Sustainable Competitive Advantage & Marketing Strategy - Innovation Guaranteed - Case Study Example

Executive Summary Innovation Guaranteed has a strong opportunity to use the different opportunity which the car industry provides by developing a seat cover which acts as a massager and ensures that the comfort of driving enhances. The organization based on the product characteristics and strengths has focused on building their products and targets all type of customers. Innovation Guaranteed which is coming with an innovative product which is a simple seat cover with additional features like acupressure and vibrator which a person can use while driving so that the different muscles of the body gets relaxed. This will help to improve the pleasure of driving. The paper shows the manner in which Innovation Guaranteed looks to work on different aspect associated with marketing, sales, promotions, financials and dealing with the different environmental factors. Overall it is seen that Innovation Guaranteed has developed a path based on which the long term future will be decided and will help them to ensure that they become accepted in the market and people look towards their products and services. Table of Contents Introduction 3 Company Description 3 Strategy Focus & Plan 4 Sustainable Competitive Advantage & Marketing Strategy 8 Operational Strategy & Management 14 Financial Analysis 17 Conclusion 19 References 20 Introduction The car market is continuously undergoing change which has thereby made Innovation Guaranteed come up with an innovative seat cover which will satisfy the different needs of the users. Innovation Guaranteed which is coming with an innovative product which is a simple seat cover with additional features like acupressure and vibrator which a person can use while driving so that the different muscles of the body gets relaxed. This will help to improve the pleasure of driving. The report thereby looks to present a complete description of the marketing plan which includes a situational analysis, the financial analysis, the market analysis and a complete description of the both the internal and external factors which will help to ensure that the product becomes successful and the new business venture provides the required return the organization is aiming at. Company Description Innovation Guaranteed which is working in the car industry looks looking to explore new opportunities so that new products can be provided to the customers which will help to enhance the experience of driving. The new product will be developed using new technology by designing seat covers through the process of acupressure so that additional comfort can be provided to people while driving the cars. In addition to it the seats will use vibrators so that it can be used to provide different muscle relaxing exercise to the person driving the car. Mission: The mission of the organization is to attract old as well as new car users towards new seat variants which works on the technology of acupressure and also has vibrator attached to it so that the different muscles can be relaxed. Vision: The organizations through the different products look enhance the experience of driving by multiplying the experience and providing additional comfort to people. Business Core Values: The organization has looked towards adopting a core value where complete reliance is being given towards designing of products which excites customers and enhance their pleasure of driving. The organization looks to build long term relations with the customers and is aiming towards building long term partnership so that word of mouth can be used to attract and retain new players as well as old users. Strategy Focus & Plan This section will provide details regarding the internal and external environment and cover areas like objectives, products, customers, internal and external analysis and SWOT analysis. The details are as Objectives The objectives of the business has been developed and directed by keeping in mind the business looks towards developing strategies so that more and more people can be attracted towards it. The different business objectives which have been identified are as Attracting and retaining old and new car users towards a special seat covers which will help to multiply the driving experience of customers Making people understand the different benefits associated with using the seat cover and the manner in which using the seal cover will help them to ensure that they are able to drive in a better way Look towards selling 1 million seat cover over a period of 2 years by having their presence in a global market and tying up with different car manufacturers so that a ready market for their product is developed Increase the penetration by building the required network of distributors and retailers so that the product can be available at every nook and corner of the globe Product Analysis Innovation Guaranteed is looking to bring a new product which will be a seat cover which will be developed on the concept of acupressure so that people while looking to drive can multiply their experiences. This will be matched by having vibrators attached to them so that the people driving the vehicles can use the vibrator and relax their muscle. This will reduce tiredness and will multiply the overall experience through which people will be able to multiply their driving experience. The new product will help to create a niche market and will provide an opportunity through which customers will be attrtced towards their products and retained (Chrisan, 2001) Customer Analysis Innovation Guaranteed looks at understanding the behavior of customer especially those who already possess a car and are looking to purchase one. The product will have its applicability for all type of cars as Innovation Guaranteed is looking to design the product for all cars. This thereby helps them to have a wide customer base to attract. The customer analysis shows that they will look to attract all people irrespective of ages, incomes, geographical locations, and social and cultural statuses so that all type of customers are attracted. The focus has to be towards understanding the different needs of the customer and then understanding their behaviour so that appropriate strategies which help to attract the customers can be developed. Industry & Market Analysis The industry and market analysis consist of different components which are industry analysis, external market