
from Marina in the North Coast and Hurghada in the Red Sea to Luxor and
Aswan in the South.
B.Tech started its distribution operation in 2005, becoming the exclusive agent for
several international brands like Ariston, Babyliss, Daewoo, and Craft. Now,
B.Tech boasts a collection of brands including Meile, Braun, Magic, and as of
June 2014, Apple.
2.6. Location and Facilities
2.6.1. Stores locations
B.Tech covers Egypt with more than 70 branches. The locations of the branches is
as follows
Cairo Alexandria Delta Upper Egypt
28 Branches 10 Branches 17 Branches 12 Branches
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2.6.2. Facilities
No production facilities are available except a subcontracting manufacturing line
for ULTRA TVs and ULTRA SDA with Unionaire.
Now B.Tech is looking for a new subcontractors for manufacturing new products
such as MDA products with larger capacity, flexible production schedules and
high quality standards.
3. Products and services
3.1. Products
3.1.1. MDA
This is a very wide category which includes many products such air
conditioners, washing machines, dryers, refrigerators, freezers, …
3.1.1.1. Agency Products
B.Tech has exclusive agency rights to distribute and maintenance for the
following brands
 Ariston
 Indesit
 Miele
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3.1.1.2. Distribution Products
B.Tech is distributing the following brands
 Toshiba
 Unionaire
 Samsung
 LG
 Kiriazi
 Beko
3.1.2. SDA
This is a very wide category which includes many products such as air coolers,
microwaves, kitchen appliances, …
following brands
 Braun
 BabyLiss
 Ariete
 ULTRA
 Philips
 Molineux
 Black & Decker
3.1.3. Air Conditioning
following brands
 Crafft
 ULTRA
 LG
 Toshiba
 Unionaire
 Fresh
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3.1.4. Electronics and IT products
This category includes PCs, notebooks, digital cameras, projectors, printers and
gaming appliances such as Sony PlayStation.
following brands
 ULTRA TVs
 LG
 Toshiba
 Unionaire
 Samsung
 Asus
 Lenovo
 Dell
3.1.5. Mobiles and Tablets
This category includes most of the smart mobile phones and tablets in the
Egyptian market. Such as Apple, Samsung, Huawei and the Egyptian brand Sico.
 Apple
 Samsung
 Huawei
 Oppo
 Honor
 Infinix
3.2. Services
The main services of B.Tech are
 Maintenance service of the exclusive products.
The maintenance service for B.Tech represents a competitive edge for the
company as it has huge fleet of maintenance centers and service cars that covers
all over Egypt.
 Spare parts service for both consumers and dealers
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B.Tech offers a wide range of spare parts for both its direct consumers and also
for major spare parts dealers that provide the maintenance service.
 Installment service for spare parts and maintenance cost
 Post warranty replacement service
3.3. Competitors
B.tech have a highly competitiveness advantages in the home appliances markets
through exclusive unique products mentioned above and wide range of
consumers who use installments in their sales and facilities. B.tech quarterly
analyze market through his wide sales force team and professional research.
B.tech have three main kinds of competitors
3.3.1. Competitors in the retail market
 Raya
 Carrfour
 Hyper Markets
 AMAN
3.3.2. Competitors in the commercial market
 Samsung
 LG
 Beko
 Toshiba (Al-Araby Group)
 Unionaire
3.3.3. Competitors in the online retail market (Digital market)
 Souq (Amazon)
 Jumia
 Raya
 Noon
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3.3.4. Competitors channels classification comparison
Competitors Type Of Competitors
Agency Products Channels (Show Rooms) Service
B-TECH   
RAYA  
Carrfour 
Hyper Markets 
AMAN 
Samsung   
LG   
Beko  
Toshiba  
Unionaire   
Souq 
Jumia 
Noon 
The above comparison shows the market that B-TECH is involved in, by which
there are stores that provide household and electronic appliances.
There are major competitors but don’t facilitate any payment plans or any
installments, so those have to collaborate with firms that facilitate payment
plans.
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3.4. Sourcing and Fulfilment
3.4.1. Sourcing
3.4.1.1. Exclusive Products
B.Tech have a wide range of contracts with international mother companies and
brands worldwide. Whcich gives B.Tech a completive advantage in the Egyptian
market.
 Indesit Merloni
 Miele
 Braun
 Babyliss
 Craft (El-Essa)
B.Tech is implementing solution strategy for resources through balance between
many sources and contracting to determine the capacity through professional
supply chain teams and systems.
B.Tech established a network with wide range of domestic suppliers and
manufactures companies to provide to its customers a complete range of
varieties in all categories.
 Toshiba (Al-Araby Group)
 Samsung
 LG
 Unionaire
3.4.2. Fulfilment
3.4.2.1. Maintenance Service
Certified customer service centers providing maintenance service for all
exclusive products and other distribution products. Implementing guide line
usage, services, maintenance, guarantee and warranty.
3.4.2.2. Packaging and logistics for online sold products
B.tech had a huge competitive advantage in its logistic department which is a
great fleet of trucks which provide the service of free shipments of sold items to
its customers and also to the dealers.
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3.5. Technology
The role of technology and systems are important to B-TECH by which they’ve
maintained their own leadership as market leader in the Egyptian market. B.Tech
is keen to fully upgrade their systems both hardware and software every 5 to 8
years. The technology systems that B.Tech use are
3.5.1. Internal systems
 CRM: For dealing with customer’s complaints, demand and forecasting
 ERP: Capable of controlling internal business processes and functions.
 RMS: To control retail sector including show rooms and financial plans
such as installments and the sales force team.
 MRP: To control commercial sales and financial departments process.
3.5.2. External Systems
E-commerce website that present their products and discounted items to their
customers, also they headed to the social media sponsorship as a part of their
advertising and marketing campaigns, Through the reacts views and people
interaction with the other social media and entertainment websites they decide
where to put their paid logos and offers.
Also they’ve maintained their mobile application to be easier and more specific
to their promotions, products and services and to be reachable by every smart-
phone user, but part of being an application owner it requires to be aware of the
updates and the two main smart-phone operating systems (Android – IOS), So
the company had to establish a development team as the most of their scope
nowadays become digital and online characterized.
All of the previous analysis leads to wide technological usage by B-TECH.
3.6. Future Products and Services
Based on B.Tech experience for the past 20 years, B-TECH has established a
trusty organization with wide network of distributors, suppliers and customers.
Therefore, we recommend a future huge expansion in our own brand (ULTRA)
In all products categories such as TVs, ACs, MDA and SDA.
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On the other side we recommend continuous expansion in showrooms to
penetrate new foreign markets such as Africa and middle east.
Third, new model in digital marketing to cover another different products &
services such as furniture.
4. Customers and market analysis
4.1. Market Overview
Egypt Consumer Electronics, Telecom and Office Equipment markets showed
successful growth in Q3 2019 vs Q3 2018. While the Information Technology
sector showed a decline. The category with the largest growth in Q3 2019 is the
Consumer Electronics followed by Telecom.
MDAs Markets reported a stronger decline in Q3 2019vs2018 compared to Q2
2019vs2018, mainly driven by a strong decline in Cooling and Washing
Machine’s market. This decline resulted because of the general increase in the
running cost of energy, especially electricity.
SDA market value witnessed a very minor decline in sales value of -1%. All SDA
products highlighted a steep decline in sales value except for the largest product,
Electric fans, which grew by around 10% sales value in Q3 2019vs2018.
There are stores that provide household & electronic appliances –Product Basis-
but don’t facilitate any payment plans or any instalments, so those Product Basis
stores have to collaborate with firms that facilitate payment plans –Payments
Basis
Except AMAN and B-TECH that they go among firms with the two strategies –
Products and Payments Plan-, That allows the two firms to makes more market
shares as they sell the products and facilitate the way the customer do payments.
4.2. Market Needs
The following characteristics is a market need
 Organized store shops and formal which reflects the research we did that
there is a shift in the consumer needs Shift in consumer buying behavior
toward modern channels
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 The need to online and e-tail because there is a shift in the customer
behavior to shop online.
 The need to stores that use installment plans.
Smart Air Conditioner Segment is Expected to Grow at a Higher Rate
The smart air conditioner segment is expected to be the highest growing
segment, accounting for a significant percentage of the global market during the
forecast period. Since the time smart air conditioner was introduced in the
market, the prices of the product have come down, making the product available
at a premium price, thereby increasing its adoption. Also, the product has the
highest recognized value and the need for connectivity compared to the other
products.
The demand for smart home appliances is triggered, owing to the growing
concerns of energy costs and the availability of innovative and affordable smart
appliances.
The introduction of additional features in smart home appliances is an emerging
