4. Assignment - Boom Beverage Business ExpansionProject Paper - NAME (1)

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PROFESSIONAL DIPLOMA IN ENGINEERING BUSINESS ADMINISTRATION FINANCIAL MANAGEMENT ENTREPRENUERSHIP MODULE PROJECT PAPER (ASSIGNMENT) LECTURER: DR JAMES TIN PREPARED BY: NAME MATRIC NUMBER SUBMISSION DATE: 04 JANUARY 2024

PROFESSIONAL DIPLOMA IN ENGINEERING BUSINESS ADMINISTRATION FINANCIAL MANAGEMENT ENTREPRENUERSHIP MODULE: PROJECT PAPER TYPE OF ASSESSMENT: ASSIGNMENT LECTURER: DR JAMES TIN INSTRUCTIONS: 1. This is an individually written assignment. 2. Please use New Times Roman font 12 when type-writing your assignment, 1.5 spacing. 3. Please submit your assignment (in WORD format) together with the cover sheet given to you and email to supportdiploma@rivermore.com.my 4. This assignment carries 80% towards your final assessment.

QUESTION: You are a business consultant to a small size trading company in Malaysia. The company is interested to expand its business to USA. The industry is depending on your own interest. Prepare a comprehensive business plan focusing on its business potential in that new market.

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Business Plan The Boom Beverage Sdn Bhd. Business Expansion to the USA No 22A-3, Jalan 17/54, Seksyen 17, 46400 Petaling Jaya, Selangor Malaysia +60 13-204 2062 admin@theboom.group www.theboombeverage.com

1.0 Executive Summary The Boom Beverage Sdn Bhd, a small sized beverage trading company with a big vision in business based in Malaysia, is seeking to expand its operations to the beverage market of the United States. With a solid reputation for providing new flavors, and delectable beverages, the company aims to capitalize on the growing demand for unique new flavors and delectable beverages in the USA. 1.1 Company Moto 1.2 Vision Statement Our vision at The Boom Beverage is to extend our vibrant presence throughout the Asia Pacific, illuminating life's moments with our delectable beverages. We aspire to infuse joy, authenticity, and effervescence into every sip, resonating with diverse cultures worldwide. 1.3 Mission Statement At The Boom Beverage, we are dedicated to concocting irresistible, real-fruit-infused beverages that resonate with the spirit of life. With our commitment to quality and innovation, we strive to captivate hearts globally, spreading the joy of flavorful refreshment. 1.4 Company Background The establishment of Boom Beverage Sdn Bhd took place on January 1, 2014, with the joint efforts of Azri Zahier Azmi, Zaid Hurairah, and Errwan Haddie Arshad, who are all forward- thinking persons. Our firm, originating from Malaysia, has quickly gained recognition in the beverage market under the flagship brand Hausboom. Our aim in undertaking this endeavor was to transform the market by addressing the lack of high-quality, halal-certified fizzy drinks that include genuine fruit juice. The creation of our brand was driven by Mr. Azri's fervor for crafting a delightful beverage. Enthused by the splendid effervescent beverages discovered in Europe, his objective was to bring a novel, lively visual appeal to Malaysia. As a result, HAUSBOOM was created, offering a selection of sparkling real juice that delights the palate with its invigorating and authentic flavors. The commitment to achieving the highest level of quality is apparent in our cutting-edge production facilities and precisely crafted methods, which adhere strictly to Halal and Good Production Practice (GMP) requirements. By strictly implementing rigorous quality control

