Management Skills And Entrepreneurship - Business Plan of a new product launch by a new business organization
Task 1
Business Plan
This particular task will include analysis of a new
product launch by a new business organization. We have taken account of Dawes
Cycles, a company which deals in manufacturing and marketing of bicycles and
has decent amount of experience in manufacturing of cycles. The company now
intends to enter into fitness industry and is going to introduce exercising
equipments. It will begin with exercising cycles first of all and success or
failure of this product will decide their future plans.
Business
Description
Dawes Cycles is one of the oldest names in cycle
industry in United Kingdom. It was started in 1906 and thus has over hundred
years of experience in production and distribution of touring bikes across the
nation. The organization produces and markets tour bikes, mountain bikes and
general bikes. Apart from that, the organization has been premier business in
providing best quality goods and services to the organization. Having such wide
experience in field of customer service could just mean that the organization
has been able to serve customers well over the years. However, as it haes been
noticed in case of other companies, the overall demand for bikes has drastically
reduced over the past few years, especially post 90’s decades. Any business
which does not opt for diversification, despite of changing market environment,
cannot go to the distance. This is the reason why introduction of new products
and services is necessary in case of such organizations.
Currently, the organization has different range of brands. Dawes brand include Galaxy and Super Galaxy; Barrosa and Dirty brands (“About Us: Dawes Cycles--nd”). One of the prime aspects which make the organization stand out of its rival is their ability to change their internal control systems and strategic management processes with course of time. The organization has constantly developed itself in accordance to change in business environment. No organization could be rigid in its approach and still achieve long term objectives. It is very important for an organization like Dawes to carefully assess the changes in business environment and alter their strategy. These days, the customer demand for exercising equipments has increased as people have become more aware about health and well being. This is the reason why introduction of exercising cycles to the customers will give necessary boost to the sales and revenues of the organization. The organization has no intention in reducing its production capacity for its flagship brands (“The Opportunist Model of Corporate Entrepreneurship--nd”). However, since it wants to capture the opportunity in the health and fitness industry, it will adopt aggressive marketing processes, which will be discussed in course of this particular task.
Business Opportunities
This part will include current set of opportunities in
the market and potential customer analysis. Let us start with the customer
analysis:
Potential Customer: The organization already has a
decent number of brand loyal customers across the nation. With introduction of
new line of products, the organization does not want to go beyond national
boundaries and will not increase geographical dimensions. The existing
customers will be approached first of all for marketing new product. However,
it is very unlikely that persons using terrain bikes will go for purchasing
exercising bikes. Exercising bikes are generally meant for people who have
hectic work schedules and have no time for exercising and leisure related
activities. This is the reason why, our potential customers will include
corporate world workers, businessmen and service class people, who devote more
than 40-50 hours a week in office. Also, it will be important that such persons
are concerned about their health. Unless, they are careful about their health,
they will never go for such fitness equipment’s shopping. As of now, it is not
possible for us to extend marketing plan and create awareness about fitness and
health related products. In current situations, we need to work over the
existing opportunities in the market. The age group for the customers will be
25-60. We are targeting young to middle aged people having hectic schedules and
working profiles.
Geographical Area: As discussed before, currently, the
organization is not thinking to go beyond England and United Kingdom. However,
if the project is successful, then organization is not going to restrict its
operations within the nation and is open to any opportunity which might come
across from rest of the world.
Business Competitors: There are number of competitors
in this industry. The organization will also take account of second hand
sellers on various platforms. However, chief competition could be expected
from:
a) Technogym
b) Gym
Company
c) UK
Fitness Supplies
We anticipate a gradual increase in competition from
online resellers; however, so many customers require hands on technical
solutions, that we expect online retailers to actually drive business our way.
Research has indicated that many of our customers use the Internet to shop and
compare; but they want to do business with someone local, for hands on
technical solutions.
Marketing Strategy
Marketing strategy will be very crucial for success of
the new product. The reason for that is simple—as of now, the organization,
Dawes Cycles is well known for tour bikes and all terrain bikes. It is an
unknown option in fitness related equipments. This is the probably first time
when the organization is introducing new line of products. Therefore, it is
crucial to inform the audience about forthcoming change in organization’s range
of products. Marketing strategy has to be planned very carefully as the
business cannot afford to overspend in the marketing process as the financial
resources available right now are pretty much limited.
Initially, the marketing strategy will aim to present
Dawes as latest entrant in fitness industry as an organization genuinely
concerned about the health and fitness of the customers. We will underline how
fitness helps our existing customers to lead a happy and healthy life. This
will be done by using different modes of media. Some of the key components of
the marketing plan shall include:
a) Launch
promotions will be directed to our specific market through a cooperative effort
with the PR consultants and to the market at large with billboard ads. Radio
spots are planned for the first 4-6 months, and we plan to offer referral
rewards and include special offers at the checkout.
b) We
noted previously that the Internet serves our customers primarily as a shopping
tool to learn more about our products and place an order for the product, but
they prefer to come to the store for a variety of reasons. As we launch our
store in new location, our website will already have been live for at least 8
weeks.
c) Social
networking like Facebook and Twitter will be used extensively for the purpose
of creating awareness about the product. Social networking could prove to be a
better source of communicating awareness about the new product online as
compared to company’s own website. These days, the potential customers spend a
lot of time online and mostly on these social networks. This is the reason why
Facebook and Twitter are primarily targeted for marketing process.
d) In
store merchandising: Providing discounts and other schemes to the customers
will also add on the marketing process. This helps in attracting attention of
customers more than any other marketing process.
