Name: Wassef Adel Wassef Assaad

Email: Wassef.assaad24bg@eslsca.edu.eg
Intake: ESL76

Executive summary:
Opportunity:

Nowadays, car owners struggle in finding a reliable source for their car spare
parts whether for preventive maintenance or corrective maintenance. It is
very hard to find a one stop shop for all needed original or aftermarket spare
parts as it takes a lot of time to search for each spare part in different areas.

As a result of the high cost of buying spare parts, people are searching for
flexible payment terms, which are very rare to find in this market. Also
means of payment is very important these days as people prefare to pay by
credit cards or electronic wallets which are not the preferred means of
payments by spare Parts retailers.

Pricing is a very important component in the buying process as most of the

retailers don’t have a one fixed price for the same part or even close to each
other, so everyone must search for the cheapest price for the same spare
part offcourse with the same quality.

Offcourse quality is the cornerstone of buying a spare part. Since prices are
going higher and higher, most of us are willing to pay for the best quality
spare part, which lasts for the longest time but for sure to a certain extent
and according to our own budget and the relative importance of such a spare
part. For instance, if someone is buying brake pads, he is willing to pay for
the best quality but if he is buying windshield wipers, he can buy a less
quality one.

Recommended solution
Going digital is the solution here as it can solve all the above problems as
follows:

- Starting an ecommerce company that deals with spare parts for one or
two brands only.
- This ecommerce company can’t buy all spare parts as it will cost a lot.
However, it will buy the fast-moving spare parts only and other spare
parts will be availed on the platform as a marketplace.
- People can buy through this platform easily and pay electronically and
after some time, they can pay in instllments.
- No more going out and searching for some spare parts as people will
just order, pay and then will receive the needed parts anywhere they
want.
- Prices will be less than on the market as there are no intermediaries or
extra expenses like renting a store.
 - The quality of the spare parts is gurenteed as the company will buy
only original and premium aftermarket spare parts and directly for
reliable importers.

Environmental analysis
The spare parts buying journey depends on the way the needed spare part is
defined, source of the spare part, type of the spare part and means of
payment.

Ways of defining the needed spare parts:

- A mechanic can tell from his own experience which spare part is
defected without using any digital devices.
- A professional mechanical engineer can define the exact defected
spare part including the exact part number as there are many spare
parts that are common in shape but can’t function effeiciently if aren’t
defined by part number.

Spare parts sources are categorized as follows:

- The sole distributor of the brand usually carries out all needed
maintenance at a higher cost including the original spare parts, usually
for the first three years.
- The ordinary mechanic, whome is usually trusted by the car owner, this
mechanic usually buys a stock of frequently used spare parts and
resells it to the car owner at a higher price yet cheaper than the sole
distributor but not always an original piece.
- Spare parts retailers who sell spare parts through their shops, whether
it is original, premium aftermarket or cheap aftermarket.

Types of spare parts:

- Original spare parts: spare parts that are originally imported from the
original car brand owner.
- Premium aftermarket spare parts: spare parts manufactured by
reputable spare parts manufacturers and sold under their own brand
name.
- Cheap after-market spare parts: spare parts that come from an
unknown source and are of the lowest quality.

Means of payment:
 - Cash is considered the main payment means in the market.
- Credit and debit cards comes next with a low contribution rate of
mayment means.
- E-wallet is the lowest payment means in the spare parts market.

Spare parts buying journy

Defi
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nee Using a precise part number
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spa Spare parts retailer
re
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Typ Original spare part
e of Premium aftermarket
spa
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Cheap aftermarket
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Me Cash
ans Credit/debit card
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Problem analysis
Business problem:

- The spare parts market isn’t organized well which is the main reason of
the chaotic practices that people witness in this market which is
concerned with availability, pricing and quality.
- There are so many reasons behind this like the less governmental
control starting from the quality assurance at receiving ports,
specialized inspection committees for retailers and applying penalties
for selling spare parts without official receipts.
- Many stakeholders are related to these problems as some importers
buy the lowest quality products from unknown sources, also the lake of
well-trained inspectors that can identify real specs of the spare parts
 and last but not least, there isn’t any digital way for identifying
reputable spare parts manufacturers or retailers.
- Because of all the above, consumers are obliged to do the following:
 Consume a lot of time and effort searching for spare parts.
 Buy any spare part even with a bad quality.
 Pay higher prices whether for good or bad products.
 Can’t return a bad quality spare part due to the unexisting
official receipt.
 Rebuy the same spare part due to the unavailability of a good
spare part at the first time and this is considered as a direct
waste of resources.

Business opportunity:

- The availability of needed spare parts under one umbrella is a great

solution so consumers will visit one platform to grab all their needs.
- Fixing prices over a long-fixed time will encourage consumers to be
loyal to this platform.
- When consumers try the quality of the products time over time, they
will get used to the service and it will be the easiest way to get their
needed parts.
- Also, when paying in installments is applied, consumers who were
willing to buy some of their parts as original and others as not, they
will for sure buy all their parts as original as they will pay in
installments.

Benefits and goals

There are several benefits for capturing this opportunity in the market, which
is concerned with the business model itself, market share and reveniews &
profitability:

Category Benefits
Business  This model is flexible enough to scale without extra
model overheads
 Managing inventory. efficiently will reduce costs.
 Customers will be able to shop 24/7 and receive their
parts at their doorsteps.
 A huge accurate information will be collected through
the platform which enables decision makers to take
the right decisions at the right time.
Market  Selecting a certain niche segment in the market will
share allow the company to achieve better services as the
segment is already small.
  Also, the products assortment will be easy to deal with
due to the specific selection of the segment.

