Aircraft engines manufacturing business plan Essay

Introduction: Schuster Aircraft Engines Manufacturer ( SAEM ) is a freshly formed fabrication company which is located at Stausberg, Berlin, Germany. As it ‘s a start up company so it has a important degree of its ain capital and it hopes to get down off their venture in a positive manner.

SAEM has set up a successful funding to get down its operations and is looking to carry on an operation at its location to run into an of all time turning demand of aircraft engines. The initial merchandise offering of the company would be the light weight Piston, Wankel and Jet engines. These merchandises will be of high demand and popular as most of the air hose companies would wish it because of its versatility ( nowadays an ideal engine should be dependable, lightweight, powerful, repairable, fuel efficient, little and easy streamlined ) .

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Aims and Mission: The chief slogan of SAEM is to offer engines of high public presentation and low in weight every bit good as size for the commercial aircrafts at a really competitory monetary value in comparing to the other premium quality commercial makers in the market. The SAEM direction believes that SAEM can emulate the bing engine makers because bing suppliers of the aircraft engines are excessively diversified to function the progressively important demands of the commercial industries.

In order to win a company should hold a vision every bit good as mission. I think vision is more of import than mission as vision focuses on the hereafter and service as a concrete foundation for the organisation. SAEM ‘s keys to success will include –

  1. Empyreal quality in footings of merchandise.
  2. Research & A ; Developments is the line of life of the merchandise and company should put a important sum in order to turn and with an purpose to vie with the giants of the market.
  3. Upgrading and keeping its referral webs in order to engender gross revenues.
  4. Bettering efficiencies of operations.
  5. Put a greater accent on production to run into the demands of the quickly turning industries.

Company Summary

There are five parts of the freshly formed company and it will be managed by 5 executives stand foring Research & A ; Development, Selling, Production, Administration and Finance. These executives act every bit accelerator as they have a supreme grade of experience and assist the company to get a important sum of market portion by concentrating on the peculiar demands of the air power industry and supplying empyreal quality of high tech engines than the remainder in the market. The company will be good organized corporation as bulk of the portions are held by five chief executives.

For start up purposes the company will be seeking to raise about $ 4.6 million in footings of loan and $ 500,000 from private investors. Stausberg, Berlin would be the lone fabrication installation for the company as of now.

Ownership Of The Company

This is a closely held corporation with seven chief stockholders who will organize the board of managers. To enlarge financing the company will be establishing public offerings in the coming five old ages though most of the portions will be retained by the rule proprietors for the foreseeable yearss in the hereafter.


Aviation industry has turned into one of the flourishing industry recently so in order to run into the demands of the modern aircrafts SAEM will fabricate compatible engines for these aircrafts. The primary focal point should stay on the research, technology and fabrication procedures because the quickly altering industry needs to revise their merchandises every bit good as design in order to last or to derive competitory advantage in the market. In order to derive competitory advantage SAEM will bring forth the highest quality of engines which are really efficient in the era.

SAEM will bring forth Piston, Wankel Rotary and Jet engines. The Wankel engines are a sort of internal burning engines which uses rotary device to change over force per unit area into a rotating gesture. Wankel engines simpler and lighter furthermore, it is about one half of the weight and size of a traditional four shot Piston engine of equal power end product. Normally the power and weight ratio is really of import in an aircraft operation so the company believes Wankel engines would be a good pick.

Apart from Turbojet and Turboprop engines SAEM will besides bring forth Precooled Jet Engines. For really high supersonic/low hypersonic flight velocities infixing a chilling system into the air canal of a H jet engine permits greater fuel injection at high velocity and obviates the demand for the canal to be made of furnace lining or actively cooled stuffs. This greatly improves the thrust/weight ratio of the engine at high velocity.

Industry Analysis:

The market is dominated by a few taking companies in the epoch in which Bayerische Motoren Werke ( BMW ) AG top the list with 40 % of market portion last twelvemonth followed by Mercedes. , Junkers. , Daimler AG and Siemens and Halske severally. These market giants have multisegment selling schemes so their gross revenues reached the surging highs last twelvemonth harmonizing to studies. BMW reported gross revenues about around $ 20 billion whereas Mercedes was likely $ 10 billion and the likes of Junkers, Daimler and Siemens and Halske were reported around $ 8 – 7 billion.

Selling of the merchandises are normally done by established and renowned local distributers as they are franchises of the parent maker and there is a limited direct gross revenues to large clients. Normally these distributers have a close bond with clients and service suppliers which finally allow the company to maximise its merchandises use. The distributers have the ability to supply funding, rapid service and replacing to some extent etcetera.

Customers choose to purchase merchandises which are dependable, easy to mend, fuel efficient and versatile for a assortment of relevant things. The company good will acts as a immense influence and most significantly the cost of the merchandise which attracts the client to purchase their long term assets.

