Category: Business Planning

Introduction

E-business has gained a lot of popularity in the recent past due to advancement in technology. The world has been turned into a global village as the emerging technologies change the world into various fronts. Business units also find themselves in position where they can no longer ignore changes being brought about by these technologies.

The geographical boundaries that existed before have been eliminated by advancement of technology in the areas of transport and communication. Movements from one country to another have been made easier through the invention of various means of transport.

Communication has also been enhanced and it is now possible for one to communicate with others in other regions of the world in real time using phones. The social media has also improved communication in the world.

Business units cannot ignore the technological advancements in the market if it intends to remain competitive. The management of Kids Designed Craft Cards must realize that the only way of remaining competitive in the market is to adopt the emerging technologies as soon as they come into existence in order to remain one-step ahead of market competition.

This firm must find a way of employing e-business in its operations in order to increase its efficiency and market coverage. E-business has become very popular in the current market in Australia and other developed countries. People have limited time to go shopping around.

They prefer making their purchase while in office or at home. This means that only those firms that conduct e-business stand better chances of tapping into a wider market in the current market. This research proposal seek to develop a prototype and give an explanation why e-business is very appropriate for this firm.

E-commerce business model

According to Bhusry (2005), it is important for a firm to come up with an appropriate model that will be able to respond to the market dynamics in order to enable a firm succeed in the market. The following model can help Kids Designed Craft Cards when developing a prototype for e-commerce business.

Source (Manzoor, 2010)

The diagram shows all the stages that should be observed when developing a prototype for e-commerce business.

Driving revenue through e-commerce business

The main intention of this project proposal is to increase the profitability of this firm in the market. Increasing revenues in the market may not be a simple process. It requires a model of how the firm will increase its profitability in the market. The management must realize that this process involves conversion of innovation process into economic value. The model below demonstrates this.

The model above identifies some of the factors that Kids Designed Craft Cards must understand in order to generate the needed revenue. It must first identify customers’ needs through this new technology. Then it should segment the market based on the demographical factors.

The firm should then determine the best value proposition for each market segment. This will result into increased sales, which will then increase the firm’s revenues.

Network and communication infrastructure required

In order to have a successful operation in e-commerce, it is necessary for the management of Kids Designed Craft Cards to understand some of the infrastructural requirements needed in this project.

This will help ensure that before the project starts, the management have rough estimates of what this project will cost in order to be completed successfully. The following list identifies the infrastructural requirements to be observed by this firm.

• Search and advertising software
• Contracting and order software
• The billing and settlement software
• Production and distribution of receipt software
• Customer service software
• Knowledge and information processing software
• The hardware

The management must understand all the associated costs for all the software and hardware needed for this project. These infrastructural needs are further discussed in other sections of this proposal.

Applications required in meeting specific e-commerce business goals

According to Manzoor (2010), when starting a new system in a firm that has been in existence for some time, it is important to ensure that the intended goals are achieved within a specified timeline. To achieve this, the application must observe the following requirements.

• Effective and efficient online shopping functionalities
• Easy process of maintaining online stores using minimum effort
• The site should be fast loading
• The interface should be user-friendly and easy to navigate
• Attractive and professional product displays
• Purchase function should be easy to operate
• Data of clients should be easily captured
• The credit card facility must be secure
• The system must have online validation of credit cards

The system must be able to deliver on the above applications in order to be considered effective enough to achieve the goals of the firm.

Addressing security issues

According to Schneider (2011), just like brick-and-moter stores need some form of security to eliminate cases of robbery or burglary, e-business must be secured. This scholar says that cyber-crime has become so rampant in the current society as crime take a new shape with the changes in the technological environment.

In order to operate an e-business successfully, KDCC must develop some form of security that will protect its operations. The customer needs to be protected from fraudsters who may be intending to steal from them by purporting to be this firm. This firm must also protect itself from any form of threat from these fraudsters in order to eliminate any form of losses that may be incurred because of fraud.

This means that the technical team must develop software that will be able to fight any malware that cyber-criminals may use to corrupt the system of this firm. All users must also be given password that they have to use any time they want to make any form of e-transaction through the website of this firm. The customers should be given an account with a password that they will use when making any transaction with the firm.

The password will remain a secrete for the customer. To enhance security, the customer can always change the password whenever he or she feels that the current password has been compromised. Every department involved in the online transactions will always have its own password when dealing with e-customers.

For instance, the marketing department will be able to deal with the customer from the time he is given an account, and respond to any issue whenever this is necessary.

The finance unit will be directly involved with the customer during the process of making payment, while the logistics unit will coordinate with the customer during the process of delivering the purchase to the designated place. Each member of this organization will be responsible for all the transactions taking place through his or her account.

Addressing e-marketing requirements

It is important to understand e-marketing requirements in order to deliver quality service to the customers. The management of KDCC should understand all the requirements of e marketing in order to run without many huddles that may affect the normal operations.

According to Awad (2002), starting an e-commerce business may appear a simple process that can easily be realized as long as there is access to the internet. However, this is not as simple as it may appear. This complex process not only requires the right instruments, but also the skilled workforce that will help in addressing various issues within the firm.

The management must first address the issue of hardware needed to develop an e-commerce. This will involve a number of computers and accessories that come with it. It will also need all the hardware used in internet connectivity. The firm will also need to identify a room where these machines will be operated from, within its premises.

The firm will then need to purchase the software that will be used to develop and run e-commerce within the firm. This will also include the software that will be used to protect the system from cyber criminals. Finally, this firm will need the skilled workforce that will help in running the system.

The marketing unit will need to have its customer-care unit at the station 24-hours a day to address any question that may come from the customers. Other departments of this firm should also be active in this new system.

Choice of payment systems to be used

Choice of payment to be used with this new system should be selected with a lot of keenness in order to enhance customer experience. According to Bhasker (2006), it is important to realize that some fraudsters are always keen to rob firms that do not have foolproof payment system.

The management must therefore, develop a payment system that will always protect itself and its customers from fraudsters. Choosing the best payment method should take a number of factors into consideration.

The first factor, as mentioned above, should be security of the firm and its customers. The second factor should be convenience. The payment system should be convenient to the client and the firm. The third factor is the ability of the firm to realize that payment has been made the moment the customer makes this payment.

Factoring all these issues together, the best approach that would be very appropriate for this firm would be the use of credit cards. This would allow a strict interaction between the customer and the finance department of this firm during the process of making payment.

However, the firm should consider another alternative of making direct bank deposits to the bank accounts of the firm in case the payment is huge and cannot be transacted easily using credit or debit cards. However, it is important to find a way through which the system will detect any direct payments to the bank account and all the necessary details of the customer who has made the payment.

Addressing privacy and other relevant ethical concerns

Some of the main concerns that have been raised by stakeholders in relevance to e-business are the need to maintain ethical issues related when conducting this business. This involves privacy issues and other issues related to customer care and protection. According to Corchuelo (2003), some customers may always want their private life to remain as such, especially when it comes to making purchase of some specific products.

It is the ethical responsibility of the firm to ensure that customers’ identity is not revealed to the public when they make purchases from the firm. Failure to observe this may seriously affect business operations of the firm as customers may lose trust with it. Another privacy concern is the need to protect the finances of the customers who is paying through credit cards.

The officers responsible for effecting the payments should not withdraw more than the right amount from the account of the customer. This is an ethical responsibility of this firm if it intends to keep its customers. It is also important to ensure that customer is not double-charged for the products they purchase from the firm. Yokoo (2008) says that it is ethical to deliver on the promise made to the customer.

When a customer sees a product online and pays for it, the firm should make an effort and deliver that particular product to the customer. The product must meet all the specifications made by the customer during the purchase. The time of delivery should also be as prompt as promised on the company’s website.

Addressing legal issues connected with the e-commerce business

As Gasós (2003) observes, it is not possible to run a business in an environment that lacks proper legal structure to protect the customers and the firm. The law is meant to protect all the stakeholders involved in the transactions. In e-commerce business, laws exist that helps in guiding the relationship between the customer and the firm, and that between the firm and other firms or the government.

The laws are already in existence, and the only issue that the firm should address is to implement them. In order to address the legal issues properly within the firm, it is important to ensure that all employees understand this law and its relevance in an e-business environment. This will help in ensuring that these employees appreciate the need to observe these legal issues in all their activities.

The next step would be to let customers know the laws and regulations governing their online transactions. The company can let them know their rights and responsibilities, and how the law protects them and the firm. This will help in creating a legal environment where stakeholders get the respect they need.

Addressing customer service issues

According to Kidd (2000), the only way in which a firm can succeed in e-commerce business is to find a way of treating its customers with a lot of decorum, and addressing their concerns as soon as possible. This means that KDCC must have a very active customer care unit that will be able to address needs of the customers as may be appropriate.

To do this, the firm must develop a state-of-the-art call centre, which will be the customer care centre. The call centre should be equipped with all the necessary communication systems and qualified workforce that will be able to respond to the questions of the customers and direct them as may be necessary. It is important to ensure that the customer care service is offered round the clock.

At no moment should the customer call and fail to get response as needed. To enhance communication, the firm may engage the social media in addressing customers’ needs. This may involve responding to customers through Facebook and Tweeter. The firm can also develop a live chart in its website where customers can reach the firm directly.

Measuring the success of your proposal

It is important to measure the success of a project in order to determine if it is economically viable. Coming up with metrics that can be used to measure, the level of success of the project may be very important in helping the management determine the next approach to take. Three departments of KDCC can do this. The first department can be the marketing unit.

The can determine the level of success by determining the increase or decrease of customer engagement within the firm. The finance unit can determine the level of success by determining the increase of income directly related to the new system. The logistics unit can measure this by determining the increase in delivery of products to online customers.

Conclusion

The discussion above demonstrates that e-commerce is the best approach through which Kids Designed Craft Cards can increase its market share locally and internationally. The new system may cost a lot to this firm during the initial installation. However, the firm stands to benefit a lot upon its completion. This research has demonstrated that if the firm comes up with the appropriate prototype, then it will be successful in this market.

References

Awad, E. M. (2002). Electronic commerce: From vision to fulfillment. Upper Saddle River: Prentice-Hall.

Bhasker, B. (2006). Electronic commerce: Framework, technologies and applications. New Delhi: Tata McGraw-Hill.

Bhusry, M. (2005). E-commerce. New Delhi: Firewall Media.

Corchuelo, R. (2003). Technology supporting business solutions. New York: Nova Science Publishers.

Gasós, J. (2003). E-business applications: Technologies for tomorrow’s solutions. Berlin: Springer.

Kidd, P. (2000). E-business: Key issues, applications and technologies. Amsterdam: IOS Press.

Manzoor, A. (2010). E-commerce: An introduction. Saarbrücken: LAP Lambert Acad. Publishers.

Schneider, G. P. (2011). Electronic commerce. Boston: Cengage Learning.

Yokoo, M. (2008). Electronic commerce: Theory and practice. Berlin: Springer.

Executive Summary

The business plan that is presented in this paper corresponds to a proposed beach company, which will provide services and beach merchandise for the individuals who operate from this locality. The proposal for the business covers many areas that are relevant to the business, including the location, environment, the operating environment, and relevant political and social factors. The host of beach activities that the business will provide includes Jet Ski rentals, scuba diving, fishing trips, issuing diving licences, and selling water and beach supplies. The location for the business is the Ingonish Beach, Cape Breton Island, Nova Scotia.

This area was selected based on the serene nature of the beach, the availability of the untapped target market, and the favourable working conditions that guarantee profitability. The business proposal consists of the financial statement for the organisation for the period that it is going to be operational, including the expected performance for the next three years. The result of the proposal indicates that with effective utilisation of the available resources, the business will be profitable in the end. Partners in the business will provide the capital that will be sufficient for the operation of the business. A loan from a favourable organisation will also be obtained for funding the business activities. Any organisation with enough funding is likely to succeed if there is continuous investment into the activities that it undertakes. The profits obtained from the business venture will mostly go into the business activities.

The area in which the business is located has no other companies that operate in the same line of trade. The absence of competition allows the company to exercise monopoly, meaning that prices can be adjusted to ensure profitability. The three-year operational financial statements are provided in the plan. These statements provide hope that the business will be profitable for the next three years. Indications prove that the business will grow over the years, with most of the growth coming from the sale of beach supplies and/or rental of Jet Skis. The business will offer sustainable services to the community.

Industry Descriptions

The industry in which the business is to be situated in is the leisure industry that attracts millions of people worldwide. This industry is a lucrative one in Nova Scotia since it employs thousands of individuals directly and indirectly. The same industry contributes significantly to the local economy by creating wealth for the locals. The company enjoys the monopoly in the respective industry in the area that it is located since no other companies offer similar services. The company’s geographical competition is also nonexistent, with the competition only being expected in the future.

The size of the company is also significant in the industry description in this section. The services offered in the business include water and beach activities such as Jet Ski rentals, scuba diving, fishing trips, issuing of diving licences, and selling water and beach supplies. Therefore, the business will be a significantly small one. Most of the services will be offered in the area of operation, with only a single outlet for these services and goods on offer. The business will only have one sector of operation, with the rental outlet providing the only available outlet for the company.

The company competes geographically in the area of Ingonish Beach, Cape Breton Island in Nova Scotia. This area has numerous attractions for tourists and other visitors. The beautiful beaches are irresistible for most of the clients who visit this country. Ingonish Beach is among the most visited areas. Visitors frequent the beaches in the period between summer and spring due to the favourable weather that is experienced during this period. The weather forms the basis for the business that operates for six months in a year, with this duration being the period that the company can provide the services in an ideal weather.

The business is significantly small with few sectors except the aforementioned ones. The provision of training for divers, sale of beach supplies, and other materials and the Jet Ski operation is the main activity of the business. These activities will not be hard to manage in the favourable political and economic environment that is available in the area. The political environment is stable enough to allow investment in the area. The existing laws do not restrict activities that a business undertakes. The external factors operating on the business include the prevailing international and local economic conditions in Nova Scotia. The labour is readily available on demand, with a significantly high population of people in the country being interested in beach sporting activities.

Internal factors that are relevant to the growth of the business include the determination of employees and the motivation that they get. Companies with motivated employees are more successful. In fact, less motivated employees leave their respective companies for greener pastures. The other internal factors that affect the performance of the business include the available capital, management, resources that the company can access, and the determination of employees. The business has a large growth potential because there is limited competition in the area in which it operates.

SWOT Analysis

The strengths of the business include the large number of service that will be offered under its name. The activities include diving lessons, provision of diving licences, and other beach supplies. The business will also offer Jet Skis to the interested individuals at a fee. The other strength of the business is that it will not require significant amounts of capital to start since the company’s size is still small. The main weakness of this business is a short duration that it will be in operation in any year. The availability of only two seasons over which the business can operate means that there is a limited time for the company to operate in a year, meaning that the available profits will depend on this period of operation.

The main opportunity that the above business may utilise to its advantage is the monopoly that it has in Ingonish Beach of Cape Breton Island in Nova Scotia. No businesses in this part of the island offer similar services to what the business is offering. This situation is an opportunity for the company to capture the market and/or offer prices that are suitable for its productivity. However, threats of competition from other companies that plan to offer similar services on this part of the beach are evident. Nevertheless, they can be addressed. For instance, competition may be eliminated through the provision of goods and services that are cheaper and appropriate to the clients in relation to those of the competitors (Huang, & Zhang, 2012). The other threat to the business is a relatively new market that it is engaging in and the nature of the market that allows little prediction of performance.

Business Description

The business is centred on the provision of leisure activities to local citizens and visitors to Cape Breton Island in Nova Scotia. The region has beautiful beaches that remain untapped, with an environment that has a host of other beautiful sceneries. The evident many wild animals are a tourist attraction. However, the fishing is also an important activity in the area. The business is centred around the provision of beach activities for people who are willing to spend on the same activities. Although the area has an attractive coastline, no company offers skiing services to the many visitors who tour the place. The proposed business will provide these services at a fee with the aim of attracting more visitors from other places.

The different species of fish in the waters around the island are unique to this part of the country. They provide an opportunity for tourists to discover the different species. Therefore, the business will have a special section that will deal with scuba diving. Interested parties will receive diving equipment from the business at a fee. Divers will also receive lessons on the best ways of having fun underwater and the best places to experience the bottom of the ocean. Nova Scotia is well known for scuba diving. A large number of enthusiastic fans will provide a large market for the venture. Divers will pay on an hourly basis for the rent of the diving instruments. This strategy will provide the much-needed revenue.

The other part of the business includes the fishing trips that are common in this part of the world. Fishing is an important economic activity that provides food for millions of people. The industry also contributes to the economies of many nations, especially those that are bordered by large seas and oceans or lakes. Fishing as a pastime activity and a sport is also practiced in many parts of the world, with tourist practicing the same. The company will offer fishing equipment for the tourists as a way of raising funds and/or generating revenue. The water around the business location is infested with different species of fish and crustaceans, thus making rental fishing equipment a key attraction in the business.

