Falconry Hobby and Equipment Supplies Shop - Case Study Example

Business Plan Report Author’s name Institution’s name Date of submission Table of Contents Introduction……………………………………………………………………………………..4 Company Details and Goals…………………………………………………………………….5 Environmental Analysis…………………………………………………………………………7 SWOT Analysis………………………………………………………………….7 PESTEL…………………………………………………………………………..9 Market Survey……………………………………………………………………………………11 Target Market…………………………………………………………………………………….13 Competitor Analysis……………………………………………………………………………..13 Marketing Plan…………………………………………………………………………………...14 Organization Structure…………………………………………………………………………...16 Financial Plan…………………………………………………………………………………….19 Summary…………………………………………………………………………………………21 Executive summary………………………………………………………………………………23 References………………………………………………………………………………………..24 Appendix…………………………………………………………………………………………25 Survey questions…………………………………………………………………………………26 Business Plan Report Introduction Falconry Hobby and Equipment Supplies Shop will be seen as the best source of effective equipment supply in the medical industry. The company is at startup phase but will supply equipment of various medical therapies as needed by the consumers in United Arabs Emirates. Also, the business will offer complementary products in order to fit the strategy established. The source of differentiation that will enhance competitive advantage in the market will be based from the distribution of the products and access by the consumers. This will encompass a unique way of sales whereby a network of clinical services is created. Business environment in UAE is very challenging since most of the competitors have embraced online marketing in creating their competitive advantage. Also, the plan will focus on the internal environment especially in evaluating and establishing the best location for the business. The analysis also covers the characteristics of the business’ target market and its competitors. Thirdly, the marketing plan is well elaborated in the report by examining the strategies of reaching out to the target market. This involves the business’ models of increasing competitive advantage in the market. Of importance still, are the business’ organizational structure and its job descriptions. This uncovers the company’s internal stakeholders; the management and employees who take care of operations. The job descriptions give the roles and obligations of the company’s employees. Lastly, the financial plan of the company looks extensively at the financial management portfolio. It explains the company’s financial undertakings and the required finances in the actualization of its aims and objectives. It also exposes the financial relationship between the company and its stakeholders. Details of the Company and Business Goals a. Business Idea & Description Falconry Hobby and Equipment Supplies Shop seek to fill the gap of packaging procedures and up to date products in the falconry industry which will offer the much-needed supplies to the growing market. The business idea identifies falconry as an amazing opportunity for business given that the sport is gathering much popularity in the UAE. The business concept targets the UAE market because of its strategic cultural positioning. Based on the emerging trends in the industry, the business is timely and a worthy entrepreneurial venture. b. Characteristics of product/service & Unique Selling Point (USP) The Falconry Equipment and Hobby shop offers a wide range of equipments and supplies as follows Braided Dacron & Bungee Cord Fox Loop Leash The Coughlin Bullet Bewit Arab Style Accordion Back Hoods –Both Leather And Metallic Hawk Or Falcon Carrier Mews Portable Rotating Perch Trackers Gloves Feeding Bags The products are uniquely designed to suit the falconry industry and provide the strategic equipments to the customers. The wide range of products suited for the industry describes the feasibility of the market. The company’s uniqueness in terms of product (new brands and packaging activities) will promote high selling point thus providing quality and up to date products to its target customers and capitalizing on effective marketing strategies. These are strategic points that enhance its competitive advantage over its competitors. With such measures, the target market is able to establish significant business relations with the business and consequently enhances customer satisfaction. Mission Statement Falconry Hobby & Equipment Supplies Shop aims to offer quality and up to date falconry gear and equipment at competitive prices to meet the rising demand of the market. Goals and Objectives To achieve a 35% return on capital investment by the end of the first financial year To increase the level of job satisfaction among the workers in the company by strengthening compensations To increase the market share at the rate of 10% every financial year for five years. To increase the size of business operation from $100,000 to $180,000 in the second year of operation. Location of the business The business is hoped to be located along the main highway in the city and in the main shopping mall for easy access by customers. The franchises will be installed just not far from the city center and others dispatched to major towns in UAE after six months of operations. f. Form of Business Ownership The business is structured on a partnership of three individuals. This is important since more capital options will be available at the same time the business will be protected from external regulations that limits its operations. Benefits of choosing this ownership structure 1) Individual assets are protected therefore in case of bad debts creditors cannot pursue personal assets. 2) The business will not pay taxes during business level operation since taxes are directed at individual level. 