trend in the smart home appliances market space. As the availability of ample
space is a major issue for most consumers living in compact homes, players are
trying to come up with appliances that have the connectivity feature, as well as
sleek designs and other attractive features.
An increase in disposable income and improvements in rural electrification drive
the industry. In addition, the rising affordability of smart appliances and
increased urbanization have fueled the demand for the market.
Big companies are focusing on introducing smart air conditioner accessories.
Startups are also trying to manufacture smart gadgets instead of manufacturing
Smart home appliances market - growth, trends, and forecast (2019-2024)
The Market is Segmented by Product (Smart Washing Machines, Smart Air
Conditioners, Smart Refrigerators, Smart Microwave Ovens, Smart Dishwashers,
and Other Products) Distribution Channel (Supermarkets/Hypermarkets,
Specialty Stores, Online, and Other Distribution Channels).
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4.3. Market Trends
Home Appliance is electrical/mechanical machine which accomplish some
household functions, such as cooking or cleaning. Home appliances can be
classified into: major appliances, small appliances, and consumer electronics.,
This division is also noticeable in the maintenance and repair of these kinds of
products. Major appliances usually require high technical knowledge and skills.
They get more complex with time, such as going from a soldering iron to a hot-
air soldering station. While consumer electronics may need more practical skills
and "brute force" to manipulate the devices and heavy tools required to repair
them.,
Home Appliance market competition by top manufacturers/ Key player
Profiled:
 Panasonic
 SAMSUNG
 SONY
 LG
 Hisence
 Philips
market for Home Appliance is expected to grow at a CAGR of roughly 5.3% over
the next five years, will reach 837000 million US$ in 2023, from 615100 million
US$ in 2017, according to a new (Global) study.
4.4. Market Growth
 Growth in the C class segment
 Currency fluctuation and impact on inflation
 New importation restrictions and hard currency protection
 Shift in consumer buying behavior toward modern formal channels
 Growth in modern channels and traditional (GfK)
 Local brands taking the advantage of market gaps (shortage) which is the
main aim and strategy of B.tech in the near future.
 New entrance and new foreign investments in modern channels (GCC)
 Market still price oriented and promo driven
 Modern are moving to governorates (C4 – Panda)
 Unknown brands went out of the market
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 Non or Limited PI presence in the market
 Big names are out of stock / market
 Change in global market brands map (acquisitions)
CONSUMER APPLIANCES BEGINS TO RECOVER AFTER MAJOR PRICE
INCREASES
Recent economic conditions in Egypt have affected many industries, including
consumer appliances. Egypt increased fuel and gas cooking prices as a part of an
economic reform to overhaul its ailing economy.
SHIFT IN CONSUMERS’ PURCHASING BEHAVIOUR IN 2018
Egyptian consumers became price sensitive after the enormous increase in prices
of consumer appliances (particularly in 2017) and continuous fluctuations. As
consumers continue to look for good quality products when buying their
household goods, they tend to concentrate more on whether they deem the
product to offer good value for money, searching for similar products at cheaper
prices.
STRONG COMPETITION BETWEEN INTERNATIONAL AND LOCAL
BRANDS
Following the various economic changes that have occurred in Egypt and the
decisions taken by the Egyptian Government to increase fuel and gas prices, the
prices of international brands increased drastically in 2018. Prices of consumer
appliances continued to fluctuate during the year through different distribution
channels.
INTERNET RETAILING GAINS IN POPULARITY
As internet retailing is gaining in popularity in Egypt, many consumers are
starting to make purchases of consumer appliances through this channel to save
time and the effort of visiting different retailers. Many retailers are now starting
to concentrate on selling their products through internet retailing and are
investing more in providing good offers to attract a higher number of consumers.
EGYPTIAN ECONOMY ON A RECOVERY PATH
Egyptians became open to purchasing international brands and attracted to the
range of different brands available. This saw a huge segment of society shifting
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their preferences towards international brands over local ones and this opened
up many opportunities for high investments to import consumer appliances.
4.5. Industry Analysis
 Analyze MDA & SDA markets from GfK
 Identify and highlight market gaps (opportunities)
 Study potential products (features – consumer reviews and insights –
suppliers)
 Understand main drivers for each category
 Understand product life cycle for each category (current and future stage)
 Study and understand consumer usage
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 Study consumer behavior (advanced) buyer Vs. user
TCG TOTAL
Jan 18 Jan 19 Jan 18
TCG TOTAL TELECO
3
4
5
6
7
TCG TOTAL
Jan 18 Jan 19 Jan 18
TCG TOTAL TEL
2,4
2,6
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TCG TOTAL
TELECOM
IT/OE
CE
PHOTO
SANITARY
MDA + AC
SDA
Jan 18 Feb 18 Mar 18
3
4
5
6
7
8
9
1.255,8
536,8
3.040,4
494,2
3.011,7
694,7
479,8
3.135,1
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IT/OE
January 2018 January 2019 January 2018 : Januar
Panelmarket
-17%
42,1
27,3
31,4
23,7
MDA + AC
January 2018 January 2019 January 2018 : January 201
Panelmarket
8,1 8,6
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SDA
January 2018 January 2019 January 2018 : January 201
Panelmarket
-12%
-9
16,6
11,8
36,3
17,3
10,5
38,8
4.6. Key Customers
B.Tech major customers are
 Mega dealers and distributors (B2B).
 DIY stores
 Middle age in both genders who is going to marry soon.
 Computer and technology geeks.
 Middle age women for personal care products.
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5. Marketing and sales
5.1. Overview
The retail market overview is summarized in the following GFK charts and
reports
SMART+MOBILEPHONES
Jan 18 Jan 19 +/-
Sales Units
SMART+MOBILEPHONES 1.436.538 1.477.258 3
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AIR CONDITIONER
Jan 18 Feb 18 Mar 18 Apr 18
0
20
40
60
80
100
120
140
160
Sales
Units
(
x
1.000
)
34.225 39.016
50.427
95.927
315.104
356.989
449.472
865.698
Jan 18 Feb 18 Mar 18 Apr 18
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COOKING
Jan 18 Jan 19 +/- Jan 18
Sales Units Th. Sales Va
P
TOTAL
ELECTRIC
90.827 83.075 -9 295.117
468 479 2 3.047
FREEZERS
Jan 18 Jan 19 Jan 1
Panelmarket
-23%
12,4
12,7
9,6
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WASHINGMACHINES
FRONTLOADING FULLAUTOM.
Jan 18-
Dec 18 Jan 18 Jan 19 Aug 18 Sep 18 Oct 18
PANELMARKET
95,3 96,2
92,0
96,2 95,3 94,4
5.2. Positioning
B.Tech is considered as the retail market leader. Regarding their facilities, stores
network, services and payment plans.
B.tech is ranked fifth in the commercial market, and we looking forward to gain
13 % from total market in 2020
The following is the positing of the ULTRA TV
 ULTRA Vs. supplier brand – change in design - colors or panels and
prices to be on par (unless there is change in features from ULTRA)
with respect to B&C TRGT group prices in this category.
 ULTRA new creation – according to market gap. And fragmented
markets
 To be no. 3 – 4 in the category we are working in 2016-2017
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5.3. Pricing
The following strategies will be used together
 Price bundle strategy in distributors segmentation.
 Price bundle strategy in large hypermarkets.
 Value deals prices according to the occasion.
 Cost plus strategy and competitive price for agencies products.
 Cost leadership (main strategy):
o Selecting a target price point per SKU per category (from market
analysis).
o Change some features to reach target price point if needed.
o To be on par with supplier. If they supply same product to the
market.
 To be on par with supplier
 Our exclusive brand we have to get more of these brands to compensate
the change of price by trade these products to distributors with high prices
 Add premium to innovations and adds on (value preposition)
 enhance the customer consumption in the territories, a new payment terms
should will be add to B.tech payment terms, paying on installments will
encourage the customer
 purchase from the stores.
 Cost leadership – competitive advantage
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 One off cost leader ship strategies is to start to manufacturer your own
brand but it will cost a lot of money we will rent a production line from
Egyptian factories by this way we will penetrate the market with new
brand with low cost and fair quality and we will test the market if it ready
to have a new brand or not
5.4. Promotion
 Create brand guidelines
 To have a brand guidelines you have to be unique brand with unique logo
with unique colors and I think B.TECH got this point and do it very well
 Create attractive product packing
 We can play this role in our brands (ultra – delta ) by being simple and
portable pack and recycled and environmental friendly
 Communicate product main USP’s
 Whenever you suffer from your device for any of these reasons: It is old, it
needs spare parts, the spare parts are expensive, you no longer use it or
even if you are willing to benefit from new features of the newer devices.
 Communicate from B.TECH as main USP- TRUST
 We believe that honesty in dealing with customer is the base of dear
business reputation and that commitment to transparency leads to trust so
preserve honesty, integrity and justice as key foundations of success
 Communicate product benefits
 Build brand equity
 By Appling these strategies “4 P’s” B.TECH can gain well established
brand equity in the market
Page 28 of 52