Fishing trips will be new to the business venture as well as the area. The target is to attract local and international tourists who are willing to engage in fishing as a sporting activity. The area that the business is to be located is serene for individuals who want to engage in sporting activities. The business will offer sporting events for the fishing parties by creating challenges and targets that they should achieve. Aside from the fishing trips that the business will offer, other activities will include training clients on the best fishing methods and other fishing activities. The long-term plan is to provide training for parties that are interested in the fishing trips. The training will be part of the activity of the business in terms of aiming at propelling the business to profitability.

Diving is one of the other activities to be undertaken in the business venture. It will offer an excellent opportunity to add to the profitability of the business. The business is located in an area where diving is an important pass time activity and sporting activity.

Provision of diving lessons to the business clients will add to the available revenue to propel the organisation to profitability. Therefore, the other activity for the proposed business will be the provision of diving lessons to any individual who is willing to part with the charges that the business will decide. After training the divers, the next activity will be the provision of diving licences for the area around the main outlet. Traditionally, the issuance of diving licences in the area had been the preserve of the local authorities. However, the provision of training services for the divers and/or the provision of licences for the same will work to boost the local business.

Ingonish Beach is one of the most popular beaches in the world with tourists and revellers flocking this place from different parts of the world and from Nova Scotia. One of the basic requirements in the beaches includes fresh drinking water. Individuals who attend diving classes along with those who are on the beach also need other supplies such as refreshments and swimming attire. The demand for these services forms the basis for the other activity of the business, namely the provision of these supplies.

The main reason for the entry into the above business is that there is an available gap in the area and in the market in terms of the provision of the above goods and services. The area is an attractive one for any investor who is willing to provide services and goods in the area. The expected sales volume in the first few days of operation will not be large, with the organisation targeting profitability by the third month of operation. The management will initially be simple to correspond with the size of the company. Hence, it will consist of a single manager in-charge of the general operations of the organisation, with subsequent management positions stemming from the different departments that will be created.

Staff members will be recruited based on the different organisational needs that correspond to the activities and services in the organisation. The first staff members to be recruited include trainers and divers who will run the training function of the organisation (Gupta & Sharma, 2004). The human resource department in conjunction with the other departments in the organisation will determine the number, qualification, and training of employees who will be recruited in the various departments. The team will be managed using the best-proven methods of managing employees, including the provision of the best employee working conditions.

Opportunities

The beach business that is proposed above has a number of opportunities that will make it attractive and successful. The market for the services that are offered by the organisation is readily available since many individuals are willing to participate in the beach industry. The area of Nova Scotia where the business is to be set up is rich in the number of tourists and party enthusiasts. The business will engage the locals through aggressive marketing techniques to ensure a constant supply of clients. The international market is performing better contrary to what was observed in the last few years.

People around the world have more money and resources to spend in leisure activities (Balderson, 2003). The world economic crisis that occurred in 2007 led to the collapse of different institutions, laying down of employees, and a reduction in organisational profits. Tourism and leisure activities declined at the time. However, with the improved economic status of the different places, the market for the proposed business is likely to improve.

The population of Nova Scotia is relatively high. Its proximity to large markets of Canada and the United States makes it a good area to set up a business. Many individuals are willing to spend on leisure activities in the area. These people will provide the market for the proposed business. The other source of market for the business prospect in Nova Scotia is the large international population that is present in the area and the different counties in the area. The weather allows high numbers of tourists in the large beaches, including Ingonish Beach in Cape Breton Island. The large population of the cities near the island will also provide the large market that is required to make the business more prosperous.

With the large available market, the business has a high probability of attracting a significant proportion of the business to the target market. This observation can be described in the form of its geographical distribution. The number of elderly individuals in the area is high. These people will be the main target for the fishing part of the business where a large proportion of the revenues is expected.

The young population in the area is known for the preference for beach parties. As such, with their large purchasing power, the business will gain from selling fresh water and refreshments. Throughout Nova Scotia, a general preference for water sport activities is evident as opposed to other types of sporting activities. This preference will ensure that the business travels on a success path and that it is able to operate profitably.

The available market will provide resources that are necessary for the propagation of the business, including the provision of revenue to pay employees and other overhead costs. The provision of Jet Ski rentals will attract the young population of Nova Scotia that prefers these types of sporting activities. Scuba diving and fishing trips are activities that attract the older population. The available market in Nova Scotia as well as the surrounding areas will provide this population with the necessary services from the market. There is also a large population of individuals who have little experience in diving. The provision of diving licences at a fee for this population will create another unconventional market. Many other individuals who prefer water activities such as those that the company is offering will provide the source of the other part of the market.

Production Plan

The business will mainly offer services at the beach as indicated above. These services will require several facilities to house and operate from. The main facility that the business will operate from is a small outlet that will be rented from one of the available houses on the beach. This facility will house the beach and water supplies that will be sold by the business, which will operate over a period of six months in a year. The small outlet is readily available over Ingonish Beach in the Cape Breton Island, with the price being favourable for the business venture. Staffing of this outlet will be a significant part of the venture. A minimum of one employee will be required to run the outlet. The size of the outlet and the success that is to be realised in the first few months will dictate the number of employees in the outlet.

The other asset that the business will own is a spot from where to operate while offering the rest of the services. The available space along Ingonish Beach in the Cape Breton Island will be rented from the different companies that will be operating along the beach. These companies will have to rent a space from where to operate since many companies are competing for the available space on this beach. The space will be rented for a period of six months every year, which is the period through which the company will operate. Ingonish Beach has beautiful beaches from where the business can operate. The initial activities will involve looking for the best position.

The other part of the business is the provision of materials and supplies to run the business for the period that it will be in existence. The main materials that the business will require include fishing vessels, the scuba diving equipment, training materials, and other items that will be on sale in the outlets. The purchase of the materials that will be required to run the business will require significant amounts of capital, which will be the main resource for the business at its start.

The operations of this business will mainly be aimed at satisfying the various needs of the clients who visit the enterprise. The main operation will be to train the individuals who are interested in diving lessons, with these clients also enjoying the services of diving in the rich waters around Nova Scotia, especially Ingonish Beach of the Cape Breton Island. The operations will involve the supply of beach appliances and equipment for the people who will be performing different activities at the beach together with those who come to enjoy the cool waters during summer and spring. Jet skiing is the other activity that the business will undertake as part of the efforts to raise revenue and/or generate significant profits.

The personnel at this business depend on the undertaken activities, especially the different operations in the organisation. The training part will require experienced divers who will be willing to divulge the secrets of underwater diving whose skills may be utilised to arrive at the different diving areas. The other requirement in the area of personnel is an individual who can operate the outlet where the beach supplies will be sold. Initially, the business will require one individual as the start is likely to see few clients to these outlets. The other personnel will be in the area of sales from where the main products from the outlet will be distributed. The supplies of these products for sale in the company’s outlet will come from the different manufacturers around Nova Scotia.

Marketing Plan

Every successful company or organisation has an effective marketing plan and place that allows it to reach its customers and clients in different areas. The target population in the area is discussed above, with the main population being tourists and other beach-loving individuals. The elderly population around Nova Scotia and other parts of Canada is also a key target market since this population is known for the fishing activities that are popular among them. The area provides a large population of individuals who like engaging in fishing activities. This population is the main target for the business. The other target population comprises tourists who are characteristic of Ingonish Beach in the Cape Breton Island.

Competition in any industry determines the success of an organisation, including the sales volume that the company achieves. The above business is the only one of its kind around Ingonish Beach in the Cape Breton Island. Hence, competition is not available. The absence of competition is beneficial to the company in that clients have a limited option in terms of the outlets that they can access. The opportunity of the business gaining a large customer base is evident based on the provision of services that are unique and/or exploiting the untapped market in this area of the country.

The application of technology in this business is crucial to its success. This strategy is evident in the technology that is applied at the institution. Fishing boats that are utilised in the fishing activities at the business incorporate the latest communication and navigation equipment. Clients can enjoy a wide variety of services while fishing in these vessels. The business also incorporates technology in the training of divers. The provision of the best areas to carry out the diving and the Jet Ski equipment will be the latest in the field. The technology incorporated into the organisation also includes the communication equipment that will be used to communicate with the tourists on the beach whilst advertising the different products that are available for them.

The socio-political environment for the region that the business is located can be considered ideal for this kind of business. The political environment is ideal because of the stability that the area enjoys. The area is secure to carry out the business without interruption from any of the external forces. Many laws are aimed at protecting businesses of this form. The other reason for the preference of the area as a business centre and the location for the business is the favourable climate that allows the activities to be run seasonally. The geography of the area is the main attraction for the large group of visitors to Ingonish Beach. There are large forests and beaches in this part of the country. Visitors to these adjacent areas frequent the Ingonish beach as part of their adventure.

The action plan in the marketing arrangement consists of a series of activities in the marketing of the business. The target market is significantly large. Different marketing strategies allow the company to reach this market. The main marketing tool that is utilised is direct marketing where the company will market itself at the beach using the personnel who are employed for the provision of the different services. A market uses a variety of marketing materials to achieve the desired effects and attractiveness to the products and services that are on offer. The combination of different marketing strategies produces a marketing mix, which is the elaborate plan of how an organisation engages the market to promote the uptake of its products and services.

In the case of the above business, different marketing strategies will be employed to achieve the best results of the marketing campaign. Many areas of the beach can be reached through the simple word of mouth. The business will initially use this method to reach the many consumers. Print media is another marketing platform that the business will employ in the marketing of the different services and goods. Banners and fliers will be available in strategic positions on the beach to advertise the different services and goods on offer. For visitors who get to know about Nova Scotia through the internet, the business will advertise itself online for some of the services it offers such as diving lessons.

Financials

The proposed business will have an elaborate accounting system once it is established. An accounting department will take charge of the different financial decisions. The operations will mainly be in a period of six months in a year, with the reason being the seasons that are experienced in this part of the world. The balance sheet for the business includes the period after inception of the business, which is the opening balance sheet, which contains the financials for the first year, which is the period of six months that the business will operate for this period. The capital required in any business is equivalent to the money that is required to buy the initial stock whilst providing the necessary appliances for the running of the business.

Opening Balance Sheet

The opening balance sheet for the business consists of the capital raised for the initial activities in the business. The available capital comes from the founders of the business. This amount is roughly two hundred thousand Canadian Dollars. The bulk of this money will go towards the buying of crucial instruments and supplies for the tourists. The initial amount for running the company will also be used in the purchase of supplies for sales in the outlet that the business operates. Some of the money will be the cash at hand, which is required to ensure continuity in the organisation.

The amount of money that is required as capital for the business will be obtained from different partners within the business, with banking institutions providing a loan for the remaining amount. The exact amount that can be raised is approximately a hundred thousand Canadian Dollars, with the rest coming in the form of loans. The money will be used to pay for the first rent of the business premise, buy the Jet Ski equipment, diving equipment, and fishing equipment. The capital will also be used to buy the merchandise for sale at the beach, including the water for swimmers at the beach.

Different organisations require different amounts of capital depending on the size of the business, the activities that they engage in, and the target market. For an organisation the size of the one discussed above, the seasonal nature of the business means that the required capital is significantly small and manageable. Entrepreneurs should not engage in business ventures that demand large amounts of capital. They should be assured of returns on investment before investing this money. The opening balance sheet provides an opportunity for investors to estimate the amount of money that is required to operate the business. It allows the assessment of business success over a period.

In the case of the above business, more than half of the capital will be used in the acquisition of assets for the business venture. Fishing boats are estimated to cost about fifty thousand Canadian dollars, with the rest of the money going to the purchase of the Jet Ski equipment. The estimated cost of purchasing the Jet Ski equipment is fifty thousand, which is also a quarter of the capital required to start the business. The rest of the money to purchase the equipment will be used to purchase the supplies for the business outlet, especially the water and refreshment that will be sold to individuals along the beach.

Many successful businesses start their investment in small ventures, which guarantee returns (Cavaleri, 2004). The risks involved in smaller businesses are significantly reduced compared to the establishment of very large investments in a single industry. The above business can be described as being diversified based on how it provides different services and goods for Ingonish Beach. The main products that are sold for the original part of the business include the beach merchandise such as the provision of water for swimmers and the refreshments that they frequently require.

Apart from the use of capital to purchase the necessary equipment and supplies, the other area that the money will go to is in the payment of initial salaries and overhead costs. The local authorities have a requirement that an annual fee is paid for any business operating along the coastline. The outlet fee, which is the amount of money that is paid for the rental outlet is part of the capital. The spot from where other services will be provided is also a rental place. The combined cost of the overheads for the first month is less than forty thousand dollars. The estimated financial cost for the business over the first one year is about a hundred and eighty thousand, which is enough to cater for the expenses in the first few months of operations.

The investment in any business should be carried out with the returns in mind (Casadesus-Masanell, & Zhu, 2013). Projected returns should cover the capital whilst ensuring that the business is profitable as soon as possible. Effective business ventures are known by how fast they are able to achieve profitability and returns on investment that the investors attain within a given time. The returns on investment within the first few months are sufficient for the business.

The relatively small size of the venture means that it can attain profitability within a short duration of time. The seasonal operation of the business is another factor of consideration in the opening balance sheet. The business will operate from April to September since this duration corresponds to the two favourable weather seasons for the area. The seasonal nature means that the first year of operation and subsequent years will only have a period of six months. This period is a challenge because the business may still be less profitable by the time of closing the first year.

The salaries of employees within the first year of operation will constitute the largest overhead cost for this business because the business focuses on the motivation of employees to ensure that they are able to achieve their goals at the organisation while at the same time attaining other relevant organisational goals. The number of employees at the start of the business venture will be small. Hence, other overhead costs will include the money used to pay for the rental outlets. The additional costs for the operations within the first month include the money that will be required to set up an aggressive marketing campaign for the business and its products. The marketing campaign will not be expensive upon considering the local nature of the business and its relative size.

The bulk of returns from the business is expected from the sale of the beach supplies. The expected returns within the first six months of starting the business are in the excess of four hundred thousand Canadian Dollars. This figure is twice the investment amount for the business. This case means that the expected profits from the first year of operation are two hundred thousand Canadian dollars. The bulk of the money will be re-invested into the business, with an addition of more supplies and the purchase of more equipment for fishing and diving operations. This money will also be used to pay for the year that follows, including the provision of additional employees to handle the projected increase in the operations of the business. The monopoly that is established on Ingonish Beach will be important to maintain since it ensures that the business remains profitable in the absence of competition. Despite the absence of competition, some of the money from the first year of operation will be channelled to marketing the business and/or providing the necessary operating funds.

Three Years of Income Statements

The income statement is a statement of the costs incurred in a business against the revenues for that organisation. The financial statements of the organisation are incorporated in this document to provide important information on the performance of the business. Income statement demonstrates how the business converts its revenue into net income. This document indicates whether the company made money for the stakeholders, or whether money was lost in the process of operations. The company’s revenue is indicated in the income statement alongside the costs of goods that are sold within a given period.

In the case of the above business venture, the three-year income statement can be made for each of the six-month period that the business will operate. For the first year of operation, the collected revenue is targeted at one hundred Canadian dollars. This money will be obtained from the sale of the beach merchandise and the other beach supplies. The revenue is derived from the total cost of the goods sold from the business. The gross sales profit is expected to be in the range of fifty to one hundred Canadian dollars. This figure is calculated from the purchase and delivery charges of the supplies after taking away the cost of the goods sold. The company is expected to make a sales profit in this first year of operation, especially given that there are no other businesses of its type in the beach.

The expenses that the business will undertake are in the range of a hundred thousand for the first year. These expenses include the payment of employee salaries, advertising, and marketing of the business, and the provision of other services such as waste disposal. The business will also spend significant amounts of the revenue in the payment of rent for the outlet, which will consume a large proportion of the money that is available for the organisation.

The other part of the income statement is the source of income apart from that stated above. The company will generate income from other activities such as the issuing of diving licences, provision of diving lessons, fishing activities, and other jet skiing services. The provision of diving licences will be expected to raise about ten thousand Canadian dollars over the first year. This figure is small due to the relatively small size of the operations. The diving licences will be obtained from the local authorities, with the training being conducted by a team that will be working for the business.

The provision of diving lessons and expeditions will generate about twenty thousand Canadian dollars for the organisation, which will be another source of income for this first year. Fishing activities by the business for its clients is expected to provide at least 50,000 Canadian dollars. The biggest source of revenue for the business will be the Jet Ski activity that the business will focus on since there is a large market for the activity. The company hopes to raise C$ 50,000 for the first year. Therefore, the total profit for the first month is expected at C$150,000, with this figure being the net income.

The second year of operation will also have similar expenses in the form of rent, employee salaries, and rewards, and the payment for the space from where the services will be offered. Rent and other expenses are expected to reach C$ 50,000 for this second year of operation, with the proposed increase in the number of employees causing the increase in the expenses. The business is also expected to increase the stock of goods available at its outlet, and hence the expense from the purchase of extra supplies. The revenue that is expected from the sale of goods in this year is C$ 100, 000. This amount is mainly from the sale of beach supplies that the business will offer over this period.

