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Opportunity analysis and customer problem and solution

Discuss about the Green market and its impact on supply chain.

The consumer market is extremely competitive. With the growing needs and demands of the customers, new offerings need to be made to the consumers in order to delight them. As more expats are entering the country , Oman, it was observed that this working population  tends to have good financial background but are unable to spend their time in buying adequate supplements for them (Anantadjaya 2013). As lives have become fast paced, event the family segment finds it difficult to shop offline. For this reason and to solve this particular problem of the customers, the companies came up with the idea of a grocery store, which is available on the online platform and can be accessed just from the mobile phone or the internet browser. This application and website would be able to solve the problem of a variety of people and cater to the growing needs of the consumers.

RationApp is an online grocery retail based business. It plans to cater to the needs of all the customers in the city and provide them shopping assistance. The online portal is available all round the clock.  It is a virtual market place which facilitates easy buying and selling of groceries to tap the growing Oman consumer goods market (Pozzi 2012). The main plan of Ration App is to operate in Oman and later on spread throughout the neighbouring countries as well.

RationApp is a web based start up with limited number of resources but it has aligned its strategies with the given visions:

  • To make RationApp available all over the continent
  • To become the largest e-portal in Oman.

The mission of RationApp is to provide an online platform to the customers where the consumers can shop for their supplies and provide them with home delivery. RationApp is for those who find traditional shopping inconvenient (Warschun et al. 2012). Their primary motive is to provide convenience to the consumers and back the solution by quality.

The main objectives of RationApp are:

  • To serve the customers at the oddest of the hours
  • To build a stable networks
  • To provide customers best value for their money.
  • To provide 24*7 customer service. 

RationApp is an online grocery store, which tends to link all the consumers and local suppliers present in Oman. It lists down all the products, which are offered by the suppliers. It enables both the sides of the supply chain by offering customers the service of ordering goods from various suppliers at the convenience of their homes and it gives a chance to the suppliers to serve the customers.

Business Description and Company Overview

The business also enables the customers to log in and book in bulk to get competitive rates.

The subheads for the products offered can be given below:

  • Packaged Salads
  • Bakery
  • Fresh Food
  • Frozen Food
  • Dairy & Eggs
  • Drinks
  • Sweeteners
  • Biscuits & Confectionery
  • Canned Food
  • Cereals & Oats
  • Cooking Ingredients
  • For Baby
  • Cleaners & Disposables
  • Personal Care
  • Batteries
  • Mobile credit
  • Pet Food

The store is headed by a Chief Executive Officer who is reported by a Chef operating Officers, a chief technical officer and a chief financial officer. These officers have various departments under them ranging from inventory, to marketing to finance and the technical web based aspect. (Refer to Appendix 2)

  • To raise brand awareness among the consumers and increase the sales.
  • To increase the popularity of the store and raise the store revenue

The target market for Ration App can be broken down to three groups: The working class, the family and the big restaurants and cafes (Higgins 2012). The working class are the ones who have no time to shop in stores, the cafe owners are the ones who would like to take the advantage of the discounts and the family ones are the targets who would like to save time and gain discounts. 

The online store wants to position itself in the eyes of the customer as a reasonable priced store who tends to offer a high variety of good quality goods (Boons and Lüdeke-Freund 2013).

This positioning will help the company to gain competitive advantage:

The system is advantageous as due to the fast-paced lives people want to save their time and invest it in better things rather than wasting their time.

The business model tends to connect both the parties to a trade and provides perishable goods in their fresh state.

The primary objective of Ration App to establish itself as a one-stop solution for all the problems relating to the grocery and other related supplies. It aims to build the image of the store and attract a large pool of customers. The marketing strategy of the store primarily seeks to raise customer awareness regarding the particular service that is offered by them. The main aim of the strategy is to gain customer loyalty and referrals.

The company message is that it is a store that saves time and energy involved in shopping. Since it is a web-based application, advertisements will be made in television, applications, and social media and newspapers.