Business Operations
Business operations will include the following
factors:
Operational
function:
Since the
organization is going to introduce entirely new range of product, hence
operations will be reengineered accordingly. However, there will not be any
substantial changes in the current decision making team and the organization
will continue with same set of board of directors and managers. Since the
current range of products of the organization is very limited, there is no
reason why the organization cannot continue with same decision makers and add
another line of product. However, there has to be separate production
facilities and for that, human resource manager will also need to recruit new
members in the organization.
Decision making personnel:
There shall not be many changes in
organization’s current operational team. Since 2001, Dawes has been owned by
Tandem Group plc, owners of Lincolnshire-based Falcon Cycles., which also owns
Falcon Cycles. Frames are now all manufactured in the Far East, some using
Reynolds 631 tubing, but the bicycles all assembled at the Falcom factory in
Brigg, North Lincolnshire. It is expected that new machineries will be
installed in existing factories and that will help in production of exercising
cycles. Even though, the new product is extremely different from existing range
of products, still since the organization produces most of the components and
accessories within the factory, the new product will be produced within the
existing facilities (“About Us--nd”).
Like any retail operation, there is always risk
associated with operating a business. For Dawes, we see our greatest exposure
in the current absence of very intense competition in this area. A significant
threat to our business would most likely derive from a sudden influx of
competing retailers, backed by a major corporation or conglomerate, setting up
multiple locations within the downtown or city area.
In the event of a major change in the bicycle market,
we might also expect to see. To reduce risk in this area, we have explored the
possibility of partnering with a number of gyms and fitness centres, one of the
best companies which have similar plans for expansion to promote both our
businesses, and increase visibility to new customers. We have also plans to
keep the costs as well as the prices very economical and thereby capturing a
big part of the market, to help create a barrier to entry in this local market.
Financial Plan
B4L is currently funded by both equity and debt
capital. The current capital structure has not be altered for long and has been
successful. Funding has been used to complete the necessary improvements to the
retail space leased at down town in London, and to cover initial inventory and
payroll expenses for the first 8-9 months of business.
Based on our research and analysis, building on Dawes’
experience and what we feel are sound business assumptions, our second year
capital requirements are for a $ 100,000-150,000 line of credit by, 2014. We
intend to be profitable by July 2016, and anticipate covering our line of
credit from cash flow beginning in July 2017.
To accomplish this goal, we have developed a
comprehensive plan to
Maximize
sales with an extensive campaign to promote our products / services.
• Add
retail outlets and sales offices.
• Reinforce
Customer Support services to handle the increased demands created by the influx of new orders and broader coverage
of existing accounts.
• Augment
company staff to support and sustain prolonged growth under the new marketing
plan.
In the current set of conditions, when the demand for
flagship products of the company is not very impressive, it will not be
advisable to take huge risks and invest substantial amount of money in new
range of product. However, since the demand for traditional and touring bikes
is not going to improve any time in future, it seems to be the perfect time to
enter in a completely new market. One of the prime reasons for entering in this
market is because none of the traditional cycle manufacturers have thought of
entering in this market yet. Fitness and health industry is not organized at
all. There are number of players but not organized as compared to any other
industry. We can take advantage of the situation and could initiate quality
products to the customers. One of the main things in our favour is the fact
that we have huge amount of experience in providing best quality products and
services to the customers. No company in the industry has experience of over
100 years of serving customers. Even though we are new in this industry, still
our experience of customer service could be utilized to carve a niche in this
industry as well. With careful implementation of resources, it will be possible
to have decent market share and achieve pre determined goals of the business
and expansion.
References
THE OPPORTUNIST MODEL OF CORPORATE ENTREPRENEURSHIP:
Retrieved on 31st December 2013 from website:
http://www.fastcompany.com/1552926/opportunist-model-corporate-entrepreneurship
ABOUT US: Tanden Group PLC: Retrieved on 31st
December 2013 from website:
About Us: Dawes
Cycles: Retrieved on 31st December 2013 from website:
http://www.dawescycles.com/t-about-us.aspx
The Opportunist Model of Corporate Entrepreneurship:
Retrieved on 31st December 2013 from website:
http://growfromwithinbook.com/2010/02/the-opportunist-model-of-corporate-enterpreneurship/
The Four Models of Corporate Entrepreneurship:
Retrieved on 31st December 2013 from website:
http://sloanreview.mit.edu/article/the-four-models-of-corporate-entrepreneurship/
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