The expenses from the other activities such as the fishing activities, diving, and issuing of licences will generate an extra C$100,000 for this year, with the bulk of the money coming from the jet skiing that will be provided by the business venture. This diversification in the organisation ensures that the business is profitable and better placed to achieve profitability in the future. The absence of competition and other business enterprises in the area of operation also allows the company to undertake these different activities. For this second year of operation, the profits from the operations of the business are expected to reach C$150,000. These earnings will mostly be reinvested into the business venture, with the bulk going into the purchase of more jet skis and fishing equipment.

In the third year of the company’s operation, the profits will have stabilised with the amount that had been invested into the venture reducing. This outcome will allow more money to be used in the purchase of better equipment and/or engage in more diversification. The net profit for this year is expected at C$200,000, which is the largest net profit for the three-year period that the statement covers. The revenue available for the organisation will be generated from the sale of goods and merchandise from the organisation, including beach supplies. Net sales are expected to have increased from the previous value to over C$150,000. The cost of goods sold over this year of operation is expected to increase. During this period of operation, the net profit is expected to be C$250,000, which is the largest profit for the three years.

Three Years of Balance Sheets

The above business is a small one that operates in a significantly small area of Nova Scotia. A small business balance sheet consists of the assets that are available for the business, the receivable accounts, liabilities, and the equity that is obtained from the difference between the assets and liabilities. The first year of operation incorporates the cash invested into the company in the form of capital. This amount is C$200,000. The receivable accounts are C$ 50,000 while the equipment and tools that are required for the start of the business total to C$120,000. The total liabilities for the business can be obtained from the sum of the payable notes and accounts for the business.

The owner’s equity is the other part of the business that is considered in the balance sheet for the above business. The business will not have made earnings for the first year of operation. Hence, the owner’s equity is obtained from the capital stock only (Shepherd & Katz, 2009). The balance sheet will then balance since the sum of the assets and the liabilities equate to C$200,000. The balance sheets allow the estimation of the profits that are available to the organisation, including the losses that the organisation incurs.

The second year of operation will also obtain the same balance in assets and liabilities, meaning that the business is operating efficiently as required by law. The profits that are expected over this year are in the range of C$200,000, which is adequate for the business of its size. The third year of operation will generate C$250,000, which is equivalent to the target profits for the same year. The business will generate enough income to oversee investment over the next few years and the provision of finance to pay the employees and purchase additional equipment to replace the aging ones.

Cash Flow

Cash flow is an important consideration for any business that aims to increase its diversity and/or ensure continued profitability. It is possible to provide the cash flow for the above business over the next three years of its operation. Cash flow allows businesses to estimate their value while depicting the financial situation of the company over the period it is operating. The rate of return of a company or its operations can be determined accurately through the cash flow since it establishes the input and outputs of the business activities.

Liquidity is an important part of an organisation or a business of any size. Profitability in the absence of liquidity is not a positive sign for an organisation (Mantecon, Conover, Altintig, & Song, 2012). The quality of income that a company generates can be estimated using an elaborate cash flow. Some of the parameters that are incorporated into the cash flow of any business include the sales made in cash, the materials bought, and the available labour that makes up the operations cash flow. The cash flow from financing constitutes the other part of the incorporated cash flow. The components of financing cash flow include the loans that are available to the business, the repayment of the loan, and taxes. The last part of the cash flow is the flow from investments that mainly consist of purchased capital.

The illustration of a cash flow is often made in the form of a table where the above values are tabulated. The values should add up at the end of the table that provides the relevant information in the company’s operation. The table below represents the cash flow for the business.

Conclusion and Final Review

The above proposal consists of a business that operates on the beach in Nova Scotia dealing with the provision of services and specific merchandise for individuals in this region. The business will operate for a period of six months in any given year, with the reason for this being the seasonal variation of weather. No businesses offer similar services and products in the area, and hence the high possibility of profitability. The financing of this business will depend on the contribution from entrepreneurs and loans from financing institutions. The cash flow for this business has been provided, with the balance sheet and financial statements for the next three years showing that the business will be profitable.

Reference List

Balderson, W. (2003). Canadian entrepreneurship & small business management. Toronto: McGraw-Hill Ryerson. Web.

Casadesus-Masanell, R., & Zhu, F. (2013). Business model innovation and competitive imitation: The case of sponsor-based business models. Strategic Management Journal, 34(4), 464-482. Web.

Cavaleri, A. (2004). Leveraging Organisational Learning for Knowledge and Performance. The Learning Organisation, 11(2/3), 159-176. Web.

Gupta, N., & Sharma, K. (2004). Creating Knowledge-Based Organisation. Hershey, PA: Idea Publishing Group. Web.

Huang, Y., & Zhang, G. (2012). An Examination of the Incremental Usefulness of Balance-Sheet Information beyond Earnings in Explaining Stock Returns. Journal of Accounting, Auditing & Finance, 27(2), 267-293. Web.

Mantecon, T., Conover, J., Altintig, A., & Song, K. (2012). The Effects of the Reporting of Off-Balance-Sheet Investments on EPS Uncertainty, Leverage and Shareholders’ Wealth. Financial Management (Wiley-Blackwell), 41(4), 1009-1042. Web.

Shepherd, A., & Katz, J. A. (2009). Cognitive approaches to entrepreneurship research. Bingley: Emerald Group Publishing Limited. Web.

A company that provides the raw material for the enterprises that produce their goods from recycled resources, S&S Recycling has a lot of potential, yet needs a careful assessment of the marketing issues that it will most likely face, as well as defining its key market target. Once providing a careful assessment of the S&S Recycling market chances, one can expect that the latter will have a successful start.

To start with, the target market must be defined so that the company potential could be analyzed. Speaking about the target market, it will be reasonable to suggest that the latter will be composed of the companies that use recyclable material as the raw material for their products. Therefore, it is reasonable to suggest that the target market will be composed mainly of the given kind of companies and entrepreneurships.

Since the S&S Recycling Company is going to offer a number of various recycled materials, such as appliances (refrigerators, washers, dryers and hot water heaters), metal items, mostly the objects made of aluminum, it will be necessary to restrict the target market to the companies that produce their goods from the given recyclable materials. Given the fact that S&S Recycling provides the raw material for creating furniture and textile products, it will be a good idea to offer the services to the companies that produce carpets and furniture.

However, it seems that the latter will not be able to use the entire range of raw materials that S&S Recycling provides. Hence, the business plan should also include the companies that use various sorts of metal to produce appliances and other goods that contain metal objects. Therefore, it seems that the target market could be expanded to include other companies that need recyclable materials for production process. Perhaps, the S&S Recycling company should give it a chance and try offering its services to the firms that deal with producing metal objects.

In addition, such a marketing issue as competition should be taken into account when analyzing the business plan. While in the latter, the aspect of rivalry is given enough attention, it still seems that the business plan could use even more analysis of its marketing competitiveness. In addition, if the S&S Recycling company decides to expand their circle of clients by including some of the companies that deal with metal objects processing and production, S&S Recycling will be able to defeat its competitors by taking over two types of clients at the same time.

While the given step presupposes that the company will have to face rivalry among the suppliers of recycled material for metal objects production, taking two niches at the same time is bound to be a huge advantage for the firm. Given the fact that the closest rival remains within a five-hour distance from the S&S Recycling, the fact that the business plan includes a policy of free bins and free picking from locations is rather appropriate and is likely to become the key advantage of the S&S Recycling.

Even though the competition in the sphere of recycling seems tough, S&S Recycling does have a lot of chances that it must take. With the help of a well thought-out strategy, S&S Recycling can become a very successful company. It is obvious that at present, the company needs to focus on the target market in order to draw as many clients as possible. The given strategy will allow the company outrun the competitors and become one of the leading companies in the area. With a good strategy in mind, S&S Recycling managers will see big revenues coming soon enough.

Executive Summary

The following business plan is worked out in accordance with the company’s background and goal targeting. Taking into consideration the current economic and market environment, the plan focuses on the development of a strategy that will provide a high-quality service locally and internationally. One puts an emphasis on the integration of the latest mobile technologies that will constitute a competitive basis in the modern transportation network market. The presented plan enlightens the key corporate policy’s issues, including the management organization, staff increase, and motivation approaches.

Background

The company’s niche is the development and the production of the high-quality mobile apps that allow a customer and a driver cooperate on the mutually beneficial basis. The company was founded in New York, USA; however, it quickly expanded its operation first to EU’s market and then to the east. Thus, now, the company’s service is available in 39 countries worldwide, and it is still in the search for new partners. The management establishment is represented by the skilled specialists focused on the productive team collaboration and unconventional decision-making.

The key idea of the service is that it offers a direct connection between a passenger and a driver; hence, no extra fees are to be paid contrary to the taxi services, for example. One of the principal competitive advantages of the company is that it pays particular attention to the issues of safety and comfort. The apps’ providers are aware of the fact that the drivers that use their services are not professionals so that the staff makes a lot of effort in order to prevent potential incidents.

Two years ago, the company launched a feedback Web service that helps to track the driver’s performance. This monitoring tool has proved to be highly efficient – it enables a customer to see a driver’s rating, read the relevant comments, and decide whether it’s worth using his services.

The company has recently started its activity in the eastern market and is an attractive object for investors. According to the annual report in 2014, the company managed to raise more than a billion dollars within the Singapore market only. In the context of the constant expansion, the company is currently engaged in a far-reaching project in China. According to the specialist’s estimation, the successful collaboration might bring more than six billion dollars.

Management

The company’s management team is represented by decisive and ambitious specialists that show a high-quality performance and excellent team spirit. All of the managers have received relevant education and constantly improve their skills and abilities with the help of the corporate courses. The company’s management hierarchy can be represented by the following chart:

The current officer’s team is represented by the following members:

1. Ted Calver – CEO & Co-FounderExperience and responsibilities: 7 years in direction, managing, and cooperation with pressSalary: 4.000 dollars per monthRelevant qualities: good social skills, analytical thinking, leadership skills

   Achievements, track record: largely contributed to the expansion beyond the USA market

   Education: Harvard Business School

2. Louis Rosier – Co-Founder & ChairmanExperience and responsibilities: 7 years in general business conductingSalary: 4.000 dollars per month

   Relevant qualities: decisiveness and high responsibility accountability

   Achievements, track record: the successful launch of the feedback apps

   Education: Columbia Business School

3. James Trappe – Chief Product OfficerExperience and responsibilities: 5 years in product managementSalary: 3.000 dollars per month

   Relevant qualities: critical thinking, creativity

   Achievements, track record: the development of the fundamental apps’ platform

   Education: Yale School of Management

4. Lilly Evans – General CounselExperience and responsibilities: 5 years in legal issues’ managementSalary: 2.500 dollars per month

   Relevant qualities: critical thinking, creativity

   Achievements, track record: the development of the fundamental apps’ platform

   Education: Yale School of Management

In order to improve the gender equality environment, one encourages women’s involvement in the workforce. The Human Resource Management is also focused on employing young and ambitious specialists that are interested in the long-term cooperation.

Strategic Plan

The mission of the company is to establish its high-quality performance on the international level. The first goal is the expansion of the targeted market in the eastern direction. The second aim is the development of the strategic marketing segmentation. According to the specialists’ estimation, a profound monitoring policy can improve the general performance considerably (Cravens & Piercy, 2013).

Moreover, the company plans to enlarge its advertising activity; the new approach is to emphasize the company’s fundamental competitive advantage – the combination of quick access and the high safety insurance. Furthermore, the current SWOT analysis shows that the primary weakness of the company is the lack of PR specialists promoting the services beyond the USA. As a result, there is a threat of being driven out of the global market.

On the other hand, the analysis shows that the company’s strength is the perspective IT department that suggested a series of innovative projects likely to improve the service. Recent research proves the necessity of the development of new programs that will be equally compatible with smartphones and laptops (Snider, 2015). Thus, there is an opportunity of occupying a new niche in the transporting field via the introduction of progressive apps.

Reference List

Cravens, D.W., & Piercy, N.F. (2013). Strategic Marketing, 10th Edition. New York, New York: McGraw-Hill.

Snider, M. (2015). Report: Mobile technology generated $3.3 trillion in 2014. USA Today. Web.

Introduction

The web 3.0 modern technologies seem to influence almost each business across the world because multinational, medium, and small business enterprises seek new technologies to improve service delivery and enhance efficiency their operations, (Almeida, Santos, & Monteiro, 2013). Through integration of technology into businesses, electronic commerce popularly known as e-commerce has become a new trend in business operations, where companies transact most of their business activities through the Internet and web-based applications (Teece, 2010). Zenith School Supplies is a young enterprise that supplies kits to thousands of schools across the Australia and is currently seeking a single and fully integrated website for its supplies. In this view, this e-business planning report provides a proposed plan for Zenith School Supplies to adopt e-commerce.

The e-commerce business model

The association between business models and innovations is indispensable in the modern world of business. According to Teece (2010), “technological innovation often necessitates business models, since technology creates both the need to bring discoveries to market and the opportunity to satisfy unrequited customer needs” (p. 176). Three main e-commerce model categories include Business-to-Business (B2B) model, Business-to-Consumer (B2C) model and the Consumer-to-Consumer (C2C) e-commerce model. The case involves a business-consumer relationship and the B2C model is an appropriate model in the case of Zenith School Supplies. B2C is one of the most effective business models spurred by modern innovations that several multinational businesses have praised for its efficiency and effectiveness in business operations.

The grounds of selecting the B2C e-commerce business model lies in the facts surrounding the case study and its perceived efficiency in business electronic exchanges that Almeida, Santos, and Monteiro (2013) discovered. Since the company deals directly with its consumers, the B2C model is significant since any business that sells directly to its consumer’s uses this e-commerce model. The B2C e-commerce model has its basis on the direct connection between a consumer and a retailer, without any intermediaries through integrated web-based technologies (Almeida, Santos, & Monteiro, 2013). Under the B2C model, the business will consider the application of two other e-commerce models: the virtual community e-commerce model and the brand awareness model.

E-commerce business on revenue

The business would derive revenue through online shopping, which is a revenue model. A major presumption involving the significance of e-commerce is its efforts in tremendous reduction of marginal operation costs that involves production and distribution of products to consumers (Rothaermel & Sugiyama, 2001). In terms of revenue improvement, B2C e-commerce model would significantly reduce the amount that Zenith School Supplies uses to run the three different online ordering programs (Spaulding, 2010). The B2C model would allow integration of virtual community model that attracts a pool of consumers through virtual communication, and thus promote online shopping of products offered by Zenith School Supplies.

Since the B2C network model will rely on the semantic web technologies and the web 3.0 technologies that are faster than the traditional web systems, it would be easy to integrate huge virtual communities that would provide data tariffs and act as indirect revenues. The payment modules that would include online transactions with credit cards, online pay-bills, e-checks, and online payment systems such as pioneer and PayPal would attract transaction fees and thus become a source of revenues for Zenith School Supplies. The accessibility of online stores by the potential customers in the virtual communities would allow Zenith School Supplies to increase its profitability.

Network and communications infrastructure

In enabling an efficient communication between consumers and the company, a modern 3.0 web technology shall be essential because it allows integration of live chats for virtual communication, provides emails for general communication, and offers infotainment, which comprise useful communication parameters (Koh & Kim, 2002). To enable a more efficient online interaction between the online purchasers and the company, the B2C website of Zenith School Supplies shall involve sharing of digital and multimedia content. Koh and Kim (2002) state that the multimedia contents such as prepared slides, 3D videos, graphic images, and printable data should be available for customers to make informed choices about the products that they purchase.

The trust and confidence (T&C) business model of communication in online business shall prevail, where a complete interaction and channels of communication between consumers and the business will exist (Chawdhry, Masera, & Wilkins, 2002). In terms of the communication network itself, consumers shall receive details about their subscription statuses, their purchasing procedures, and prompts about the available offers and discounts. The virtual communities can meet on the social platform designed for further discussions or share comments and replies through a messaging system available on the website (Chawdhry, Masera, & Wilkins, 2002). Apple, Android and Windows mobile apps for the virtual store for school kits will further form the communication system, where consumers will interact with the company.

The application needed for e-commerce business goals

The Zenith School Supplies established four major goals of the intended e-commerce, namely, combination of the three different online stores for cost effectiveness, designing a website with a rich information portal, making efficient website in communication, and enabling the business to reach global markets (Akçura & Altinkemer, 2002). Based on such demands, web 3.0-platform technology will be crucial in integrating quick e-payment systems, building online communities, and positioning online stores to enhance their accessibility. For cost effectiveness in the B2C e-commerce model, the company shall need a website with a rich information portal, where applications such as brand awareness model will apply, with ample information about school kits (Akçura & Altinkemer, 2002). To make the goal of globalization successful, the use of virtual community applications will aid.

