Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

Business Plan Strategies Add in library

32 Download13 Pages 3,093 Words

Question:

An Entrepreneurial Venture - groups are to develop an entrepreneurial product or service that could be commercialised ?

 

 

Answer:

Introduction

This business plan is about a start up company called Johnson Group is about to launch their new product in the current business environment. This product named as W-plus and will have several innovative features in the mobile segment. All the detailed analysis of the product will be discussed in accordance to the background of the product, mission, vision, marketing mix and financial plan that can be implemented and evaluated by the start-up company (Fletcher, 2012).

1. Background of the idea

The product that the start up company will be launching is a mobile phone that can be acted like a bracelet and with innovative features. This is a niche market and unique product that can cater a wide range of customers. The customers will be attracted with such a new product as there is a huge demand for advanced mobile technologies in the current business environment (Lagarde, 2013). Adding to this, many electronic companies are launching new innovative products, therefore, it will be easier for the company to commercialise and market this product in all types of market and in the all segments of customers. Moreover, the company can also be able to create a blue ocean strategy that will further help the company to gather a huge market share.

2. Mission

The main mission of the product of the company is to create brand equity of its product and also to create a brand image of the company. Apart from this, the company will target to increase an awareness of the product among its customers in the market. This mission of the company will be directed by the long term vision of the company. This mission and vision of the company will be targeted to achieve by planning of short term and long term goals and objectives of the business organization. This mission of the company will be directed and evaluated by the marketing mix and product mix designed for the product of the company (Birt, 2013).

3. Product offered to the customers

The product that is being offered to the customers is a bracelet mobile phone. The consumers of the product can use this product as a style statement also. Apart from this, the size of the product is extremely small so that is easily carried by the customers. Adding to this, the product also has a wireless Bluetooth technology that will make the customers feel free to use the product. Moreover, the product can be used as wrist watch by the buyers and consumers. Therefore, it can be said that the product W-plus will have 3-in-1 features within itself. The main segment of the customers of this product is the youths of the society. This is the main reason why the company will design the colour of the product in four different colours. The colours are black, blue, brown and purple. The choice of colour plays an effective part in the psychology of the consumers (Fuchs, 2012).

For this reason, the company will select all the colours of youth to cater the segments of the customers and consumers. Apart from this, the product is an on-street chargeable product and it has several features of a mobile phone. It has expandable memory of 16 GB and a 5 megapixel camera. The battery backup is 650mm and will have an operating system of Android Kitkat. Initially the product will be launched in the market segment of the Australia. This is the overview of the product W-plus that will be designed by the company.

 

4. Market analysis

Before launching a new product, every business organization needs to analyse the market in which the company is about to operate. A proper analysis of the overall market will further help the company to judge the strength and weakness of its competitors and to have an overview of the consumer behaviour in the market segment (Lagarde, 2013). Therefore, the company Johnson Group need to perform an industry and competitor analysis before launching the product.

4.1 Industry analysis

An appropriate analysis of the industry of the product W-plus can be evaluated with the help of the porter’s five forces analysis (Pamorama.net, 2015). This can be explained with the help of the following figure.

Fig 1: Porters five forces model

(Source: Aaker, 2013, p.52)

Power of bargaining of the consumers- The overall bargaining power of the consumers will be low even though the product and the company is completely new in the product. This is mainly because the product offers many innovative features with advanced technology to the customers of the product. The customers mainly the youths are technologically freak and the design and features of the product will drive the customers towards the product.

Power of bargaining of the suppliers- The respective suppliers of the business organization will have a power of bargaining regarding the product. This is mainly because the product is new in the market and the company is a start up company. Due to lack of resources, the suppliers of the company will get an opportunity to bargain with the company regarding the supply of raw materials to the company (Birt, 2013).

New entrants’ threat- The business organization Johnson Group will face a huge challenge from the threat of new entrants. This is mainly because the mobile segment rather than the electronic segment is easily imitable. Therefore, there is a huge possibility that the product will be copied by the existing competitors in the current business scenario.

Threats from the new substitutes- The business organization will face an intense threat from the substitutes of the market. There are few products available in the market with similar features (Fletcher, 2012). Therefore, the company needs to take various steps to minimize challenge.