Launching campaign
ja
n
fe
b
marc
h
Apri
l
ma
y
Jun
e
Jul
y
augus
t
Se
p
Oc
t
No
v
De
c
Timing
Tv ads ✔ ✔ ✔ ✔ Two
times per
day
Radio ads ✔ ✔ ✔ ✔ ✔ Two
times
per day
at rush
hours
Newspaper ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ 1th
Friday
from
every
month
Magazines ✔ ✔ ✔ ✔ On time
per
quarter
Social media
marketing
✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ Every
week
Bell boards ✔ ✔ ✔ ✔ Ring
road –
Mehwer
ST – 6
October
bridges
Sales promotion ✔ ✔ ✔ ✔ Occasion
s 30%
1. Create brand guidelines
2. Create attractive product packing
3. Communicate product main USP’s
4. Communicate from B.TECH as main USP- TRUST
5. Communicate product benefits
6. Build brand equity
7. Launching campaign
Page 29 of 52

5.5. Distribution
 Open new markets:
o Penetrating new B&C dealers
o Reach new geographical areas
o Re-activating B&C dealers
o Attracting new customers at existing channels.
 Target distribution channels:
o B2C
 Modern channels (Retail - hyper markets – Power retailers -
online)
 Traditional channels
o B2B
 Brand guidelines
 Attractive and clear packing design
Page 30 of 52