Reveniews  Implementing several pricing strategies will help
& sustain profitability with the scope of fixing prices for
profitability fixed periods.
 Adding some accessories to the portfolio, which is
usually higher in margins will encourage consumers to
buy them with their needed spare parts.
 Reducing costs by optimizing operational costs, better
partnerships with importers and reducing overheads
will increase profitability overtime.
 Implementing loyal programs will increase the
customer base and the repeated orders.
 Partnerships with certain maintenance centers in
different geographical areas will increase customer
base and profitability.
Costs and funding

Initial costs for a new project are considered as the most crucial element in
starting a new business. It represents how big the company will be presented
to the market in terms of volumes and marketing expenditure. At the
introductory phase, the company will depend totally on the self-funding of
the founders till it reaches a certain maturity phase that allows it to use
other funding methods for aggressive growth.

The initial costs that are needed at the beginning is categorized as follows:

Category  Item Capex/ Cost

Opex
Technolog  Website development Capex 40,000 EGP
y  Website hosting Opex 5,000
 Electronic payment methods Capex EGP/year
 Email accounts Opex 1,0000 EGP
 Subscription fees in global Opex 12,000
spare parts networks EGP/year
8,500
EGP/year

Products  Capital allocated for buying 1.5 M EGP/year

inventory
Office  Renting a small office Opex 96,000
including including storage EGP/year
storage  Furniture and supplies Capex
area  Utilities Opex 80,000 EGP
24,000
 EGP/year
Legal and  Commercil registry and tax Capex 20,000
regulatory card obtaining fees. EGP/year
complianc
e
Marketing  Online marketing campaigns Opex 180,000
costs Opex EGP/year
 Events and Exhibitions 100,000
EGP/year
Logistics  Courier related costs, Opex 18,000
delivery/COD EGP/year
Consultan  Dealing with external Opex 60,000
cy consultants in marketing or EGP/year
sales

Expected reveniews/first year

2,175,000 EGP/year

Feasibility

This study was carried out to analyze the potencial for establishing the
company in terms of market size, compatetives, and risks. As a result of
gathering the data below, it is obvious that there is a need for such an e-
commerce company serving consumers who prefere to buy their products
online rather than going for retailers.

Market Analysis:

- Demand: according to a survey that was carried out for a sample of

100 persons, 35.6% buy their spare parts by themselves and they
bought only 8.3% of these spare parts through e-commerce platforms
due to unavailability of their needs online.
- Target market: it includes individual consumers and partnerships with
selected maintenance centers.
- Market size: The market size is exceeding L.E.1bn/year and is growing
so there is a significant opportunity for this company specially that
there isn’t any company that is doing the same business model.

Competitive analysis:

- Competitors: the existing competitors are ordinary retailers and only

one e-commerce platform which presents a marketplace model for
 anyone who is dealing with new spare parts, used spare parts,
accessories, tools, maintetnce services, …. etc.
- Strengths and weaknesses: Reputable retailers are trusted by
consumers as they are working for years in the market, they have also
a big buying power from importers however they have big overheads,
liabilities, limited goods variety and it is very hard for them to go
digital.
- Competitive differentiation: The new company value proposition will
include variety of products whether in stock or marketplace, flexible
payments and convenient services.

Risks:

- Market risks: Importation regulations, inflation, currency devaluation

are most important risks that affects the quality of the products
needed and the demand in general.
- Operational risks: Logistics services that are carried out by courriers in
terms of lead time, cash collection and service quality.
- Financisl risks: Funding could be a major risk if the founders started the
business and didn’t succeed in securing the total capital needed till,
they collect reveniews.
- Technology: The integration that is needed to connect a website, a
warehouse management system and an accounting system could be a
big challenge at the beginning as it is very expensive to adopt a
complete ERP system.

Implementation approach
Project initiation:

- Phase 1: Project Setup (Month 1-2)

- Set up the project team, including hiring key staff (project manager, IT
team, marketing team).
- Finalize legal and regulatory compliance, including obtaining necessary
licenses and permits.
- Begin website development and integration of payment systems.

Project Planning:

- Phase 2: Platform Development & Inventory Acquisition (Month 3-4)

 - Complete the website development and payment integration.
- Establish partnerships with spare parts suppliers and logistics
providers.
- Purchase initial inventory of fast-moving spare parts.
- Set up the office and storage facility.

Project Execution:

- Phase 3: Soft Launch & Initial Marketing (Month 5-6)

- Conduct a soft launch of the e-commerce platform with limited
inventory to test the system and gather user feedback.
- Initiate online marketing campaigns targeting the niche market
segment.
- Begin logistics operations, ensuring timely delivery and quality control.
- Monitor customer responses and adjust the platform and marketing
strategies as needed.
- Phase 4: Full Launch & Expansion (Month 7-9)
- Full launch of the platform with an expanded inventory and a
marketplace model for additional spare parts.
- Scale up marketing efforts, including participation in industry events
and exhibitions.
- Introduce installment payment options to attract more customers.
- Expand partnerships with logistics providers and car service centers to
enhance the customer base.

Project Closure:

- Phase 5: Post-Launch Review & Optimization (Month 10-12)

- Conduct a detailed review of the platform’s performance, customer
feedback, and financial results.
- Optimize operations based on insights gathered from the post-launch
review.
- Finalize the transition to ongoing operations, closing the project office
and integrating the project team into regular business operations.