Industry competition- The business organization will face a tough competition from the existing competitors in the mobile phone segment. Therefore, the organization must evaluate separate strategic plans to counter the competitors from the current market.

Therefore, it can be said that the organization Johnson group needs to implement its business strategic plans in accordance to the industry analysis done and evaluated with the help of porter’s five forces (Meng, 2012).

Apart from this, it can be said that in the mobile phone segment, Apple has the highest market share, followed by Samsung and HTC. But, it can be also infers that the company is based on blue ocean strategy. Therefore, it can be said the main competitor of the organization is Apple. On the contrary, Apple do not have any bracelet mobile phone, therefore, the company can have their own set of customers. However, since, it can be also inferred that this type of product is not present in the market of Australia. For this reason, the company will be able to create a radical innovation or a monopolistic competition in the market segment (Fao.org, 2015).

4.2 Competition

The organization Johnson Group will face a tough challenge from all the competitors in the market, even though the product of the company is unique and caters the blue ocean segment of the market. The main reason behind this is that customers prefer mobiles with advanced and suitable technologies. Companies like Apple, Samsung, HTC, Sony, etc are already present in the business segment of Australia. The marketing mix of the product will depend how intense competition the company will face. This can be further explained with the help of perceptual mapping of the product (Starcevic, 2013).

The product W-plus will mainly cater the youths of the society. Therefore, it can be inferred that if the company keeps a high pricing strategy, it will face competition from the high street products and if the company keeps a low pricing strategy, it will face competition from the low street companies. However, it can be said that there are no bracelet mobile phones present in the market segment. Therefore, the company will be able to create a monopoly market in the market segment for a couple of years if the company aims only on innovation.

 

5.0 Marketing mix

The marketing mix of the product can be explained with the help of 4P’s of marketing. These are product, price, promotion and place.

5.1 Product

The overall classification of the product can be done in several ways. These are size and shape, packaging, colour, level of quality, durability, core competencies and brand name.

Size and shape- The overall size of the product is extremely small and acts as a unique bracelet of the product. Since the product is aimed to cater the youths of the society, the shape of the product is oval shaped and is curvy (Kim, 2013).

Packaging- The packaging of the product will be driven by innovation of the product. It will be of several colours and the company logo will be present in the extreme left end of the company. Furthermore, the overall packaging will be done in such a way that no competitors can easily imitate the product

Colour- The product will comprise of four different colours. These are black, blue, brown and purple. This is mainly because the product will be used to cater the youths of the society. All the selected four colours are known as the colours of youth (Meng, 2012).

Level of Quality- The product will be of high quality as it caters the niche market segments of the products. Quality is driven by a better innovation for any business organization. Therefore, the company needs to keep the quality standards very high in order to attract a wide range of customers.

Durability- The business organization Johnson Group needs to keep the product durable in nature according to the industry standards. It has been often seen that many innovative products are not that much durable in nature (Arokiasamy, 2012).Therefore, the product development team of the company have an important role to play to make the product as much as durable and present it to the customers.

Core competencies- The product W-plus has several core or unique competencies that have made the product innovative in nature. The first core competency of the product is that it is a unique product that can act as a bracelet as well. Apart from this, the product has a 3-in-1 feature that will attract the customers towards the product. These are the major competencies of the product W-plus.

Brand name- The organization is new; therefore, it does not have a brand name.

5.2 Price

The target market of the product is the youths of the society in the domestic segment of Australia. Therefore, the price of the product will be $300. It cannot be classified as a high street product or a low street product. It lies somewhere in between. Adding to this, if the product is successful in the market and if the demand is more, then the company may think to increase the prices. The company may follow and implement hit and run pricing strategy (Meng, 2012).

5.3 Promotion

There are several promotional tools that can be used and implemented by the organization Johnson Group. The company needs to depend upon the word of mouth strategy to market its products as it is a start up company. Therefore, it can create and implement a viral marketing process through social media tools. Moreover, the company can also implement traditional promotional strategies through electronic media and print media. Apart from this, the organization Johnson Group can also go for sponsoring activities in the field of sporting events (Aaker, 2013). This will help the company to create an extensive viral marketing of its product W-plus.