 BTL activities and premium locations at distribution channels
 Attractive POSM
 Teasing campaign (pre-launching)
 Launching campaign full range
 SR branding and window display
 Online activities (different platforms) – SEO
 Smart display @ selective channels
 Brand website
 Bloggers
 Brand character (advanced) – bring into life.
 Distribute ULTRA at B.TECH SR’s with focus on Delta & U-EGY
 B.tech have much focus on high level brands like Samsung and LG so we
start to sell low and medium level brands like Ultra and Delta the target
customers in rural places and most of our branches in capitals so we will
distribute this brand by local distributors
 Penetrate hyper markets
 Hyper markets are consider as on of the big channel for selling items they
serve all customers level we can use them to distribute high and medium
level brands, so it’s win win situation for both of us they will sell my
exclusive products with V.Good customer service support and I will
increase my market share and test the market for new brands
 Open new B&C dealers with special focus on Delta & U-EGY
 Reach new customer within current dealers
 Payment methods is a key to reach home appliances customers in Egypt we
have to make payment plans and installment plans compatible with
customer needs
5.6. Product
 Fill in market gaps
 By adding new brands to satisfy all customer level and expand categories
offered in B. TECH stores like mobile phones and air conditions to full fill
all customer needs
 Ensure product quality and availability – suppliers
 In b tech we depend on quality not in price only by our quality team we
choose the most effective product that satisfy the customer needs and buy
our customer service support we build our customer creditability
Page 31 of 52

 Professional product visibility
 Ensure product knowledge
 Product knowledge one of sales representative responsibilities to customer
he has to be aware of all products we offer we trained them well in our
training centers and in manufacturer factories we sales representative
watch the manufacturer process he will be confident when he talks about
any of our products
 Warranty as per market offering
 By our engineers and technicians, we grant highest level of efficiency and
experience. This comes along with B. TECH customer service system via
our short number 19966; equipped with large number of well-trained
agents ready to serve you 7/24 and to receive all inquiries, guarantee,
installation, delivery requests, complaints, suggestions and sales orders.
 Hummer on after sales service
 To be in touch with our clients, post warranty replacement service that
Whenever you suffer from your device for any of these reasons: It is old, it
needs spare parts, the spare parts are expensive, you no longer use it or
even if you are willing to benefit from new features of the newer devices
5.7. Competitiveness
5.7.1. Cost leadership (main strategy):
Selecting a target price point per SKU per category (from market analysis).
Change some features to reach target price point if needed. To be on par with
supplier. If they supply same product to the market.
5.7.2. Differentiation (complementary):
Change in product design & packing. Creating a new and exclusive SKU’s inside
some categories with premium for brand awareness. Create new and innovative
features for a certain SKU’s
Page 32 of 52

6. Strategy and implementation
6.1. SWOT Analysis
W
1. No brand awareness (New
brand)
2. MDA Launching limitation due
to Electrolux contract Sep-16
3. High overheads rate and impact
on GP and prices.
S
1. Strong & trusted brand name
B.TECH
2. B.TECH Retail & Comm. Network
and facilities
3. Strong MKTG activities
4. Local production & Full control on
brand
INTERNAL
T
1. Currency fluctuation
2. Price war in B & C class
3. Third party (innovations,
production, and Quality)
4. Product availability from third
party
O
1. Change in consumer behavior
(shift from traditional trade to
organized and specialized
channels)
2. The growth in C class segment
3. Empowerment for local production
4. Enter new market (dealers –
customers)
5. Market is fragmented in some cat’s
6. Growth in online and consumer
engagement.
EXTERNAL
Page 34 of 52

6.2. Tows analysis
Internal
S
External
O
S
1. Strong & trusted brand name B.TECH
2. B.TECH Retail & Comm. Network and
facilities
4. Local production & Full control on brand
O
1. Change in consumer behavior (shift from
traditional trade to organized and
specialized channels)
4. Enter new market (dealers – customers)
engagement.
SO
1. Focus on warranty from B.TECH as USP
2. Start with fragmented markets
3. Start filling market gaps with products
fits in B&C.
4. Partnering with well reputed and good
quality local suppliers
5. Open new dealers B&C
Internal
W
External
O
W
1. No brand awareness (New brand)
2. MDA Launching limitation due to
Electrolux contract Sep-16
3. High overheads rate and impact on GP
and prices
O
1. Change in consumer behavior (shift from
traditional trade to organized and
specialized channels)
4. Enter new market (dealers – customers)
engagement.
WO
1. Conduct digital brand awareness
campaign
2. Buying market share by reducing TRGT
GP in launching phase 2016
Page 35 of 52
How to take advantage of
opportunities by overcoming our
How to use strengths to take advantage
or our opportunities

Internal
W
External
O
S
1. Strong & trusted brand name B.TECH
2. B.TECH Retail & Comm. Network and
facilities
4. Local production & Full control on
brand
T
3. Third party (innovations, production,
and Quality)
4. Product availability from third party
ST
1. Work with suppliers that has good
reputation in the market and capacity to
meet requirements.
2. Set a strong legal contract to ensure
copyrights, product supply time plan,
MKTG, and quality,…etc.
Internal
W
External
O
W
1. No brand awareness (New brand)
2. MDA Launching limitation due to
Electrolux contract Sep-16
3. High overheads rate and impact on GP
and prices
T
3. Third party (innovations, production,
and Quality)
4. Product availability from third party
WT
1. Set a strong legal contract to ensure
copyrights, product supply time plan,
MKTG, and quality,…etc.
6.3. PESTEL Analysis
6.3.1. Political
 Political stability leads to stability in economy
Page 36 of 52
How to minimize weaknesses and avoid
threats?