analysis and internal market analysis so that business could be developed on determined lines Industry Analysis The industry for seat covers is highly saturated with different players looking to work on the same business fundamentals. Innovation Guaranteed could bring about a change in the manner the industry thinks as having sat covers with additional features like acupressure and vibrator will revolutionize the industry and will look to attract new players towards it. This will create a new scope in the industry and will provide an opportunity where organizations through innovation will be able to bring about the required change in the manner different decisions are taken (Chrisan, 2001) PESTEL Analysis The PESTEL analysis is an external environment analysis and is as External Factors Opportunities Threats Consumer/social The car market is highly stable ensuring continuous demand for the product Change in the perception of customers towards use of public mode of transport will impact the demand for cars Competitive Differentiated product will help to give a niche market for its products Competitors will look to use the same technology and will thereby intensify the degree of competition Technological Continuous change in technology and upgrading the technology is a must which will help to develop new products Increase cost associated with research and development and a lower success rate increases the overall cost for the business Economic Improving purchasing power parity an option which will attract all segment towards the society Customers having more options due to high disposable income makes it difficult to determine the demand for a particular brand Legal/Regulatory Strong rules ensuring that all organizations abides with it Competition Analysis The degree of competition for Innovation Guaranteed is limited as there is few players who are looking to provide similar car seats. On the whole the car seat industry is highly sophisticated and competitive as the degree of competition is very high. But while looking at the seat cover with acupressure and vibrator the competition level is low and will thereby provide an opportunity through which the business will be able to create a niche market (Frambach, Prabhu and Verhallen, 2003). This thereby provides an opportunity to identify the framework through which overall development of the business would become possible. Since, the degree of competition is limited at the moment it will thereby help to work on the fundamentals through which business growth will be identified. SWOT Analysis The SWOT Analysis is as Strengths: •New Product •Continuous growth in car sales •Increase in disposable income Opportunities: •Increase in consumer demand for products which multiply their experiences even at a higher cost •Improved technology •Growing in urban youth Weaknesses: •Limited client base •Limited market knowledge Threats: •Competitors to work on same business model •Availability of different options making it difficult to retain customers The SWOT analysis helps to identify the different areas which Innovation Guaranteed can use and develop their presence in the market. This will help them to focus on core areas and will provide the required impetus through which the overall working of the organization will be ensured. Sustainable Competitive Advantage & Marketing Strategy This section will look to focus on business differentiation strategy which the business will adopt, the manner in which business will be able to gain competitive advantage and attract customers, the marketing strategy which the business needs to develop which will look towards target market and marketing mix and finally the sales strategy which will focus on identifying the future trends towards sales. Business Differentiation Innovation Guaranteed has worked towards developing a model which has looked towards developing a sustainable business model which will look to multiply the driving experience of customers. The business has looked to work on a differentiation strategy where they look towards providing car seat with acupressure and vibrator facilities so that the different muscles can be relaxed while driving. This will help to bring about a change in the manner customer looks towards bringing about a change in the different products are marketed and sold. The product is different from all other products in the market as it moves away from the traditional form of object towards products which are more technological advancement (Bateman & Snell, 2004). The product has further been differentiated on the fact that the same seat cover can be used for driving while also relaxing and muscle relaxation. This will help to bring about a change in the manner in which customer looks at product and will be able to create a niche market for their products (Chew, Cheng & Petrovic-Lazarevic, 2006). In addition to it the manner in which the car segment is growing and having a differentiated product which they look towards bringing about a change in the manner in which market is growing. This will help to ensure that the overall potential for the business grows and will be able to create a niche market for its products. Competitive Advantage The demand for consumer products which Innovation Guaranteed is looking to work on will be successful as it will look towards attracting customer so that they get attracted towards the product. Further, there is a need and demand for consumer products which helps to multiply the experience of customer as apart from providing driving facilities it will look to provide additional comfort due to the presence of acupressure and vibrator which will be attached to the seat cover (Guest, 2002). This will help to attract customer as it will satisfy their different needs and wants which the customer is looking for. Further the attraction and retention of customers will be looked towards providing a competitive advantage on the following grounds Internal Factors Strengths Weaknesses Management Has a strong management team capable of performing different roles Huge size of management might have an effect on decision making as the process would be delayed Offering Product aimed at maximizing customer pleasure and experience Increase expense for the customers as the product has been priced high Marketing Distribution of products through different stores and mediums Increased cost of using the established network Personnel Have employees with the required knowledge