The available storefront applications would provide the company with an opportunity to display its brands, its store location information, its major services, and important information regarding the corporate activities (Rothaermel & Sugiyama, 2001). Other applications may run through online brokerage, where companies that closely interrelate with the business style of school kits would purposely allow consumers to find similar products on a single purchase for convenience. Companies dealing with school games equipment and playing tools for the kids can form part of the targeted brokerage partners for the intended websites.

The model for the e-marketing requirements

E-commerce emerged as a means of transforming production and distribution processes a given market segment. Important e-marketing model should be cost-effective, time saving, accessible, allow quick interaction, and universal reach (Rothaermel & Sugiyama, 2001). The B2C e-commerce model and the integration of the virtual community and the brand awareness model would satisfy most of the e-commerce requirements. The B2C e-commerce model integrated with the two models will ensure availability of visible online stores for convenience. Moreover, the website will have adverts to increase awareness, integrate online e-payment systems to save time, and incorporate marketing systems, where promotion and adverts will run (Rothaermel & Sugiyama, 2001). With such features, product awareness, product online accessibility, product payment, and feature description will be achievable.

Choice of the payment system

The B2C e-commerce model allows a direct communication between retailers and consumers through websites, where payment arrangements on items acquired or services sought are agreeable (Akcura & Altinkemer, 2002). While dealing with Teacher Tailored Kits involves individuals employed in an organisation, dealing with Kid kits involves children, who are under the guidance of their parents. B2C model allows business organisations to arrange for payment systems such as e-check, credit cards, smart cards, and other electronic payments (Akcura & Altinkemer, 2002). For security reasons and efficiency, the proposed B2C model will use smart cards because they are secure and allow real-time purchase.

The e-commerce business model and security issues

Security is a major concern in e-commerce business because of its susceptibility to cybercrimes. B2C model has several security issues that require attention to protect customers and the company. To improve security of the B2C model, Zenith School Supplies should enhance safety of login details, integrate consumer authentication codes, transfer data in encrypted form, and provide real-time support to customers. Additionally, the website should integrate order fulfilment conditions, online product guidelines to avoid misleading websites, assisted search systems, credit and e-payment verification processes amongst others.

The B2C e-commerce model allows companies to design websites that allow direct communication between the consumers and the company. A separate web segment of new users within the B2C web platforms will be an important feature that would enable the company distinguishes new customers, who will have to design personal passwords and authentication codes to keep the website free from hackers. The procedure of entering the payment sections will involve proper inspection and authentication of the payment modes, payment documents, and the information about independent users shall be confidential.

E-commerce model and legal issues

Since businesses operate in various jurisdictions, which are subject to diverse rules and regulations, business models must adopt and integrate into these rules and regulations. Teece (2010, p. 177) asserts that, “business models must morph over time as changing markets, technologies and legal structures dictate and/or allow” the growth of businesses. Controlling the accessibility of the Internet and social platforms is a critical concern because laws within certain countries disallow children from accessing the Internet. The greatest advantage of the intended B2C e-commerce model is its ability to allow businesses to integrate cyber patrol systems that maintain strict adherence to regulations and rules governing e-commerce.

Since the Zenith School Supplies will integrate some revenue e-commerce models, the issue of fraud and deception may arise among consumers. According to Amit and Zott (2001), to ensure proper scrutiny of customers, login and authentication protocols shall apply to each of the sensitive Internet visits and financial transactions. Such protocols will ensure that users will have to use their authentication codes and passwords to avoid legal issues involving fraudulent use of login details and credit data (Amit & Zott, 2001). Purchasing of kits for children must require separate detailed authentication through a system that would require parents and teachers to take responsibility of controlling and guiding children.

Privacy and other relevant ethical concerns

With the increasing traffic of web users and Internet consumers, communication is becoming unsafe. Owing to increased web insecurities, safeguarding consumer information and maintaining their privacy is, therefore, a great challenge (Amit & Zott, 2001). Ethical and privacy concerns are major problems that the proposed e-commerce model of B2C faces. In addressing the privacy and ethical issues, the company will consider using the latest techniques of developing websites using the web 3.0 technologies. Almeida, Santos, and Monteiro (2013, p. 5) affirm that web.3.0 improves trust and privacy of customers because its enables “the identity management in order to ensure the authenticity.” Hence, the use of web 3.0 is essential in securing privacy of customers in the proposed e-commerce plan for Zenith School Supplies.

Since virtual community e-commerce model shall apply, the intended website will require real-time maintenance with respect to privacy and anonymity through the use of encryption technologies to protect sensitive data such as authentication codes and passwords (Amit & Zott, 2001). Zenith School Supplies will also need to comply with copyrights and patent laws for it to conduct ethical business activities and compete effectively in world of e-commerce. Moreover, privacy of customers is central in protecting their shopping behaviour and unauthorized use of their data. As Amit and Zott (2001) propose that protection of customers using the virtual private network patrol systems will be essential in the prevention of cybercrimes.

E-commerce model and customer service issues

The major intentions of e-commerce are improving efficiency and effectiveness of its operations, promoting consumer-shopping experiences, and enhancing convenience in shopping. In addressing major customer concerns that commonly arise from online shopping, the intended B2C e-commerce business website will provide a 24-hour customer service that will allow consumers to present their shopping challenges, seek shopping and transaction assistance, and report any concern that is disturbing their interaction with the website (Spaulding, 2010). An easily accessible online retail store, where consumers will access products, find information regarding a specific product, and compare the prices of different products, shall be available for 24-hours for customers to seek assistance whenever they want.

A free communication between consumers shall remain granted in the website to allow consumers to share experiences on the designed website, share comments, and ideas about the products of the company, and seek support from each other (Spaulding, 2010). Through the same virtual communities available on the website, consumers will have a social media platform integrated within the model to allow free sharing of opinions, challenges, and anticipations concerning the designed website. Quick and convenient payment systems shall deliver the desired online shopping experiences for consumers (Teece, 2010). Irrespective of geographical setting, the company shall offer free shipping services based on a certain purchasing agreements made with clients.

Metrics for measuring success of the proposal

Being a business model that directly deals with the use of Information technology, the metrics for measuring the success of the proposal may include the use of Soft System Methodology (SSM) as the assessment tool. SSM is among the most effective tools for measuring the progress of organizations that operate in a complex marking environment like e-commerce (Kotiadis, 2007). SSM includes the mnemonic CATWOE concept (Customers, Actors, and Transformation, Weltanschauung, Owner, and Environment), which allows comprehensive assessment of all stakeholders and success factors of Zenith School Supplies.

Conclusion

The demand for convenient purchasing of products through websites, virtual stores, and social platforms has augmented with the web 3.0 technologies making substantial efforts to enhance e-marketing. Websites that allow communication and interaction restricted to businesspersons and consumers are B2C e-commerce models, where direct selling between merchants and consumers occur. Since the management of Zenith School Supplies is keen on expanding globally, the report points out that a direct e-commerce for consumers with a powerful portal containing ample information and increased efficiency, B2C e-commerce website is essential. Combined with the virtual communication e-commerce model and the brand awareness model, the company will hit global markets and increase its revenues.

References

Akcura, M., & Altinkemer, K. (2002). Diffusion Models for B2B, B2C, and P2P Exchanges and E-Speak. Journal of Organizational Computing and Electronic Commerce, 12(3), 243-261. Web.

Almeida, F., Santos, J., & Monteiro, J. (2013). E-commerce business models in the context of web 3.0 paradigm. International Journal of Advanced Information Technology, 3(6), 1-12. Web.

Amit, R., & Zott, C. (2001). Value Creation in E-Business. Strategic Management Journal, 22(1), 493-520. Web.

Chawdhry, P., Masera, M., & Wilkins, M. (2002). Strategies for Trust and Confidence in B2C E-Commerce. Communications & Strategies, 45(1), 81-110. Web.

Koh, J., & Kim, G. (2004). Knowledge sharing in virtual communities: an e-business perspective. Expert Systems with Applications, 24(1), 155-166. Web.

Kotiadis, K (2007). Using soft systems methodology to determine the simulation study objectives. Journal of Simulation, 1(3), 215-222. Web.

Rothaerme, F., & Sugiyama, S. (2001). Virtual internet communities and commercial success: individual and community-level theory grounded in a typical case of TimeZone.com. Journal of Management, 27(1), 297-312. Web.

Spaulding, T. (2010). How can virtual communities create value for business? Electronic Commerce Research and Applications, 9(2), 38-49. Web.

Teece, D. (2010). Business Models, Business Strategy, and Innovation. Long Range Planning, 43(1), 172-194. Web.

Executive Summary

Plush is a specialty café that will serve various foods from small businesses in Kuwait. The café will offer home- made meals and desserts from the best ten online cuisine businesses. Through a special selection process the top ten businesses will be featured at Plush, and their dishes will be available for customers to enjoy in the comfort of a relaxing homelike atmosphere.

During the last three years, there has been a considerable rise in the number of bakeries, sandwich, national food, and dessert shops that have popped up on the social network scene. A simple explanation of the existence of these previously mentioned services could be attributed to our cultural habits of gathering around a meal on every possible occasion.

Plush will offer the convenience of enjoying home cooked foods from the top entrepreneurs in Kuwait without having to go home to enjoy them. We simply wish to offer a place where persons of all ages can gather to have their favorite meal served in a comfortable atmosphere and in a relaxing ambience.

Products

We will target the top ten small businesses that serve savory and sweet foods. Fifteen of the industry’s best entrepreneurs will be selected based on a survey that we will conduct on our target market. Chef Adla, a prominent figure in the food and beverage industry, will then select the top ten.

The management

Plush co-founders Haya AlMansour and Ahmed AlOmair bring a unique mix to the business. For instance, Haya Almansour has over 5 years of experience ordering specialty foods from small businesses. Including family gatherings as well as friends’ functions and business meetings she has organized no less than thirty-five events.

Ahmed AlOmair possesses a unique talent of putting things together, his experience abroad as well as his current position as projects manager makes him a highly suitable candidate to bring the project and its participants to a successful start.

The Capital

With a modest capital in mind we aim to put the focus on the food. Our capital will include costs for construction and marketing.

The Market

One might say the market is saturated with cafes and dessert shops, with the existence of certain Franchise coffee shops. As such, the line that differentiates a restaurant from a café has become blurry. Plush, however, will strictly serve pre-packed, homemade well-known existing meals that have already built up their fan base. This concept is one of a kind and does not exist in the Kuwait market. Our main focus will start, remain, and continue to be on the small businesses and their star dishes.

Company Summary

Plush café will be located in downtown Sharq, KIPKO tower. This is a new commercial tower that is home to some of the best small businesses in Kuwait. You can find a variety of products and services under one roof including a health club, designer shops, photography services, restaurants and cafes and offices.

It is also a prime location for surrounding businesses, towers and governmental organizations. This makes it a suitable spot to open Plush café as it would be easily accessible and highly convenient. The café will provide top selling meals and snacks from the best home cooks in the country to their surrounding community of businesses and homes; including Shuwaikh, Shameya, Kifan, and Abdullah AlSalem residential areas.

Start Up Summary

Company Goals and Objectives

The major goal of Plush café is to offer a place where persons of all ages can gather to have their favorite meal served within a comfortable atmosphere and a relaxing ambience. Moreover, Plush café’s aim is to bring to our client the food that they crave and put it in a cafe so that they can enjoy it here rather that stay at home.

The objectives are to:

• Provide top selling meals and snacks from the best home cooks in the country
• Offer homemade meals and desserts from the best ten online cuisine businesses
• Offer the convenience of enjoying home cooked foods
• Be the best food provider for customers of all ages.
• Gain a market share of more than 10% in the first financial year.

Legal form of ownership

The Plush café is owned by two partners which makes it a partnership. The choice of partnership over other legal forms of ownership is the high ability to make decisions and share losses at the same time. Moreover, it will be possible to generate the required capital.

Owners

The owners of Plush are its co-founders namely, Haya AlMansour and Ahmed Al-Omair. The two have a wealth of experience in the food industry. Moreover, they have unique business acumen necessary for starting up a successful business.

Relevant owner experience

Haya Almansour has over 5 years experience in ordering specialty foods from small businesses. Including family gatherings as well as friends’ functions and business meetings she has organized no less than thirty-five events. Ahmed Al-Omair possesses a unique talent of putting things together, his experience abroad as well as his current position as a project manager makes him a highly suitable candidate to bring the project and its participants to a successful start.

Haya AlMansour has a Bachelors’ degree in Management and a Masters Degree in Advertising and Marketing. She has prior experience in marketing and HR, in branding and marketing, and a small business of personal fashion line. Currently, AlMansour is a HR officer at Kuwait Oil Company.

Based on the past experience, AlMansour shall bring marketing, branding, and human resource experience on the table. This shall boost the marketing and human resource departments respectively. On the other hand, Ahmed AlOmair holds a Bachelors’ degree in Electrical Engineering. He is a visionary leader who is committed, determined, and cooperative. His working experience in Abu Dhabi and Sharja will boost the operations of the business.

Management & Leadership style

The owners (Haya AlMansour and Ahmed Al-Omair) are tasked with the responsibility of running the company at the management level. We shall be involved in daily decision making process, management, and overseeing that the business runs smoothly. In addition, each of the partners shall delegate his skills and knowledge on areas of expertise.

Since the business is a partnership, a contract shall be drawn to briefly outline percentage share, role in the business, and the strengths of each partner. Lastly, a partnership agreement shall be established. The most important and interesting function of management in Plush shall be leadership.

The dynamics of leadership in the company starts with the owners who shall use inspirational, collaborative, and delegative form of leadership (Alkahtani, Abu-Jarad, Sulaiman and Nikbin 78). Other employees shall be expected to be cooperative, innovative, and customer friendly.

Startup Capital

The major source of capital is personal savings and borrowing from family members and friends. Other than the stated sources, the partners seek financial backing from people willing to invest in small businesses. The capital is required for initial onset of the business. The capital will be spent on four categories; cutlery and crockery, construction, marketing, and licensing, and employees.

Different cutlery and crockery will be purchased to be used to in the process of serving the customers. Types of crockery to be purchased are such as serving plates, cups, and bowls. For self service, large bowls, platters, plates are essential for holding significant amounts of food. The necessary cutlery required shall entail different sets of spoons, forks, and knives, forks.

The folks and the serving spoons major purpose will be serving dishes and food from communal serving bowls and plates during personal diners. Finances will be required for construction purposes and installation of different café equipment. Food refrigerating system and heating machines will also be purchased

Marketing and Licensing

Under marketing, finances will be required for the branding, the website design, promotion and advertising, and for undertaking any form of marketing research. The city’s business license department will be contacted with the aim of acquiring a business license. A business license will be applied for a cost of 800KWD. Since the business will operate in the hotel industry health department permits will be sought for the business and respective employees at a cost of 800 KWD.

Employees

Other than the partners, five employees (a cook, a cook helper who also cleans the plates, a cashier, and two waiters) will be employed.

Table 1: The table represents the four categories discussed that require capital start up

Plush café will provide all prepared savory and sweet foods, pre-packed, homemade well-known existing meals to the targeted customers. This means that the provided food will be already be prepared. Moreover, Plush café will provide top selling meals and snacks from the best home cooks in the country, coffees, desserts cup cakes, molten, cakes, hot snacks and salads, and all kind of hot drinks.

Market position

The products provided are competitive because the concept is the first of its kind and does not exist in Kuwait’s food market. Also, there is limited competition as homemade food will be provided to the targeted consumers on their convenience.

Unique selling position

The fact that the provided products are homemade, gives Plush Café a competitive advantage over the traditional food providers. Based on our market research, we are optimistic that the business will succeed.

Anticipated demand

Since there is an already built up fan base for pre-packed, homemade well-known existing meals, the anticipated quantity of products is very high. In a period of 12 months, we anticipate an individual customer to buy out 10 to 15 times in a month.

Pricing strategy

Competitive and penetrative pricing strategies will be adopted while pricing the products. The implication made is that Plush Café will ensure quality-price relationship so as to create value for consumers’ money. Penetrative pricing which involves the use of lower prices will be used with the expectation that quantity demanded will increase.

Value to customer

Plush café products will create value for the consumers through quality food and customer services, customer satisfaction, and convenience as customers will not be required to eat their homemade dishes from home any longer.

Growth potential

A high growth is expected since there is an already built up fan base for pre-packed, homemade well-known existing meals. As such, we anticipate a market share of more than 10% in the first financial year

Marketing Analysis

Market analysis entails the exploration of the market segmentation, positioning, and targeting (Lamb, Hair and McDaniel 3). The major target group for Plush café products is persons of all ages. This means that old and the young, and men and women of different ages are prime targets.

Persons of all ages have been chosen because they can gather to have their favorite meal served within a comfortable atmosphere and a relaxing ambience. This provides them with convenience because they can enjoy home cooked foods from the top entrepreneurs in Kuwait without having to go home to enjoy them.

Human capital and money will be focused on all people so as to create a great yield return. Persons of all gender, age, education, ethnicity, employees, with different hobbies, lifestyles, and values, as well as with different usage rates and benefits are Plush café target. Specializing in strictly pre-packed, homemade well-known existing meals to customers provide a competitive advantage to Plush Café.

