Business Plan

 

Name:

Institutional Affiliation

 

 

 

 

 

 

 

 

 

 

 

 

Contents

Business Plan. 3

Mission Statement 3

Vision Statement 3

The Company’s Values. 3

The Team.. 3

Management 3

Board of Directors. 4

Organization structure. 4

Market Summary. 5

Basis of operations. 5

Market Analysis. 6

Target Market 6

Positioning. 7

Pricing strategy. 7

Promotion. 7

Opportunities. 7

Opportunities. 7

Threats. 7

Business Concept 7

Competition. 8

Competitive Analysis. 8

SWOT analysis. 8

PESTLE Analysis. 9

Goals and Objectives. 11

Goals. 11

Majestic Long-term plans. 11

Objectives. 11

Objectives of the company. 11

The Company Strategy. 12

Principal activities, product, and services. 12

Financial Plan. 13

Financial Information. 13

Sales forecast 14

Projected Cash Flow.. 14

Resources Requirements. 18

Financial Resources. 18

Human Resource. 18

Company Stock. 19

Risk and Reward System.. 19

Principle Risk. 19

Key Issues. 20

Near- Term Issues. 20

Long-term Issues. 20

 

 

Business Plan

The Majestic Company takes pride in its work. As such, it has created a mission and a vision statement. Furthermore, it has some of the aspects that it considers to be its core values. These include the:

Mission Statement

The company believes in the immense potential that its clients have concerning how they can impact their business success. Furthermore, the company strives to maintain a good organizational culture that will help maintain its more customer flow, thus, creating higher “returns on investment.”

Vision Statement

The Majestic Company strives to remain as the most adored and respected organization in the Middle East, as well as other parts of the Asian Continent. As such, it invests a lot in its marketing research activities.

The Company’s Values

The company has three major aspects that act as forms the center pillar of its core values for easy and destined operation. These include aspects such as the passion, the client obsession, and the maintenance of integrity values.

The Team

Management

Management is the key drive of any organization. An organization with a good management team that formulates good strategies will always succeed. Currently, the Majestic Company has only three employees in its team to spearhead the operations of the company for the time being. They include Information and Technology Specialist who is responsible for web designing, operations manager who is responsible for the operations of the company and customer care attendant. However, the Company will need additional staff to oversee its operations as it continues to grow and expand.

Board of Directors

Currently, the Majestic Company does not have a board of directors. It is in the process of looking for qualified and experienced individuals to work with the company management in propelling the organization into a different level. Plans are underway to draft contracts of service for the directors of at least five years so that they can be able to serve the organization for a longer period.

Organization structure

The company is planning to adopt a functional organization. A functional organization structure is where the staffs is arranged according to the function that each performs. For each function, a department will be created under it, and all the functions of the organization are grouped into that department. One advantage of this type of structure is that communication, as well as coordination, will be well effected in the organization.  Another merit is that it is easy for the organization to introduce new employees due to its flexibility and easy to understand. The following is a sample of the proposed structure by Majestic Company.

 

 

 

 

 

 

 

Proposed organization structure

Board of Directors

 

 

Chief executive officer (CEO)

 

Marketing Manager               Human resource Manager                  Operations Manager

 

Sales team                              Assistant Human Resource                Operations team

 

Market Summary

Basis of operations

The basis of operation for the Majestic Company will be based on market penetration and expanding into the market.  The idea of conducting business online is rapidly gaining ground with the consumers because of its convenience and cost savings. The company can achieve ease in penetrating the market by adopting aggressive marketing as well as promotional strategies. Majestic will be adopting a promotional strategy that will be geared in penetrating the market upon its inception. The strategy of pricing its products by making them affordable to their targeted customers will make the company gain ease in penetrating the market. Once a word of mouth spreads that the company is offering quality and affordable products, more and more customers will be willing to buy the products and by this, the products will penetrate easily in the market.

To achieve expansion in the market once the company has established itself, it will form strategic alliances as well as mergers with other companies in the market. Merging with other companies will enable Majestic to expand into other markets. Strategic alliances are one of the best strategies that companies can adopt to expand their markets. Majestic is also planning to increase the range of products that it uses to expand its markets once the customers get familiar with the existing products.