about the products Problems will increase if the experienced employees leave the company Finance Expected high income due to growth in car industry Increased risk as customer might not accept the product Manufacturing High quality products which are durable and consistent Fluctuations in the prices of raw materials R&D Increased R&D to develop new and better products Marketing Strategy The marketing strategy of Innovation Guaranteed will look towards covering areas like target market and marketing mix and will look to cover the following areas Target Market The product developed by Innovation Guaranteed is aimed at all customers who have a car or are looking to purchase a car shortly. Further, the product has been designed and developed in different shapes and sizes based on the different seats which the different manufacturers of cars have in their different models. This will thereby ensure that the product looks at attracting all type of people purchasing or looking to purchase the different type or variant of car. Further, the target market for Innovation Guaranteed is also very niche and it will mostly attract customers who have spent a higher sum while purchasing the car as those category of people will look at higher comfort level. This will help to attract people especially belonging at the higher segment of the population having a higher disposable income and looks to purchase product which will maximize the satisfaction level. This section of the society will be considered as the primary customers whereas the secondary customer will be the one who purchases car which are less costly but still looks to increase their overall experience (Bristow and Frankwick, 1994). The customer analysis further shows that Innovation Guaranteed is looking at all type of people irrespective of ages, incomes, geographical locations, and social and cultural statuses so that all type of customers are attracted. This will also help to focus on the individual needs of the customers and will provide an opportunity where the strategies are directed and moulded according to the requirements of the customers and looks towards achieving the desired outcome. The strategy will thereby focus on all type of customers and will help to ensure a better penetration in the market. This thereby will ensure that Innovation Guaranteed is able to target the correct section of the society as the customer base the organization is looking is large and will thereby help to increase their reach attract more people towards the product. Marketing Mix This section looks to present the marketing mix and the details are as Product Strategy: The product which Innovation Guaranteed has come up with is slightly different from other products in the market. The organization based on the need has developed a product which is a simple car seat cover but with additional features like acupressure and vibrator which a person can use while driving. This will help the person to relax and ensure that the experience of driving gets enhanced (Chen, 2003). The massager will help to relax the body and will act as a point where the organization will be able to differentiate the manner in which different services is being provided and will help the product to create a different market for the product Pricing Strategy: Innovation Guaranteed looks towards pricing its product in such a manner that it can be easily availed by all. The price is slightly high compared to normal seat covers and is entirely due to different features which the product provides (Chen, 2003). The organization has relied on a strategy of matching price with different features and quality which will ensure that the customer using the product will experience a high degree of satisfaction due to the different features which the product provides. In addition to it the price has been kept such keeping in mind that people using cars have a high disposable income and will be willing to pay extra for extra comfort. Place: Innovation Guaranteed looks at ensuring that the availability of the product at every corner of the country and looks to establish this by developing distributors, retail chain and better relationship so that the entire process looks at developing better network. Further, the organization also looks to have after sale service at different location so that if any issues arise it can be resolved (Brassington and Pettitt, 2001). The location which has been further considered is one which is easily accessible and where people regularly come for different car fittings. This will help to deal with the different needs and requirements and will help to ensure better results due to location advantage. Promotion Strategy: Innovation Guaranteed is aiming to promote its product through stores and demonstrating the different features. The organization is stressing high o highlighting the different features which the seat cover has and looks to develop their promotion strategy based on it (Brassington and Pettitt, 2001). In addition to it different form of media like print, audio, visual and so on so that maximum market penetration becomes possible and the product is able to appeal to maximum number of people. Also looking to have different promotional schemes like discounts and offers will help to develop the required network and will result in improving the overall progress of the business (Krasnikov and Jayachandran, 2008) Sales Strategy The organization has also looked to identify the sales they are expecting to have in the near future and is as Expected Sales GBP in Year 1 GBP in year 2 GBP in year 2 Management funding 20000 22000 24000 The organization estimates a modest growth of 20% each year and is based on the growth rate which the industry is witnessing. In addition to it the manner in which the demand for car is increasing has also been considered and based on it the required estimate sales have been identified. Operational Strategy & Management This section will comprise of the following areas Operation Strategy The operation model of the business has been developed and determined based on a simple strategy of finding out the different areas which they need to stress so that the overall performance improves. The operational model which is being used is to look towards attracting customers based on different product features and quality. Most importance is given to make people understand the different benefits which they will get and bring about the required change in the