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Description
Four entrepreneurs would like to build a multi dimensional entertainment center “Qassim complex”, and this complex will provide a number of facilities, such as, cinemas, creative activities, different sporting zones, and food courts (which will focus on diversified cuisines from around the world) together with extensive emphasize provided upon flourishing cultural practices, like music, dance, exclusive occasions, and painting exhibitions.
Features of the Product or Service
All the products and services in this complex will contain high- level of differentiations in every aspect. A distinctive touch of many diversified cultures will be present in the facilities of the complex through all spheres to add on an exceptional experience for the customer.
For example, there will be numerous foods courts, bars, and cafes throughout the area to avoid boredom of the customers and these food courts will comprise not only the local dishes of Dallas, but also the most popular dishes from the rest parts in the world.
This conveys the idea that each restaurant would be specialized in a particular type of cuisine, with some focusing on tendering Chinese and Thai food and spicy non-veggie Bengali dishes accompanied by delicious Bengali desserts and pickles, appetizing Indian curries, America’s specially featured doughnuts, pastries and cakes, together with Arabian Kabsa lamb, falafel, etc.
The sporting zones will be consisting of various types of sports like snooker and pool, billiard, video games, gambling, long tennis, table tennis, blackjack, video poker, poker, craps, slots, roulette, pai gow poker, keno, wheel of fortune (the big six), basketball, archery, chess, and many more.
In addition, there will be eleven swimming pools in the entire complex, out of which three will be used for weekly swimming competitions by the holidaymakers coming to visit the Qassim complex.
On the other hand, the exhibition hall will be occupied every evening with different painting exhibitions of many renowned painters from throughout the world – this must be including paintings of Donatello, Sandro Botticelli, Leonardo da Vinci, Michelangelo Buonarroti, Albrecht Durer, El Greco, Camille Pissarro, Gustav Klimt, and Pablo Picasso.
However, the artifacts of modern day artist, like M F Hussein, Naoto Hattori, S M Sultan, Zainul Abedin, Robert, and Shana Parkeharrison will also be present in the galleries of this complex.
Some hall rooms will be present for practicing other cultural activities, like dancing and musical concerts. There will be a wide range of dance forms for the visitors in the Qassim complex, starting from ballet, salsa, tango, rumba, samba, street dance, Bharatnatyam, and Bengali tribal and classical dances like Kathak and Kuchipudi presented by group of specialized dancers from America, Bangladesh, Brazil, India, UK, and some African countries. In the musical concerts, both folk / tribal music and contemporary music will be performed.
The concert organizers will invite different international musicians from the most famous bands like Backstreet boys, Miles, Fannypack, DM & Jemini, Souls, Magnetic Fields, Dolchut, and Le Tigre; conversely, tribal and folk musicians will include popular solo performers from a number of countries specializing in diversified folkloric music of different cultures to entertain the daily visitors at the Qassim complex.
In addition, the entrepreneurs of the Qassim complex will make sure that the most blockbuster and award winning movies are demonstrated everyday in the cinemas, so that the holidaymakers remain pleased with the provided services. The key aims of the entrepreneurs would remain with satisfying the customers to the highest level and offering them the best possible services so that they become loyal visitors.
Superior quality services will make sure that the customers are not feeling any distress regarding the high price of the products and services and they would be gratified to pay for such excellence and variety in the world of entertainment. Because of this vision from the part of the entrepreneurs of the Qassim complex, they will also design the bars in such a way so that visitors from any particular ethnicity receive the gratification; moreover, the most rocking DJs will be appointed over there for ensuring the best possible musical pleasure.
Customer Benefits
The features of the products and services above describe the kind of benefits that the customers will receive from the Qassim complex as a whole. They will get each of the segments of this complex as highly differentiated and unique from any other entertainment centers in the city.
Moreover, they will be benefited by enjoying the cultures of not just Texas, but there will be cuisines, music, dance, exhibitions, and games that originated from different culture from across the world.
Uniqueness (USP)
The differentiation will be not only in terms of the features of the products and services offered, but in fact, a marked significance will also exist in terms of aesthetics, architecture, key concepts, project layout, innovative design, and authenticity.
Therefore, for offering such an exceptional experience for the customers, the entrepreneurs have planned to charge them a bit higher than those of the competitors in the market do. The unique selling price will therefore have a higher mark up cost.