standards, we guarantee that each sip of HAUSBOOM provides our clients with genuine and unadulterated natural deliciousness. Hausboom has rapidly become the most rapidly expanding beverage in Malaysia and has also achieved notable progress in global markets. In a span of 24 months, our exports have reached many nations, such as the United Kingdom, Germany, the Maldives, China, Brunei, Singapore, Korea, and Japan. Our goods are now distributed in more than 1500 petromarts, as well as over 1000 restaurants, cafés, retail shops, and hypermarkets. We have achieved an excellent sales record, with about 2 million bottles sold. The foundation of our success is our steadfast commitment to excellence, ingenuity, and a customer-focused strategy. As we strive to increase our presence internationally, our goal is to provide Hausboom's authentic fruit-infused drinks to customers globally. We aspire to redefine the concept of refreshment and provide a delightful experience for taste buds with each sip. 1.5 Products and Services Our product portfolio includes HAUSBOOM Sparkling Real Juice, Boom Energy Shot, HAUSBOOM Plus Vitamin Water, Wolf Coffee, and Soyful Soy Milk. HAUSBOOM Sparkling Real Juice, the pinnacle of our offerings, features six luscious flavors—Mango, Guava, Lychee, Lemonade, Blackcurrant, and Strawberry—in 275ml glass bottles, each a testament to our commitment to delivering delightful, all-natural beverages with real fruit juice. 1.6 Business Objectives i. Market Penetration: Establish a formidable presence in the competitive USA beverage market within the next three years, capturing a significant market share. ii. Product Diversification: Innovate and introduce new product lines tailored specifically to the discerning preferences of the American consumer base, expanding our portfolio while adhering to our ethos of real-fruit goodness. iii. Operational Excellence: Optimize logistics and supply chain processes to ensure efficient and prompt delivery, enhancing customer satisfaction. iv. Brand Recognition: Forge strategic partnerships and launch impactful marketing campaigns to elevate brand visibility, positioning The Boom Beverage as a trendsetting force in the global beverage industry, offering unparalleled taste experiences with real fruit.

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1.7 Management Team 2.0 Market Analysis (USA Market Overview) i. Size and Growth The United States has a thriving beverage business worth $760 billion, which includes both alcoholic and non-alcoholic drinks. The projections indicate that the revenue is expected to reach US$328.1 billion by 2023, with an annual growth rate of 2.90% (CAGR 2023–2027). The United States is a dominant player in the global beverage business, making a substantial contribution. It is projected that each individual in the country will generate around US$0.97k in revenue by 2023. It is projected that by 2027, the consumption of alcoholic beverages outside of the house, such as at bars and restaurants, would account for 69% of total expenditure and 29% of total volume consumption, amounting to 62.2 billion liters. Although there is a projected decrease in volume growth (-1.9%) in 2024, the average volume per person for soft drinks in 2023 is forecast to be 194.20 liters (Statista, 2023). Significantly, there is an increasing demand for healthier beverage options, indicating a change in consumer preferences towards drinks that include

natural ingredients and have lower sugar levels. This presents substantial potential for new companies entering the market. Figure 1: USA Beverage Market Growth (Source: (Statista, 2023) ) ii. Trends and Preferences There is a growing trend among American consumers to choose healthier beverages, namely those made with natural ingredients and lower levels of sugar. Staying updated on these developments will be essential for Boom Beverage Sdn Bhd to get a competitive advantage. This trend highlights a chance for firms such as Hausboom to cater to customer desires for genuine, fruit-infused drinks. iii. Competitive Landscape PepsiCo, Red Bull, and Monster Beverage Corporation are the dominant competitors in the beverage industry in the USA. These companies aggressively form alliances with supermarkets and hypermarkets in order to increase their market share. Boom Beverage Sdn Bhd's strategy for differentiation will be shaped by a thorough understanding of its strengths and weaknesses. Notwithstanding this rivalry, there is a oppertunity for pioneering companies such as Hausboom to establish a specialized market by providing distinctive, high-quality drinks that prioritize authentic fruit and natural components.

