Entrepreneurial Strategy And Analysis Essay For Buynow.

Promotion and marketing

Discuss about the Entrepreneurial Strategy and Analysis Development.

The purpose of this report is to draw attention to the growing needs and aspirations of the society with regard to e-shopping of grocery items with the click of a button on mobile. The idea is to provide the consumers the kind of service which they expect and satisfy them readily without any need to visit the store near the house, anytime and anywhere. In the era of globalization, there has been a tremendous flow of information with respect to providing various kinds of services, be it shopping, paying for utility bills or online banking (Schaper 2016). To make this operational, a new venture christened as “Buynow” is being hypothetically set up. The objective of “Buynow” is to provide instant delivery of grocery items to the customers at a competitive price and help in retaining their patronage through different promotional schemes and offers.

Now-a-days, customers have the option to transact anything with the click of a mouse and to capitalize on this mode of delivery channel, the idea behind developing Buynow is to enable the same customers to buy their goods on the go without worrying about the safety and schedule of the items to be delivered. The target customers will be everyone from roadside vendors to ultra rich individuals. Even though it will be commercialized but the target segment will cover only individuals and families and residential localities and not the commercial or corporate buyers.

There is a huge potential in this field and there are lot of unexplored business opportunities which can be harnessed, keeping in mind the specific needs and benefits of the customers at large. Those who do not have net connectivity can also avail the services of the company through short message service based applications. Promotion and marketing of the features of the application will be done through existing shopping applications, which are regularly used by the customers.

Promoting a product or service is the first and most important step in building the brand in front of the public. Multiple methods can be adopted to increase the visibility of the service, the most popular and broad based technique is to use the social networking sites and capitalize on its global network. Use of social media sites like Facebook and Google+ provides a ready platform to market new products and services, as they are widely used daily by a large number of online enthusiasts. Buynow plans to purchase advertisement space on these websites and project the features of the company’s service. It helps the company to reach out to the prospective clients on a more personal level through the use of social media websites. Based on this thinking, customers will easily be able to pick their option by comparing the features of rival companies. Marketing of the brand can be carried out though other modes as well, like partnering with local shops and grocery stores, putting advertisements on their doors, tying up with banks which will act as an intermediary in the payment system (Cumming and Johan 2016). Since grocery is a daily need item for all, the company has a great opportunity in front of it by partnering with farmers and grocery shops by eliminating the functioning of the middlemen, which eats a significant pie in the entire value chain-from farm produce to final consumption.

Pricing and distribution

Pricing is a decisive criterion to keep the patronage of loyal customers and add new ones by constantly upgrading and innovating futuristic strategies, thereby getting deep inroads into the market for having a competitive edge. Pricing for this proposed service will be kept to the minimum, but with better features and serviceability options, so as not to compromise on the qualitative aspect of the same. Without putting any extra burden on the customers, Buynow wants to provide the service at the doorstep and build a loyal base by following a customized approach. Since there are a number of firms providing similar services but they charge a premium price with regard to particular time and place. Buynow wants to fight this theory and provide all the services at a competitive price without charging any extra penny. While launching the service for the first time, the initial cost will be a bit on the higher side as it happens with any other services, but it will not take too much time for gaining a market share as the products for which the online service is to be launched are not new but the ways and means of procuring from the market will be a game changer (Beyerlein 2014).

Distribution strategy is to be done through existing channels of social media and brick- and mortar grocery stores. The main thrust will be on how effective the channel of distribution will be in percolating the desired information to the intended customers. At first it may happen that initially customers will not find it comfortable while carrying out this activity sitting in the confines of their home, but after a month or two, they will not shy away from indulging in exploring this channel of purchase and shelve the conventional mode of buying daily consumptions (Beyerlein 2014). Preliminary activity of door to door distribution of pamphlets can be carried out for the first three weeks to spread the actual message; explaining the rationale behind implementing this technology and how it will save time and money for the consumers and contribute to the GDP of the economy in the long run (Douglas 2015). Banners can also be distributed to the local shops, where customers generally frequent to buy their daily needs. By resorting to this approach, it will have an immediate connect with the locals as they will feel that the company is really looking forward to building a bridge with them through customized and personalized service.

Product features

Buynow will have several simplistic features, which can be easily operated by anyone. It can be accessed by both smart phone users and feature phone users, thereby covering almost all the mobile subscribers in the market. One has to download the application on his/her mobile and register with the first name, along with the mobile number and a password. This password will have two-stage authentication process for verification of the user, thereby eliminating any probable misuse of the application and protecting the user confidentiality.