Profit Potential and Durability
The entrepreneurs believe that the because of the “never before experienced” thrill that will be present in the Qassim complex, the prospect that a potentially high number of visitors will come to enjoy here increases.
This is the reason for which the profit making potential is high as well. In addition, as the entrepreneurs will be focusing on integrating a range of services for the four key segments with the touch of different aesthetics and flavors, the chances of a feel of repetitiveness or boredom from the part of the customer reduces.
This will in turn increase the durability of the products and services by lessening the necessity of renovating, diverging, or reshuffling the Qassim complex. However, the entrepreneurs presume that at least for the first five years the requirement of the renovations are not so important and after this time, some changes will be brought in different periods depending on the rate of depreciation on each sector. A presumption of the durability of the sectors and the period after which the owners will start renovations has been shown on the table below:
Table 1: Requirement of the renovations on each sector. Source: Self generated.
Patent or Other Forms of Creativity Protection
Owing to the fact that the entrepreneurs of the Qassim complex are going to start their business in Dallas of Texas, they will need to contact the United States Patent and Trademark Office (USPTO) for getting their business idea protected. Apart from patent protection, the USPTO will also be offering copyright and trademark protection.
However, the most alarming issue that the owner of this business will have to face is the chance for the applications to be rejected by the United States Patent and Trademark Office. It is important to note that in recent years, the chances of abandoned applications are raising as shown in the graph below:
Figure 1: Rising Number of USPTO Abandoned Patent Applications Each Year. Source: Generated from Crouch (1).
With more and more start up businesses trying to protect their ideas, the number of the applications is rising as well. The following graph shows the number of patent grants per year (some parts of 2011 are estimated):
Figure 2: USPTO Patent Grants Each Year. Source: Generated from Crouch (1).
Process and Plans for Obtaining Protection
According to EMKF (1), the process and plans for obtaining patent protection is practically quite complex – beginning with a convoluted procedure of “listing” the start up business, tangible patent claim has split into numerous components, comprising an obvious/ succinct account of the start-up’s affirmation of uniqueness and solitary originator, engraved illustration of discovery, reporting charges, and “claims” of exclusivity.
This delineates the real limits of the special rights that the originator expects protecting throughout the period of the patent; through inadequate drafting, impressionists or rivals would be capable to bring out analogous working or courses devoid of tormenting about breaches; conversely, through inadequate drafting, the originator will face the risk that the examiner will reject the proposed claims.
In this context, the entrepreneurs of the Qassim complex will have to be very cautious about applying for the claim and carry out a cost and benefit analysis regarding the fruitfulness of the protection in comparison to the possible advantages achievable. They will have to answer a range of questions to themselves for conducting the cost and benefit analysis in order to decide whether the business idea should be protected; this has shown in the flowchart below:
Figure 3: Analyzing the decision for the need to protect the business idea. Source: Self generated from Business Link (1) and USPTO (1).
As stated by USPTO (2-12) and USPTO (8), entrepreneurs should also be cautious about drafting the written illustration of the business to make sure that it is neither possible the patent examiner to reject the patent nor it so weak that the rivals in the market are able to break it. The entrepreneurs of the Qassim complex will be following a simple process for obtaining patent protection, as shown in the diagram below.
Figure 4: Process for obtaining patent protection. Source: Self-generated from USPTO (64) and USPTO (49).
The Production Process
The main departments of the Qassim complex will be Cine complex, Exhibition galleries, Food courts, Sports zone, and Bars. However, except of the food courts, none of the other departments will have any requirement of an integration of the production processes. The rest of the sections will highly concentrate on services.
Nevertheless, in case of the food courts, it is important to deliver freshly processed and deliciously cooked meals to the visitors every hour. In order to deliver fresh foods every hour, highly specialized chefs will be appointed from different parts of the world that are better acknowledged about the way of making dishes belonging of diverse ethnic origins.
Therefore, the owners of the complex will select chefs from the Chinese, Thai, Bengali, American, Indian, and Arabian origins. With the facilities of a strong supply- chain of unprocessed vegetables, meats, spices, etc., the chefs will be able to cook freshly every time by getting fresh supplies just in time from the potential supplier groups (for example, farmers). A brief production process has figured out below:
Figure 5: A brief production process at the food courts. Source: Self generated.