Figure 2: Beverage Market Share of Companies in USA 3.0 SWOT Analysis: Expansion to USA a. Strengths:  Quality Drink : Hausboom is renowned for its high-quality drinks that are enhanced with genuine fruit, catering to the increasing need for natural ingredients.  Diverse Product Range : Providing a wide range of drinks that cater to different preferences gives a competitive advantage and attracts a vast range of customer tastes.  Established Brand in Malaysia : Establishing and growing successfully in Malaysia not only enhances reputation but also provides a solid basis for expanding internationally.  Customization Services : The capacity to customize goods to align with changing customer needs and preferences demonstrates adaptability and a focus on consumer satisfaction. b. Weaknesses:  Limited USA Market Knowledge : Lack of extensive understanding about US consumer behavior, preferences, and market nuances may pose initial challenges.  Logistical Challenges : Adapting to the complexities of logistics, distribution, and supply chain management in a new market may present hurdles.  Brand Recognition in the USA : Establishing brand awareness and recognition in a highly competitive market may require significant effort and time. c. Opportunities:

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 Growing Beverage Market : Hausboom's real-fruit-based drinks have a promising prospect in the growing US beverage industry, particularly in the segment that favors healthier alternatives.  E-commerce Growth : Leveraging the surge in online shopping and e-commerce platforms provides an additional avenue to reach and engage American consumers.  Sustainability Trend : Hausboom's commitment to using natural ingrediants positions them well in a conscious market, as they cater to the growing customer need for sustainability. d. Threats:  Intense Competition : Facing established giants in the beverage industry may pose challenges in gaining market share and consumer attention.  Economic Factors : Fluctuations in economic conditions can impact consumer spending and market demand.  Regulatory Compliance : Navigating and adhering to stringent US regulations and standards may require significant investment and adjustments. 4.0 Marketing and Sales Strategy a. Target Market: In order to successfully customize communications to different customer groups, the segmentation strategy draws lines between them. Primary One, which includes those in the 16– 24 age range, aims to appeal to this tech-savvy and adventurous demographic by promoting young energy, fashionable lifestyles, and colorful cuisines. For young professionals (those between the ages of 24 and 35), the focus in Primary Two should be on the health advantages, adaptability, and portability of these natural, on-the-go drinks. Designed to appeal to children's taste buds and parents' worries, Secondary One's marketing strategy for the 6–12 age bracket centers on engaging tastes, colorful packaging, and an emphasis on wellness. Secondary Two, which includes those over the age of 45, is targeted at people who are looking for traditional values in drinks, as well as those who are nostalgic, reliable, and health-conscious. Brand image deliberately aligns with each segment's tastes by emphasizing health advantages, a varied selection of flavors, and real-fruit deliciousness.

b. Marketing Channels: Widespread exposure and participation are guaranteed by using a variety of marketing channels. In order to produce compelling content, create influencer collaborations, and launch targeted adverts, it is necessary to have an online presence. Social media platforms like TikTok and Instagram are great tools for this. Hausboom collaborates with e-commerce sites to make their items more accessible. To guarantee widespread physical availability, we have partnered with grocery shops, health food stores, and convenience stores. Generate strong brand loyalty via event participation, health-related activity sponsorship, and involvement in local community projects. c. Sales Strategy: Retailers use eye-catching displays, free samples, and package discounts as part of their in-store promotions to visually and experientially attract customers. The purpose of these educational programs is to encourage healthy use of real-fruit beverages by informing customers about their advantages via workshops, seminars, or online sessions. Through partnerships with cafés, gyms, and health-conscious restaurants, Hausboom is able to reach a wider range of customers. The introduction of subscription models or loyalty programs enhances the incentive for customers to make repeat purchases and fosters brand loyalty. 5.0 Operations Plan a. Supply Chain Management: In order to guarantee timely purchase of consistent quality raw materials, the sourcing strategy entails establishing connections with local US vendors or distributors. Hausboom implements rigorous quality control procedures at every level of manufacturing to guarantee that their goods continue to be of premium quality and meet their high standards. To avoid stockouts or overstocks, advanced inventory management uses specialized software to track inventory levels, forecast demand, and keep track of purchases. It is critical to maintain strong connections with suppliers in order to negotiate advantageous terms and build dependability all the way through the supply chain. b. Distributions:

The distribution strategy of the organization relies heavily on collaboration with well-established logistics partners who specialize in distribution on a national or regional scale. As a means of improving inventory management and reducing transportation times, warehouses will be placed in advantageous locations. Effective channel management is the result of close cooperation between distributors and retailers; this collaboration centers on making sure products are available, promoted, and placed appropriately across all channels in order to reach the widest possible audience. c. Regulatory Compliance: Ensuring compliance with FDA rules on beverage imports, labeling, and safety requirements is a top priority for the firm. Engaging legal advisers will help manage the intricacies of regulations and ensure smooth conformance. We continue to prioritize obtaining all certifications and accreditations that are important for producing and distributing beverages in the US market. Quality control procedures are based on following industry standards, especially Good Manufacturing Practices (GMP), which guarantees product excellence and goes above and beyond statutory requirements. 6.0 Financial Projections a. Revenue Projections We foresee and projected a positive growth in our financial projections for the next three to five years, taking into account market trends, marketing strategies, and operational costs. Include break-even analysis and return on investment projections. Monthly sales are the largest indicator for this business. There are some seasonal variations with the months of March through September being the highest sales months. Plan Month 1 2 3 Current Interest Rate 10.00% 10.00% 10.00% Long-term Interest Rate 10.00% 10.00% 10.00% Tax Rate 30.00% 30.00% 30.00% Other 0 0 0 General Assumptions

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Monthly Revenue Break-even $1,685 Assumptions: Average Percent Variable Cost 23% Estimated Monthly Fixed Cost $1,294 Break-even Analysis (Kindly refer to appendix 2 and 3 for projection of P&L and Balance sheet for 3 years) b. Funding Requirements We also present take into all the consideration of the amount on funding required for the expansion, outlining how the funds will be utilized for marketing, operations, and other relevant areas. c. Risks and Contingency Plan We had identified potential risks such as economic downturns, supply chain disruptions, and regulatory changes. Develop contingency plans to mitigate these risks and ensure business continuity. i. Identified Risks:  Economic Downturns: Drinks and other non-essential purchases may take a hit if the economy were to enter a recession. Sales and market demand for luxury drinks might take a hit if consumers' discretionary spending drops.  Supply Chain Disruptions: Disruptions to the supply chain may halt production and delivery for a variety of reasons, including problems with logistics, insufficient raw materials, or unanticipated occurrences. Delays in production, shortages in inventory, and difficulties in satisfying customer demand might result from these interruptions.  Regulatory Changes: There is a risk to operations from changes in rules, particularly those concerning compliance requirements, imports, or labeling. Changes to product formulas to match new requirements, higher operating expenses, or compliance problems might result from any abrupt changes. ii. Contingency Measures:

 Economic Downturns: Our goal is to employ diversification measures so that we can better weather economic downturns. One way to do this is to provide limited editions or expand the product lineup to meet the needs of customers with different budgets. At the same time, in order to keep profits up during these tough times without lowering product quality, we will be implementing strict cost-control measures.  Supply Chain Disruptions: One way to prepare for any interruptions in the supply chain is to build connections with other suppliers and look into local sourcing options. This will help you become less reliant on any one provider. Maintaining safety stock levels also ensures continuous product availability by acting as a buffer against unanticipated supply chain interruptions.  Regulatory Changes: Legal counsel will conduct frequent compliance evaluations for The Boom Beverage Sdn Bhd in response to regulatory changes, allowing for quick adaption to any revised requirements. The operational approach will put an emphasis on adaptability, so the supply chain can quickly respond to changes in regulations without generating major disturbances. iii. Overall Risk Mitigation Strategies: The business will do scenario planning, drawing up comprehensive backup plans for different degrees of each risk scenario. For quick decisions, it's important to keep an eye on market movements, changes in regulations, and worldwide economic trends. In order to respond quickly and effectively to any unexpected problems or crises, it is a good idea to set up credit lines or cash reserves and to develop cross-functional teams. 7.0 Conclusion The comprehensive business plan for The Boom Beverage Sdn Bhd's expansion into the USA market outlines a strategic blueprint for achieving success. By prioritizing quality, implementing new marketing techniques, and optimizing operations, the firm is well-positioned to build a prominent presence in the very competitive US beverage industry. This plan serves as a comprehensive guide for establishing a presence in the US market, delineating financial forecasts, financing prerequisites, and techniques for minimizing potential risks. The Boom Beverage Sdn Bhd is fully confident in our capability to successfully carry out

