The Gap, Witchery and Xenia Boutique - Case Study Example

FEASIBILITY STUDY Name: Course: Instructor: Institution: City: Date Executive Summary This feasibility study involves studying of the family clothes. The business will be selling clothes such as men’s wear, women’s wear, junior’s wear, children’s wear and sportswear. The study outlines marketing strategies and the competitors. The company’s competitors include, The Gap, Witchery and Xenia boutique. The marketing strategies of the company include Product differentiation, creation of relationship-oriented business, fostering corporate social responsibility and concentrating on diversified communities as the target market. The study projects the company sales, expenditures and its cash flows. Based on the projections and marketing strategies, the study expects the company to be successful in the coming years. Product/ Service The business will offer family clothes. This will consist of men’s wear, women’s wear, junior’s wear, children wear and sportswear. In order to fit into the market and compete effectively, the business will provide trendy wear. Market Environment The target market for the business will be everybody within the business place of location and its wider region. Typically, for this business the target market will be different family members who frequently buy clothes. The products of the business will be bought from the business premises and or through click and order, that is from the website. The purchasing power of the consumers will be influenced by factors such as income level, age and gender and consumer attitude. Competition Competitors to the business include Birdsnest, Witchery, Xenia Boutique and the Gap. Top competitor income for the last year Birdsnest $12, 456, 785 Xenia boutique $11, 234,727 Witchery $10,675,354 The Gap $8,354,768 Industry Clothing industry is a mature industry however slow growing. This industry comprises of high competition. This competition affects the continuous changing operations and structure. Due to high competition in this industry, the market needs adequate research and some specialization before attempting to initiate penetration. Therefore, the company will be doing frequent market research in order to analyze changes in consumer taste and preferences. Business Model The business model for the business will consist of four main components namely, value proposition, e-business concept, sources of revenue, and resources, activities and capabilities. These components will provide the organization with a functional structure, ways of provision of goods and services, ways of generating revenue and creation of new markets. Marketing and Sales Strategy The business is a mortar and brick since interaction with customers is vital for its success. The company’s marketing strategies will involve: Product differentiation Creation of relationship oriented business Fostering corporate social responsibility Concentrating on diversified communities as the target market To promote the products and website, the website will have a design which is more attractive, for example by professional designing, providing sufficient information on the website, having a clean design and making sure the site is easily navigated. Management and Personnel The business is a company owned by an individual who will be assisted by other family members and legal experts. Other members of the company will be sales specialist, responsible for sales and marketing, manufacturing team, responsible for production of clothes. The owner and his family members will perform other functions. Critical Risk Factors SWOT ANALYSIS SWOT analysis takes into consideration the business strengths, weaknesses, opportunities and threats. These are influenced by the business model and size. Strengths The strengths of this business plan are; The business will be able to hire expertise to facilitate in manufacturing, marketing and sales of its products and services. The business will be able to have an online interaction with its customer. This helps in enhancing business-customer relations and hence enables the business to improve service delivery. Weaknesses The weaknesses of this plan may include; The business requires hiring of expertise to help in manufacturing of the trendy clothes. The cost of hiring could therefore prove to be high. In addition, the business does not have enough established assets that will be in line with this business plan. Therefore, it will require the establishment of assets and supply chains before the initial sales could take place. All these process will require high capital investment that might not be at disposal currently. Opportunities Opportunities that will arise from this business plan may include; After the establishment of the business, more opportunities will arise. This is due to; expansion of the market, improved supplies, reduced operation costs in the end and improved consumer awareness of the business existence. The business takes advantage of the current cost effective manufacturing technologies. This will ensure the business produces clothes that are affordable and can effectively compete in the market. More opportunities will also be realized as a result of the establishment of highly reliable suppliers and distributors of the business products. These in turn enhance the delivery process. Threats The threats for the performance of this business may be in relation to competition, management and security of the business website. However, the risk will be minimized by coming up with appropriate marketing strategies that will facilitate penetration and create consumer awareness of the company products. Website security threats will be minimized by use of anti-virus software in order to protect the networks and ensure the information sent and received in the system is free from viruses. Financial Information Break Even Analysis Monthly Break Even Revenue $135,450 Variable cost Average Percentage 25% Monthly Estimated Fixed Cost $106,743 Cash Flow Projections Year 1 ($) Year 2 ($) Year 3 ($) Cash from the Operations Cash Sales 2,345,754 3,897,654 4,654,786 Cash from Receivables 2, 086,343 3,453,321 4,243543 Cash from other Operations Additional Cash Received 0 0 0 Sales tax, VAT 0 0 0 Borrowings 0 0 0 Other Liabilities 0 0 0 Long term liabilities 0 0 0 Sale of Current liabilities 0 0 0 New investment received 0 0 0 Total Cash Received 0 0 0 Expenditures Expenditures from Operations 0 Cash Spending 0 0 0 Payments 0 0 0 Cash Balance 4,432,097 7,350,975 8,898,329 Balance Sheet Projections Year 1 ($) Year 2 ($) Year 3 ($) Current Assets Cash 0 0 0 Account Receivables 0 0 0 Inventory 0 0 0 Other Current Assets 0 0 0 Total Current Assets 0 0 0 Long term Assets 0 0 0 Total Assets 0 0 0 Current Liabilities Accounts Payable 0 0 0 Other Current Liabilities 0 0 0 Long term Liabilities 0 0 0 Total Liabilities 0 0 0 Capital Retained Earnings Total Capital 0 0 0 0 0 0 Total Liabilities and Capital 0 0 0 Net worth 0 0 0 Feasibility Decision/ Recommendation The company competition is highly varied. The company will face competition from already established companies such as The Gap, Witchery and Xenia boutique. Therefore, in such a competitive environment, companies with creativity in developing family clothes will be rewarded high returns. The company is however confident that when implemented, the projected sales and revenues will be earned. Due to the company’s marketing strategies, the company will be able to reach its targeted. However to meet all these targets, the company will require an initial startup capital for reputation establishment, development of infrastructure, development of the internal system, product development and for extensive marketing. The company owner will raise the initial star up capital with assistance from the family members. Implementation of the plan will enable the company to be successful in the coming years. References Brown, R., Gutterman, A. S., & Curry, J. E. (2011). A short course in international business plans: charting a strategy for success in global commerce. Petaluma, Calif, World Trade Press. Pinson, L. (2008). Anatomy of a business plan: a step-by-step guide to building the business and securing your company's future. Tustin, CA, Out of Your Mind & into the Marketplace. Read More