To determine the market size, existing data related to the food industry in Kuwait will be collected. Five Porter’s competitive forces of threat of entry, bargaining power of buyers, competitive rivalry, bargaining power of suppliers, threat of substitutes will be adopted (Porter 87). Threat of entry by other operators in the near future is most likely to reduce the profitability of Plush Café.

The bargaining power of buyers is very low since the concept is new in the industry which means that Plush Café products will have power over the buyers. The market is saturated with cafes and dessert shops, with the existence of certain Franchise coffee shops. As a result, the line that differentiates a restaurant from a café has become blurry.

Nonetheless, plush café is expected to have a low competitive rivalry because it uses service and product differentiation to create a competitive advantage. The bargaining power of suppliers is very high because Plush café depends of its suppliers to provide already prepared food.

As such, Plush café has less control over its suppliers. The presence of other food providers is an indication of threat of substitutes (Porter 87). This implies that Plush café will be affected by threat of substitutes which may reduce its profitability.

Financial Analysis

Financial objectives Plush café are:

• Gain a market share of more than 10% in the first financial year.
• Increase sales by 10 percent in the second year
• Increase sales by 25 percent in the third year

The financial tables on the subsequent pages are based on the assumptions listed below:

• The costs of labor, rent, and groceries will remain constant for the first of the year but change by 3 percent in the consecutive years.
• The business will not be affected by macroeconomic factors such as financial instability, increased interest rates.
• There is an anticipated increase in demand for homemade meals and desserts
• The advertising costs will reduce by 75% after the first year, as a result of word of mouth.

Start-up costs [First Month]

In the first month, Plush café requires a monthly start-up costs of 11,250 KWD coupled by 125,000KWD total equipment/capital costs invested as a down payment. The equipment/capital cost (inclusive of business price, cutlery and crockery, food refrigerating system, and heating machines) will be incurred during the inception of the business.

Start-up costs for [YEAR]

In the first year, Plush café requires a start-up costs of 91,000 KWD coupled by 125,000KWD total equipment/capital costs invested as a down payment. The equipment/capital cost (inclusive of business price, cutlery and crockery, food refrigerating system, and heating machines) will be incurred during the inception of the business. Therefore, the business requires a financial backing of 216,000 KWD.

Profit and Loss Forecast

The profit and loss forecast show that Plush café as a potential business venture which will make profits in the first year, second year, and the third year consecutively. The profits are expected to increase as the demand increases as a result of world of mouth. Moreover, the market is anticipated to increase by 10 percent in the first financial year.

First year Gross profit = (120,000-26000)/120,000 x 100=78%

First year, the Net profit = 36,000/120,000 x 100 = 30%.

Second year Gross profit = (132,000-26720)/132,000 x 100=79.75%

Second year, the Net profit = 45,520/132,000 x 100 = 34.48%.

Third year Gross profit = (165,000-27000)/165,000 x 100=83.36%

Third year, the Net profit = 77,650/165,000 x 100 = 47.06%.

From the above calculations, the both gross and net profits will increase annually as a result of the anticipated demand in the food industry. The profits will however be realized if the stated assumptions are upheld.

Works Cited

Alkahtani, Ali Hussein, Ismael Abu-Jarad, Mohamed Sulaiman & Davoud Nikbin.” The impact of personality and leadership styles on leading change capability of Malaysian managers.” Australian Journal of Business and Management Research 1.1 (2011): 70-98. Print.

Lamb, Charles, Joseph Hair, and Carl McDaniel. Essentials of Marketing. Mason, Ohio: South-Western Cengage Learning, 2010. Print.

Porter, Michael. “The Five Competitive Forces that Shape Strategy.” Harvard Business Review, 86.1(2008):78-93. Print.

Executive Summary

The continued growth and use of plastics in packaging consumer products as well as in both commercial and industrial applications has contributed to the augmented demand for plastics. Most importantly, the consumer awareness of environmental implications of the use of plastics and the need to recycle the solid plastic wastes has added to the increased demand for plastics particularly from the recycled wastes. The increased demand for recycled plastic products and the few plastic recycling manufacturers provide an opportunity for establishment of plastic recycling and manufacturing firm.

Replay Plastics will be manufacturing plastic products from recycled polyethylene terephthalate (PET) majorly from used water and beverage bottles. As the major raw materials for the manufacturing process, PET is currently the largest quantity collected plastic material for recycling. Replay Plastics will take advantage of both increased market for the recycled plastics and the huge availability of raw materials to establish in the American market.

Replay Plastics will be located in western US particularly California to take advantage of the excess raw materials and available market. Once established, the firm will be incorporated as a private liability firm and operational within six months. The business plan provides an overview of the firm detailing every step in its operations and development as well as financial requirements.

Company Summary

As indicated, Replay Plastics will be manufacturing plastic products from recycled polyethylene terephthalate (PET) majorly from used water and beverage bottles. In addition, Replay Plastics will take advantage of both increased market for the recycled plastics and the huge availability of raw materials to establish in the American market. Replay Plastics will also be producing Recycled PET (RPET), extruded spin stock-sheet PET as well as high-strength and well-built extruded PET. The product will be sold out to the industrial clients for commercial purposes.

The Background of the Owner and the Management Team

Replay Plastics ownership and senior management team consists of the three founders. Barack Braddock is one of the founders and owners of Replays Plastics. Currently, Barack Braddock is the president and Chief Executive Officer (CEO) of the firm and possesses over thirty years experience in the industry. The practical knowledge of the president in plastic recycling manufacturing process is wide and covers all conversion facets and entrepreneurship development. Barack Braddock has been involved in various successful ventures in the industry and productively transformed over five plastic manufacturing companies. The other management team and owners of Replays Plastics include Sam McGuire and Carl Smith.

Sam McGuire is the Chief Operations Officer (COO) and Senior Vice President (VP). The COO holds a degree in engineering with over twenty years experience in the consumer recycling industry. Sam McGuire is also the inventor of the technology applied in the principal cleaning and decontamination of used plastics and the technology will primarily be applied in the manufacturing process. Sam McGuire patented the technology, which has been applied in over twenty-five plastic recycling projects around the globe. Carl Smith is the Chief Financial Officer (CFO) of Replays Plastics. Carl Smith is highly experienced in financial management. Carl Smith has also served as board member in various institutions both in public and in private sectors.

The Mission of Replays Plastics

Replay Plastics will be committed to transforming solid plastic waste into commercially viable merchandise through the application of recycling techniques that takes into consideration the environment. In addition, Replay Plastics will also be committed to upholding responsive, just, and ingenious work atmosphere, which values diversity, innovation, and hard work.

Objectives of Replays Plastics

The main objectives of the firm are financial. In fact, within five years Replays Plastics will be committed to attaining a financial goal that will enable its continuous operations. The main objectives of the firm include:

• Sales growth of over $15 million from the first year of operation to over $43 million in the third year of operation
• The growth in gross margin of over 35% from the first year of operation to over 50% in the third year of operation
• The growth of net profit margin of over 13% in the first year of operation and over 20% beginning from the second year.

The Key Successes or the Competitive Advantage

Replay Plastics’ success will depend on the secure supply of used bottles and industrial solid plastic wastes to stock PET raw materials. The suppliers will be contracted from both waste-collecting firms and industries. In addition to constant supply of raw materials, the firm will enjoy constant sales of the final products. In fact, there is a huge market for the recycled plastics in industries and consumer packaging. The availability of the huge market presents a colossal opportunity for the firm to succeed amid increased competition. Moreover, the administrative team of the company is additional advantage. The executive management of the firm is drawn from highly experienced and respected personnel in the industry.

The Products

From the solid plastic wastes, Replay Plastics will produce the Recycled PET (RPET) flakes majorly from the used water and beverage bottles. In addition, the company will produce extruded spin stock-sheet PET as well as high-strength and well-built extruded PET used in securing large packages. The products will be manufactured from the RPET produced within the company. In other words, the RPET produced in-house will be used in the manufacturing of other products while the remaining will be sold to other manufacturing companies.

The spin stock-sheet PET will be distributed to the firms that use it as raw materials to produce high-visibility packaging materials. In other words, the product targets producers of laminates as well as fabricated plastic packaging merchandise. In addition, the product forms the primary raw materials in the manufacture of pallets used in engineering as well as construction.

The products will be manufactured through a patented recycling process in which cleaning and refining of the used solid plastic wastes are achieved. The extra flakes undergo another manufacturing process that results in high-strength strapping, which are then vented to other manufacturing industries, which add value to end up with more quality final product.

Competitive Advantage of the Products

Pricing will be a critical determinant of the products to potential clients. Given the fact that most of the products are manufactured from cheap used recycled raw materials, the final product prices will be lower in relation to the competing products. Low prices combined with quality packaging products will form a strong competing factor that will enable the company attain a sizable market share. In addition, timely delivery of the products to the end users will be another competitive advantage. The quality of the products, which are almost practical to the end users, quick delivery as well as cheaper prices of the final product will enable the company capture and sustain a sizable market share.

Sourcing of Raw Materials

As indicated the final products will be manufactured from recycled used solid plastic wastes, particularly water and beverage bottles. The firm will rely on excess of used PET water and beverage bottles collected every year from most of the states in US where the company will be located. The collected used solid plastics are made available for recycling companies while excess is shipped out to overseas destinations. Symbiotic relationship created with firms dealing in raw materials will enable continuous flow of inputs. The close relations with the firms will ensure a constant inflow of required raw materials as well as continuous availability in the near future.

Manufacturing and Operations Plan

Location and Operation Processes

Replay Plastics will establish a refining plant to be located in California, USA to take advantage of enormous quantity of raw materials collected in nearby states as well as the huge market in the industries in close proximity. Initial capacity projections of the firm is estimated to be around 46 million tons of manufactured products taking advantage of stock of used plastic bottles currently being collected in most of the states in the US states. Moreover, Replay Plastics will be vertically integrated to increase its efficiency in production. The products will be distributed through packaging division while the extra-recycled merchandize will be sold to be used as raw materials in another manufacturing process. The establishment of the recycling facility is expected to take four months after initial funding.

Management

The creators of Replay Plastics will form senior management team. However, several qualified employees are expected to join the firm. Balance employees in terms of technical skills, managerial capabilities, and financial knowledge will be hired and trained to take various responsibilities for the smooth and efficient operations of the firm. Though the operations of Replay Plastics will depend on the senior management, junior employees will be trained on other responsibilities. The management team consisting of the senior managers and various departmental employees will ensure smooth operations of the firm. The full management team is expected within six months of the firm’s operations.

Financial Summary

The expectations are that the firm’s essential facilities are put in place within four months after preliminary funding. However, sales and profit margins will be achieved in six months after the start of operations. The sales and profit margins are expected to grow gradually in the next three years. The initial investments are estimated at $2.7 million for the construction of the facilities, purchase of equipment, and related expenses. The owners of the firm will contribute sixty percent of this amount while forty percent will be funded by outside investors who will receive thirty percent equity in Replay Plastics in addition to Internal Rate of Return (IRR) of fifty percent on dividends in the next five years. At the end of the third year, the firm will consider various options including public offering, and is estimated that Replay Plastics will be valued at over $250 million resulting into over 7 times EBITDA. Initial funding is expected immediately to establish facilities for manufacturing processes.

Market Opportunities

Market Size and Expected Growth Rate

The increasing demand for reused plastics will offer significant benefits to the operations of the plastic industry. In addition, the augmented demand for recycled materials will result in improved orders for finished recycled plastic products. Presently, PET leads in terms of volume of reused resin. Actually, the annual delivery of PET exceeds eight hundred million tons. In the coming years, the supply of PET is projected to record growth in excess of one billion tons. In addition, the users of recycled plastic products will continue to increase creating strong demand for the final product of the firm.

The polyethylene terephthalate controls the market for recycled resins due to its ever-increasing significance, visibility, and use. Studies postulate that approximately 16.5% of the entire four billion pounds of PET utilized fifteen years ago accounted for recycled sources. Additionally, in the United States, the yearly production of plastics from recycled sources account for estimated four percent. US remain the biggest producer of plastic waste approximated to be over ninety billion tons yearly. Apart from aluminum, synthetics account for greater value products in waste stream markets as well as the highest forecasted market growth rates.

Market Trends

The recent years have experienced significant expansions in the market and uses of recycled plastics. Indeed, over four million US families have been leading in the collection of used plastic containers for recycling. The market for reused plastics in the US is projected to continue spreading out. As such, firms are expected to utilize innovative expertise to ensure efficiency in the separation and reprocessing of high-purity resins. Due to increased prices of alternative products and quality of the recycled products, expansion and growth in demand is expected in the near future. Further, application of environmental-friendly technologies in the plastics market will also ensure growth.

The market segmentation will be in terms of the kind of the finished products. In essence, the surveys indicate increasing fanaticism trends in amassing as well as segregating superfluous packages among US populace. In other words, the households are willing to do without degrees of expediency in order to enhance the disposability of the recycled items. Further, several families are going as far as purchasing premiums for reprocessed plastic items.

Another critical inclination in the plastic market is the increasing refusal by households to consider burning of synthetic products before reprocessing. In reality, the public has been in support of materials that can be reprocessed. Studies show that the reprocessing pace of PET containers sold has reached thirty percent from fifteen percent previously recycled. The rate of PET bottle reprocessing has been alarming over the recent past and is projected to increase in the coming future. Data from the US Environmental Protection Agency (EPA) show that synthetic beverage containers form an estimated three percent of the solid wastes cast off in the United States. As such, the plastic recycling industry players have augmented the reprocessing of such beverage containers and launched research and development initiatives. Most importantly, the EPA aims to recycle twenty-five percent of the municipal solid waste stream.

The reprocessing production projects augmented levels of synthetic recycling in order to develop long-lasting solutions to the solid waste menace. As such, analysts forecast that in 2015, over 50% of the entire PET bottles will be reprocessed. In addition, the plastic market forecasters anticipate that more plastics will be recycled annually. Through the creation of superior value using recycled thermo-formable sheets for packaging market, Replay Plastics will provide solutions to the plastic waste menace.

The yearly collection of PET post-consumer materials in US account for over 200 million pounds. However, the market lacks local cleaning and refining facilities that aid in the conversion of containers into resins for re-manufacturing. Replay Plastics manufacturing processes will be concentrated in United States due to the presence of the big market and availability of raw materials. Replay Plastics will utilize other firms located in various parts to increase the presence of its products. However, cheap products from Asia will dampen demand for recycled plastic products in US.

Currently, parts of United States and Canada lack autonomous extrusion plants of PET sheets. However, plastic recycling industry is growing in some states such California, Oregon, and Washington due to enabling factors such as raw materials availability and market. Further, the states have numerous clients for the recyclable products. Nonetheless, contracting deliveries and shipping costs of the recyclable products to some parts of the US as well as the rest of the world make the project unappealing.

Expected Market Share

Replay Plastics is aware of the existing prospects in the market. Therefore, the firm will put forward an upright-incorporated conversion facility that produces extruded sheet as well as high-strength strapping exploited from reprocessed PET post-consumer containers. In order to seize the opportunity, the firm will utilize high-tech expertise as well as employ own cleaning and refining processes. The expected market share will depend on market segmentation strategy. The high demands for recycled PET as flake resin, roll stock to manufacture elevated visibility wrapping, and strapping for lumber industries will form the basis of the market aggregation. The firm will also consider operating within the proximity of markets to gain competitive advantage over rivals.

The total annual demand for recycled PET flakes is over a billion pounds. However, the US market produces approximately 800 million pounds. Consequently, the firm’s clients are forced to utilize expensive products manufactured by original materials. Such clients are compelled to import cheap merchandise from developing economies. Since sales are price-sensitive, the firm will attract customers by offering recycled PET flake at lower prices ranging between $0.42 to 0.53 compared to virgin resin whose current pricing ranges between $0.63 to 0.75.

Further, the firm will tend to capture a market for other finished products. Studies show that the market demand for recycled PET sheet and film is over a billion pounds. In addition, Replay Plastics will be expecting to capture a share of the domestic plastic strapping market worth over 200 million pounds. Replay Plastics will use the recycled PET to produce cheap strapping to take over the strapping market. Moreover, data from the American Plastic Council (APC) show that consumers of PET in California are sixty-three, eight in Oregon, and ten in Washington. On the other hand, the consumers of HDPE in California are seventy-three, nine in Oregon, and thirteen in Washington. Replay Plastics will target such consumers in order to augment the market share.

Environmental and Industry Analysis

Industry Analysis

The firm faces no direct competition in its operations in United States presently. The firm intends to capture entire production in US. The firm’s capability of sourcing post-consumer container inventories will be a critical segment in Replay’s vertical incorporation tactic of operations as well as the production of highly demanded products by consuming industries. In addition, the firm will have own refining and cleaning segments to gain competitive edge over rivals.