this plan. We are well-prepared to not only enter but also flourish in the US market, providing outstanding value to our consumers and accomplishing our strategic objectives. References GourmetPro. (2023). Overview of the US Food and Beverage Market and How To Enter It (2023) . Retrieved from https://www.gourmetpro.co/blog/us-food-beverage-market-entry Statista. (2023, August). Soft Drinks - United States . Retrieved from https://www.statista.com/outlook/cmo/non-alcoholic-drinks/soft-drinks/united-states TheBoomBeverage. (2023). About Us . Retrieved from https://www.theboombeverage.com/ 8.0 Appendices and Exhibits Appendix 1: CEO and Director of Boom Beverage Sdn Bhd – Azri Zahier Azmi

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Appendix 2: Pro Forma Profit and Loss Year 1 Year 2 Year 3 Sales $52,217 $77,383 $104,446 Direct Cost of Sales $12,114 $17,772 $24,227 Other Costs of Sales $0 $0 $0 Total Cost of Sales $12,114 $17,772 $24,227 Gross Margin $40,103 $59,611 $80,219 Gross Margin % 76.80% 77.03% 76.80% Expenses Payroll $10,800 $11,232 $11,681 Marketing/Promotion $1,410 $1,466 $1,525 Depreciation $400 $400 $400 Utilities $1,720 $1,789 $1,861 Insurance $1,200 $1,248 $1,298 Payroll Taxes $0 $0 $0 Other $0 $0 $0 Total Operating Expenses $15,530 $16,135 $16,765 Profit Before Interest and Taxes $24,573 $43,476 $63,454 EBITDA $24,973 $43,876 $63,854 Interest Expense $3,632 $2,626 $1,576 Taxes Incurred $6,282 $12,255 $18,563 Net Profit $14,659 $28,595 $43,315 Net Profit/Sales 28.07% 36.95% 41.47% Appendix 3: Pro Forma Balance Sheet

Year 1 Year 2 Year 3 Assets Current Assets Cash $15,458 $36,139 $69,854 Inventory $905 $1,328 $1,810 Other Current Assets $675 $675 $675 Total Current Assets $17,038 $38,142 $72,339 Long-term Assets Long-term Assets $4,000 $4,000 $4,000 Accumulated Depreciation $400 $800 $1,200 Total Long-term Assets $3,600 $3,200 $2,800 Total Assets $20,638 $41,342 $75,139 Liabilities and Capital Current Liabilities Accounts Payable $480 $3,089 $4,071 Current Borrowing $31,510 $21,010 $10,510 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $31,990 $24,099 $14,581 Long-term Liabilities $0 $0 $0 Total Liabilities $31,990 $24,099 $14,581 Paid-in Capital $10,000 $10,000 $10,000 Retained Earnings ($36,010) ($21,351) $7,244 Earnings $14,659 $28,595 $43,315 Total Capital ($11,351) $17,244 $60,558 Total Liabilities and Capital $20,638 $41,342 $75,139 Net Worth ($11,351) $17,244 $60,558

4. Assignment - Boom Beverage Business ExpansionProject Paper - NAME (1)

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