behavior of people so that they are able to use it for different reasons (Taylor & Cooper, 2008). The company through the process also looks at testing the market and exploring other opportunities through which other innovative products can be developed. The operations will further carried out through the only established network of dealers and distributors so that the process provides gains and help to develop the business on the already established network which is present. Innovation Guaranteed also looks at ensuring that the human resource which will be needed to carry out the different activities is done wisely. The organization looks to hire the best talent so that the different work can be carried out in the best manner and thereby helps to improve productivity. This will act as a framework through which Innovation Guaranteed will be able to ensure that customer satisfaction can be enhanced as they will be able to develop and supply products and services by explaining the same to the customers (Cable & Judge, 2006). This will lead towards increased customer satisfaction and will provide a directive through which better service and products will be provided. Further the implementation plan has been developed by Innovation Guaranteed which aims to highlight the different things which the business looks to achieve in the next few years. This will help Innovation Guaranteed to determine the manner in which strategies are being developed for improving business quality and will help to determine the overall directives through which the implementation process will be carried out and is as Year To be Achieved New Targeted Markets (millions) Cumulative Targeted Markets (millions) Today Developing new hybrid products 250 250 1st Year Introduction of pricing mechanism and price differentiation strategies. 320 600 2nd Year Enhancing hybrid products by use of new technologies 370 970 3rd Year Product differentiation to meet the needs of the market 420 1320 The different implementation strategy which Innovation Guaranteed has identified will help them to work on the required areas through which product acceptance and customer satisfaction will enhance (Cook & Dave, 2004). The implementation process thereby looks to develop the business on different fundamentals and will thereby look towards bringing about the required change so that more and more people look towards the product and services. Management The organizational structure is one where the business follows a chain of hierarchy. The top management passes on the different objective to the lower management and determines the goals which have to be achieved. The organization has looked at ensuring that people at all levels can provide their useful inputs so that the entire working of the organization gets shaped up. Further, the management also looks at having decentralization of power so that the different work can be carried out in the best possible manner (Macher & Richman, 2004). The overall impetus is to be innovative and come up with new and better products and solutions which will help to improve the thinking process of people. This will thereby look at fostering a mechanism through which the overall change in the manner different activities and services are provided can be looked at and better resource application becomes possible Financial Analysis The financial analysis for 2 years is as Projected start-up cost GBP Working Capital 4500 Initial lease payments and deposits 1500 Salary to salesmen 1000 Opening supplies 4500 Marketing Budget 3000 Miscellaneous and unforeseen costs 500 Total Start-up Cost 15000 It is to be noted that this are hypothetical figures and may vary county to country and upon the scale of business being setup. Sourcing of funds can be as under. Source of funding GBP Management funding 20000 Banks and Lender 50000 A hypothetical profit and loss statement of Innovation Guaranteed may look like this: PERFORMA PROFIT AND LOSS STATEMENT(yearly) GBP for year 1 GBP for year 2 Sales 80000 100000 Cost of goods sold 20000 25000 Gross Margin 75% 75% Operating Income 60000 75000 Less expenses payroll 1000 1000 General administrative 3500 3500 Marketing expenses 3000 3000 Insurance cost 1000 1000 Rent and utilities 1500 1500 Interest cost 5000 5000 Miscellaneous costs 1000 1000 Net operating income 44000 59000 Cash Flow Statement   In GBP   Cash flow from Operating Activities     Net Income 9900   Add: Depreciation Expenses 8500   Less: Increase In Accounts Receivable -8000   Add: Prepayments Made 5000   Add: Increase in Income tax Payable 5500   Less: Increase in Inventories -24000   Less: Interest Payments -5200   Less: Interest Payable -2500   Add: Accrued Liabilities 6000   Net Cash flow from Operating Activities   -4800 Cash Flow from Investing Activities     Furniture Purchased -20000   Net Cash flow from Financing Activities   -20000 Cash Flow from Financing Activities     Issue of Share 30000   Cash paid for accounts payable 50000   Long term loan -12000   Net Cash flow from Financing Activities   68000 Opening Cash   7000 Closing Cash   50200 The financials thereby shows the manner in which the organization looks to gain from different the different activities and bring forward the manner in which the business is looking towards bringing about a change in their working style. Conclusion Innovation Guaranteed which is coming with an innovative product which is a simple seat cover with additional features like acupressure and vibrator which a person can use while driving so that the different muscles of the body gets relaxed. This will help to improve the pleasure of driving. The paper shows the manner in which Innovation Guaranteed looks to work on different aspect associated with marketing, sales, promotions, financials and dealing with the different environmental factors. Overall it is seen that Innovation Guaranteed has developed a path based on which the long term future will be decided and will help them to ensure that they become accepted in the market and people look towards their products and services. References Brassington, J. and Pettitt, M. 2001. Principles of Marketing, 2nd Edition, Prentice Hall Bristow, D. and Frankwick, G. 1994. Product manager influences tactics in marketing strategy development and implementation. 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The Role of Individual Differences in the Managing of Stress, Journal of Organizational Change Management, Vol. 1, no. 1, pp. 1-19 Read More