The Company strategic operations will revolve around reaching the target clients at the shortest time possible, in the most convenient ways, and at the least cost possible. As such, Replay Plastics will strive to create a channel of distribution that endeavors to attain the major operational goals. The strategic operations will be based on the mission of providing value to the customers

Environmental Analysis

The analysis of the plastic industry in which Replay Plastics operates will exploit the application of five forces model developed by Porter. The model will provide the necessary tools that are critical in the appraisal of the competitiveness of the companies within the plastics industry. Most importantly, the model will offer analytical tool on how the external environment influences the strategic operations of Replay Plastics.

The Buyers Bargaining Power

The demand of products made from recycled PET has been steady over the years. However, the purchasing patterns of consumers depend on products’ eminence, price, delivery period, market closeness and the firm’s repute. The consumers can effortlessly surrogate the products offered by Replay Plastics in the plastic recycling industry through purchasing merchandise provided by other companies in the industry such as virgin PET. As a result, the organization’s share of the market can be abated. The Company will have to look into the quality, prices, and delivery times of products to attract numerous buyers. Moreover, the firm will consider locating its operations near the market to capture more buyers. Therefore, the buyers have high bargaining power in the plastic recycling industry.

Bargaining Power of Sellers

The demand for recycled PET resins remains high. However, the Recycled PET is under-supplied due to improbability in delivery. Therefore, the firm will have to consider sourcing post-consumer as well as post-industrial waste before venturing in the industry. Further, Replay Plastics will reflect on having independent cleaning and refining facilities instead of buying flake in the open market. In addition, the firm will consider securing agreements with vendors and manufacturers to ensure efficient and constant supply of plastic inventory. The management will also have to consider locating its cleaning and refining plants near the delivery stores to avoid expenses incurred when hauling plastic materials. In principle, the suppliers in the plastic industry enjoy high bargaining power.

Threats of New Market Entrants

The expenses incurred in the establishment of cleaning and refining plants are expensive and industry-specific. In addition, the paucity of recycled PET flake leads to the institution’s post-consumer container facilities. As such, the firm will incur the additional costs in sustaining trademark devotion as well as establishing plants. Most importantly, the business will consider its delivery chains, localities, and trademarks as well as the financial capital to gain the advantage of warding off potential competitors.

Competitive Rivalry in the Industry

The Company will exploit technological advancements as well as financial strengths to increase competitive edge over other firms. In addition, Replay Plastics will encounter competition from other companies operating in the extruded sheet trade such as Advance Extrusion, Plasti-Shell Packaging, Petco, and Klockner. The competitors will reduce the share of market controlled by Replay Plastics.

Threat of Substitute Products

The players in the plastic industry offer diverse similar products. Replay Plastics will consider employing convenience and low-price strategies to counter substitute threats. Moreover, the firm will consider using two-stage manufacturing plants including cleaning and refining post-consumer bottles as well as extruding the consequential flake to produce high quality products.

Management Team

The management team of Replay Plastics will consist of both experienced and skilled workforce. The skilled and experienced workers will mainly be employed in management and supervisory positions. However, at the lower levels, unskilled temporary labor force will be requid. Replay plastics will majorly depend on the vast experience and technical skills of its founders. The founders have over thirty years experience in almost all aspects of plastic manufacturing processes as well as business enterprise development and operations.

Braddock Ben has been involved in the formation of various successful companies including multi-cavity Plastic Injection Molder Container (PIMC) facility. The manufacturing processes of Replay Plastics will depend on the Braddock’s expansive experience in polymer raw materials facets, plastic recycling and transformation methods as well as business enterprise development and growth. Besides, the CEO has been involved in the start-up, development and growth of other plastic transformations and manufacturing companies. In addition to the involvement in the management of plastic conversion manufacturing firms, the CEO has over fifteen years experience in plastic industry consultations. The consulting firm has been involved in establishment, development and growth of the plastic manufacturing plants.

Besides vast experience of the President and CEO, Replay Plastics will rely on the technical skills of Sam McGuire, the executive VP and (COO). Sam McGuire holds a degree in engineering with over twenty years experience in the consumer recycling industry. Moreover, Sam McGuire is also behind innovations that have been used in the recycling process. The firm will primarily depend on this technology. Sam McGuire patented the technology, which has been applied in over twenty-five plastic recycling projects around the globe. Further, the VP has been involved in the management and operations, design, installation, construction and commissioning of diverse private companies involved in recycling processes of solid wastes around the globe.

Before joining Replay Plastics, Sam McGuire served as Vice President International Business Development and Engineering (VP-IBDE) in the previous firm. The major functions in this position included implementing corporate business models in other countries, licensing intellectual property to various firms including joint ventures, managing, designing, and constructing recycling facilities as well as continuous technical and business support to other companies. The technical and business support produced various joint ventures in the industry. Sam McGuire is expected to bring his vast experience and technical skills in the development and growth of Replay Plastics.

The firm’s financial capabilities will depend entirely on the experience and technical skills of CFO. Carl Smith is the Chief Financial Officer (CFO). The CFO is an experienced banker and financial investments consultant. Carl Smith has also served as board member in various institutions both in public and in private sectors. Smith has successfully raised funds for various organizations including over forty firms in both private and public domain. Previously, Smith served as a CEO of various organizations besides being board member of diverse financial organizations both in banking and non-banking sector. The expectations are that Smith will bring in his vast financial experience to raise fund for the establishment, development, and growth of the firm. Combined with managerial and technical experiences as well as financial skills, the capabilities in terms of personnel will be significant for the growth and development of Replay Plastics.

The Personnel Plan

Besides the technical, managerial, and financial capabilities of the founders of the firm, Replay Plastics will also depend on the junior personnel drawn from various fields and capabilities. The expectations of the firm are that the junior personnel will be increased with time. However, at the beginning, the firm will have fifty-three junior employees including six part-time staff. The junior staff is expected to increase with the growth of the firm. In the second year of the firm’s operations, the junior personnel will have grown to fifty-nine including nine part-time while in the third year, the junior management team will have grown to seventy-three including fifteen part-time employees. The capabilities and competencies of the expected junior management team are provided in the summary of the personnel plan.

The Benefits of Replays Plastics to the Community

Environmental Benefits

Replays Plastics is involved in the plastic solid waste recycling process, which is considered one of the greater environment management practices. Since the raw materials used in the manufacturing processes are mainly plastic wastes, the firm is involved in the better way of managing the environmental waste. As indicated, data from the US Environmental Protection Agency (EPA) show that synthetic beverage containers form an estimated three percent of the solid wastes cast off in the United States. As such, appropriate waste management practices such as recycling in necessary.

Economic Benefits

Besides employment opportunities, Replay Plastics will form end-user products of collection firms based in various states in US. The symbiotic relationships established will ensure continued existence of both firms as well as provision of revenue to the governments. Moreover, Replay Plastics will contribute to the continued growth of other related industries as well as support economic activities of the surrounding communities.

Financial Plan and Data

Replay Plastics will require over $5 million start-up capital comprising of total assets and expenses. The start-up expenses will include costs incurred during the facility preparation on on-site construction services, legal services and accounting, special consulting, local engineering, lab equipment and supplies as well as contingency plans. The costs in these activities add to the total expenses that the firm will incur to start the operations. However, the largest start-up in terms of finance is required for the building of manufacturing facility. Once completed, the facility will be one of the long-term assets. Besides buildings, machinery, and fixtures, inventory as well as cash are categorized as assets.

The expectations are that the installation of the equipment will take approximately six months. Upon completion, the operations of the firm will immediately begin and the production process will proceed as planned. However, the realization of the profits will come after another six months. In other words, net income from sales and daily cash flows to finance operations will be realized within six months after the start of manufacturing processes.

Financial Assumptions

For Replay Plastics to start collecting net revenues, the following financial assumptions will be made.

• There will be thirty days allowed to collect the accounts receivables. Thirty days are allowed because of prior experience and understanding of the customers within the industry
• The prediction for inventory turnover is twelve times
• The burden of the personnel contribution consists of the employee’s healthcare
• The accounts receivable financing will be seventy percent charged at twelve percent interest rate per year.
• New equipment will be bought in terms of hire-purchase requiring down payment of thirty percent while the remaining amount paid on delivery of the merchandise. The purchase is cataloged as long-term asset bought from the cash flows
• Growth rate of five percent is predicted in all costs and sales

Break-Even Analysis

Break-even is the point the Company will begin making profits. For Replay Plastics to break even, the Company has to produce over 716,000 units per month. The units are arrived at after taking into consideration the monthly fixed cost of about $184,000 and a variable cost of 51% of prices per unit. According to the estimates, the firm is likely to break even in the first month of sales. The general assumptions of break-even analysis are summarized below.

Projected Profit and Loss

In the first and second years of operation, the expectations are that the firm will experience rapid growth in sales. The growth in sales is attributed to the augmented production capacity as new production facility is added to the manufacturing process. The assumptions is that all the products will be sold and the favorable gross margin will be attained in the first month of sales at least cost. The constructive income on sales will be attributed to straight-down combination of the firm’s operations. In addition, the management capabilities in supervising the preliminary sales and marketing enable Replay Plastics incur minimum costs in sales and marketing.

Projected Cash Flow

According to the planned estimates, Replay Plastics will start generating encouraging income in terms of cash flow six months after the start of operations, which is the twelfth month after initial investments. As indicated in the summarized cash flow table below, Replay Plastics will start clearing long-term debts in its balance sheet while adding new equipment and facilities for the production processes. The activities will be achieved within two years of operation. The owners and other investors will start earning dividends in the second year of operation.

Projected Balance Sheet

The projected balance sheet indicates the net worth of the firm in the next three years of operation. The projected net worth is the result of combination of immediate sales conventions, rapid increase in production capacity as well as straight-up incorporation of the manufacturing processes. The net worth is estimated in excess of the reserves in terms of resources. The indication is that growth in profit margins will be greater in relation to the resources reserves put in the firm.

Projected Business Ratios

The ratios are projected against the industry growth. The ratios indicate the premeditated strong expansion in returns on investments, productivity, resources as well as cash flows. The returns on investments are expected to increase every year to allow financing of the internal daily operations of the firm as well as purchase of new equipment to increase production capacity. The increased capacity, the straight-down combination of production processes as well as increased efficiency in business operations explains the rapid growth in profitability. Moreover, the significant diversion of the Company ratios and that of industry is attributed to the capability of the firm to utilize the low-cost recycled materials in the production process.

Long-Term Plan

The firm’s long-term plan includes full production capacity within the first three years of operation. To attain the required full capacity, the firm needs to reach a third of production capacity in the first year of operation using initial production facilities constructed during the start-up. In addition, a third of production capacity needs to be arrived at with introduction of new production facility in the second year of operation. With additional production facility equipment in year three, the full capacity is expected to be attained. From the beginning of the production process to the attainment of full capacity, the products are expected to have been sold and the projected net margins arrived at. The assumption is that there will be constant five percent increases in the sales prices as well as cost of resources in terms of input and workforce in every year of operation. The result will be constant increase in profit margins from the first year of operation through to the third year assuming the expansion of production capacity is invariable.

The Company Exit Strategy

Even though there is no indication that Replay Plastics will be sold in the near future, the industrial trends show that the firm will cost over $250 million in the next five years of operation. According to the industrial trends in private sales, purchases below $25 million result in 5.4 times EBITDA whiles purchases ranging between $26-260 million result in 7.3 times EBITDA. The worth of Replay Plastics after five years is based on the projections. However, the management of the firm is indifferent in ensuring that Replay Plastics remains under their ownership or retains the annual cash flows.

References

• Lee, J, The right-brain business plan: A creative, visual map for success, New World Library, San Francisco Bay, 2011. Web.
• McKeever, M, How to write a business plan, Nolo, Berkeley, 2012. Web.
• Pinson, L, Anatomy of a business plan: The step-by-step guide to building your business and securing your company’s future, aka associates, Chicago, 2008. Web.
• Stutely, R, The definitive business plan: The fast-track to intelligent business planning for executives and entrepreneurs, FT Press, Upper Saddle River, 2002. Web.

Business plan competitions began in the U.S. universities during the early 1980s. Since then, the programs have been initiated in several universities around the globe.

Business plan competitions are organized with the aim of encouraging development of new business enterprises, expanding local economies and encouraging cultural change. Business plan competitions generate a lot of funding from investors and well-wishers.

As a result, the competitions are highly valued by the students and those involved. In the U.S.A, business plan contests are so competitive that they attract students from all over the world.

Currently, most of the programs’ sponsors and critics have questioned whether these contests are really worth the funding they receive.

After analyzing the effects of business plan competitions on the organizers, community and the participants, it is with no doubt that, the events are very valuable.

From my analysis, I noted that the contests provide opportunities for students to improve their entrepreneurial skills and knowledge.

Similarly, students involved in the competition are provided with opportunities to generate new ideas, increase their self-esteem, access to business advisers and network.

Most of the students who have been involved in the contests suggest that the programs have enabled them to learn entrepreneurship skills and knowledge through practice and criticism.

Through the programs, the sponsors aim at increasing revenues, raising profits, support recruiting efforts, and motivate their companies to focus on innovations. It is supposed that through these competitions, financiers and entrepreneurs are challenged to implement on new projects.

Similarly, most companies associated with the competition programs have improved their corporate image. In addition, through these events, most companies, financiers, have helped students implement their business and projects, consequently helping them generate profits.

By doing so, the companies involved have not only remained competitive but also attracted and retained the best talents in the markets. Researchers have indicated that business plan competitions have clearly set goals. The organizers must outline their programs’ objectives.

By doing so, they will be able to manage financiers and participants expectations. To accomplish this, the competition’s goals must identify what the organizers anticipate from the participants during and after the competition.

Equally, the competition’s goals must indicate how the event will benefit the participants. In this note, organizers are encouraged to set goals that will enhance participants’ careers.

Similarly, investors, entrepreneurs and organizers should be encouraged to host more competitions to enhance innovation and entrepreneurship.

To measure the competitions’ returns, several metrics can be employed. Although the metrics employed to provide the organizers with valuable information, it should be noted that these metrics alone provide insufficient information.

The most popular metrics employed are returned on investment metrics and organizational metrics. Through return on investment metrics, financial returns and resource investments are correlated and analyzed.

Return investment metrics help the organizers to evaluate how the entrepreneurs’ ventures are performing, and through this, they can justify the importance of their competitions.

Alternatively, organizational metrics provide the organizers with valuable information on how the funded companies’ plans are geared towards sustainable innovations.

Despite the numerous benefits of modern business plan competition, it should be known that the current model plans would be faced with numerous challenges in the near future. Over the last 5 years, several intellects have criticized on the programs objectives.

Critics believe that the events’ motives have shifted from enhancing innovation programs to being profit ventures.

Equally, it has been alleged that the events have majored on encouraging the participants to develop winning plans rather than teaching them relevant techniques for use in the implementation of their business ideas.

Due to these challenges, I advise the events’ organizers to adopt modern contemporary business plans as the popularity of their models dwindles yearly. In this regard, I have proposed a business model plan for the competitions, which the event organizers can adopt.

Through this model, participants would be measured by how best they will implement their business ideas in the field, rather than how best they will write their business plan.

In my model, participants would earn points based on their business plan, source of hypotheses, objectives, lessons, and productivity. Contrary to the current models, business plans would carry the least marks during the evaluation process.

Participants with comprehensible hypotheses, objectives, and outputs will earn more marks than those without. Through this, I am certain that students will have a competition that is more practical, rather than theoretical writing exercise.

Through my competition program, the winning participants will receive cash prices ($100,000), media exposure, and capital for their startup business.

To ensure that the competition will sustain itself in the future, I would seek funding from several companies who have lost hope in the current models of business plan competitions.

Before the program is launched, we will publicize our competition through the media houses, students’ journals and through the social media.

Through this, we will not only attract numerous participants, but also sensitize the current learning institutions on the importance of adopting the contemporary models.

Executive Summary

The car wash industry develops rapidly to respond to the increasing needs and demands of customers. The JAMA Company is one of the leading companies within the market, which works to provide the high-quality services and increase the company’s competitive advantage.

The JAMA Company’s strengths are the focus on the provision of the top quality services and the 24-hour support for all the customers in different communities because of using the innovative technologies.

The Business Description

The JAMA Company is a corporation which operates within the field of car wash services. The company works to guarantee the provision of its customers with such services as normal cleaning, outside polishing, and full polishing.

Being at the high stage of the development, the company plans to increase the competitive advantage while orientating to utilizing the effective technologies such as apps for making calls and using the call center services to reach customer at different places within a short period of time. It is possible to forecast that at the end of the third year, the company will pay dividends close to the highest percentage norm to its shareholders.

The principal aim of the business plan is to communicate this prospect to the JAMA Company investors operating in the car wash industry and to attract more investors to participate in the business as well. The JAMA Company intends to have the two years loans that will cover its business operations during the first three months.

Such forecasting tools as the time series analysis, regression, and correlation analysis are incorporated in the business plan in order to demonstrate the accuracy of the predictions in relation to the expected revenues.