A grass route level of marketing will also be applied where the consumers will be given put coupons in order to try the application or the online store for the first time and buy goods for free. This way they will be able to experience the service and gain knowledge (Baden-Fuller and Haefliger 2013).

Vision

Marketing Mix of the company involves, the 4p strategies used by the store to reach out to its consumers, the marketing mix of RationApp comprises of the following:

  • Pricing:the pricing scheme is based on standard industry practices. In fat great discounts will be offered to the consumers.
  • Distribution: The distribution network is extremely strong and all goods will be delivered before time.
  • Advertising and promotion: As stated previously, the advertisement mediums will be the internet, social Medias, newspapers and television advertisement. Various campaigning facilities will also be held around the company in order to gain the attraction of a wide number of people.
  • Customer service: Customer service is considered to be the key to the success. The employees and staff are trained adequately so that they can maintain the quality of the service being provided by them (Chwolka and Raith 2012).

Before setting out the marketing plan, several focus groups were set out in order to understand the basic needs and demands of the target market and who should actually be identified as a target market. These research sessions helped adversely in the decision making process of the store’s initial operations. The marketing research was also done by competitor analysis, which was done by visiting the competitors and analyzing their offerings.

The business environment is extremely competitive today; therefore, it is extremely important for any business to have a soundproof strategy for the way ahead. Hence, to stay ahead in the competitive world, RationApp has three plans (Chan, He and Wang 2012). The plans are given as follows: 

The company engages in extensive marketing research and planning whereby it constantly needs to look out for the needs of the consumers and come up with new plans and ideas that shall favour the needs of the target market. Whether it is a new product or a new idea, research is the key to success. This research is then incorporated into the planning of the store. Strategic planning helps the company to build a good image in the eyes of the consumers.

Ration App faces competition from big brands but it has to take out strategies to overpower them in the given country. For this purpose, the company needs to know and recognize its consumers better than the competitors and this task is quite easy to achieve in the world of data analytics (Brigham and Houston 2012). The purchasing history of the companies can be tracked and suggestions and re0stocking of the products can be done accordingly. Ration App follows this method to make sure that it does not lose its customers to the competitors.

The following are tracked by the online store:

  • Regular online and offline habits
  • The size of the family and their preferences
  • Their interests, passions , hobbies and assorted worries

The reactiveness of the company must be avoided at all costs, as the company needs to create its own pat rather than getting into the path of the other companies (Arnold 2013).

RationApp is a common platform for wholesalers, suppliers and retailers as well as customers. The business promotes greater market reach and provides convenience to the consumers.

The main model of the business can be divided into two categories:

Business to Customers- This is meant for the customers in the household. This model is to cater the needs of the customers (Shi and Zhang 2014). This model is built to provide the best services to the consumers and providing hem the best quality products. The customer can browse the products through the various catalogs and order the selected items, which the firm then delivers to the customers at their doorsteps. The business primarily plans to spend all its resources in this.

Mission

Business to Business

This particular model is meant for the wholesalers and the retailers. The application also provides supplies to them. However, this is not their primary motive, it is a future idea.

Business Process

The business process is extremely simple. The whole process can be divided into the buying process and the selling process.

In the buying process, the program permits the user to search the items and select the items that he needs the most.

Registration

This is an integral part as the seller needs to be registered year. The registration process is fast and easy (Laudon and Laudon 2013).

Browse

Through browsing, the buyer can have a look at the variety of products and select the ones that suit him the best.

Select

Before ordering for the product, the customer can pay attention to the Details, quantity, listing information, payment details and seller information

Payment- The customer has a wide variety of options available to pay from. The customer can pay by cash, debit card, net banking, credit card, tickets or RationApp wallet. The company is trying to bring back the option of paying by PayPal accounts.

Feedback

Feedback plays an important role in the business. After the delivery has been done, the application asks for the feedback of the various customers (Jiang Yang and Jun 2013). The customers then give the company the required number of stars and advise the company to improve on certain parameters.