Raw Materials
The raw materials will consist of musical instruments and enhancing infrastructures for bars and hall rooms, as well as chairs, tables, large screens, TVs, cookeries, decorative materials, fresh vegetables, meats, spices, milks, other raw foods, sofas, apparels, and other furniture. In addition, different kinds of alcoholic drinks (like ram, vodka, whiskey, beer, red wine, champagne, and so on), soft drinks (colas, orange drinks, and various juices), coffee beans, and fresh chocolate from Kenyan farmers are necessary. Apart from that, a range of gaming instruments like snooker, table tennis board, etc, together with sanitary equipment, disinfectants, dishwashers, etc., are necessary to prepare the Qassim complex every day for producing the required services for the visitors.
Key Suppliers
The key suppliers of the business will be farmers of vegetables, coffee beans, cattle, fishes, and producers of processed items, like colas, juices, hardcore drinks, furniture, decorative products, music systems, and so on.
Costs of Materials
The owners of the business will try to keep the production costs at low levels so that the profits of the Qassim complex are maximized. With this view in mind, they will be focusing on finding low cost suppliers for the raw materials in order to make sure that chances are present for the business to achieve economies of scale in near future, after attaining the break-even point. Therefore, the key suppliers will be providing material at reduced prices owing to their low bargaining powers.
Future Products or Service Offering Plans
After about five to six years, with the retained profit from the business, the owners planned to integrate a new shopping mall segment in the complex as well as an extension in the sports zone center to include games like sky diving, parachute jumping, ice-skating, golf court, and car racing facilities in the outer sports ground of the complex.
The Target Market
The entrepreneurs have targeted people of all ages for the Qassim complex to be successful. Because of including people of all ages in the list of customer groups (starting from children aging from 5 to 12, youngsters aging from 13 to 19, youth groups of 20 to 40, as well as middle aged people in the community), the owners have designed the departments of the complex in an all-inclusive pattern. For example, some parts of the sports zone are for kids (like video games), some parts are for young people (like tennis or swimming), whereas other parts are for middle- aged people (for example, gambling).
Conversely, the bars, concerts, and dance shows will be especially made for the young people, exhibitions for middle- aged and old people, and restaurants and cafes for everyone. However, it is important to argue that because of the high priced offering of the Qassim complex (owing to its high differentiations); it would not be wise for the owners to target the lower or middle- income earners. The higher income earners will be the best group of people to pay for these specialized services of the complex.
The strategy of including higher income earners is perfect for the business as Dallas is a luxurious area and higher income earners usually live there. In addition, because of the fact that the complex will be upholding the culture, heritage, and tradition of a range of different countries and ethnic groups, it is quite natural that both international and domestic customers will be visiting the area (that is the target customer groups are not merely the US customers).
Tourists form different parts of the world that are coming to visit the United States is also targeted by the business. With such a board group of target customers, the assurance of profit maximization is quite predictable for the business.
Demographic Profile
The Qassim complex will initially run its business with merely one building in the Dallas city centre; however, within 10 to 12 years, as it would turn out to be a successful complex in the county, it has a vision to open stores not only in Texas, but also throughout the entire United States. In 2011, United States has a total population of 313,232,044; the average age of the total population is 36.9 years (with an average of 35.6 years in men, and 38.2 years in women) and a populace growth rate of 0.963 per cent annually (US Census Bureau, 1).
Recently, the birth rate of the country is 13.83 births per 1000 people and death rate is 8.38 deaths per 1000 people; moreover, the net migration rate of the US is 4.18 migrants per 1000 people.
The urban inhabitants represent 82 percent of the total population with a rate urbanization of 1.2 percent; the life expectancy of the total population is 78.37 years and total fertility rate is 2.06 children per woman. According to Indexmundi (1), the government expends about 5.5 percent of the total gross domestic product for education purposes of the US and it is arguable that the literacy rate of the total population is 99 percent; the following table shows the age composition of the total US population:
Table 2: Age Composition of the US Population. Source: Self generated from US Census Bureau (1).
At the time of opening the Qassim complex, it is imperative for the owners to ensure that it has the apposite arrangements and competencies to serve people from every ethnic background; the table below illustrates the ethnic and the religious groups present in the country:
Table 3: Religious and Ethnic Groups. Source: Self generated from US Census Bureau (1).