The current organization structure is based on the work of ten sales executives, and it is expected that each representative is able to work with more than five customers per hour, depending on the urgency of the services which are discussed and provided. Following the assumption mentioned above, it is possible to note that the company can work for 50,000 clients per year while providing the high-quality services.

Mission Statement

The mission of the JAMA Company is to provide the high-quality services in relation to normal cleaning, outside polishing, and full polishing in order to satisfy the customers’ needs with references to the use of specific apps and call center services to contact the customers quickly and successfully. The JAMA Company develops to become the leading service supplier of car wash services within the industry.

The company is devoted to creating a binding association with its customers by providing the excellence service as well as the effective customer support. The company’s strategic goals and objectives are to grow steadfastly, becoming profitable during the third month of operations as it is depicted in the business plan.

Products and Services

The JAMA Company plans to operate effectively basing on the work of four car wash small and mobile stations to provide the car wash services in four different locations.

The work of these car wash stations should depend on the effective communication with the customers with the help of such technology as the call apps and with the help of call centers to ease the provision of services as well as to improve the efficiency of service provision, while guaranteeing the immediate feedback.

The company intends to provide the segregation of duties in relation to providing the cleaning, outside polishing, and full polishing services. The use of reports and performance assessments can lead to the better administration of business. Thus, the initiative can contribute to the increased profits for the company.

Marketing Strategies

Consumer Inducement

The JAMA Company focuses on car wash services. The corporation is created as a personalized service for its customers to provide the systematic services. The company can differentiate itself among the other competitors within the industry because of offering the high-quality services for the customers.

A good business strategy enables the company to overcome the competitors since the orientation to the customers’ final decisions is prevailing. The JAMA Company has strived to provide the high-quality product to the clients while guaranteeing the superior services with attractive prices that can be discussed as convincing for the customers to use the proposed services.

From the company’s perspectives, the current generation of customers has the special powers in influencing the selling-purchasing relations. That is why the company demonstrate the concern about the customer’s preferences and orients to the customers’ interests and decisions in order to satisfy them completely relying on the customer lock strategy as the way to reduce the negative effects of competition within the industry.

The company studies the customers’ opinions on the services to receive and understand the feedback on the company’s services. The company plans to refer to the effective sales promotion and advertising strategies, ensuring that the company’s services are fully accepted by the customers.

To contribute to the sale promotion, the company intends to employ an expert to control the business promotion strategies and work with the latest technologies. The implementation of the idea to use the call apps and efficient call centers is rather effective to promote the company’s services as well as to build the reputation within the industry.

As a result, the implementation of these strategies makes customers use the promoted services since they are attracted to the company. This situation can lead to the increased revenue in relation to the business development.

Advertisement and Promotion

The company’s advertising and promotional strategies are organized and developed basing on three major perspectives which are the public relations, promotion of the Internet site, and the improvement of the company-customer relations.

Public relations

The JAMA Company relies on providing the information about the company and services in newspapers and magazines. These efforts will be realized with references to developing the stories concerning the company’s mission and objectives, concrete actions and services, the company’s potential customers as well as the company’s personnel.

All these attempts and approaches can guarantee the acceptance and recognition of the company and its services within the community. Thus, such strategies can lead to the enhanced profits of the company in return because of creating the good reputation of the company to the public’s perception and feedback.

Building good relations with the public is a key approach to the successful business because the potential clients can be attracted to a company which focuses on the sustainable relations with the community.

The company communicates with the community within which it operates with references to the concept of the corporate social responsibility. Thus, the principle of the social responsibility is the key to the successful business as it can boost the company’s image in the public’s eyes, and this situation can lead to reduction of misunderstanding within the community in relation to the company’s services.

The customers will be ready to use the company’s product when they experience the need for the product and services. Thus, good public relations must be upheld with references to succeeding in the competitive market where customers have the power to decide what to buy and where to buy as well.

The development of the website for promoting the company’s services would enable the business to reach many customers within a short period and rather easily.

The focus on the other promotional techniques can cost about $ 25,000 since an expert should be employed to develop specific strategies to attract more customers to the business because the company’s employees often do not have the relevant expertise in the field.

It is necessary to pay attention to the development of the management and marketing departments in order to use all the benefits expected from the implementation of the innovative technologies for supporting the services proposed by the company for the customers belonging to four different communities.

That is why it is important not only to provide the detailed information about the advantages of using the call apps and call centers for the target audience but also to refer to the customers’ interests which can be different with the references to the definite communities or locations.

The company’s website

To receive the information about the customers’ satisfaction in relation to the company’s services within a short period, it is necessary to promote the materials about the use of four new locations for car washing, available apps, and call centers with the help of the JAMA Company’s website.

The use of the Internet as a tool of advertising and as the part of the promotion strategy is effective because the Internet resources can be discussed as the fast-growing and key promotional channels. The Internet promotional campaign is expected to be successful because it is a convenient way of communicating the customer within a short period of time.

The focus on the Internet resources and social networks can become the part of the major promotional strategy used by the company since almost many people have the access to the Internet connection, and it can be easy for the company to win the customers’ attention.

The Internet cost is minimal if there will be reductions in advertising and promotion costs. That is why the company is oriented to creating a website for advertising the services.

The company-customer relations

The company intends to maintain the customer records in relation to sales by phone, and the business can use a lot of information on the company’s customers to modify the approach to selling services.

In order to achieve the maximum from the customer look-in strategy as well as to focus on the reduction of hostile competition within the industry, the business orients to retaining details about each customer’s behaviors and attitudes to ensure that the services that they are given are satisfactory.

The focus on feedbacks is relevant since the company is able to correct any minor mistakes that the customer can notice while attracting new customers to the company. These strategies can lead to the reduction in competition, the customer lock-in as well as to increasing the competitive advantage.

The Operations Plan

The first step is the selection of the four specific locations for placing the mobile and small car wash stations. The location of the company’s car wash services centers is strategically important to guarantee the easy access of the customers to the provided services.

The main aim of planning the effective location of services centers is to ensure that customers are in a position to have the services done by the company without seeking any external parties for assistance. The company’s estimates to cover the rent payments are of $ 240,000 totally per annum as well as the expected material costs are of $120,000.

The JAMA Company is a new competitor within the market, and a good strategic position and location with references to the car wash centers and call centers will guarantee the availability of the company’s services. While analyzing the perspectives, it is essential to pay attention to the customers’ behavior, their needs, and to the price they prefer.

The business can take advantage of the situation in order to reduce the time necessary for the product to be recognized within the market and be fully accepted by the customer.

This approach can lead to the reduction in start-up costs, advertising and promotional costs. Thus, the company’s management considers the choice of location as the focus on the strategically useful places to locate four different stations which services can contribute to the competition within the industry.

The company intends to develop the 24-hour provision of the assistance and support for the customers with the help of call centers and modern call apps. The company tries to ensure that its services are available at any time, and it provides the friendly services to the customers.

The company is oriented to establishing the balanced services provided to its clients. This approach will contribute to improving the company’s image and its reputation among customers.

The use of the call apps and developed call centers with the highly technological equipment will enable the company to enlarge the number of the sales representatives to react to the customers’ calls.

The use of innovative technologies contributes to utilizing the full on-screen data on the customers and the services they want to be offered since the company intends to have four outlets or stations that will provide the equitable services to the customers in relation to their preferences.

The company will have the full data on the customers’ needs so as to provide the satisfactory services. In this case, the implementation of call centers services and the use of call apps to support the four new stations in different locations are based on the use of top technologies and proper equipment.

The next stage is the recruitment of the support team. The business intends to distribute jobs to persons in relation to their qualification, and the company ensures that each worker knows what is expected and what duties should be performed.

New employees will be required to pass specific tests developed by the company’s management team before beginning the recruitment process in the company because the business aims to hire quality workers. The business outfit policy will command the management team to regulate the company’s following the right path to succeed and to demonstrates professionalism in the industry.

The Financial Plan and Forecasts

The Financial Summary

The JAMA Company focuses on providing the car washing services in four different parts of the country within the same period of time.

Referring to the financial analysis worked out for the first year of the company’s operation, it is possible to state that the company relies on raising a net profit in $329,000 after the first year of operation while fixing the net total for the first month of implementing the idea as 21,500 and the net profit in -30,500 and for the twelfth month – the net total in 113,000 and the net profit in 71,000 (Figure 1).

Figure 1

The company plans to have a steady growth rate in relation to the sales. This strategy will be attained with the focus on the latest technologies for providing services as well as with the concentration on guaranteeing the customer satisfaction in different regions in which the business will be operated.

The number of clients expected during the first year of operation with the use of call centers and call apps will be increased with references to the implemented promotional strategy.

The company plans to earn the revenue of $54,000 per annum from the cleaning department, $255,000 from the outside polishing, and $534,000 from the full polishing. The revenue from different departments would amount $843,000 per annum after the second year of operation with the new technologies.

The Operating Costs

It is also necessary to calculate the possible operating costs for the first year of providing the services in order to see the complex picture of the potential revenues and predict all the expenses and gains. The company’s monthly expenses include expenses on salaries, fuels, material, and housing as well as on insurance and visa (Figure 2).

Moreover, it is essential to predict the expenses on rents, advertising and promotional companies, the new equipment in call centers, and the use of call apps along with the specific phone equipment for the support teams.

Figure 2

The detailed analysis presents some favorable trends in sales forecasting and, as a result, such other factors as the intensive capital rationing as well as the effects of inflation might inhibit the achievement of the estimates. Some measures have been undertaken to minimize the adverse effects of those externalities. The management team believes that the only factor that inhibits attainment of this budget analysis is the effective financial plan.

All the other factors contributing to the achievement of this forecasting have been fully incorporated, and the company’s management team considers that as soon as the financial plan is developed, the business can have no other focus than the orientation to the high returns.

The sales projection aims at ensuring that the fixed cost should be preserved at the minimal level since the changes can affect the break-even point.

The company is a new competitor within the industry, and the high fixed costs as start-up costs accentuate the possible downfall in business and that is why it is important to provide the realistic forecasting that incorporates all the elements of the financial forecasting while constructing and analyzing potential estimates.

The Break-Even Point

In order to propose some assumptions of the financial development of the company, it is necessary to calculate the break-even point according to which the company’s expenses and profits are equal (Figure 3).

Figure 3

The focus on the situation when there are no financial losses or gains in relation to revenues is necessary to forecast the potential profits in the future. The JAMA Company can earn no profit or loss when it reaches a break-even point with references to spending $ 33.97 per unit of services provided as it is calculated below.

Contribution margin per unit total contribution /No. of unit produced.

Contribution margin per unit (2,085,000 / 2035) = 1024.57

Break even point = (total fixed / contribution margin per unit)

Break even point = $ 34, 800 / $ 1024.57= $ 33.97

This point is regarded as a stable point at which the company will signifying that the liquidity position of the business can be rather high in relation to the low ratio. The break-even point can be achieved within a reasonable time, accentuating the useful income statement projection.

The statement of the company’s financial position, as well as the aspects of the cash flow, can depict a positive trend, and the strong capital base can be enhanced since the margins of safety will be low, and the company will focus on the proper stock management in order to guarantee the constant supply of material as well as the provision of services to the customer.

The poor inventory system would make the company to have a bad reputation with the customer.

Return on Investment

The company can also achieve 24% return on investment with references to the stated net profit after calculating taxes and with references to the total assets. Thus, the company intends to use the funding from external sources as well as from their sources which is worth 15% of the total value of the initial capital required and seeking 85% from the outside funding.

Business Control

Quality Control

The company’s workers need to have the necessary high skills and expertise in field of support and providing the car wash services. The JAMA company intends to use the specific software to manage investigation on the personnel’s effectiveness in order to control the quality of the services provided.

This approach can guarantee that all the received calls with the help of call apps are dealt with in the similar manner and with references to the ethical code of conduct developed for the company since the customers require the high-quality and professional services.

We are going to ensure that the customers are encouraged to give feedback on the received services in relation to whether the company is able to deliver the services on time as well as whether the services which are offered to them meet the expectations, and whether the improvements should be implemented.

Thus, the management, quality assurance, and sale departments control the company’s performance and focus on the customers’ reaction as well as on the areas which should be improved regarding the information on the productivity.

Ensuring that the active cooperation exists between the company and the public living in the community, it is necessary to refer to the concept of the corporate social responsibility which contributes to building the effective business reputation. As a result, more clients will be attracted to the business.

The employment of the well-trained and competent workers can also lead to the improved efficiency and to the increased production because the management team believes that a competent worker can understand the role of high-quality services in the business as well as the business goals and objectives.

Thus, the company will provide the high-quality products and services along with offering the competitive and rather affordable price for customers. This approach to the promotional strategy can make more clients visit the company’s stations and service centers.

Accounting Systems

The company will concentrate on using the latest accounting software in business in order to manage the company financial system. This software is effective to check on the sales performance as well as promotional activities frequently. This process will enable the management team to assess the productivity in relation to the observed revenues received by different stations located in different places.

The JAMA Company provides the payment to workers basing on the performance reports and contracts, and it will be easy to assess the employees’ performance and to ascertain the employees who achieve the higher performance results.

Long-Term Goals

The company’s commercial purpose is to operate above or close to the break-even point at the end of the financial period with a steady growth rate during the next three years. The company focuses becoming profitable after the three months of the business operation depending on new technologies, four new stations, call centers, and on the use of call apps to receive and send the orders and feedbacks.

The company orients to the net profit of at least $320,000 per annum with the profit margin being higher than 8% after three years from developing the business.

Opportunities and Risks

Today, the company provides three basic services, which are normal cleaning, outside polishing, and full polishing. The company will expect to diversify its business operations and services provided as well as to expand the services in relation to the work of the support team with the help of call centers established to support the work of four new small stations located in different regions of the country.

The company also plans to negotiate the insurance contracts to safeguard their properties against damages and possible risks.

The JAMA Company also plans to implement the superior service content as well as the additional investing in other ventures while ensuring the work of the effective and updated database management systems. This procedures and approaches will lead to improved client loyalty as well as to increasing the competitive advantage.

The threats for the company’s development and operation within the market depend on the ineffective strategies used by the management team when the team tries to implement specific mechanisms to ensure that the company remains active in the market and within the industry.

It is important to cope with the competitors within the industry while providing unique and superior products and services to the clients available with references to comparably low prices.

Conclusion

The mission of the JAMA Company is to become the principal service supplier of car wash services. The company is devoted to creating a binding association with its clientele with providing the excellent services as well as the adequate customer support with the help of call apps and call center services.

These factors are important because customers are inclined to choose car wash service centers, which can guarantee the provision of the top quality services in relation to cleaning and polishing cars. That is why the company’s strategic goals and objectives are to achieve the rapid growth and to become profitable during the third month of providing operations.

To achieve the stated results, the JAMA Corporation currently plans to refer to establishing four services centers as rather small stations which activities are supported with the help of call centers and useful call apps. The focus on using innovative technologies is necessary to guarantee the company’s achievement of the significant competitive advantage.

The main features of the car washing industry in which the JAMA Company operates are the presence of a large number of small competitors which can attract more customers while providing the high-quality services along with proposing the appropriate prices.

While developing the work of new call centers and new four services centers, the management team of the JAMA Company should pay attention to such facts as the preferences of the local customers in relation to using the specific cleaning and polishing services during different periods.

The JAMA Company should orient to the customers who are inclined to choose the high-quality services for adequate prices, thus, the company’s aim is to attract the price-conscious and quality-conscious customers while ensuring them that the company focuses on the high-quality 24-hour provision of services and support with the help of call centers and specific call apps.

Introduction

The company will be called the LeBanze Automotive Company. The mission of the company is to provide customized SUV and pickup trucks that are affordable and very durable.

The business strategy will be marke-oriented strategies such as product proliferation, product modification, and product diversification to meet the market demand. The business intends to penetrate the Gulf automotive market within one year.

This analytical treatise attempts to explicitly review the concepts of the organizational chart, supply chain, and efficiency in the business plan for the LeBanze Automotive Company.

The purpose of this business proposal is to describe the business type, its aims and objectives, the main activities, location, unique selling point, the reasons for creating this company, market environment, business needs, as well as rationale for the business, target market, customers, and key competitors.

The business is called the LeBanze Automotive Company and it is established as a private company in order to meet local market demand for the sports utility vehicles in the Middle Eastern Block.

The core business sector is the motor vehicle manufacturing industry, which also focuses on designing and creativity to customize SUVs to clients, especially in the UAE and the rest of the Gulf region.

Business Idea and Main Activities

The LeBanze Automotive Company business will be established to address all needs of the SUV market in the UAE where the customers would be capable of purchasing their required vehicles from its outlets.

Moreover, they will get the facility to order by using the company’s web portal in which the company will deliver the vehicles within a reasonable period. The owners have already established a strong network within the UAE and the rest of the Gulf region.

The product line of the business will consist of a variety of off-road vehicles with specially integrated characteristics to mitigate physical problems like inbuilt communication unit challenges, stronger chassis, and quality part.