This feedback is extremely important as it informs the suppliers about their performance.

The selling process of the given application allows the retailers, wholesalers and the distributers to enlist with them and allow their products to reach the specific consumers. (Refer to Appendix 1)

The supplier has to first register the company at a fixed cost, which involves steps like uploading the contact information, the user id and password creation, email confirmation and also enlisting the products offered.

The supplier can manage the products that have been registered and also intake the feedback process as it helps to improve the process.

The primary revenue model for RationApp is extremely simple. The online application does not charge the customer for browsing the products (Beardwell and Thompson 2014).

The application earns the browsing from a variety of sources like:

  • The registration fee- Paid by the manufacturers and distributors.
  • Listing fees- Paid by the manufacturer and distributor
  • Service charges-Paid by the same customers in the form of the shipping charges, maintenance charges for its business
  • Discounts- available to the parties depending upon the deals (Nilsson, et al. 2015).
  • Advertisements- the Company allows various companies to advertise their product and thereby charges nominal fees from them.

Rations App works on two models, which are:

Stock it yourself model

In the given model, the business maintains its integrated warehousing system that helps to cater the needs of the different customers (Al-Nawayseh 2012). In this method, the firm has the ultimate control over the fulfilment process. As the business is comparatively new, they have kept a limited number of warehouses in the city.

Objectives

The second model is the Outsourcing warehouse model

In the given model, the company collaborates with different logistics specialist companies who handle the task of shopping the different orders and piling of stock. As the order is received by the company, the information about the order is transmitted to the logistic company and they ship the product to the customer.

Time slots for delivery

Ration App offers different time slot offerings for the customers, which depend on the demands placed on the wants of the consumers. The different time slots offered are:

2 hour

This is the best and the fastest time slot provided by the company. The products are delivered to the consumer within 2 hours of the order placed (Gatewood, Feildand Barrick 2015). No discounts are offered in the given category as the costs are extremely high. This is the most suitable for the working population who do not have any and order last moment.

6 hour

The customers receive a limited amount of discount in the given category. This slot targets the family segments that require the product in a few hours.

1 day

Customers using this slot receive high discounts as they help the company to reduce the transportation costs, which is from the warehouse to the consumers.

2 day

The customers choosing this kind of delivery receive the maximum discount as they help the company to incur the minimum amount of transportation and the time to deliver is large which helps the store to pick up several orders in the area.

Inventory is considered to be one of the most important segments and helps the company to a great extent in cost effectiveness (Best 2012). The main purpose of managing an inventory is to get the right goods at the right time to the right consumers and at the right cost.

The online store purchases the items in quantities, which are greater so that they can utilize the benefits of reduced shipping and other costs (Kotler 2012). The inventory of the store depletes gradually as the store fulfils the orders received from the customers and is replenished as and when new orders are received.

The online store replenishes the inventory as and when a particular set minimum level of stock is reached. The store constantly refreshes its inventories and it receives a huge quantity of products in the warehouses and delivers accordingly.

These are the costs, which are incurred on moving the goods from one place to another. These include moving the goods from customers to warehouses and between the various suppliers and warehouses.

Products and Services Offered

It can be stated that the logistics network of the store is interrelated to the activities of the company by:

  • Mirroring the mission of the company
  • Improving the efficiency of the information and material flow (Mullins, Walker and Boyd Jr 2012).
  • Bringing the different sub-systems together.

Human Resource forms an important aspect of the organization and the following section provides a description of the major staff that is involved in the business.

Roles and Responsibilities

Each warehouse has its own managers who have various subordinates working under them. These subordinates tend to work under the supervision the manager who gives them the orders. Each warehouse has 10-12 subordinates along with delivery personnel who are involved in the delivery.

Recruitment

The recruitment of the given staff is done through newspapers and online websites advertisement. The staffs that are selected after the recruitment process is then trained (Hutt and Speh 2012). They are trained in various fields like customer service, delivery and quality services.