 Modern are moving to governorates (C4 – Panda)
 Big names are out of stock / market
6.3.2. Economical
 New entrance and new foreign investments in modern channels (GCC)
6.3.3. Technology
 Growth in modern channels and traditional (GfK)
6.3.4. Social
 Local brands taking the advantage of market gaps (shortage)
 Unknown brands went out of the market
 Change in global market brands map (acquisitions)
6.4. Product Portfolio Analysis
Page 37 of 52
STAR
BRAUN
BABYLESS
?
INDEST
CASH COW
ARISTON
MIELE
DOG
CRAFFT
BCG

Sequence
The most ideal development path of a product is that from Question mark to Star
and Cash Cow. The route to Dog should be postponed for as long as possible.
Some products remain stuck as a Question mark and become Dogs at an early
stage. This is a costly affair for a business as investments have been made in the
product and in the promotion around the product. The route of a product via the
ideal development path will eventually bring in money with which investments
can be made in other and/or new products that will be deployed in the market
as a Question mark. However, for the sake of the continuity of the Cash Cows
and/or Stars, Dogs are also necessary.
Page 38 of 52

Strategic choices
Choices and Operational Strategies could be derived from BCG Matrix, by which
determining the Question Mark (INDEST), the Star (BRAUN & BABYLESS), the
Cash Cow (ARISTON & MIELE) and the Dog (CRAFFT).
Star
 Generate large profits from increasing sales in Braun & babyliss skus.
 New market & new channels distribution for two brands
 Increase our market share required to sustain growth
Dog (crafft)
 Focusing on specific dealers.
 Stop market campaigns.
 Focusing on retail (b-tech showrooms).
Cash cow (Ariston & Miele)
 Build customer loyalty develop substitute brands.
 Increase usage rate.
 Decrease marketing expenses
 Raise prices
Question mark (indesit)
 Cash from (Ariston& Miele) sales profit to investigate and improve indesit
sales
 Increase market share
 New price map regarding to its competitors
 New marketing campaigns
 Supplier support
Page 39 of 52

6.5. McKinsey 7S Model
B.Tech McKinsey 7S model features the link between the seven different
elements of the company’s business to increase the total efficiency. In this model,
it is clearing indicated that a business has hard and soft elements.
6.5.1. Strategy
Every little Helps is the marketing communication message of B.Tech that it
pursues along with its cost leadership business strategy. This strategy is being
sustained by the supermarket chain due to the excessive exploitation of
economies scale and using bargaining power when dealing with suppliers for
securing low purchasing costs. B.Tech has applied different strategies.
At present, B.Tech is facing a number of complex issues such as long payment
cycle.
6.5.2. Structure
The organizational structure of B.Tech is highly hierarchical and includes many
layers from store sales to management to the CEO. To simplify the organizational
structure, the roles of deputy store managers were eliminated. The Board of
Directors has ten members in total and eleven members of the executive
committee of the company. Now the company believes that there is no need of
one leader, they should work as a whole from top to down to achieve the
successful strategies.
6.5.3. Systems
The retailer chain of the company basically relies on wide and spread range of
systems for approaching a sustainable operation on the daily basis. The best
example of it was the performance evaluation system which was having forty
different measures before and they were reduced to only six key performance
measures. To achieve its pre-determined strategies B.Tech used a steering wheel
that smartly and simply used to help the employees in the coming.
6.5.4. Shared Value
The objectives and belief of the company are stated with the help of shared
values. The organization has its belief that by increasing the sophistication of
management techniques from being just a simple manufacturing company to a
standard value chain.
Page 40 of 52

6.5.5. Staff
Staff means the number of employees a company has throughout its
organization. More than 3,000 employees are recruited all over Egypt by B.Tech.
6.5.6. Style
The working style of the company which it takes up help the company to achieve
the goals or objectives of the company. Steering wheel style was used by B.Tech
to achieve its objectives. This wheel has 90-degree arcs, on which the company’s
four main areas are considered, and they are employee performance, customers,
operations, and customers.
6.5.7. Skill
the capabilities of an organization or its employees to complete a particular task
is described as the skills of the company. B.Tech administers complete
knowledge to its employees so that they could work efficiently and effectively
within the organization. It led to skill enhancement of the employees to work as
per the standards of B.Tech Company.
The McKinsey 7-S framework has given a clear picture of all the elements, that
are needed to align to attain success. Going through all the elements there are a
lot of places where a lot of improvement is required if the company wanted to
achieve its objectives. B.Tech needs to save any amount of money it could to
remain the cost leader of the market. The focus of the company should be on the
availability, services, and especially on the pricing policy of the company and
this should be the new strategic priority of the management.
When coming to structure, B.Tech has a very difficult and highly professional
organizational structure, which is not required most of the times. A lot of cost
reduction could target if the organizational structure of the company is made a
bit easier. A few unnecessary posts could be removed from the hierarchy. The
work system followed by the company it quite spread out and thus’ affects and
delays the working of the company. A less difficult and renewed system with
less number of procedure need to be followed will be beneficial for the company
as the workers will work in that time which they use to waste in following
unnecessary procedures of the company.
The beliefs and objectives of the company should be clearly defined and easy to
follow. The management should simplify its objective to make it understand by
Page 41 of 52

the common person working in the company and work hard to attain it. With
such a large number of employees, it is necessary for the company to pay
attention to their needs, training, and development, so they give back good work
performance. The company is paying attention towards all the main areas by
using steering wheel style which helps it to focus on all the major factors. Skill
factor of the company is also working well. The company prefers to administer
the knowledge about every aspect of the company to its employees hence,
getting work done from them as according to the company’s standards.
6.6. Competitive Edge
B-Tech is the largest chain specialized in the trade and distribution of electrical
and household appliances in Egypt.
B-Tech has been able to act as an exclusive agent for the finest brands in the
Egyptian market. Such as Ariston, Indesit, Miele, Braun, Ariete, Ultra, Babyliss
and I-Cock.
Cost leadership (main strategy): Selecting a target price point per SKU per
category (from market analysis). Change some features to reach target price
point if needed. To be on par with supplier. If they supply same product to the
market.
Page 42 of 52