Aims and Objectives

The aim of formulating this business is to sell SUV products to local businesses and private customers. However, it has aimed to introduce an online platform to attract the modern customers and to become a profitable company by the end of the first year of operation.

At the same time, this business is committed to provide quality products and outstanding customer care services to solve dilemmas and to please the clients.

On the other hand, the LeBanze Automotive Company has long-term objectives, such as, expansion of business in the customized SUV market, and vertical integration and merger with different companies to enter new market within the next five years of operation.

However, the key objectives of this automotive business are:

• To boost its profit margin per year by 8% and to start new services from the second year of the business operation.
• At the same time, the owners have some commitment to save the environment of the indigenous Middle Eastern Blocklocality. Therefore, it will introduce environment-friendly operational activities from the third year of the operation, such as hybrid and pure electric SUVs.
• The owners will allocate 10% of the total profit for the marketing activity as it plays a vital role to increase sales revenue.

Business Location

The business will need to find out an appropriate business location in the United Arab Emirates for setting up the SUV distribution centre and carrying out the operation profitably.

However, in this context, it is essential to argue that the owners of this new business will have to survey the market of that location carefully in order to recognize and better understand the business atmosphere, traditions, demography, people, customers’ and attitudes in order to run the operations successfully.

The store will be situated in Dubai, United Arab Emirates, where the clients will get accessible transportation services. The company will then roll out smaller stores across the Middle Eastern Block.

A good position will make sure that the business will run profitably with a good flow of patrons, as people would be better aware of its location.

Unique Selling Points for the LeBanze Automotive Company

The owners and marketers of the LeBanze Automotive Company will adopt five-stage processes in order to assess the business because banks are unresponsive to invest a large amount for the projects viewed as non-viable.

The LeBanze Automotive Company team will identify unique characteristics of their SUVs by comparing with the SUVs of the competitors, assess the emotional demand from the perspective of the customers, and find out the limitations of the competitors.

These procedures will help the management to avoid risks of investment to some extent. The business will design a unique campaign plan to aware to move forward as well as gain competitive advantages in the UAE’s SUV market (Arabian Gulf’s consumer spending boom par. 5).

Industry Analysis of the LeBanze Automotive Company

Macro-environmental analysis

The macro-environment analysis studies external forces whose influence in one way or the other affects the performance of the LeBanze Automotive Company in particular. Players in any business industry often lack the ability to control these external forces.

Political environment

The closer economic relations in the Gulf region will benefit the LeBanze Automotive Company’s business performance for a long time. The country enjoys political stability, which is a perfect environment for doing business.

This is a good assurance for shareholders, both domestic and foreign, that their investment is safe and it is an incentive to them to add even more (Arabian Gulf’s consumer spending boom par. 5).

With continued political stability, the LeBanze Automotive Company is poised to grow and expand even more as many investors are assured of safety in the event that they decide to put their money into the venture.

Economic factors

The Gulf region offers an economically sound environment that is good for business activity. The World Bank acknowledged UAE as a rich country in 2005 while the country’s GDP hit the $ 1 trillion mark in 2006.

The UAE economy has one of the highest Purchasing Power Parity (PPP) in the world. The country has little inflation and interest rates with one of the best infrastructures in the world.

UAE’s stable economy with the high living standards of her population portends a lucrative market for LeBanze Automotive Company’s business performance.

More citizens of the UAE and the Gulf region have a high demand for SUVs due to the country’s high per capita income. UAE’s improved demand for SUVs will prove substantial for the overall performance of the LeBanze Automotive Company.

Technological factors

The LeBanze Automotive Company may invest heavily in information communication technology as it aims at improving service delivery and customer satisfaction. The online purchase portal is as a result of the company’s initiative.

The Service Oriented Architecture is yet another technological initiative by the LeBanze Automotive Company which will enable the company management to monitor general trends in performance at a glance and spot out any existing bottlenecks that could be slowing down business.

The speed with which this happens helps the management to put corrective measures in place that eventually averts losses or negative growth. These technological advances will attract more customers to the company due to the improved efficiency with which clients are being attended to.

Legal factors

The LeBanze Automotive Company will be a registered business entity that is licensed to operate UAE.

The company will remit taxes to both governments as a legal requirement and the funds go a long way to finance activities such as building and improving infrastructure, financing public goods paying salaries and buying necessities such as medicines.

As a legal requirement, the company is expected by the regulatory authorities to be tax compliant. The fees are remitted directly to the government of Abu Dhabi.

In the UAE laws of commerce, certificate of compliance for taxes are issued to business that remits their returns accurately form which taxes are deducted (Arabian Gulf’s consumer spending boom par. 5).

Micro-environmental analysis

Industry competitiveness analysis using Porter’s five forces model

Threat to market entry

It is difficult for any aspiring automotive company to enter into the industry in the UAE market and manage to break even more comfortable.

In UAE, the LeBanze Automotive Company’s business magnitude together with that of its main competitors such as Toyota and Nissan are well established and would easily enjoy economies of scale to the disadvantage of a new entrant.

It would require massive capital for an aspiring investor to outperform their business prowess.

The LeBanze Automotive Company is well-positioned to survive in the competitive market through gaining from economies of scale, competitive price tags, and reliable customer base in the UAE and other Gulf nations (Arabian Gulf’s consumer spending boom par. 5).

Threat of substitutes

Toyota and Nissan automotive companies pose the greatest danger to LeBanze Automotive Company’s existence and business performance. These companies have been in the industry for a more extended period and are well established than the LeBanze Automotive Company.

The Toyota and Nissan companies have the same products as the LeBanze Automotive Company and sometimes offer significant discounts to customers. In the UAE automotive industry, loyalty to a brand plays a vital role in customer behaviour.

Therefore, Toyota and Nissan brands have the ability to offer an alternative perfect substitute to customers who may be unsatisfied with the SUVs offered at the LeBanze Automotive Company. Unsatisfied customers, therefore, have other alternatives from where they can get the SUVs.

However, in order to remain relevant, the LeBanze Automotive Company has established a unique market for its customer through customised optometry SUVs.

Power of suppliers

Suppliers in the UAE automotive industry have more power owing to the existence of many SUV brands. As a matter of fact, suppliers may instigate market demand and supply variances.

This leaves the suppliers with the power to dictate on proceedings in the industry, such as the market prices and distribution logistics.

However, the LeBanze Automotive Company has endeavoured to use its deep reservoirs as a strategy for balancing the supply forces in the fragile SUV market of the UAE and other Gulf nations (Arabian Gulf’s consumer spending boom par. 7).

Power of buyers

Reflectively, the amount of output in terms of turning over sales depends on the buyers’ purchasing power.

The higher the purchasing power, the better the turnover in total sales realised over a definite period. The LeBanze Automotive Company’s performance in the UAE depends highly on the ability of the SUV users.

On the other hand, unreliable and weak purchasing power translates into losses and underperformance of the company.

The management must, therefore, do everything within their means to ensure that service delivery and quality of the SUVs meets the expectations of customers (Barringer and Duane 34).

The purchasing power determines profitability and probability of survival of a business in the short and long term.

If buyers feel dissatisfied because of poor SUV product, they can easily opt to acquire the same SUVs from rival automotives, thus losing out on business opportunities for the LeBanze Automotive Company.

Rivalry

There are several automotive companies operating in the same industry with virtually all of them dealing with a variety of the SUV products.

For instance, the Toyota Company provides the biggest competition to the LeBanze Automotive Company due to its most significant market share and expanded network standing at 30% (Barringer and Duane 34).

With many customers looking for good value for their money, the quality of the SUVs has remained the main basis upon which customers are making their final decision to purchase in the UAE and other Gulf nations.

All the players in the industry are putting measures in place to ensure they attract more customers and therefore expand their market share. In line with this, the LeBanze Automotive Company’s Abu Dhabi branch will be the most significant and busiest SUV retail store.

The LeBanze Automotive Company’s business strategy

Cost Leadership Strategy

Cost leadership strategy is vital in business management especially in an industry with stiff competition. Reflectively, the concept, as proposed by Porter, is a mean of establishing a sustainable competitive advantage over other player in the industry.

The LeBanze Automotive Company has adopted the cost leadership strategy to improve its efficiency through streamlining operations.

As a result, this venture has developed a cumulative experience, optimal performance, quality assurance, and is in full control of their operational chains.

In order to cut down the cost of production and marketing, the company has embraced the modern technology in its online sales, human resource management, purchasing, and dispatch departments.

The company has entered into a partnership with dealerships rather than engaging its resources in obtaining raw materials and selling to its customers. As a result, the general overhead cost of operation has been reduced substantially.

Also, the company has opted for diversification and expansion of stores in order to gain from economies of scale as the overall turnover grows.

As a result, issues of underperformance have been minimized substantially. At present, this company produces the best quality packaging of its customized automotive products at the lowest possible price despite the high quality since production is done in mass.

Besides, the company has introduced a series of efficiency monitoring systems such as performance valuation, efficiency in production, target management, and electronic purchasing, which has greatly reduced labour cost.

These ventures aim at enabling the company to optimise profits through efficiency in production, sales, accountability, and use of company resources while maintaining quality (Barringer and Duane 34).

Benefits and Suitability of the Cost Leadership Strategy

Efficiency monitoring in distribution, sales, cash flow management, labour, and diversification as employed by the LeBanze Automotive Company is particularly suitable for the firm as it is more of a precautionary measure that shields the firm from effects of redundancy and underutilization of production variables.

Despite rivalry in the SUV industry, the LeBanze Automotive Company has been in a position to monitor all its operation chains and periodically evaluate the same as a means of reducing overhead cost due to underutilization, poor balancing, and unaccountability (Trassard par. 5).

As a result, the LeBanze Automotive Company has managed to transform its portfolio and capital structure by 18% since most of operation lines are optimally utilized.

Consumer Analysis

The LeBanze Automotive Company products target male and female clients in the middle and high end of the economic ladder. This group is characterized by high disposable income and high demand for luxury vehicles that attest to their social status (Barringer and Duane 22).

Despite the fact that the market for the SUVs has been in existence for a long time, there are very few companies that offer the customized SUVs that satisfy the demands of this class of clients in the Gulf region.

This group is further divided into customers in the age group of late thirties who are the primary users of the SUVs and customers in the age group of twenties who are in the minority segment in terms of demands for the LeBanze Automotive Company.

Due to exposure to information sources such as newspapers, television, radio, and magazines, product announcement through these avenues and word of mouth does come in handy.

The decision on the best product, therefore, rely on the information on multiple exposures to different competing products.

In order to diversify market operations, the LeBanze Automotive Company has created multiple SUV products from the same product with different coloration, sizes, and customisation.

This has created an environment of their competition and blocks other competitors from invading into the company’s customized cycles market. These sub-products are differentiated by features, prices, and the difference in quality.

As forecasted in the market research, this strategy has been successful towards dominance as it offers a variety of options to consumers, while at the same time, maximizing benefits of economies of scale in the Europe market (Barringer and Duane 31).

The same should be adopted in the expansion strategy towards the Gulf region.

Market strategy and rationale

From the above analysis, it is apparent that the company may gain in the Gulf market. Among the market strategies, the company should adopt include product proliferation, product development, and market foresight.

Reflectively, product proliferation as a strategy is the same as strategies that companies adopt to create opaque barriers for their competitors.

Through this approach, the market share leader will automatically have the discretion to reap maximum benefits ahead of its closest competitors.

For instance, this strategy will be beneficial for the company when it became the first company in the Gulf region to provide customized SUVs(Arabian Gulf’s consumer spending boom par. 7).

Product development entails the innovation process aimed at modelling the existing product or improving on it to balance with the changing preferences of the customers. As a result, the older version will be phased out of the market as preferences change.

The company should model itself as the leading company in the Gulf SUV industry in terms of design and innovation. The company will benefit from this strategy in terms of market expansion, especially among its early adopter customers.

The product development variables at the company are connected at the central point of strategic planning which encompasses cost, speed, quality, flexibility, and dependability create a smooth continuous operation tracking model that operates like a computer from one segment to another.

Therefore, the major part of the success puzzle for operations implementation management strategy delivery operates on the periphery of the soft skills involving the timeless vision of organizational principles, defining value of the business, determining requirements, clarifying the concept, building teams, mitigating task, resolving issues, and providing direction as incorporated in the operations management system of the company in the European market.

The company has developed a highly structured marketing distribution channel that operates independently.

Foresight is very crucial since it gives a company rough perspective and an overview of the future concerning the expected and unexpected changes and challenges (Barringer and Duane 41).

Therefore, the company should carefully examine and evaluate their past and endeavour to adopt relevant skills that will be relevant for future challenges and responsibilities in the Gulf market.

In the quest for internationalisation, the company should opt for the use of local labour as a strategy to include in the management team members from the countries of operation through training of young and talented managers who are skillful.

Besides, the company should embrace the need for the creation of an integrated structure to absorb company goals and those that favour business in the branches that will operate in the Gulf region (Arabian Gulf’s consumer spending boom par. 7).

Therefore this strategy was very crucial, especially in the forecast of future direction as the foreign markets are used for customisation and the introduction of unique aspects in the automotive industry.

As a strategy aimed at keeping customers, the process embraced corporate social responsibility in the foreign markets such as sponsorship of education products and partnership with the local medical societies.

Benchmarking Competition in relation to Toyota Company

Situation at the LeBanze Automotive Company

Globalisation has created a serious impact on the automotive sector with an innovative and deviating period of organisational, economic activities including the development of technology, increasing market demand, production and workflow, investment and trade patterns, competition among the rival companies, as well as two facing the threats of global financial.

With lean production and outsourcing, the automotive parts industry is increasingly important for global production chains.

The LeBanze Automotive Company is going over to modular assembly in which the main components manufacturer coordinates the design manufacture and installation of the major parts or systems of the car or truck.

The value chain of the industry may suffer from declining wage rate due to competitive pressures in less developed countries with comparatively lower per-capita income. This is the situation that the company is facing.

Situation at the Toyota Company

In the case of Toyota, globalisation flourished in the nineties through FDI flow, production in other countries rather than the home and through its internationalisation strategy during the seventies and eighties with a successful record of accomplishment.

Toyota introduced its overseas production in Australia in 1963, Thailand in 1964, New Zealand in 1966, Peru in 1969, and Indonesia in 1970 while the company engaged with 52 overseas production factories in 2006.

Toyota Motor views globalisation as a more efficient way to address a future aspect in advance, including spreading unpredicted risks and prospects. Thus, the Toyota Companyposes the highest threat towards the survival of the company in the Gulf region.

Solution to the above situational analysis

As the international automotive market is getting more and more competitive in terms of producing environment-friendly products and capture the market as well, the LeBanze Automotive Company should recheck the strategy of the competitors to develop a product range.

It should develop an integrated marketing communication system in order to inform people about the positive side of Eco-friendly cars for the environment within the Gulf region.

Also, the LeBanze Automotive Company should increase expenditures for the R&D than the previous year, which would help to produce new Eco-friendly, creative, and differentiated vehicles.

The LeBanze Automotive Company needs to increase its integrated marketing communication effort to aware customers about the positive side of its products and the importance to use of Eco-friendly products to reduce global warming within the Gulf region.

Conclusion

As the Gulf governments seek to re-invent their economies and restore investors’ confidence, the Gulf market currently enjoys a relatively peaceful and economically stable business environment.

Factually, the Gulf region seems to be embracing the spirit of globalisation and economic liberalization with an upbeat positive mood of better focused economic growth accompanied by the development.

Thus, it is recommended that the LeBanze Automotive Company should maximize the available opportunity to establish a structurally feasible marketing program as it has the advantage of knowledge on the Gulf market segmentation and demand trends.

In line with periodic marketing analysis, the entry should be fast-tracked within not more than 18 months.

For various reasons, the sales of the SUVs and the tracks would be best done by salespersons of the Asian native. This will increase the chances of credibility and ease of the interpersonal variables during product promotion and provision.

The company can hire Asian salespersons and orient them on the product’s features and production processes and later send them as representative of the LeBanze Automotive Company in the Gulf region.

At this stage, it would be necessary to encourage and facilitate the company-agent relationship which has been found to go a long way in the creation of a healthy trade environment.

The automotive products of the LeBanze Automotive Company need to be integrated into the achievement of various organizational goals through the distribution processes to ensure that the products reach all designated customers within a reasonable period.

Correspondingly, the LeBanze Automotive Company may seek to offer different packages for its products and other associated services so that all customers are integrated into the marketing plan.

Besides, the plan should offer a variety of different distribution channels that will be vital in the attraction of new customers within the Gulf region.

Works Cited

Arabian Gulf’s consumer spending boom to sustain strong car sales for years 2013. Web.

Barringer, Bruce, and R. Duane. How bringing its business plan to life helped a social enterprise get off to a strong start, New York, NY: Free Press, 2009. Print.

Trassard, Pauline. Mobile and Automotive Industries: New Business Models Needed to Promote Collaboration. 2 Jul. 2013. Web.