Market Analysis

Target Market

Majestic Company’s target market is the younger generation. Younger generations have been the ones that appreciate technology more as compared to the older generation. There are more concerned with trendy lifestyles that are offered in the electronics market. The younger generation, especially the male are more concerned with electronics as the industry is a view to being more masculine than feminine. The Company takes this opportunity to target the young generation with trendy electronics. Besides the young teenagers, the company will also target the older generation as they are considered to have the capability to use electronic products. However, they take the time to appreciate technology. The adults are too considered to have a constant flow of income; hence, it is easier for them to afford the company products.                                                         Additionally, fashionable products also excite the youth and offering to them clothing as well as beauty products that are in fashion will be a way of winning their loyalty.

Positioning

Majestic Company will create a perception in the mind of the individuals that offering electronic products through online is something that is a trend to them.  Most of the teenagers in the recent past consider buying of electronic products as a means of appreciating technology. To make the online company website attract more visitors, it will have to display attractive pictures of the products that they are offering. By displaying the products, the customers will be able to get a clear view of the products that the customers are offering. The company is trying to position itself by offering 24/7 services to its customers. The company plans to offer exceptional quality services that will meet their customer satisfaction.

Pricing strategy

One advantage of running an online business is that it very convenient for the customers as well as the company. The aspect of convenience in the online business helps to reduce costs of operating the business. For the Majestic Company to get profits, it will have to have a good pricing strategy for its products. The first strategy that the company plans to adopt is known as penetrating pricing. In this type of strategy the company will adopt a low price for goods and services to gain a market share in the market. Charging the products of company low price will make them affordable to their targeted customers. The Company will use product line pricing. It is the type of pricing where products that are different ranges are priced differently. The pricing will enable different categories of products to be priced differently in the market. The Majestic Company will also use the psychological pricing to trick customers’ minds that the products are cheap. For example, if a product costs 50 Dollar, they will attach a price of 49.99 Dollars. Such a pricing strategy will make the customers buy the products.

Promotion

Majestic Company is planning to adopt a good plan for its business. The promotion plan will involve marketing directly to the customers. One of the strategies to be adopted is customer email subscription. The website will be designed such that customers have an option of subscribing email. The company will then use the emails subscribed to the market, they exist as well as new products for the customers. Majestic will also utilize the social media platforms such as Twitter, Facebook, and Instagram to market its products and services. Images of the company’s product will be displayed in the social media so that customers can get a chance to view the feature of the product that they are interested. The company is also planning to be conducting monthly draws where clients can participate. Those who get a chance to win in the draws will be awarded shopping vouchers. When these strategies are well implemented, they will increase customer satisfaction with the organization.

Opportunities

Opportunities

Since most of the teenagers are interested in fashionable and trendy things in the market, Majestic Company is in a good position, as that is what it is offering. The company will be able to increase and grow its markets by offering trendy and fashionable products to their targeted group.

Threats

One of the major threats that the company faces is the existence of stiff competition in the online business. The online industry is made up few firms that tend that acquired monopoly powers due to their dominance in the market.  The price war in the online industry will largely affect the profits of Majestic Company. Further, the existence of small physical stores in the market will also greatly have a negative impact on the company sales.

Business Concept

The Majestic Company has been founded on the basis of various concepts and principles. The main aim of embracing this concept is simple, to induce more customer satisfaction, thus, creating a surge in demand for its products. First, the Majestic Company want to create an environment that will leverage its store footprints. As a result, the company has made it simple for any interested party to access its products and agent in an easy manner. It has opened various stores in different places to make its products easily accessible. It has also embraced the act of engaging its esteemed customers in different level especially when trying to create a good relationship. On the other hand, the company has embraced the business aspect of e-commerce. It wants to realign its marketing and other business activities with the current market demands. The technological aspect is a must for most of the global activities. Therefore, in order to suit to these changes and demands, the Majestic Company has seen the need of incorporating the technological aspect in most of its business activities. Apart from that, the company has also created a market condition that enhancing the relationship between its officials and the customers. As such, the company is able to portray its image as more a friendly organization towards its target customers. Therefore, the embracing of such business concept had boosted its business and its rate of thrive in the current competitive its business sector.