7. Financial plan, statements and sales forecast
7.1. Financial statements and forecast
( Millions EGP) 2017A 2018A 2019F 2020F
Income Statement
Total Revenue 256.28
EGP 276.40
EGP 298.10
EGP 321.50
EGP
Revenue 256.28
EGP 276.40
EGP 298.10
EGP 321.50
EGP
Cost of Revenue, Total 218.39
EGP 232.53
EGP 247.59
EGP 263.62
EGP
Gross Profit 37.90
EGP 43.87
EGP 50.78
EGP 58.78
EGP
Total Operating Expenses 257.97
EGP 275.49
EGP 294.20
EGP 314.18
EGP
Selling/General/Admin. Expenses, Total 36.16
EGP 39.62
EGP 43.41
EGP 47.56
EGP
Depreciation / Amortization 2.94
EGP 2.82
EGP 2.70
EGP 2.59
EGP
Other Operating Expenses, Total 0.49
EGP 0.53
EGP 0.57
EGP 0.62
EGP
Operating Income (1.69)
EGP 0.91
EGP (0.49)
EGP 0.26
EGP
Interest Income (Expense), Net Non-Operating 5.72
EGP 6.40
EGP 7.16
EGP 8.01
EGP
Gain (Loss) on Sale of Assets 0.04
EGP
Other, Net 5.73
EGP 5.25
EGP 4.81
EGP 4.41
EGP
Net Income Before Taxes 9.80
EGP 12.56
EGP 16.10
EGP 20.63
EGP
Provision for Income Taxes - 3.17
EGP 3.17
EGP 3.17
EGP
Net Income After Taxes 9.80
EGP 9.39
EGP 9.00
EGP 8.62
EGP
Net Income Before Extraordinary Items 9.80
EGP 9.39
EGP 9.00
EGP 8.62
EGP
Net Income 9.80
EGP 9.39
EGP 9.00
EGP 8.62
EGP
Income Available to Common Excluding Extraordinary Items 9.80
EGP 9.39
EGP 9.00
EGP 8.62
EGP
Diluted Net Income 9.80
EGP 9.39
EGP 9.00
EGP 8.62
EGP
Diluted Weighted Average Shares 67.44
EGP 67.44
EGP 67.44
EGP 67.44
EGP
Diluted EPS Excluding Extraordinary Items 0.15
EGP 0.14
EGP 0.13
EGP 0.12
EGP
Diluted Normalized EPS 0.14
EGP 0.14
EGP 0.14
EGP 0.14
EGP
Balance Sheet
Total Current Assets 567.48
EGP 586.39
EGP 605.93
EGP 626.12
EGP
Cash and Short Term Investments 28.25
EGP 22.76
EGP 18.34
EGP 14.77
EGP
Cash & Equivalents 28.25
EGP 22.76
EGP 18.34
EGP 14.77
EGP
Total Receivables, Net 289.79
EGP 355.66
EGP 436.50
EGP 535.72
EGP
Accounts Receivables - Trade, Net 46.99
EGP 50.86
EGP 55.05
EGP 59.58
EGP
Total Inventory 176.39
EGP 184.62
EGP 193.23
EGP 202.25
EGP
Prepaid Expenses 73.05
EGP 5.68
EGP 0.44
EGP 0.03
EGP
Other Current Assets, Total - 17.67
EGP 17.67
EGP 17.67
EGP
Total Assets 622.47
EGP 640.28
EGP 658.60
EGP 677.44
EGP
Property/Plant/Equipment, Total - Net 53.16
EGP 51.03
EGP 48.99
EGP 47.02
EGP
Property/Plant/Equipment, Total - Gross 102.25
EGP 102.77
EGP 103.29
EGP 103.82
EGP
Accumulated Depreciation, Total (49.08)
EGP (51.74)
EGP (54.54)
EGP (57.50)
EGP
Intangibles, Net - 0.94
EGP 0.94
EGP 0.94
EGP
Other Long Term Assets, Total 1.83
EGP 1.92
EGP 2.01
EGP 2.11
EGP
Total Current Liabilities 515.38
EGP 523.80
EGP 532.36
EGP 541.05
EGP
Accrued Expenses 79.96
EGP 15.84
EGP 3.14
EGP 0.62
EGP
Notes Payable/Short Term Debt 234.32
EGP 273.99
EGP 320.38
EGP 374.62
EGP
Other Current liabilities, Total 201.10
EGP 233.97
EGP 272.21
EGP 316.71
EGP
Total Liabilities 515.38
EGP 523.80
EGP 532.36
EGP 541.05
EGP
Total Debt 234.32
EGP 273.99
EGP 320.38
EGP 374.62
EGP
Total Equity 107.09
EGP 116.48
EGP 126.69
EGP 137.80
EGP
Common Stock, Total 67.44
EGP 67.44
EGP 67.44
EGP 67.44
EGP
Retained Earnings (Accumulated Deficit) 39.65
EGP 49.04
EGP 49.04
EGP 49.04
EGP
Total Liabilities & Shareholders' Equity 622.47
EGP 640.28
EGP 640.28
EGP 640.28
EGP
Page 43 of 52