Once the user gets into the home page of the application, it can directly go to the order now option and select the item(s) to be ordered and then select the number of items before placing the final confirmation for payment. Once a user gets registered on the portal, he/she can access the same without requiring inputting the details every time a transaction is made. After getting the delivery of the consignment, the customer will acknowledge the same through the finger print option feature on the device brought by the delivery person. This idea, the company hopes, will be an enticing one for the investors to pump in money.

By segmenting and positioning the service in the local Australian market before spreading its wings nationally or internationally, the firm will gauge the response and generate sufficient feedback before incorporating any changes or upgrading the service for meeting any new requirements. Initially, the target segment for the company will be the households, wherefrom the grocery items can be placed either through a simple messaging service or via online method. The purpose of targeting the households is to gain firsthand knowledge of the convenience and difficulties being faced by them while going through the same (Davidsson and Tonelli 2013). After this step, the company intends to target the single persons, who do not have that much time in their hands to go shopping for the daily items. They can schedule their daily needs by issuing a standing instruction on the portal and place the order later, which will require very little time.

Before bringing the service into the market, certain factors related to logistics need to be sorted out with respect to deliverables and infrastructure. Adequate fund is needed for recruiting human capital, which will form the backbone of the organization (Siddiqui, Marinova and Hossain 2016). Without infusion of right talent and resources, Buynow will not be able to match up to the desired level of expectations as it is thought out to be. Proper infrastructure is needed for establishing the operational part, which will constitute the nerve centre of the business. Instead of one single large office, the firm plans to spread out like branches in separate cluster like forms in different areas. There would be no centralized operational command centre for daily authorization of transactions but delegation of authorities and responsibilities will be the ultimate structure, thereby smoothing the free flow of business activities. Each departmental head will be responsible for the proper functioning of the chain of operations, who will directly report to the senior management on a fortnightly basis.

Target market and strategy

Training will have to be provided to the new joiners to enable them to acclimatize to the changing trends and environments of business operations in the modern era. They will be groomed in such a way that, the clients to whom they would be delivering to, feel pampered by the company just the way they are treated in their neighborhood stores for years.

The company plans to raise capital through a combination of both equity and debt so as to minimize the risk factors associated with only equity raising. Before raising capital through initial public offer route, the company will pool in immediate resources from the owners and his friends and family members as it does not want to expose itself to any liabilities in the market. Fund pooling for the second stage will be done through raising of capital in the market after filing necessary details with the country’s regulatory authorities (Jones 2016).

The firm intends to tie up with some advisory bodies for preparation of a better financial strategy, which will enable it to use the optimum amount with full potential. Since raising of venture capital is critical in the early stage funding process, Buynow will tie up with private equity fund houses, which have good reputation in the economy through years of experience. Due to a subdued environment in the mining sector in the country, the Australian economy is transiting towards a more techno based industry as the dollar gradually weakens and barriers get removed (Harms, Breitenecker and Schwarz 2014). There are thousands of new and upcoming industries, which are cropping up in the continent and managing various types of businesses, are employing a lot of people, which further boosts the employment prospects. Several new age companies which have raised their venture capital funds and are leading the growth chart are Atlassian, Xero, Envato, Campaign Monitor, Canva, OFX, Freelancer, Vend, Invoice2go. These companies are pioneers in the field of tech start-ups, who have embraced technology for charting the growth path of the future and established its network by using the right channels (Acs, Szerb and Autio 2016).

After the infusion of seed capital at the preliminary stage of operations, venture capital funding would be followed so as to project the firm’s visibility in the local and national market in a better fashion. All the above mentioned firms have pooled in their resources from reputed venture capital funds, which have an established goodwill owing to their sound functioning in the economy as a whole. Buynow intends to rope in the world renowned private equity fund house Kohlberg Kravis Roberts and co. (KKR) as it’s truly an industrial leader with assets of $60billion under management. Since the firm will need an infusion of $200 million after 6 months of operations, it will first utilize the fund in setting up the technological infrastructure and all necessary software for starting the portal. Out of this $200 million, $2 million is needed for setting up the technical aspects of the company; $120 million will be required for establishing the centre head of operations and the rest will be implemented for recruiting manpower and training them. For synchronization of other aspects of the venture, another $50 million will be required for tying up with local organizations like shops and restaurants, public transport, fee payable to government authorities and services and also to the licensing authority.