Market Analysis Summary:

Last twelvemonth the engine fabrication industry had reported gross revenues about $ 15.4 billion. As the aircraft engine industry has a immense and full-blown market so it is already noticed that it has a five per centum ( 5 % ) growing yearly.

Commercial aircraft companies, general air power schools and relevant companies are the chief clients of the merchandise. SAEM direction believes the commercial aircraft companies would be the subjugate consumers of SAEM merchandise as they have a bulky and thick pockets, the greatest demand for big orders or aircraft engines and more significantly the greatest demand for preciseness controlled equipments.

The little section companies are the most quickly turning sub section of the commercial engines fabricating section. Normally this little section companies have comparatively a low entry / issue barriers in the competitory market. Since these companies do n’t hold a deep pocket so they are non seen as potentially big market for SAEM.

The current tendencies in the economic system have a immense influence in the market section. Companies like BMW, Mercedes have experienced recent ruins in gross revenues due to a weak planetary economic system and retrograding consumer ‘s assurance degree. If this tendency continues so it would be really difficult to stomach for SAEM as their undertaking will be hard to get gross revenues contracts and funding.

The recent tendencies show that to derive the market a company should be advanced and should work on the research and development in order to bring forth more and more specialised engines and should pass more on the promo budget in order to derive the client consciousness. SAEM ‘s purpose is to make the zenith in concentrating on these tendencies and being the first 1 in the market to present advanced thoughts and proper execution of those thoughts can convey in a alteration.

Market Analysis

Market Cleavage:

As high grosss can merely come from big commercial air hose companies so SAEM ‘s chief focal point will be on the companies over $ 2 billion in one-year gross. Normally these companies look for dependable, lightweight, powerful, repairable, fuel efficient, little, easy to run and offer a assortment figure of characteristics including safety types of characteristic to minimise the possible hazard. Basically these companies tend to purchase merchandises like Wankel, Turbojet and Pre Cooled Jet Engines.

Mid sized air hoses companies would more likely crook to merchandises like Piston and Turboprop engines. Unlikely big commercial companies the one-year gross or the mid sized companies range from $ 500 million to $ 2 billion. As these mid sized companies are still in the procedure of turning so cost economy is a important factor to them.

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Target Market Segment Strategy:

The big commercial aircraft companies are the mark market for SAEM. It is of SAEM ‘s primary focal point through direct merchandising via its assorted relationships and referral webs. Promotion creates consciousness, so the company invests a important sum to advance merchandise consciousness which may ensue in a good lift in gross revenues. Furthermore, direct merchandising has ever been effectual in shuting gross revenues in footings of gross revenues every bit good as selling cost.

Merchandise presentation is an of import tool, used by SAEM at its site to shut gross revenues. Why this is an of import tool because presentation of merchandise is a critical measure in gross revenues procedure. Clients are brought to the site to turn out the capablenesss and effectivity of the merchandise, to educate and heighten their cognition about the merchandise and last but no the least is to set up a good relationship.

Market Needs:

Demands of an ideal engine has increased in recent old ages as most of the commercial aircraft companies want high acting and versatile engines which should be dependable, lightweight, powerful, repairable, fuel efficient, little and easy streamlined. New entrants every bit good as bing engine shapers are introducing new material to carry through the demands.

Competition and Patterns of Buying:

In the national degree there are plentifulness of SAEM ‘s rival even a few of them are giants in the international market. BMW is a celebrated name worldwide and in the market for likely 90 old ages so their merchandises are good known every bit good as trusted. The trade name name is adequate to sale their merchandise.

By and large big commercial aircraft companies look for established names that have a good repute in the market so they normally consider the top notch companies as their merchandises are empyreal and dependable. SAEM is a start up company and non good known so showing their merchandises to the purchaser is a critical portion of the purchasing procedure.

SWOT Analysis:

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. A utile tool implied by SAEM in order to cognize their market place. A company capitalizes depending on their strength, failing is what a company shore up, chances are what a company invest in and company identifies its possible menaces.


  1. SAEM produces the highest quality of engines which are really efficient in the epoch and are dependable.
  2. SAEM has got good relationships and referral webs with the big commercial aircraft companies.
  3. SAEM direction is really experient and has vast cognition in selling and gross revenues every bit good as production.
  4. SAEM invests a important sum in R & A ; D so that the company keeps on introducing new merchandises at times.
  5. The merchandise monetary value is really competitory in the market as the engines are of empyreal quality
  6. SAEM is located in the capital metropolis of Germany ( i.e. Berlin ) . So it has loads of benefits as most of the trading is done in the dumbly populated countries.
  7. Management and the workers will seek to set their cent per centum as it ‘s a freshly formed company in order to win and derive a higher place.


  1. SAEM is a start up company so it does n’t hold a good repute unlike the established companies in the market.
  2. SAEM will non be publishing any portions in its first twelvemonth for public involvement so the profitableness will be comparatively low. But in the coming old ages it would make full up its loopholes.
  3. The new direction will be working together for the first clip so it may do a few jobs understanding each other.
  4. For SAEM it would be a colossal undertaking to bring forth aircraft engines with less labours and machineries.