Other Customer Characteristics
According to the US Embassy (1), the characteristics of the customers of the country are critically diverse; its population is an astonishing blend of nearly every ethnic assembly and race found on earth; additionally, all communities possess their own ethnic backgrounds, cuisines, and beliefs; which is now familiar as the local American legacy making-up the key characteristics of its people.
Customers’ Motivation to Buy
In the pace of the massive economic turmoil in the American society from 2008 to 2009, the motivation of the customers in the country to buy products suffered from serious impact. Where people strived to meet up their requirements of purchasing the basic necessitates, it seemed quite insensible for the luxury item producers to hope for profits from their businesses. However, as the economy started to develop from the very beginning of 2010, it now seems that the customers are gaining back their confidence and are showing quite optimistic motivation towards purchase of luxuries.
Market Size and Trends
It is notable to argue that the Qassim complex will not belong to any particular market or industry, as it would integrate the features of a number of industries within itself. Therefore, it is crucial to consider the trend of all the industries separately. According to IBISWorld (1), the average turnover of the sports zone or physical fitness industry in the US is 24,227.5 million, where as the turnover growth rate is 2.2 per cent.
On the other hand, the bar and nightclub industry of the United States has a total turnover of USD 22 billion, with a growth rate of – 0.3 per cent from 2006 to 2011 (IBISWorld, 1). Conversely, surveys suggested that food courts industry in the country has an average turnover of USD 178.1 billion, with a growth rate of 2.3 per cent. The following figure shows the categorization of different types of restaurants and the market size:
Figure 6: Categorization of different restaurants and market size. Source: IBISWorld (1).
How Large Is the Market
It is noteworthy from the above provided data that the restaurant and food industry is the largest market in the country in contrast to the bar and nightclub industry, which comes the second and the physical fitness industry, which come in number three.
Trends
With a growth rate of 2.3 per cent, the food courts industry is in a higher growth pace; however, although the sports and fitness industry’s growth rate is 2.2 per cent, the growth rate of the bar and nightclub industry is falling by – 0.3 per cent.
Competitors and Competitive Advantage
The Qassim complex does not have any direct competitors because of having numerous offerings. Whist the indirect competitors focus on a single type of product or service, this business will focus on all at a time – this is the most influential competitive advantage of this business; nevertheless, the following table outlines some major competitors of the complex:
Table 4: Major competitors. Source: Self generated.
Strengths and weaknesses
Key strengths are –
- Large Start up capital and location of the complex;
- Multiple service in a single complex will be one of the most important factors of success;
- Experience of the employees will assist the company to develop brand image (Kotler & Gary, 122).
It has many weaknesses –
- The marketers have already researched on market and find out a suitable location for the company, but they were not emphasis on the cultural factors and the ability of the owners to ensure good environment for the diversified customers;
- Coordination of the functions of the employees and management of different segments can be one of the most significant factors to organize the complex.
Advertising and Promotions
To develop brand image, the complex will offer gifts and discounts for New Year, mother’s day, father’s day, teacher’s day, and Christmas day; moreover, besides of advertisements in weekly magazines, Google, Yahoo, MSN, Facebook, and Twitter, business’s own website will also play an important role.
Media Use for Generating Publicity
Newspapers, radios, magazines, billboards, multimedia, and online advertising will remain as the key media through which the business will attempt to generate publicity in the US market.
Pricing Strategy
The owners of Qassim Complex would ask comparatively high price as it would provide diversified service in a single complex; however, it must consider several factors to set up price for its products and services –
- As there are numbers of sports centre and bar exist in Dallas, the marketers should offer competitive price but it would not possible due to high start-up costs;
- Global economic downturn and adverse impact on purchasing power of the company;
- Key challenges and success factors;
- Major strengths and weaknesses;
- Buyer’s behaviour analysis and so on
Distribution Strategy
Qassim Complex will distribute products and services from a single complex and it has no subsidiary complex in Dallas; though the management will expand business in outside Dallas and develop the distribution channels.
Sales Strategy
The entrepreneurs of the Qassim complex will definitely adopt customer oriented sales strategy rather than production oriented selling because this business will place the customers at the heart of its operations and emphasize merely on their comforts.