Competition

Competitive Analysis

When analyzing a competitor, the Majestic Company uses an analysis know as SWOT and PEST analysis to analyze both internal and external environments.

SWOT analysis

SWOT stands for, Strengths, Weaknesses, Opportunities, and Threats.

Strengths

One of the company strengths is the selling of authenticated products. Further, the company will provide information to its customers on how to identify counterfeit products that are in the market. Through providing this information, the customers will gain confidence with the company products and hence buy the products. The company is also planning to have secure modes of payment to avoid customers being defrauded.

Weaknesses

Majestic has a weakness in this line of operation. Many customers are not satisfied when trading online.  Others aspect like clothing needs an individual to fit to be satisfied. Currently, the company does not have a physical store that customers can assess to fit such products. Additionally, once an item has been shipped to a client, the company does not take it back in case it is defective. It may make the company lose customers to their competitors like Amazon who have a policy of taking back and replacing products that are found to be defective.

PESTLE Analysis

PESTLE is an acronym that stands for, Political, Environmental, Sociological and Technological. It is a tool that Majestic Company uses to analyze its external environment.

Political factors

Political factors are factors touching on the government regulations in a certain state or territory.  Majestic company will be based in Qatar and hence it will be affected by the political factors of Qatar. One major factor is the regulations and policies that affect the operation of the business and the taxation policy as they affect the profitability of the firm.

Environmental factors

One of the environmental factors that will affect the company is the acquisition of credit facilities from financial institutions as it is a first time company. An inflation rate that has continued to hit the country due to global recession is a factor that will affect the firm’s operation.

Sociological factors

The aspect that the firm has taken into consideration is the cultures of the Qatar people. The products that they are offering are not in contradiction with the cultures of Qatar. It will thus make the company to be easily accepted in the society.

Technological factors

Majestic Company operates an online business that requires investment in technology. The nature of the business needs internet infrastructure. In Qatar, the government has invested much in internet infrastructure that makes it easy for the company to carry its operations.

The following are the major online businesses that are currently selling the same products as our business and will continue to pose a great challenge to our business

Amazon

Amazon is an online company that specializes in selling of different products online. It started as a bookstore and it has grown to a giant online company selling different types of products. It has numerous websites for different countries. For instance, it has one for Germany, Italy, United States, and the United Kingdom among other states. Additionally, the company offers international shipping services for its products. It has a large base of customers, and it has continued has won the loyalty of its customers. It has immense resources at its disposal, and it has continued to command the market as the leader. Amazon will pose a big challenge to our company since we are new in the market. Customers have confidence in the company that makes it hard for customers to consider services of other companies.

EBay

EBay is another giant company that operates an online store. The company offers a wide range of products to its customer and too has been in the online business for quite some time. The company too operates several websites for different countries and offers international shipping same as Amazon. The company too will pose a great challenge to the existence of our business due to the resources and large market share that it controls in the online industry.

Goals and Objectives

Goals

Majestic Long-term plans

For any organization to compete well in the market, it has to have a strong strategic plan. Organization long-term goals are goals that span a period of more than five years.                           The Majestic Company has formulated its long-term goals in the market. One of the long-term goals of the company is expanding its operations and market share to attain the status of other giant firms within a period of 5 years.  To achieve this status, the company is planning to create partnerships with other businesses that they are on the same line of operation. The company also has plans to use the strategy of acquisition and merging with other firms to get synergy.  The firm is also planning to diversify its operations into other sectors to increase its portfolio.

Objectives

Objectives of the company

  • The objectives of the Majestic Company include the following;
  • Provision of high-quality sales as well as services to its clients
  • Offering their clients a wide variety of products and brands
  • Provide product packages that are priced appropriately for the market
  • Repayment of loans that they will acquire from the lenders in the first year of operation

The Company Strategy

The company plans to operate an online retail store that the customers will be able to access their products as well as their services. The company blog will be running 24/7 including the weekends. The company’s online store regularly updates any new product introduced into the market. The website will be designed in such a way that the customers can be able to chat with the employees of the company concerning any issue that they might be having. The company will source for competent, and skilled management team is going to lead the company and its operations. Training and development of its employees are also other strategies the company is planning to be undertaken. Marketing of the company will be carried via social network sites, as most of its targeted customers are active on those sites.