Schedules

The staff’s works in two shifts. There is always an extra executive present to deal with urgent deliveries.

Performance Reviews

Performance reviews tend to help when the staffs is being promoted. The feedback as provided by the consumers is utilized and served as a backup for the reviews and based on these reviews, the staff is praised and paid accordingly (Armstrong et al. 2015).

  • The best performers of the task are given monetary awards and certificates to praise their efforts
  • Every month a social gathering is held, where these best performers are praised.
  • Team members who perform well are included in the annual newsletter of the company.
  • The best performers of each project are provided with tickets to movies and shows

The compensation and packages as offered by the company are based on industry standards and the company follows an incentive scheme to encourage the employees

The financial plans will state down the various assets required by the company and also state down the initial costs required by the store to set up their business and also the sale estimations

The financial plans have been attached in the excel file and also can be referred below:

  • Start up Costs:
  • Warehousing costs
  • Rent
  • Staff expenses
  • Legal fees
  • Inventory and transportation costs
  • Web applications set up costs

START-UP REQUIREMENTS

Start-up Expenses

Legal

 OMR      5,000.00

Stationery etc.

 OMR      2,000.00

Brochures

 OMR      1,500.00

Consultants

 OMR      1,000.00

Insurance

Rent

 OMR    60,000.00

Research and Development

 OMR      1,200.00

Expensed Equipment

 OMR      5,200.00

Other

TOTAL START-UP EXPENSES

 OMR    75,900.00

Start-up Assets

 OMR    10,000.00

Cash Required

 OMR      5,000.00

Other Current Assets

Long-term Assets

 OMR      3,215.00

TOTAL ASSETS

 OMR    18,215.00

Total Requirements

 OMR    94,115.00

START-UP FUNDING

Start-up Expenses to Fund

 OMR  75,900.00

Start-up Assets to Fund

 OMR  18,215.00

TOTAL FUNDING REQUIRED

 OMR  94,115.00

Assets

Non-cash Assets from Start-up

 OMR  10,000.00

Cash Requirements from Start-up

 OMR    5,000.00

Additional Cash Raised

 OMR    3,215.00

Cash Balance on Starting Date

 OMR  10,000.00

TOTAL ASSETS

 OMR  18,215.00

Liabilities and Capital

Liabilities

Current Borrowing

Long-term Liabilities

Accounts Payable (Outstanding Bills)

Other Current Liabilities (interest-free)

TOTAL LIABILITIES

Capital

Planned Investment

Investor 1

 OMR  94,115.00

Investor 2

Other

Additional Investment Requirement

TOTAL PLANNED INVESTMENT

 OMR  94,115.00

Loss at Start-up (Start-up Expenses)