Company summary related to location, layout, and operations (downtown, Dallas, TX)
Operations
The entire operational system would be managed by the managers of particular department in accordance with the direction of CEO and other board of directors, existing rules, and regulations of the country, the provisions of article of association, code of conduct of the company and so on (Johnson, Kevan and Richard 29).
However, the marketers have already selected a suitable place for the Complex in Dallas and they have considered number of factors in order select the place, such as, the population of the place, target market, transportation facilities, business opportunities, customer behavior, parking place and so on.
Operating Cycle (e.g. hours, shifts)
As the complex mainly deals four different segments, it should have effecting operational plan to reduce costs of the business and control all business units properly; however, related operational plans are-
Table 6: Operating cycle. Source: Self generated.
Location
Description of identified location
According to the report of City Mayors Statistics (1), Dallas is the 9th largest city of the US though this city was not in top 100 cities in 1960; however, the total population of Dallas was about 1,232,940 in 2006. However, the following table shows the population chart of top ten cities –
Table 7: Top ten largest cities in the US. Source: City Mayors Statistics (1) and Hove (1).
Demographic analysis for location
Table 8: Demographic analysis.Source: Self generated from Onboard Informatics (1).
Lease, rental rates
According to the report of Trulia (1), the Average price per square foot was more than $59.0 last year, but this rate is increasing significantly, as this rate is now about $71.39; however, the price of lease, or rent for the Qassim complex would depend on the size of the business and total required area.
Labor needs and wage rates
Wage rate of the employees in Dallas depend on the efficiency, education, experience, job rank, nationality of the employees and so on; however, the management of Qassim would provide hourly basis and it would fix price after negotiation though the company would ensure equal opportunity to provide benefits of the same rank holders.
Overall advantages
According to the report of Indexmundi (1), United States is one of the most suitable places for private companies since the government of this country has changed controlling techniques and decreased tariffs and other taxes to assist the small private companies from economic crisis and legal barriers.
Therefore, overall economic situation is favourable for the sports zone and food sector while purchasing power parity (PPP) increase significantly (Indexmundi 1) though the unemployment rate is increasing dramatically, but it not affects on our business as the marketers of this complex would not target unemployed customers (IndexMundi 1). However, the following table shows some key features to find out economic condition of the suitable location as the business would expand all States of this country –
Table 9: Economic factors of the United States. Source: Self generated from Indexmundi (1).
Facilities (retail, manufacturing) and layout
Four partners would visit many places and research on the markets (socio-cultural factors, business risk, and the market demand) to identify the best place for Qassim Complex in Dallas; however, they select a place considering the following advantages –
- The marketer of Qassim Complex will choose a place besides the road for a clear view and it will be walking distance for the many target customers.
- They must consider large place for car parking;
- The place should have all the advantages to arrange party;
- It should have the opportunity to use natural assets;
- The marketer of this complex will concentrate on the transportation facilities to increase loyal customer base
Ownership
Legal structure and discussion of reasoning behind choice
Four entrepreneurs decided to form Qassim complex under partnership agreement; however, the memorandum and articles of association of this complex have included some significant provisions about their interests and liabilities, such as –
- According to the article of association, all the partners have to equally share profits and bare losses;
- The partners must follow local rules and regulation in order to avoid legal barriers, conflict of interest among the directors;
- Most importantly, four owners have to participate in the board meeting and join in management team to take decisions with mutual understanding.
Ownership percentages
- All entrepreneurs will equally invest for this complex and invest 40% of total capital, as a result, the distribution of capital would be –
Table 10: Total Capital. Source: Self generated.
Key managers and employees
It has already decided that the complex will recruit five managers for five major segments and recruits many employees considering the requirement and pressure of works.
Company Structure
The company structure of “Qassim complex” would be comparatively complicated because it must have four different business segments, such as, sports zone, Movie, gallery for events and printings, food corner with dancing facilities, and so on. However, the management has intention to expand the business in all States of the USA excluding Texas, they will open new complex after developing the brand image of Qassim Complex and they widen the products and service line in the future.
However, a chief executive officer would control the entire company and all managers and employees would bound to follow the decision of the CEO tough it is a difficult task for the CEO to control entire complex, as it should have many business-units in a single complex. In addition, each business segment should have four different departments in order to maintain the particular segment, for example, human resource, production, and finance are essential to control each department.