Infrastructure requirements

Since the population in Australia is sparsely populated, channelization of funds needs to be done in a prudent way so that large amount of funds does not get concentrated in a single spectrum. Venture capitalists have an expertise in investing the funds in such a way that risk factor is minimized through optimum utilization of resources at its disposal (Amboala and Richardson 2016). Since venture capital is considered as a subordinate way of raising capital compared to other modes of capital funding, its risk factor increases in case the investee company gets dissolved owing to any sort of issue like bankruptcy or other financial difficulties (Fleisher and Bensoussan 2015). In such a scenario, the investee firm has to bear all the risks arising involved if and when the company in which it is investing winds up its operations (Burgers et al. 2016). Considering the prospects of Buynow in this upcoming venture, it is highly unlikely that the firm will get dissolved due to lack of funding or lack of proper forecast pertaining to the expansion of its activities.

• During the early stage financing, demand for capital will be low at the germination stage
• During the startup and first stage, demand takes an upward curve.
• In later stages, owner’s capital will be more at the seed stage and gradually it will decline with the higher stages.
• At the time of listing, market funding will remain low compared to the expansion stage when infusion of fund will be much better.
• Incidence of selling of shares will be low in the first stage as it will take some time for the secondary investors to purchase shares as will keenly watch the performance of the company for the first six months or so (Weber and Jung 2015).

In view of the above points and scenarios, Buynow will not rely too much on the initiative of the venture capital funds as the investor firms do not like to invest heavily into firms which have very high capital requirements at the first place. After carefully studying the performance of the company over a considerable period of time, the investee firms approach the venture capital fund houses for supporting the funding prospects (Tan and Fan 2015). This company too will follow this approach as it intends to present a clear idea of its intent of operations, both in the short term and long term.

This risk is associated with the intention of launching the right kind of product or service for the customers. It may seem easy on the paper as consumer behavior is a tricky thing to understand for generating business from them (Butt, Jamil and Nawaz 2015). Even though Buynow is clear in its direction but it wants to tread the path of caution by learning from the existing service providers, which have a similar line of business activity in other areas as well. This risk factor can be controlled by studying the specific needs and requirements of the consumers and where the gap lies which can be filled in a judicious manner (Li 2014).

Knowing the target segment of the consumers is one of the most crucial aspects before launching a new service or product (Cui et al. 2016). The firm is well aware of its segment but it needs to identify the incumbent companies, from where the existing consumers purchase their products and services. If the market risk favours the company, then it will definitely succeed, provided it has an early mover advantage (Williams 2014).

Some first time investors have the advantage of ready funds from family and friends and also from crowd-funding initiatives which can be harnessed through an advertisement in the local newspaper (Giudici 2016). Identification of key business milestones is the stepping stone to go to the next stage of expansion, which Buynow is clear in its thought and approach.

Building a sound operational team is the key to achieving the success of the initiative, for which the firm will scout for the right talents and groom them to perform to the best of their abilities (Ratten 2016).

It is often seen that many entrepreneurs get so much involved in analyzing the intricate details that they tend to ignore the ground realities of operations on a daily basis, which in turn hampers the growth. To better control this dichotomy, it is essential to strike a fine balance between being a micro planner and a 35000 foot view strategist (Terjesen et al. 2013).

Conclusion:

Based on the above standpoints and deliberations, it can be inferred that the success of the new venture will depend on factors, which are incidental to the objectives of the firm itself. Since the company is going to launch a service, the product of which is a daily necessity item, it does not expect to face too much of a hassle in convincing the customers the viability of this method of purchase. It is a well established fact that customers want everything to be delivered at their doorstep, so it won’t be surprising to see if they lap up this prospect of purchasing groceries on the move, sitting in the confines of their homes or anywhere. After taking into account the logistical challenges and issues facing the fund raising approach, the company is looking forward to securing its base and achieve the initial targeted objectives before inviting expressions of interest for infusion of capital for setting up the main infrastructure and distribution network. By going through the analogies of the incumbent players in this field and garnering lessons from their early successes and failures, it will have a strong wherewithal to fight the unforeseen yet probable contingencies in the future. Since risks are an inherent part of any business venture, the same will be mitigated gradually through incorporation of changes and amendments in its strategic aspects and daily deliverables. Careful analysis coupled with an awareness approach towards the functioning of the ground realities on a frequent basis will be followed so as to minimize the sudden repercussions and problems in executing the tasks involved. The main purpose of the firm is to set itself up locally, build its brand visibility nationally and venture into the secondary market by going global through partnerships and mergers and be a pioneer in this field by showcasing its true abilities of turning a startup into a sensational giant.

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