Principal activities, product, and services

Majestic Company is planning to deal with the following products

Electronics- The electronics ranges from radios, Television sets, play stations, Xbox, digital cameras, calculators, mobile handsets, speakers and radios. There are wide ranges of electronics that the company can offer by for a start it has decided to specialize in these categories.

Computers and accessories- computers with their various accessories will be made available in the company retail stores.  The company will also sell computer parts.

Jewelry- Jewelry will also be made available in the business stores. They will include weddings and engagement rings, ear and nose rings, bracelets, necklaces among others.

Beauty products- Beauty products will be traded in the Majestic online store. They will range from cosmetics, perfumes, colognes and other products that in the line of beauty.

Sporting equipment– Sporting equipment will range from basketballs, football, table tennis equipment, rugby equipment, and hockey equipment.

Clothing- Clothing will include dresses, boxers, shirts, skirts, shoes, socks and other clothing for both males and females.

Baby products- Baby products such as diapers, shoes, toys will also be offered be offered by the Majestic company online store.

The company will also be offering shipping services that mean that the customers will be able to receive the items that they have ordered within the jurisdiction of the business.

The store will further have a chat box where customers can directly talk to a customer care representative, unlike in situations where they will send an email and wait for a reply. The service will help to save a lot of time for customers who have issues that they want them handled. The online store will also offer the services of a shopping bag where customers can place the items that they have picked from the store. Once the item has been placed in the shopping bag, it will remain there until the buyer makes a decision to sell the item.                                                              A calculator that will automatically compute the price of goods that a customer chooses will also be available for this purpose.

Financial Plan

Financial Information

The financial part is going to offer information on the finances of the company about the marketing activities of the company. The company will address sales forecasts, projected cash flows, expense forecasts and the breakeven analysis about the marketing strategy that the Company plans to adopt. The company requires an initial capital investment of 500,000 USD to finance its start-up.  Majestic Company has 100,000 USD in its account, and it is seeking to source the 400,000 USD from lenders and other investors who might find the plan important. Currently, the Company is negotiating with potential investors seeking for funds.                                                                The initial capital budget has been analyzed as shown

Sales forecast

The first month of operation, the company will concentrate on building on its inventories. Majestic Company is not expecting to make sales within the first month after launching its online store. The second month will be on streamlining the operations of its website company and testing it for efficiency and reliability. After building on the inventory, the company is expecting to commence on making sales in the third month. Majestic is expecting to increase its sales the following months. The company to create awareness about its products that will make the company increase in its sales will conduct aggressive promotions and marketing activities. The company will also hire sales representatives to increase the sales of the company.  The sales forecast can be illustrated as shown (see Appendix).

Projected Cash Flow

The company is projecting to start generating cash flow from the beginning of the third month. Since the company is not expecting to make sales in the first and the second month of operation. Majestic Company also anticipates that the cost of operations will continue to go down as it continues with its operations. The projected cash flow for the organization can be illustrated as shown (see figures and tables below)

Initial capital budget

Cost of inventory                              200,000

Operating expense                             100,000

Advertisements                                 150,000

Miscellaneous expenses                     20,000

Provision for uncertainties                 30,000

                                                           500,000

The figures given below are in USD


 

Projected cash flow

  Jan Feb March April May June
Sales     100,000 150,000 200,000 600,000
Loan 400,000          
owner 100,000          
other            
Total receipts 500,000   100,000 150,000 200,000 600,000
Payments            
Web 50000 20000 40000 40000 5000 2000
Promotion 40000 20000 10000 30000 4000 5000
stationery 10000     10000   1000
travelling 20000 40000 20000 10000 5000 2000
Networking 20000 20000 10000 30000 10000 5000
salaries 100000 100000 105000 110000 130000 130000
Net cashflow 260,000 (200,000) (175,000) (80,000) 46,000 585,000
Opening bank balance   260,000 60,000 (115,000) (195,000) (149,000)
Closing bank balance 260,000 60,000 (115,000) (195,000) (149,000) 436,000

 

Profit and loss for six months period.

