Introduction
Blue Sky Satellite Communications CC (Blue Sky) is a communications solutions and satellite service provider in Africa with its operations base in South Africa. The company provides both satellite phones and terminals plus airtime packages customized to the client’s needs.
By focusing on its strengths, its key customers, and the underlying values they need, and the introduction of broadband technology, Blue Sky Satellite Communications will meet the following goals: increase sales to more than $20 million in three years, improving the gross margin on sales to greater than 30%, and improve inventory turnover to eight turns by Year 3.
This business plan leads the way. It renews our vision and strategic focus of adding value to our target market segments: the corporate business and high-end home office users, in our horizontal market. It also provides the step-by-step plan for improving our sales, gross margin, and profitability.
The Company
In 1996, Pedro M G Camacho started “Hyper Parts Com Division” after purchasing a satellite phone from COMSAT. He was so impressed with its abilities and potential that he decided to start his own satellite communications company. In 1998, the firm changed its name to Blue Sky Satellite Communications. It has since had two good years of legal trade, with the prospect of enormous growth. As Pedro saw Inmarsat as a niche market and reacted well to it, the same outlook has been given to VSAT, as it is the next logical step in the development of the satellite communications industry.
Blue Sky Satellite Communications is built on the assumption that the management of satellite technology and the development of broadband services will be the most important step in communication since the invention of the telephone. As a service provider for Inmarsat and VSAT services, we have placed our selves at the forefront of the most unconnected continent in the world, Africa. Our goal is to create as many links in Africa in the shortest space of time. This is to be achieved by partnering up with local telecommunication companies, be they private or government run.
In order to implement our goals we will focus on the following keys to success; increase Inmarsat airtime usage, develop the VSAT market, increase marketing in Africa, outsource quality services, introduce better value-added services to end user, and maintain and increase customer services.
Blue Sky Satellite Communications is located in Bedfordview,South Africa. It is only 15 minutes from the Johanessburg International Airport, and 15 minutes from Sandton, a suburb of Johanessburg.
The firm presently consists of 4 employees under 1 director. In the near future, the company plans to increase the company size by at least 20 people. The main additions will be in sales personnel, in-house customer support which would run constantly (24-7), and a technical support department. Marketing and promotions are outsourced to specialized firms.
We source our product from different Land Earth Stations and various equipment manufactures. In most cases, we deal directly with the manufacturer and service supplier.
The Market
The growth in the use of the Internet for sending messages and other information has made our products and services one of the most sought after commodities around. With the advent of broadband, we expect the growth to be exponential, more and more people and corporations will invest in faster and better communications systems to make them more productive and to show a better bottom line.
The satellite services market is worth an estimated $12 billion in Year 1 for the African and Middle east markets, and there is a projected growth of 20% per year. Blue Sky aims to tap into this market, and expects to be able to capture a 10-20% market share.
The projected market growth for the Telecom’s industry has been one of the most highlighted aspects of new business in the marketplace today. With the coming of age of the new broadband services and the privatization of many Telecom companies (which were previously run by the government), we see that growth is going to far surpass any projection that has been made in the past.
We shall provide our customers with systems that allow them to become more productive through offering two types of hardware. Inmarsat products, such as the Mini-M Sat Phone and the M4 Global Area Network terminal, are poised to maintain a growth pattern over the next 24 months. The re-launch of the Iridium product will also impact the market, and we are in good position to take advantage of this opportunity. The VSAT market has just appeared last year, and the sentiment is that it will grow even further in Year 1 and Year 2.
Blue Sky has a number of local competitors. They provide us with the ongoing determination for the provision of better customer relations. We learn from their mistakes, and have kept a good relationship with them.These companies are : African Satellite Corporation, Pertec International, Grintek Telecom, and Station Africa. In order to successfully compete with these companies Blue Sky has focused on the future trends in the industry to position itself to become the dominate company in this industry. Some of the most important trends are:
To maintain the recurring monthly income in top form, all customers will require maximum attention through strong customer service. The customer service center and the Internet interactive chat will account for many of the solutions offered to customers for fast service.
The most obvious and important trend in the market is declining prices. This has been true for years, but the trend seems to be accelerating. We see the major manufacturers and suppliers putting systems together with amazing specs–more power, more speed, and more bandwidth.
Another trend is ever-greater connectivity. Everybody wants to get onto the Internet, and every small office wants a LAN. A lot of small offices want their LAN connected to the Internet. It will be the challenge of Blue Sky to offer customized service packages with all the desired features at a competitive price.
The company is focusing on the small and large businesses that need a wide variety of services packages that have lower costs per airtime than other competitors.
Strategy and Implementation
- We aim to emphasize service and support. Blue Sky does not just sell the service to the client and leave it at that. We will communicate with the client on an ongoing basis with important information about the product or service which has been delivered.
- We aim to build a long-term relationship with the customer. As recurring income is the aim of this business, we need to maintain as many clients as is possible. This means that we have to have constant contact with our clients. This is achieved by sending out newsletters and emails so that they are kept up-to-date with all that is happening in the marketplace.
- Focus on target markets. Having a goal and focus on a certain market segment will make Blue Sky successful. As we have been in the business for many years, we understand the constant changes in requirements, and, due to a lean management structure, we are able to make the required decisions on new markets rather quickly and efficiently. This then lends itself to have the necessary focus on the market segment as its’ needs change.
- Differentiate and fulfill the promise. We aim to be different from other service providers. We want to be the household name in Africa when it comes to satellite services of any sort. We want to provide pre-paid services and rural telephony and get involved in the education of the users and sub-users of our products. We want to meet all our promises and go the extra mile for those who need it most.
Financial Projections
The company expects to earn $62.2 million by year three with a gross margin of 31.7%. Controlled SG&A costs will create a very strong net margin. Over the next three years, the company will be investing $6.2 million in further long-term assets in order to achieve a regional presence in Africa.
1.1 Mission
Blue Sky Satellite Communications is built on the assumption that the management of satellite technology and the development of broadband services will be the most important step in communication since the invention of the telephone. As a service provider for Inmarsat and VSAT services, we have placed our selves at the forefront of the most unconnected continent in the world, Africa. Our goal is to create as many links in Africa in the shortest space of time. This is to be achieved by partnering up with local telecommunication companies, be they private or government run. In so doing, we can offer all our customers the most legal route to high quality communication wherever they are.
Blue Sky Satellite Communications, bringing satellite communications down to earth.
1.2 Keys to Success
- Increase Inmarsat airtime usage.
- Develop the VSAT market.
- Increase marketing in Africa.
- Outsource quality services.
- Introduce better value-added services to end user.
- Maintain and increase customer services.
1.3 Objectives
- Sales increasing to more than $20 million by the third year.
- Bring gross margin up to above 30%, and maintain that level.
- Sell $4 million of service, support, and training by Year 2.
- Improve inventory turnover to six turns next year, seven in Year 2, and eight in Year 3.
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