5.4 Place

The initial place of launching the product will be the local market of Australia. The company is an Australian based company and it has designed its products primarily based on the segments of the local markets. However, if the product is successful, then the company may extent its products globally (Starcevic, 2013).

 

6.0 Financial plan

Financial planning is very important for every business organization. The business organization Johnson Group needs to utilize its financial resources in order to launch the product successfully in the market.. The business organization needs to opt for various sources of funds in the financial market.

The source of funds can be in the form of short term source of funds and long term source of funds. The Johnson group can also infer source of funds from the long term source of funds (Kim, 2013).  These can be in the form of loans of commercial and financial institutions, asset back loans, funds of secondary markets, etc.

Apart from this, source of funds can also be in the form of equity and debt instruments. Equity can be the form of ownership interest and capital and debt instruments can be in the form of loans. The company can also go merchant bankers and venture capitalists. However, both these source of funds have several disadvantages (Arokiasamy, 2012). In terms of equity, the biggest disadvantage is that the organization may have to dilute its stake. On the contrary, in terms of debt instruments, the company faces financial leverage risk.

After evaluating the appropriate source of funds, the organization may prepare the financial statements for the first year. These statements can be in the form of cost sheet, profit and loss account, cash budget, cash flow statements and balance sheet statements.

The cost sheet statements can be evaluated as the following:-

 

 

Statement of costs

 

 

 

 

 

Indirect expenses

 

 

55000

Direct expenses

 

 

45000

Prime costs

 

 

100000

Office and administration expenses

 

 

200000

Selling and distribution expenses

 

 

100000

Total costs

 

 

400000

Table 1: Cost sheet statement

(Source: Created by Author)

The above cost sheet statement infers that the total costs incurred for the first financial year after the product is launched in the market.

The cash budget of the organization for the first financial year is as follows:-

 

Cash budget

 

 

 

 

Total receipts

 

475000

Total payments

 

400000

Profit/loss of the year

 

75000

                                                                                           Table 2: Cash budget of the company

(Source: Created by Author)

The cash budget of the company reflects the target costs of the company with reference to the profits that can be obtained. This type of budgeting tool will help the company to evaluate the forecasted costs of the business organization. It is assumed that the organization will be in profits within the first year itself.

Profit and loss account

 

 

 

 

 

Sales

 

475000

Less: Gross profit

 

275000

Less: Operating expenses

 

100000

Operating profit

 

100000

Less: interest and taxes

 

25000

Profit after tax

 

75000

Table 3: Profit and loss account

(Source: Created by Author)

Cash flow statements

 

 

 

 

 

 

 

Cash from investment activities

 

 

200000

Cash from financing activities

 

 

25000

Cash from operating activities

 

 

25000

Closing cash balance

 

 

150000

Table 4: Cash flow statements

(Source: Created by Author)

All the above figures and tables suggest that the business organization will be in profits after the first financial year. The cash flow statements reflect the projected cash inflows and cash outflows for the first financial year (Birt, 2013). The projected profit and loss statement reflects the total income and expenditure for the first year.

Overall, it can be inferred that the break-even point of the product will be touched and surpassed with the first year itself. Adding to this, the business organization will try to match up with the financial plan evaluated and this will further help the company to nullify the variances in the cost.

 

7.0 Critical risks

There are various risks that the start up company Johnson Group. These risks can be in the form of systematic risks and unsystematic risks. The systematic risks can be the risks existing in the market. The market risks can be classified in the form of inflation, unemployment, government policies, environmental issues, etc. The unsystematic risks are known as the business risks that exist within the business environment. These risks are related to leverage risks, credit risks, liquidity risks, risk of competitors, etc (Starcevic, 2013). The organization needs to minimize and nullify all these risks in order sustain its product in the market.

Conclusion

From the above business plan, it can be deduced that the start up company needs to evaluate several marketing strategies and financial strategies before launching its new product W-plus. The organization needs to evaluate the business audit in the very first stage before the actual launch. This will direct the company to reach to their desired goals and objectives.