Sales revenue  
Electronics 150,000
Computer & Accessories 200,000
Jewerly 50,000
Beauty 200,000
Sports 50,000
Clothing 300,000
Baby products 100,000
Total 1,050,000
Direct  expenses  
Web 157,000
Stationery 21,000
Gross profit 872,000
Indirect expenses  
promotion 109,000
travelling 97,000
Networking 95,000
Salaries 675,000
Net Loss (103,000)

 

Resources Requirements

Since Majestic Company is being launched for the first time in the industry, many resources will be required to start the company.  However, since Majestic are online Company resources will not be immense as if it were operating a physical store.

Financial Resources

The company will require financial resources to for the initial start-up of the company. Capital is required to fund the operation of the company expenses such as administration costs, wages, and salaries to be paid to employees, shipping and transport costs, costs of maintaining the website and any other cost that is required for effectively running the business. The company will also need money for advertising as well as promoting its product in the market.

Human Resource

Human resource is one of the most vital resources in the success of an organization.  The company has proposed to acquire three staff for the start of the business. The company will require an Information technology specialist to design and maintain the website of the company. Additionally, it will need an operations manager who will be responsible for the operations of the company affairs.

Company Stock

Products that the company will be trading in their website are another major resource that the organization will need in their stores. The Majestic Company will require an initial opening stock that they will start trading with for the company. The company is currently in talks with potential suppliers to establish good relationships with them. It is important to develop good relations with the suppliers in the market to ensure that the company store does not run out of stocks at any given time. A steady flow of supplies is important for the organization to make the business reliable to customers in case they need any product.

Risk and Reward System

Principle Risk

The Majestic Company is aware that in every field of business one opts to venture; there is usually a risk. What matters is the rate of the risk and what measure the organization undertakes to deal with such a risk. One of the main challenges that the business faces is that with the online business, it is not possible for customers to touch and feel the products that they are purchasing. The absence of physical conduct with the products as well as the seller of the products is a matter of concern to most of the customers. The first time consumers tend to have insecurity about the quality of the products as well as the safety of their money.                                                                             However, the business has tried to overcome these challenges by placing real photos of its products on its website where the customers can get a view of them. Additionally, the company website has incorporated a chat where customers can be able to chat with the company customer care in the case they need to seek any clarification. Through the chats, customer feedback can be obtained as well as it builds the customer confidence in the products that they are purchasing.

The other risk that the company faces is the price wars from competitors in the market. Since the products of the competitors are identical with ours, they might decide to offer low selling price for their products in the market. The giant companies might decide to sell at low prices in instances when they want to clear their old stock. The stock being cleared could be selling at a loss. Our company in such instances cannot afford to sell its products at a loss; hence, it will end up losing customers to competitors. The only strategy that the company can adopt is creating confidence to their customers that their products are of high quality, and that is why they are selling at high prices.

The availability of obtaining a good and trusted supplier in the market can also present a big problem to the organization. In instances where the supplier fails to deliver, products that have run out of stock in our can create a bad reputation to our customers. When customers inquire for something and realize we do not have in our stores, it might create a bad image as well as loss of customer loyalty. On overcoming this challenge, the Majestic Company is planning to establish strong relations with its suppliers and where possible sign contracts with such suppliers to ensure that, they do not breach the terms of contracts.

Key Issues

Near- Term Issues

The company needs to analyze various strategies it can use to counter the competitive threats. It should be keen in understanding various strategies its rivals use. The failure to take such precautions may lead into threats of being phased out in the market.

Long-term Issues

The Majestic Company should be ready to improve its internal organs and structures. At this juncture, it should determine key areas that can improve the level of production efficiency. Furthermore, the company should continue researching on key areas that can help that require more funding to improve their efficiency. For instance, it may require more funds to be allocated towards the marketing activities in order to boost sales. The effective marketing is highly important especially in promoting more customer awareness. Again, in case the company fails to take into consideration such issues, it may risk being inefficient in terms of production.

 

 

 

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