Introduction
NYS Enterprises, headquartered in Qatar, deals with the importation of products such as agrifood (lentils, pulses), seafood, and other goods. The company serves as a supplier to hypermarkets such as Lulu, Monoprix, and Carrefour. Buying and selling goods from and to other nations has been a significant part of the economy of many nations. Countries such as Qatar are not well established in the production of animal food and other types of agrifood; seafood forms part of the market for importing these products. The report conducts a market analysis of NYS Enterprises’ new line of products, specifically frozen beef, in Qatar, and summarizes the company’s financial plan for the product line.
Market Analysis
Market Size
Qatar imports more than 90% of its food because it is poorly suited for farming, and trade is crucial to feeding the country (Evdokimova et al., 2020). Between 2019 and 2020, Qatar experienced the fastest-growing import markets in animal food, with Oman at $3.7 million, the Netherlands at $1.35 million, and Jordan at $675,000 (OEC, 2022). The country imported $31 million in animal feed in 2020, making it the 95th largest animal feed importer globally (Dolnicar et al., 2018).
In Qatar, frozen meat imports stood at 370,000 shipments, imported by 188 importers in the country from 153 suppliers globally (IndexBox, 2022). Generally, meat/beef imports in the country continue to show a prominent expansion. Beef imports have shown considerable growth since peaking in 2017 and have continued to grow in the immediate term (Mordor Intelligence, 2022). Therefore, the frozen beef import market in Qatar has experienced significant expansion in recent years.
Segmentation
The target market for frozen meat/beef is a group of potential retailers and wholesalers that NYS Enterprises identifies to sell its products. Each group of businesses may be divided into small or large segments based on demographic and behavioral factors. The target audience demographic is based on supermarkets or retailers that work with the company. It focuses on the concept that NYS is seeking to reach resolution-makers, who encompass actual hypermarkets, supermarkets, and retailers with unique needs and interests (Dolnicar et al., 2018).
For example, Generation Z retailers and wholesalers share the same interests and prefer frozen beef. NYS Enterprise must look into both small and large retailers, as well as hypermarkets and supermarkets, to supply meat products (Nicholson & Gómez, 2022). NYS Enterprise will target supermarkets such as Lulu and Carrefour, as well as retail outlets in famous cities and towns across Qatar.
The behavior of the targeted audience is centered on the supermarket’s purchasing journey and behavior. It considers aspects such as benefits sought, usage rate, and online shopping habits. For example, the supermarkets and retailers in Qatar mostly order their products from NYS Enterprise. There is an increasing trend among retailers to prefer e-commerce, and the company can tap into this to fill the gap (Evdokimova et al., 2020). Modern technology has led people to adopt eating frozen meat, particularly among Generation Z, as well as retailers and supermarkets such as Carrefour.
Demand for Meat and Competition
The meat market in Qatar is competitive, with many regional and domestic players distributing meat products. The players of the leading market strongly compete in certifications, quality, and product portfolio, with their major differentiation strategies being partnerships and expansions (Connect2India, 2022). Additionally, in gaining a competitive advantage, leading meat manufacturers have expanded their business within the region by launching new product lines and increasing production capacity. Some meat products are only accessible in certain seasons.
Therefore, to meet the demand for beef and overcome the seasonal demand fluctuations, importers of meat in Qatar are focusing on frozen meat. Furthermore, the changing lifestyles of people globally and the increasing demand for ready-to-eat food are driving the frozen meat supply. The main competitors of NYS Enterprises in the frozen meat/beef line are Gulf Center for Foodstuffs, Delta Group, Federal Foods Qatar, and Saboor Company W.L.L. (Connect2India, 2022). Hence, NYS Enterprises will have to strive against many competitors in this industry.
Financial Plan for the New Product Line
Sales Forecast
The projection shown below is a conservative sales forecast for NYS Enterprises over the next three years, focusing on its new line of frozen beef in Qatar. We expect actual revenues may be significantly higher after the market improvement, although we also plan for other possibilities (Berry, 2022). Table 1 shows that frozen meat/beef will increase from 36,000 kilograms to 47,610 kilograms. The market is projected to grow over the next three years, as the company is expected to sell 3,000 kilograms of meat monthly, which translates to approximately 36,000 kilograms in the first year of operation for this new product line.
Table 1: NYS Enterprise Sales Forecast
Income Statement
Sales: NYS Enterprise has calculated its market value of frozen beef, which is $18 million in the first year. NYS has noted that the cost of goods sold is approximately 60% of the selling price. Operating expenses are typically 6 percent of the selling price based on NYS’s competitor, although the company has assumed it to be close to 10% for them. In terms of taxation, the agro-based sector may be eligible for a tax holiday for the first three years. Furthermore, Qatar Bank has a plan in which it will finance 50% of the company’s investment at a 0% interest rate and delay repayment for the next three years.
Table 2: A Pro-Forma Income Statement for NYS Enterprise
Pro-Forma Balance Sheet
NYS Enterprise plans to construct a plant comprising warehouses and offices on a 2-acre plot, which will cost $1 million. The company will purchase a fridge truck for $340,000 and a factory establishment for $700,000, excluding equipment. The firm plans to purchase machines for its production valued at $1 million (Jumadilova et al., 2017). In terms of investments, NYS will invest all of its earlier-year retained earnings in the next year to enable the continuous growth of the firm.
Table 3: A Pro-Forma Balance Sheet for NYS Enterprise.
Pro-Forma Cash Flow Statements
NYS Enterprise plans to increase its types of non-current assets and current assets, not through debt or equity funding, but by utilizing its retained earnings. Since the company needs to purchase new assets, it incurs a cash outflow from its retained earnings to fund the purchase of these assets (Jumadilova et al., 2017). Since the firm has no tax obligation or debt, its cash from financing activities will be zero across the three years.
Table 4: A Pro-Forma Cashflow Statement for NYS Enterprise.
Table 5: Operating Budget for NYS Enterprise.
Conclusion
The market analysis has revealed that NYS Enterprises has the potential to capitalize on the imports of a new product line of frozen beef into Qatar. The country’s meat/beef imports are still expanding at prominent rates. The target market segment has been focused on demographic and behavioral aspects. There is an increase in demand for frozen meat due to improvements in technology and transportation alternatives. The financial plan summary indicates that the company has the potential to generate profits from the venture and drive growth.
References
Berry, T. (2022, December 2). How to forecast sales. Bplans. Web.
Connect2India. (2022). Meat importers in Qatar | meat Qatar importers database. Connect2India. Web.
Dolnicar, S., Grün, B., & Leisch, F. (2018). Market segmentation analysis: Understanding it, doing it, and making it useful (3rd ed.). Springer.
Evdokimova, O., Butenko, I., Gubina, O., & Evdokimov, N. (2020). Consumer demand analysis while choosing processed cheeses on the market of the Oryol city. Food Industry, 5(3), 77.
IndexBox. (2022). Qatar’s beef market report 2022 – Prices, size, forecast, and companies. Web.
Jumadilova, S., Sailaubekov, N., & Kunanbayeva, D. (2017). Company’s financial state forecasting: Methods and approaches. Investment Management and Financial Innovations, 14(3), 93-101.
Mordor Intelligence. (2022). Edible meat market report | Size, share, growth & trends (2022-28). Web.
Nicholson, C. F., & Gómez, M. I. (2022). Market and supply chain models for analysis of food systems. Food Systems Modelling, 129-157.
OEC. (2022). Animal food in Qatar. Web.