  1. Most of the established engine fabrication companies are excessively diversified to function the progressively important demands of the commercial industries.
  2. SAEM is stepping up into a new market so in a few occasions a new entrant has some opportunity to be a large hit if SAEM can maintain up with client ‘s outlooks.
  3. SAEM has good connexion with a few major air hose companies nationwide so in future they can set up its name worldwide by oral cavity to talk promotion.
  4. Presentation of a merchandise is ever really effectual as it educates the client. This market scheme will pull a few possible clients who try to maintain up with the modern tendency of engines.


  1. SAEM is n’t an established name so it possibly a large floating-point operation in market as it ‘s a start up company. Brand name is what a client wants.
  2. SAEM does n’t hold adequate fiscal strength as it ‘s a private start up company so it may non vie with its rivals in footings of money. Such as SAEM ca n’t set havoc sum in promotional budget of the merchandise to make the client consciousness unlike the established names in the market.

Scheme and Implementation Summary

SAEM will win or rule the narrow section of the market by fabricating high quality robust design and thermic daze opposition engines which are ideal for an aircraft and highly exact in footings of commanding. The effort is to carry through the repute in order to turn.

Competitive Edge:

SAEM ‘s upper manus would be its relationship with the assorted commercial aircraft companies countrywide and degree of quality every bit good as merchandise characteristics.

Gross saless Scheme:

SAEM ‘s scheme is to make the height but steadily and easy. The company predicts to present gross revenues about $ 61 million in first twelvemonth, $ 76 million in the 2nd twelvemonth and $ 97 million in the undermentioned twelvemonth harmonizing to the program, .

Gross saless Prognosiss:

Many high profile aircraft commercial companies have expressed their involvements to purchase SAEM ‘s merchandise as SAEM has an extended relationship with them and by using it SAEM can leverage contracts through direct gross revenues and on-line presentations method.

To make client consciousness SAEM will get down off their advertisement run through trade diaries and magazine, direct mail advertisement and all other possible agencies. Customer consciousness will hold a havoc impact on company gross revenues. In the approaching yearss one time SAEM establishes its name and repute the company will seek to lure its primary or chief distributers to transport out SAEM ‘s merchandise. To supply extra gross revenues and chances for marketing trade name new merchandises SAEM has established station gross revenues service and parts division.

Management Summary:

Fabian Kurtz, Chief Executive Officer ( CEO ) – Mr. Kurtz has a huge cognition every bit good as experience in the engine fabrication industry with gross revenues and selling capacities. He received legion awards while he was the gross revenues executive in Curtiss – Wright, an US based engine fabricating company.

Tim Schneider, Chief Financial Officer ( CFO ) – Mr. Schneider is a Certified Public Accountant ( CPA ) has been a Vice President with Deutsche Bank Investment and FinanzCenter. He has a batch of experience which brings heavy focal point on finance. He was a former CFO in “ Wesco Aircraft Germany GMBH “

Stephanie Becker, Vice President of Gross saless – Has a solid apprehension of a diverse scope of concern direction application. Miss Becker has a strong background in gross revenues and selling, squad edifice, quality confidence and strategic partnership developments. She was the frailty president of gross revenues in “ Glasflugel ” .

Lukas Weissmann, Service and Production Manager – He was the service squad director in “ Diamond Aircraft Industries – Oesterreich ” . He has a huge experience in order processing, programming of outsourced orders. He has a complete cognition of the engine fabrication process and related material.

Han dynasties Friedrich, Vice President of Marketing – He holds a strong background in all facets of selling and gross revenues methodological analysis. Has extended cognition in proficient market, pricing theoretical accounts, consumer packaging, channels of distribution, technological tendencies, budgeting, growing, net incomes etc. He has experience of over more than 30 old ages and usage to be a reputed forces for GE Company, US.

Forces Plan:

Research & A ; Development is the line of life of any fabrication company so it ‘s of no admiration that SAEM is traveling to set greater accent on R & A ; D by puting a important sum.

Fiscal Plan:

For start up costs for the first three old ages SAEM expects to raise $ 4.5 million in loans and half of million dollars in private investings. In the following three to five old ages at that place will be an up rise of an extra $ 50 million in funding as there will be initial public offering which is already scheduled. For a start up company the immense finance will supply an chance to turn operation in a planned manner.

Break Even Analysis:

Break Even Analysis for a merchandise is calculated where entire gross received is tantamount to the entire costs associated with the sale of the merchandise. SAEM ‘s interruption even analysis is normally based on the norm of the first twelvemonth figures. These are expressed as per unit gross, per unit cost and fixed costs. Basically these are conservative premises which increase the possible hazards when it comes to accurate appraisal.

Projected Net income and Loss

SAEM expects a steady disposition in footings of net income over the approaching three old ages of operation. The net income and loss table undertakings its steady rise.


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