Reference List

Books

Aaker, D. (2013). Marketing research. Hoboken, NJ: John Wiley & Sons.

Birt, I. (2013). Writing your plan for small business success. Crows Nest, N.S.W.: Allen & Unwin.

Journals

Arokiasamy, A. (2012). The Effect of Marketing Mix and Customer Perception on Brand Loyalty. IOSR Journal of Business and Management, 4(2), pp.1-11

Fletcher, R. (2012). Revisiting the marketing mix at the bottom of pyramid (BOP): from theoretical considerations to practical realities. Journal of Consumer Marketing, 29(7), pp.507-520.

Fuchs, S. (2012). Type 2C protein phosphatases in plants. FEBS Journal, 280(2), pp.681-693.

Haag, A. (2013). Writing a Successful Business Plan: An Overview. Workplace Health & Safety, 61(1), pp.19-29.

Kim, K. (2013). A Case Study Concerning the Strategic Plan: V2020 of Chosun University. SJBM, 1(4), p.43.

Lagarde, F. (2013). Socratic Questioning Applied to Social Marketing. Social Marketing Quarterly

Limongi, R. (2013). To plan or not to plan? An analysis of the impact of planning on the disbanding or growth of Brazilian start-ups. IJESB, 18(3), p.349.

 

Menegaki, A. (2012). A social marketing mix for renewable energy in Europe based on consumer state(Meng, 2012).d preference surveys. Renewable Energy, 39(1), pp.30-39.

Meng, S. (2012). Measuring E-Marketing Mix Elements for Online Business. International Journal of E-Entrepreneurship and Innovation, 3(3), pp.13-26.

Myrna, J. (2012). A rolling stone gathers no moss: prevent your strategic plan from stagnating. Business Strategy Series, 13(3), pp.136-142

Starcevic, S. (2013). Research of brand personality concept in marketing. Marketing, 44(2), pp.149-172

Websites

Fao.org, (2015). Chapter 8: Product Decisions. [online] Available at: https://www.fao.org/docrep/W5973E/w5973e0c.htm [Accessed 15 Jan. 2015].

Pamorama.net, (2015) The Role of Color in Marketing | Pamorama. [online] Available at:

OR

For years now, MyAssignmenthelp.com is providing affordable essay help to millions of students worldwide. Our essay assistance services have helped us in assisting students with even the toughest essay assignments. We take pride in the fact that we cater the best assistance to search terms like help me with my essay. We offer affordable services in the fastest way possible. For our fast delivering services, students trust us with their urgent essay assignment needs. Two of our most popular essay writing services are maths essay help and English essay help.

Most Downloaded Sample of Management

271 Download1 Pages 48 Words

Toulin Method Of Argumentation

You are required to write a researched argument essay that convinces persuades the reader of your position / stance. This is an academic, researched and referenced do...

Read More Tags: Australia Arlington Management Management University of New South Wales Management 
202 Download9 Pages 2,237 Words

Consumer Behavior Assignment

Executive Summary The purpose of this report is to elaborate the factors which are considered by individuals before selecting an occupation. Choosing an occupati...

Read More Tags: Australia Arlington Management Management University of New South Wales Management 
367 Download13 Pages 3,112 Words

Internet Marketing Plan For River Island

Introduction With the increase enhancement in the field of technology, it has been considered essential by the businesses to implement such technology in their b...

Read More Tags: Australia Arlington Management Management University of New South Wales Management 
325 Download9 Pages 2,203 Words

Strategic Role Of HR In Mergers & Acquisitions

Executive Summary In a merger & acquisition, role of an HR has emerged as a very critical function. At each stage of merger and acquisition process, HR plays a s...

Read More Tags: Australia Arlington Management Management University of New South Wales Management 
353 Download7 Pages 1,521 Words

Relationship Between Knowledge Management, Organization Learning And HRM

Introduction In this competitive business environment where every business organization is trying to attract the customers of each other, it becomes essential for ...

Read More Tags: Australia Arlington Management Management University of New South Wales Management 
Next
Free plagiarismFree plagiarism check online on mobile
Have any Query?