Financial Ratios Rule Unit 2017A 2018A 2019F 2020F
Liquidity ratios
Current Ratio CA/CL Times 1.10 1.12 1.14 1.16
Quick Ratio (CA-INV)/CL Times 0.76 0.77 0.78 0.78
Cash Ratio Cash/CL Times 0.05 0.04 0.03 0.03
Leverage Ratios
Total Debt Ratio Long Term Debt/TA Times 0.38 0.43 0.50 0.59
Debt/Equity TD/TE Times 2.19 2.35 2.53 2.72
Equity Multiplier TA/TE Times 5.81 5.50 5.05 4.65
Profitability Ratios
Net profit margin NI/Sales % 3.82% 3.40% 3.02% 2.68%
ROA NI/TA % 1.57% 1.47% 1.37% 1.27%
ROE NI/TE % 9.15% 8.06% 7.10% 6.26%
Asset Management Ratios
Asset turnover Sales/TA Times 0.41 0.43 0.47 0.50
Inventory Turnover COGS/Inventory Times 1.24 1.26 1.28 1.30
Days Sales in Inventory 365/Inventory Turnover Days 294.80 289.80 284.87 280.03
Payables turnover COGS/A.P Times 0.93 0.85 0.77 0.70
Days Cost in Payables 365/ Payables Turnover Days 391.62 430.08 472.31 518.69
Receivables Turnover Sales/A.R Times 5.45 5.43 5.42 5.40
Days' sales in receivables 365/Receivable Turnover Days 66.92 67.16 67.40 67.64
Page 44 of 52

(in millions) 2017A 2018A 2019F 2020F
Operating cashflow 1,250,000.78 3,730,000.78 2,214,898.74 2,858,340.89
- ∆in net working capital 10,490,000.00 10,982,571.99 11,493,894.35
- ∆ in net capital spending (2,130,000.00) (2,044,655.76) (1,962,731.06)
Free Cash flow to Firm (4,629,999.22) (6,723,017.49) (6,672,822.40)
(in millions) 2017A 2018A 2019F 2020F
EBIT (1,690,000.00) 910,000.00 (490,000.00) 263,846.15
(1- T) (22%) 78.00% 78.00% 78.00% 78.00%
Depreciation and amortization 2,940,000.00 2,820,000.00 2,704,897.96 2,594,493.96
OCF 1,250,000.78 3,730,000.78 2,214,898.74 2,858,340.89
(in millions) 2017A 2018A 2019F 2020F
Current Assets 567,480,000.00 586,390,000.00 605,930,133.40 626,121,397.97
Current Liabilities 515,380,000.00 523,800,000.00 532,357,561.41 541,054,931.64
Net working capital 52,100,000.00 62,590,000.00 73,572,571.99 85,066,466.34
∆ NWC (CA t - CL t) - (CA t-1 - CL t-1) 10,490,000.00 10,982,571.99 11,493,894.35
(in millions) 2017A 2018A 2019F 2020F
Net Fixed Assets 53,160,000.00 51,030,000.00 48,985,344.24 47,022,613.18
∆ in NCS ( FA t- FA t-1) (2,130,000.00) (2,044,655.76) (1,962,731.06)
Change in net capital spending
Change in net working capital
Operating Cashflow
Free Cashflow to Firm (FFCF)
Page 45 of 52

Total Revenue Historical Growth Rate
Revenue 7.85%
Cost of Revenue, Total 7.85%
Gross Profit 6.47%
Total Operating Expenses 15.75%
Selling/General/Admin. Expenses, Total 6.79%
Depreciation / Amortization 9.57%
Other Operating Expenses, Total -4.08%
Operating Income 8.16%
Interest Income (Expense), Net Non-Operating -153.85%
Gain (Loss) on Sale of Assets 11.89%
Other, Net
Net Income Before Taxes -8.38%
Provision for Income Taxes 28.16%
Net Income After Taxes
Net Income Before Extraordinary Items -4.18%
Net Income -4.18%
Income Available to Common Excluding Extraordinary Items -4.18%
Diluted Net Income -4.18%
Diluted Weighted Average Shares -4.18%
Diluted EPS Excluding Extraordinary Items 0.00%
Diluted Normalized EPS -6.67%
Total Current Assets 0.00%
Cash and Short Term Investments
Cash & Equivalents 3.33%
Total Receivables, Net -19.43%
Accounts Receivables - Trade, Net -19.43%
Total Inventory 22.73%
Prepaid Expenses 8.24%
Other Current Assets, Total 4.67%
Total Assets -92.22%
Property/Plant/Equipment, Total - Net
Property/Plant/Equipment, Total - Gross 2.86%
Accumulated Depreciation, Total -4.01%
Intangibles, Net 0.51%
Other Long Term Assets, Total 5.42%
Total Current Liabilities
Accrued Expenses 4.92%
Notes Payable/Short Term Debt 1.63%
Other Current liabilities, Total -80.19%
Total Liabilities 16.93%
Total Debt 16.35%
Total Equity 1.63%
Common Stock, Total 16.93%
Page 46 of 52

Liquidity ratios 2017A 2018A
2019
F 2020F
Current Ratio CA/CL Times 1.10 1.12 1.14 1.16
Quick Ratio (CA-INV)/CL Times 0.76 0.77 0.78 0.78
Cash Ratio Cash/CL Times 0.05 0.04 0.03 0.03
7.2. Financial Analysis
The actual financial statements for B tech were spread for years 2017 and 2018,
then accordingly a forecast for the years 2019 and 2020 were made. The forecast
drivers for the income statement were made as historical growth rate, as the
trend was determined to be reasonable and matches the company’s strategies.
The balance sheet assets were also forecasted by historical growth rates.
In 2017 B tech had a modest liquidity position, where in 2017 it had a current
ratio of 1.1. This shows that for each 1 pound of current liabilities the firm will
have 1.1 of current assets to cover it. A current ratio of more than one is a good
thing, as a current ratio of lower that one will put the company at a position for
financial distress and inability to cover its obligations on the short term. In 2018
we find that the current ratio increased to 1.12, this shows improvement for B
tech.
We find that the forecasts detect that this current ratio will increase over the
years 2019 and 2020, as the current assets will increase by a percentage higher
than the short-term liabilities, which is a favorable thing and shows
improvement of the liquidity position.
As for the quick ratio, that shows the firms ability to pay short term obligations
without relying on inventory, as inventory is the most illiquid current asset as it
takes time to be sold and sometimes may be revalued or determined to be
obsolete or damaged. The quick ratio for 2017 and 2018 was 0.76 and 0.77
respectively, this means that for each 1 EGP of current liabilities the firm will
have only 0.77 in current assets excluding inventory to cover it. It is also
forecasted that this ratio increases to 0.78 in 2019 and 2020. This shows a higher
performance, which is the higher the better.
Page 47 of 52