3) The compliance requirements are limited thus formalities are simple and clear. General Operational Resources The partners ensure that the operations of the shop are conducted in the best way possible. Every operational mechanism is closely monitored by the partners to identify the needs to be met. This ensures that meeting the needs of the market are a priority for the business. Additionally, the employees of the shop are vital resources in managing the different tasks in running the business. They are entitled to provide quality products and ensure that customers remain satisfied. These steps aim at improving the business’ competitive advantage in the market. Environmental analysis The environmental analysis covers the business’ internal and external environments. In essence, the analysis puts across an in-depth evaluation of the internal and external stakeholders of the business. SWOT Analysis Strengths Weaknesses Opportunities Threats I. Experienced personnel II. Quality products III. Excellent management knowledge by the partners III. Competitive pricing Low involvement level by employees at the start phase Financial limitations The company is fairly new in the industry Expanding its target market Establishment of mobile clinics The revival of the falconry industry Competition from other companies Strict government importation policies Loss of workforce to competitors Analysis From the information above, it is clear that the strengths, weaknesses, opportunities and threats of Falconry Hobby and Equipment Supplies Shop have a huge impact on its operations. In reference to its strengths, the experienced personnel are significant in enriching the internal environment of the company by ensuring that the company’s operations are executed accordingly. The provision of quality products enriches customer satisfaction and improves business relations between the parties. Excellent management practices provide a good platform for coordinating the internal and external environments. Competitive prices positions the business at a strategic position to reach out to more clients. The strengths of Falconry Hobby and Equipment Supplies Shop are vital in enhancing its corporate identity and corporate reputation. The weaknesses present limitations to the progress of the business in industry. Financial constraints limit the capacity of the business to expand exponentially. Financial limitations affect the ability of a company to have competitive advantage in the market (Rainey, 2005). Since the company is new, it does not have the employees are lowly involved to the business activities. This calls for a wide operational capacity for the company. In order to eliminate the weaknesses, the management needs to put in place strategic mechanisms of addressing the limiting factors. The opportunities of Falconry Hobby and Equipment Supplies Shop are strategic and a platform for its corporate expansion. The falconry industry presents the business with an amazing opportunity to expand its target market. It can reach out to the young and adventurous people, tourists and Arabs desiring to maintain their cultural heritage. This will definitely increase the company’s profitability. Additionally, the established market ground provides an opportunity for the company to supply its products to an increasing customer base. A well established market position enables a business to multiply its opportunities (Bowhill, 2008). Thus, from the analysis, the opportunities position the business at a strategic angle of developing its corporate structures. The threats that the business faces refers to the external factors that might have a negative impact its success. Competition from other companies implies that customers are divided among the existing businesses. In order to handle this issue, the management of Falconry Hobby and Equipment Supplies Shop should continually develop effective ways of improving competitive advantage. The strict government policies on importation limit the capacity of product volumes from overseas. In addition, the possibility of loss of employees to other companies threatens the human resource development of Falconry Hobby and Equipment Supplies Shop. Of course, the threats affect the functionality of the business and calls for viable alternatives in the management of the business operations. PESTEL Political factors The quality and standardization of services is controlled by the central government where healthcare service providers recruit staff from different countries and with different education curriculum. For instance, most of the nurses are outsourced from Philippines and India. Therefore, adapting to facilities and equipment supplied by Falconry Hobby and Equipment Supplies Shop would take time plus resources invested (training in this case). Also, the complex regulations requirement and licensing from the government has led to obstacles like inconsistencies when it comes to required standards of the machines and non-uniform record keeping. There are also low premium strategies from the insurance providers to the business operating under this ownership. For example, equipment associated with the treatment of cancer may need much investment in technology but the insurance on this is relatively low. These aspects exist within the political environment and may hinder negatively the Falconry Hobby and Equipment Supplies Shop form achieving the set objectives. Economic factors Economic factors have also played a big role in affecting the operations of the business. United Arab Emirates countries experience a growth rate of 0.5 (a shift from 3.90 in 2013 to 4.40 in 2014). This implies the purchasing power of households is quite stable since the firms in the region are able to reward them (households) without any uncertainty. The high profitability prospects for the company are high because of the economic growth in the UAE Crude oil production (a major source of revenue to the economy) has remained at 2920.00 BBL/1K implying an insignificant change in per capita income on the other side. The kind of economic environment will favor Falconry Hobby and Equipment Supplies Shop. 1 represent year 2012, and 2 represent year 2013 Social factors Competitors are more interested in corporate social responsibilities in the current business environment. Also, they are sensitive to the needs of people and development of society at all. When it comes to social responsibility, Falconry Hobby and Equipment Supplies Shop have to invest much on this by large