Organization Chart
It has already mentioned the CEO would control the company, it should have four managers to mange four segments, and managers are responsible for their functions. The employees of different department would perform their own activities though manager of one department can ask help from other department, such as, employees of production department of food sectors are responsible for controlling quality of ordered food items. However, the following diagram shows the organizational structure of Qassim Complex –
Compensation and benefits
The compensation plans of Qassim complex would also be complicated as it has four departments to serve the function of different segments. However, they would perform different way in different environment and receive salary with different salary structure; therefore, the budget of the compensation plan would be difficult to measure in a single table.
In addition, the compensation of the employees of Qassim complex would increase per year considering the performance of the employees as they get other rewards if they help the company to increase customer base by giving highest effort. The management has decided that employees would receive payment hourly basis and get benefits for quality and experience of the performance, however, the following figure shows the salary structure of few employees and four manager –
Table 11: Compensation structure. Source: Self generated.
Directors, supporting professionals and advisors
Since the organisational chart of Qassim complex is not simple, they need to prepare a code of conduct besides memorandum and article of association to direct the higher authority to arrange annual meeting, design rewarding and remuneration policy, and take necessary steps for the future development and so on.
However, this complex would not have any non-executive director at initial stage, but it should appoint NED in accordance with the disclosure requirement if the company listed in the stock market. However, Board of Directors of this complex would take all decisions considering external and internal environment and these decisions need approval of the CEO; however, they should arrange training program to develop customer service and efficiency.
As the market is uncertain and competitive, the management of Qassim Complex need to take help of the supporting professionals and advisors to sustain in the challenging market. Many large companies like Enron and Worldcom have collapsed for the unethical behaviour of the executives; therefore, Qassim Complex should develop strong financial management system by contacting with accounting firm and consultants to improve internal management system.
Moreover, this complex has to contract with different companies, suppliers, individuals and so on; therefore, the company would face legal problem if they breach clause of the agreement and this risk influences the company to contact with law firm to mitigate cases or avoid any claim.
On the other hand, Qassim Complex is highly diversified service provider and the success of one business segment depends on the performance of another segment; therefore, it should have to recruit at least two consultants who would be able to give proper suggestion to co-ordinate the performance of all employees and make profits from all sectors of the business.
Potential problems, risks, and remedies
Qassim complex may suffer number of problems to start business and buildup brand awareness, for instance –
- The total capital for the project is only $7 million and large parts of the capital have to spend for decoration, startup the business, purchasing equipment for the sports zone, and arrange other entertainment facilities. As a result, the management of Qassim complex may face financial crisis if they can’t manage their capital in accordance with the financial plan;
- The purchasing power of the US customer has decreased due to adverse impact of global financial crisis and the concurrent “Occupy Wall Street” movement has spread out in all States. In this context, the management need to concentrate on the prospect of the business more carefully in order to prepare strategic plan for the future;
- As the customers get the opportunity to book this complex for various events, the scheduling will have to be flexible and efficiently responsive;
- However, Qassim Complex has to face legal barriers in order to carry on the business;
- In addition, short budget for the promotional activities and brand development projects will create hindrance for the future development;
- It would be really difficult task to control operating expenses because of increase the price of equipment, raw materials, remuneration of staff, and marketing activities;
- At the same time, this company can become bankrupt due to mismanagement, and lack of the experience.
Alternative courses of action
The entrepreneurs of Qassim complex should design alternative course of action considering the above-mentioned risks –
- As the budget is short for the projects, the partners need to find out other sources of capital and invest fund if necessary to start operation and reach break even points;
- They must recruit efficient, dynamic, and educated employees, who would not leave the company within short period. Therefore, the management of this complex should recruit employees from Asian countries as they work hard with low price and they become efficient if they get proper training;
- The market should consider multimedia marketing strategy as it is one of the most effective marketing tools to develop brand (Hisrich & Michael, 87);
- They must follow one-to-one strategy and have to create companies’ own website within three months of its operation;
- This company can use joint venture strategy to expand business and avoid financial hardship;
- It should arrange integrated marketing communication campaign to aware people about the facilities of new complex;
- The directors should arrange regular meeting (quarterly or monthly) with the employees and managers in order to know the actual position of the business and give proper guidance.
Works Cited
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