However, for the cash ratio we find that the cash ratio for 2017 was 0.05, which is
a very low ratio. However, the cash ratio is usually very low for firms, as it only
measures the cash with respect to the current liabilities. A too high cash ratio is
not a good thing as the firm may use this cash to be invested and earn a rate of
return on it. However, a too low ratio will make the firm unable to pay any
obligations that arise. In 2018 and the forecasted years we find that cash ratio will
decrease as the cash will not grow at a rate higher that the current liabilities, this
may be a drawback for B tech. It should work on trying to liquidate its inventory
faster by improving its inventory turnover or by injecting more cash for the
company through debt such as taking credit facilities for example at an interest
rate.
The overall liquidity position for B tech is determined to be favorable, however it
could be improved.
As for the asset management or efficiency ratios, we find that B tech has a total
asset turnover ratio in 2017 of 0.41 and will increase to 0.5 in 2020 according to
our forecasts. This reflects the firm’s ability to generate sales using its total asset.
Thus in 2020, the firm will generate 0.5 EGP of sales for each 1 EGP of assets. This
is a high number for the firms and shows its efficiency in generating sales. B tech
had an inventory turnover of 1.24 I 2017 this means that it has 1.24 inventory
cycles a year. This shows that B tech sells all its inventory and purchases new
inventory 1,24 times. However, we expect this ratio to increase in our forecast
and reach a ratio of 1.3 in 2020. The higher the inventory turnover the better, as it
shows the firm is better at generating sales and turning over its available
inventory. In 2020, it will take the firm an average of 280 days to sell all its
inventory in stock and purchase new inventories. The lower the days the better
to allow the firm to sell more in fewer days.
As for the payable’s turnover, it had 0.93 ratio starting 2017. This means B tech
pays its payables 0.93 times a year, and the lower the better, because firms prefer
fewer times to pay to keep the cash with them a longer time. This ratio is
forecasted to reach 0.7 times in 2020, this shows improvement in its position, as it
will have more room and time before it must pay its suppliers. In 2020 it will take
about 518 days for it to pay its payables, this is a desirable position for the firm to
pay late, however it should determine if taking cash discounts will have benefits
that exceed the benefits of paying the outstanding payables later.
Page 48 of 52

B tech had a receivables turnover of 5.45 times, this means it collects its
outstanding accounts payable 5.45 times a year, which is the higher the better. B
tech will reach a receivables turnover ratio of 5.4 in 2020, this shows a decline.
This is not a favorable thing as it will have lower efficient in its credit collection
policy, but this may be due to a very fast expansion or growth in its sales.
However, when we compare the receivables turnover to the payable’s turnover,
we find that the receivables surpass the payables, which is a good thing for the
firm as it will have cash to use for a long time.
Asset Management
Ratios
2017
A
2018
A 2019F 2020F
Asset turnover Sales/TA
Time
s 0.41 0.43 0.47 0.50
Inventory Turnover COGS/Inventory
Time
s 1.24 1.26 1.28 1.30
Days Sales in
Inventory
365/Inventory
Turnover Days
294.8
0
289.8
0
284.8
7
280.0
3
Payables turnover COGS/A.P
Time
s 0.93 0.85 0.77 0.70
Days Cost in
Payables
365/ Payables
Turnover Days
391.6
2
430.0
8
472.3
1
518.6
9
Receivables
Turnover Sales/A.R
Time
s 5.45 5.43 5.42 5.40
Days' sales in
receivables
365/Receivable
Turnover Days 66.92 67.16 67.40 67.64
In terms of the firm's leverage position, we find that in 2017 it had a total debt
ratio of 0.38, this means that the firm finances its assets 38% using debt and the
rest is equity. It is expected that as the firm grows it will use more debt to finance
its asserts reaching a total debt ratio of 0.59.
Page 49 of 52

Leverage Ratios
2017
A
2018
A
2019
F 2020F
Total Debt Ratio
Long Term
Debt/TA
Time
s 0.38 0.43 0.50 0.59
Debt/Equity TD/TE
Time
s 2.19 2.35 2.53 2.72
Equity Multiplier TA/TE
Time
s 5.81 5.50 5.05 4.65
In terms of performance in profitability, we find that B tech had a net profit
margin of 3.82% in 2017, this means that it generates 3.82% of net income for each
1 EGP of sales. However, due to an increase in expenses going forward, we find
that the forecasted net profit margin will reach 2.68% in 2020. This shows a
decrease in the firm's profitability and is unfavorable, as it shows possible
inefficient management of expenses. The return on assets for B tech was 1.57% in
2017 and will be 1.27% in 2020. This also shows lower profitability as indicated
by the ROA. The return for equity ratio was 9% in 2017, this means that for each
1 EGP the investors invest in the firm, they get 9% of it as net income. The ROE
will decrease to 6.26% in 2020, the reason for this decline may be inefficient
management of expenses that will lower the net income as well. B tech should
work on its management of expenses to improve its bottom line performance so
that its profitability position would be better.
Page 50 of 52

Profitability Ratios
2017
A
2018
A 2019F 2020F
Net profit margin NI/Sales % 3.82% 3.40% 3.02% 2.68%
ROA NI/TA % 1.57% 1.47% 1.37% 1.27%
ROE NI/TE % 9.15% 8.06% 7.10% 6.26%
The free cashflow to firm was further computed for B tech, we find that the firm
had negative cashflows in all years, despite having a positive net income. This is
possible as the firms operating cashflows was lower that the change in networkin
capital and change in net capital spending, a sthe firm will have large changes in
its networking capital as the current assets will grow at a large rate in the future.
The firm will also have a negative net capital spending which means that it will
sell more assets than it will invest in new assets in the calculated years.
(in millions) 2017A 2018A 2019F 2020F
Operating cashflow
1,250,000.7
8 3,730,000.78 2,214,898.74 2,858,340.89
- ∆in net working
capital
10,490,000.0
0
10,982,571.9
9
11,493,894.3
5
- ∆ in net capital
spending
(2,130,000.00
)
(2,044,655.76
)
(1,962,731.06
)
Free Cash flow to
Firm
(4,629,999.22
)
(6,723,017.49
)
(6,672,822.40
)
Page 51 of 52

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