contribution to charitable dispensaries and may be schools. Community involvement through provision of opportunities for the residence of UAE may be challenging at the initial stages of business. It is good that the company is ready to provide training youths to work on the casual works within the company. Technological factors Being a manufacturing giant, Falconry Hobby and Equipment Supplies Shop, the great development will be driven by technological developments and innovations. Advance in technology especially with a centralized system of monitoring company’s store will promote franchising in UAE of Falconry Hobby and Equipment Supplies Shop. This will help the consumers to identify and access near stores where they can purchase the supplies. Company’s website as well will enrich consumers with the information about the product and can provide a platform of presenting new brands to the customers. Environmental factors The climate of UAE is hot especially in the cost regions and the humility sometimes reaches 90% in summer and winter. Temperatures at times goes extreme (about 50 degrees Celsius) and this may be harmful to the ‘raw material’ suppliers to the business. Though there is recognition by International environmental organizations on the biological diversity in most of the UAE regions, the challenge remains to be the socio-economic warrant granted on the ecosystem of birds especially when it comes to safety in the environment where they are accustomed. Legal factors Municipalities are entitled to monitor multitude activities which include pest control and managing of gardens in which these birds are kept. They provide information to the Environment Research and Wildlife Development Agency (ERWDA)for evaluation and reporting on the animal welfare. These legal restrictions may overstretch business’s efforts during the initial stages of development. Results of Market Survey Results of the company’s market survey show that the prospects of business expansion are high. The extensive survey reveals that there is a feasible market for falconry business, and that the company needs to capitalize on the relevant resources. The survey results show that customers are 65% of the respondents are receptive to buying falconry equipment online while 35% are not. Most of the online respondents were middle-aged youths expressing interest in the falconry business. 85% of the online target market is young adults while 15% is adults aged over 50 years. 75% of the interview correspondents were falconry enthusiasts who were willing to use the services of the company. 10% of the respondents who had not practiced falconry expressed interest and formed part of the potential customers to the company. Questionnaire results from across different age groups showed that young people were more enthusiastic towards the products than the aged. This is particularly because falconry is a fun sport and costly, when it comes to acquiring quality falconry equipment. Analysis of Survey Results From the results, it is evident that the business’ target market is wide, and it can utilize on various platforms to deliver the products. The online platform has great potential in respect to selling products; the company should enhance its online communication to serve its clients better. Moreover, the survey results imply that the company should invest much with the young falconry lovers, and at the same time, raise awareness among the aged customers. Additionally, a vast variety of products is significant to cater for those who cannot afford some of the products. It is also important to improve the promotional strategies to reach out to those with little knowledge about falconry. Target Market Characteristics The company’s target market is the young and adventurous customers, as well as the adult generation that desires to practice falconry as a cultural sport. The young and adventurous customers are more, and can be reached through online, over-the- counter and home delivery services. The adult target market is also increasing through extensive promotional activities, and shows prospects of growth. Furthermore, the growing index of the company has the capacity to attract potential customers and increase market segments. Competitor Analysis Royal shaheen and Al hurr falconry services are major competitors to Falconry Hobby &Equipment Supplies Shop. The falconry companies have had a long-standing history in the industry; hence, poses threats to the company. The best strategy to deal with the competitors is offering a wide range of products with the best qualities, and also offering competitive prices. This will go a long way in winning out the increasing competition in the industry. Marketing Plan a. Product positioning As a falconry equipment and hobby shop, the business positions its products with such specialty. This implies that the shop only offers products in the falconry industry. The specialty positions the business at a strategic market level, since some businesses integrate other functions in their operations. The specialty in Falconry Hobby and Equipment Supplies Shop creates the expertise that positions its products at a strategic market level. Moreover, location of the business at pet-zone parks positions the products at a strategic level to reach out to more customers. The business targets young Arabs endeavoring to maintain their falconry culture, and adventurous people. The company is aiming at strategically reaching out to its customers with quality and timely delivered falconry products at competitive prices. b. Pricing Strategy The pricing strategy that the company uses is in relation to the quality of the products and services. The company’s commitment in offering quality falconry equipment determines its pricing index. The target market requires quality falconry supplies; hence, the company is continuously committed in availing the same. Moreover, the business offers after sales services upon the purchase of the products; hence, attracting target customers. In reference to this, the provision of quality and timely products is a considerable factor in strategizing for the pricing index of the products. Certainly, this