 OMR  75,900.00

TOTAL CAPITAL

 OMR  18,215.00

TOTAL CAPITAL AND LIABILITIES

 OMR  18,215.00

Total Funding

 OMR  94,115.00

Year 1

Year 2

year 3

Units

20506

35000

90000

Unit prices

 OMR               100.00

 OMR               100.00

 OMR               100.00

Sales

B 2 c sales

 OMR     20,50,600.00

 OMR     35,00,000.00

 OMR     90,00,000.00

Direct Units Costs

B to C sales

 OMR                 80.00

 OMR                 80.00

 OMR                 80.00

Direct costs of sales

B to c sales

 OMR       2,56,450.00

 OMR       5,00,000.00

 OMR       6,00,000.00

Performa p and l

Year  1

Year 2

Year 3

Sales

 OMR  20,50,600.00

 OMR  35,00,000.00

 OMR  90,00,000.00

Direct Costs of sales

 OMR    2,56,450.00

 OMR    5,00,000.00

 OMR    6,00,000.00

Gross Margin

 OMR  17,94,150.00

 OMR  30,00,000.00

 OMR  84,00,000.00

Gross Margin percentage

87.49390422

85.71428571

93.33333333

Expenses

Payroll

 OMR    1,20,000.00

 OMR    1,50,000.00

 OMR    1,60,000.00

Marketing

 OMR        20,000.00

 OMR        15,000.00

 OMR        14,260.00

Rent

 OMR        10,000.00

 OMR        10,000.00

 OMR        10,000.00

Taxes

Depreciation

Others

 OMR        12,534.00

 OMR        16,666.00

 OMR    1,75,280.00

Total

 OMR    1,62,534.00

 OMR    1,91,666.00

 OMR    3,59,540.00

EBIDTA

 OMR  16,31,616.00

 OMR  28,08,334.00

 OMR  80,40,460.00

Net profit

 OMR  16,31,616.00

 OMR  28,08,334.00

 OMR  80,40,460.00

 %

79.56773627

80.23811429

89.33844444

References

Al-Nawayseh, M., 2012. Electronic commerce logistics in developing countries: The case of online grocery shopping in Jordan (Doctoral dissertation, Brunel University School of Engineering and Design PhD Theses).

Anantadjaya, S.P., 2013. Entrepreneurs vs. Business Plans: A study of Practicality and Usefulness.

Armstrong, G., Kotler, P., Harker, M. and Brennan, R., 2015. Marketing: an introduction. Pearson Education.

Arnold, G., 2013. Corporate financial management. Pearson Higher Ed.

Baden-Fuller, C. and Haefliger, S., 2013. Business models and technological innovation. Long range planning, 46(6), pp.419-426.

Beardwell, J. and Thompson, A., 2014. Human resource management: a contemporary approach. Pearson Education. Bratton, J. and Gold, J., 2012. Human resource management: theory and practice. Palgrave Macmillan.

Best, R., 2012. Market-based management. Pearson Higher Ed.

Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-the-art and steps towards a research agenda. Journal of Cleaner Production, 45, pp.9-19.

Brigham, E.F. and Houston, J.F., 2012. Fundamentals of financial management. Cengage Learning.

Chan, H.K., He, H. and Wang, W.Y., 2012. Green marketing and its impact on supply chain management in industrial markets. Industrial Marketing Management, 41(4), pp.557-562.

Chwolka, A. and Raith, M.G., 2012. The value of business planning before start-up—A decision-theoretical perspective. Journal of Business Venturing, 27(3), pp.385-399.

Gatewood, R., Feild, H.S. and Barrick, M., 2015. Human resource selection. Nelson Education.

Higgins, R.C., 2012. Analysis for financial management. McGraw-Hill/Irwin.

Hutt, M.D. and Speh, T.W., 2012. Business marketing management : B2B. Cengage Learning.

Jiang, L., Yang, Z. and Jun, M., 2013. Measuring consumer perceptions of online shopping convenience. Journal of Service Management, 24(2), pp.191-214.

Kotler, P., 2012. Marketing Management, millenium edition: Custom Edition for University of Phoenix.

Laudon, K.C. and Laudon, J.P., 2013. Management Information Systems 13e.

Mullins, J., Walker, O.C. and Boyd Jr, H.W., 2012. Marketing management: A strategic decision-making approach. McGraw-Hill Higher Education.

Nilsson, E., Gärling, T., Marell, A. and Nordvall, A.C., 2015. Who shops groceries where and how?–the relationship between choice of store format and type of grocery shopping. The International Review of Retail, Distribution and Consumer Research, 25(1), pp.1-19.

Pozzi, A., 2012. Shopping cost and brand exploration in online grocery. American Economic Journal: Microeconomics, 4(3), pp.96-120.

Shi, S.W. and Zhang, J., 2014. Usage experience with decision aids and evolution of online purchase behavior. Marketing Science, 33(6), pp.871-882.

Warschun, M., Albers, S., Delfmann, W. and Müßig, R., 2012. A fresh look at online grocery. Retrieved July, 3, p.2013.

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