is the best pricing strategy for the company because the target market for the company is committed in securing quality products. The thriving business environment brought by the target market shows prospects of growth; hence, providing quality products and services will be a viable strategy in determining the pricing index. c. Place/Distribution Strategy The location of the business serves as a significant factor in the distribution of a company’s products (Bowhill, 2008). Located at the heart of the UAE, the placing of the business is strategic in serving customers and attracting potential customers. In addition, setting the business at pet-zone parks enhances its feasibility in reaching out to the target markets. Due to its strategic nature, the business is able to distribute its products with ease while delivering to customers. The company’s expansive distribution strategy is made possible by outsourcing distribution services from reputable distributors in order to provide timely delivery solutions to the customers. Since the company’s distribution policy is delivering products to the customers in a timely fashion, it has embarked on a plan to ensure than it expands its communication channels to communicate effectively with the customers. Moreover, there are effective over-the-counter services that customers have expressed satisfaction on. The company is able to cater for customers who buy equipment in bulk and those who buy manageable products because of its effective distribution strategy. d. Promotion Strategy The company’s promotional activities are vital in its growth and development. In this respect, there are significant ways that the company has utilized in marketing its products. Placing adverts in magazines (pets and hobby) as advertising platforms have proved to be extremely significant for the business. Promotion of a business’ products helps in connecting with the target customers (Beamish & Ashford, 2006). Extensive publicity in falconry events as well as animal shows is also a viable promotional platform in reaching out to the target market. Of importance still, is the use of social media in connecting with online customers. This gives customers an opportunity to buy the products from an online platform. Offering discounts to customers as a sales promotion strategy is also a pertinent promotional activity that is critical in attracting customers. The promotional strategies are important in enhancing the ability of the business to reach out to its customers as well as attracting potential customers. Since the target market is diverse, the diverse promotion strategies are essential in reaching out to the respective customers. Organizational Structure, HR plan and business operations Directors Accountant Administrator Shop operators Summary Job Descriptions Directors The directors control the entire operations of the company and have the overall authority of the business They approve every policy in the running of the business They are responsible for the approval of finances allocated to various departments Manager The manager is responsible for the hiring and firing of the staff Approves significant business operations in the absence of the directors Organizes for business meetings Handles disciplinary cases for the company Under the authority of the directors, the manager pays the rest of the staff members Identifying areas of change in the business Ensures that the roles of the other staff members are met with utmost professionalism Accountant Ensures that the company’s finances are managed effectively Advices the company on financial issues Prepares the company’s budgets Identifies areas of financial priority for the business Administrator Organizes for the relevant trainings for the staff Caters for the welfare of the staff Ensures that staff has a cordial relationship with the staff Ensures that the products and equipments of the company are in good storage conditions Coordinates the buying of supplies and importing products from abroad Shop operators They are responsible for the selling of the company’s products Giving feedback on the customers’ comments Giving timely and quality services to the customers Ensuring the safe and effective delivery of products to customers Financial Plan a. The start up cost The start up cost for the business totals $100, 000. The expenses include, rent for the falconry shop, operational finances, marketing and utility related costs. The partners contributed the capital to start the business and also sourced funds from bank loans in order to kick start the business. b. Break-even analysis Break-even (Units per month) 6798 Break-even (Monthly revenue) $ 17102 Revenue (average per unit) $ 2.5 Variable cost (average per unit) $0.35 Monthly projected fixed costs $10645 Output Fixed cost Total cost Total Revenue 0 10645 10645 0 1000 10645 10995 2500 2000 10645 11345 5000 3000 10645 11695 7500 4000 10645 12045 10000 5000 10645 12395 12500 6000 10645 12745 15000 7000 10645 13095 17500 The business is expected to break even after 8 months of operations. The will have establish its base in the market. The average per unit revenue is set to be $2.5. The business is expected to sell 6798 units per month accounting to $17102 monthly revenue. The fixed cost of production per unit is $1.56 per month and a variable cost per unit of $0.35. Therefore, the business will be operating above the liquidity ratio. c. Cash Flow Net Cash Flow Cash Balance Jan 14000 35000 Feb 14000 35000 Mar 16000 40000 Aprl 20000 45000 May 25000 50000 Jun 20000 56000 Jul 22000 60000 Aug 25000 70000 Sept 26000 73000 Oct 19000 80000 Nov 20000 110000 Dec 26000 120000 The company’s cash flow for every month shows that it has been on an upward trend. The first two months shows that the company’s cash flow has been a constant $14, 000. After the second month, the company’s cash flow projection is above $14,000. August and December have the highest amount of cash flow for the business. This shows that the company is on a considerable profitability level. Summary The business plan report covers significant areas of the company and proposes viable ways of enhancing profitability. Based on the report, it is evident that the company is on the right track in capitalizing on the opportunities in the market. The business is highly likely to make considerable success because of its feasible market positioning. The pricing strategy is a significant aspect in reaching out to its target market by enforcing competitive prices for its wide range of customers. Thus, the availability of customers is an essential success point for the company. Moreover, the ability of the company to develop strategic competitive advantage mechanisms is vital in putting it on the way to success. The falconry industry offers the Falconry Equipment and Supplies Shop excellent opportunities for growth. Executive Summary The UAE provides an amazing entrepreneurial opportunity for the falconry industry. With the long-standing history of the industry in the UAE, it is certain that business owners can benefit much from the venture. In reference to the business environment in the UAE, Falconry Hobby & Equipment Supplies Shop is a business that seeks to capitalize on the opportunities available to meet the increasing demand for the business. The business proposes to provide falconry products to its customers at competitive prices and assures its customers of quality. Quality of products and services is the unique selling point that Falconry Hobby & Equipment Supplies Shop seeks to deliver to its target market. The company aims at winning out competition by offering a wide range of products with utmost quality. There are various reasons that support the creation of the business. Firstly, it is the cultural attitude associated with the business. Since the location of the business is in the UAE, and it encourages falconry as a cultural sport, the business venture is strategic in that respect. Secondly, there is an established market in the UAE; hence, setting up the business offers great opportunities. Thirdly, there is need to fill the gaps in the industry, and encourage the growth of the business to greater heights. Moreover, the owners of the business are widely experienced in falconry, and have management skills, which will be instrumental in the running of the business. The ownership of the business is partnership based. The like-minded partners pooled resources together and provided capital for the start of the business. The partners are responsible for the profits and losses of the company. Thus, they share the losses and profit that the business incurs. The role of the management team is to oversee the operation of the business and approve of any major policy affecting the functioning of the company. The company’s target market is young and adventure-loving people of the UAE, and the aged generation that desires to continue with the tradition of falconry. The company’s role is to maintain the target market and put up viable strategies of ensuring that it develops the business to greater heights by attracting potential customers in the market. Competitors are inevitable in every ambitious business operation; hence, a company seeks to find feasible ways of winning out competition in the industry (Rose, 2012). The company identifies competitors by studying the market trends and the financial performance of other companies. Through this, the company is in a position to adjust its pricing strategies, promotional activities and quality standards in order to manage the competition from other companies. The company conducted a marketing research to identify its strong points and the areas that it needs to change. The marketing research is critical in helping the company forge forward in becoming a reputable company in the falconry industry. Through the marketing research, the company identifies the patterns of its target market, and the areas of preference for the target market as well. The marketing research is vital in establishing the marketing plan for the business. The marketing plan includes the product positioning, pricing strategy, place/distribution strategy and promotion strategies. An in-depth analysis of the marketing plan plays a significant role in helping the company to realize the best ways to deal with and reach out to its customers. The financial summaries for the company show that it has high prospects for growth. The profitability margin is above average; hence, it is worth noting that it is responding well to market conditions. Based on the financial analysis, the company’s financial projection in two years is set to have a 45% increase. Thus, the company has great opportunities in the market. References Beamish, K., & Ashford, R. (2006). Marketing planning, 2006-2007. Oxford: Elsevier/Butterworth-Heinemann. Bowhill, B. (2008). Business planning and control: integrating accounting, strategy, and people. Chichester, England: Wiley. Bowhill, B. (2008).). Marketing strategy. London: SAGE. Bowhill, B. (2008). Innovation, product development and commercialization case studies and key practices for market leadership. Ft. Lauderdale, FL: J. Ross Pub. Rainey, D. L. (2005). Product innovation: leading change through integrated product development. New York: Cambridge University Press. Rose, V. (2012). Consumer behavior. Delhi: University Publications. Smith, T. J. (2012). Pricing strategy: setting price levels, managing price discounts, & establishing price structures. Mason, Oh: South-Western Cengage Learning. Willoughby, M. (2006). Strategic marketing decisions. Oxford: Butterworth-Heinemann. Appendix Survey Questions Have you used the services and equipment of The Falconry Hobby and Equipment Supplies Shop before? How are the services in the Falconry Hobby and Equipment Shop? Is the quality of equipment supplied at the shop satisfying? What changes would increase the quality of the services and equipment offered by Falconry Hobby and Equipment Supplies? Are you comfortable with the pricing of products? According to you is the pricing matching with the quality of the products offered? Do you prefer online purchases or over-the-counter purchases? What is your perception about purchasing equipment online? How often have you practiced falconry, if not, are you willing to venture into falconry? Read More