Business Enterprise Proposition - Essay Example

? Business enterprise proposition Table of Contents Executive summary 3 2. Vision, aims and objectives 4 3. Business market environment and competitive advantage 5 4. Marketing Strategy 7 5. Management Structure 8 6. Sales targets and objectives 9 Reference List 10 1. Executive summary The business plan is developed to establish a private limited company named “Body and Balance”. The company will provide healthy food for the customers, who are healthy conscious. The shop will be operating in Oxford Street since it has many renowned gyms where the shop will be able to target health conscious people (Lacey, 2013). The target customers of the business are young individuals who lie within the age group of 17 to 35 years who are interested in healthy living and falls in middle and upper middle class. The shop will be facing direct competition from Bodychef and indirect competition from Marks and Spencer, Sainsbury and Waitrose. The business requires an initial investment of ?60,000. So finance required by the organization is ?90,000. The company has its competitive advantage as portioning, pricing and delivery. 2. Vision, aims and objectives Vision The business plan looks towards starting a private limited company with the name “Body and Balance” and establish itself as one of the leading companies in the healthy food industry. A private limited company signifies an organization who can sell their shares privately within a group of friends or family. Private limited company has the word “Limited” in their name (Johnson and Aldhamland, n.d.; Anon., 2008). The main advantages that the private limited company enjoys are as follows: They can raise large amount of capital. Liability is limited. Ownership is transferable. They have the flexibility to decide on the proportion of dividends and salary to be paid as compared to the sole traders whose basic accounts are subjected to tax at fixed rate. On the other hand, the private limited companies are also seen to suffer certain disadvantages like they take more time and cost to set up. At the same time the accounts are also complicated (Shakespeare, 2011). Reason for doing this business The main reason for opening a shop in this particular sector is because research has proved that as time is passing more and more people are becoming health conscious and they are getting inclined towards healthy food. Thus this business looks for tapping a hyper growth experienced by the health food industry. Aim The business aims towards attaining 5% market share in one year. Here market share is defined as the share of the market occupied by ‘Body and Balance’ out of the total potential market. The total potential is indicated as the sum total of the annual sales of all the companies operating in the market including the firm itself and the potential customers who have not made the purchase yet (Luther, 2001). Objectives The business will be starting with a small shop that will be strategically located near the local gyms in the Oxford Street area. The future plans of the business have been shown below: 1-5 years: Increase the number of branches to five. 5-10 years: Expanding the business by entering into other markets and developing new products. 10-15 years: Opening new branch at New York. 3. Business description, market environment and competitive advantage Business Description The company ‘Body and Balance’ provides healthy food to their customers that will last for 1 to 3 days. The company will also provide planning services free of cost. They have their own nutritionist to provide innovative and up-to-date meal plan to the customers. On the requirement of the customers the company also provides supplements like nutrition and vitamins. Special orders can be taken as per the flavour of the customers. Market Environment The business will be operating in the health food market, which in UK is showing a growth of ?2 billion annually (Durisin, 2013). The company will be opening its shop in the close vicinity of the gyms. So they are mainly aiming the customers of the gym as their potential customers. The gym and fitness centre are seen to grow dramatically over the past few decades. In UK there are 5.2 million registered gym members (IBISworld, 2013). The business is targeting a small portion that amounts to 1 million. The target customers of the business are young individuals who lie within the age group of 17 to 35 years, who are interested in healthy living and falls in middle and upper middle class. Competitive advantage The main competitor of Body and Balance is Bodychef who is offering same healthy food products that the business is dealing with. Bodychef has a monopoly in the market in which it operates. They focus on providing health services such as diet plans and also provide five different types of meal based on the body balance of the person (Bodychef, 2013). Apart from this the company also has some indirect competitors like Marks and Spencer, Sainsbury who are also providing healthy food. Some of the fast food chains have also planned to enter into this market but failed to erase their image as an unhealthy food supplier. The company has its competitive advantage as portioning, pricing and delivery. Since Bodychef has a monopoly in the market, so in order to penetrate this market the company has decided to offer their product at a lower price. They have their own website through which the customers can register themselves and order their products online but the minimum amount should be three days meal. 4. Marketing Strategy Initial target market The business is planning to target the customers who are between the age group of 17 to 35 years, falls in the middle and upper middle class and regularly goes to gym. The company has planned to set up their shop close to the gym in order to reach their initial market easily. Reason for choosing them This segment is more health conscious and regularly workout to lead a healthy life style. They will readily get attracted towards the product of Body and Balance. Deals to be offered The products will be offered at a lower price than the competitors. 100% free planning of meal by specialised nutritionists. Appropriate supplement will be provided on demand of the customers. Facility of placing online order for the goods is also provided. Unique selling point Lower price of the product than the competitors. On placing the minimum order of three days meal, home delivery facility will be provided. Provide sufficient amount of meal at an affordable price (Barnes, Blake and Pinder, 2009). Marketing Mix Product: The business provides healthy food for the customers for the provision of 1 to 3 days. Apart from these they also provide free diet planning, accepts special customised orders and food supplement. Price: The firm has decided to provide one day meal that includes three meals at a price of ?17.5 for each person. They incur a cost of ?9 and expect to generate a profit margin of 94%. Place: The shop will open in close vicinity to gyms located in Oxford Street. Promotion: The shop will be promoting its products through advertisements in the gym. On order to make the people aware of their products the shop will use social media, online marketing, billboards and brochures. These billboards and brochures will be placed in the gym (Masterson and Pickton, 2010). 5. Management Structure The organization will follow a decentralised management structure. Decentralised organization signifies that the authority that is committed to the material, money and people are widely diffused throughout the structure of the organization. In simple words the responsibility is spread over a wider range (Cole, 2002). The main advantage is that the senior management can concentrate on strategic decision making whereas other employees who are at lower level can facilitate the decision making by their profound knowledge about the environment rather than the person sitting at remote location. It also motivates the employees (Sutherland and Canwell, 2008). The main disadvantage is that the operations may be hampered if there is lack of communication and motivation amongst the employees and senior management. In future the company would like to expand their management structure along with increase in the responsibility. The top management will be responsible for strategic decision making while the lower level will take decision related to their day to day operations. At present the organization requires a minimum of 20 employees. Source: (Client’s presentation) 6. Sales targets and objectives The firm has estimated to incur cost of ?9 for each person for meal of one day. In order to generate a profit margin of 94%, the products will be sold at a selling price of ?17.50. Therefore the main objective of the business is to generate revenue of ?204,000 and estimated profit of ?102,000. Reference List Anonymous, 2008. Estonia company laws and regulations handbook. Washington D.C.: International Business Publications, USA. Barnes, C., Blake, H. and Pinder, D., 2009. Creating and delivering your value proposition: Managing customer experience for profit. London: Kogan Page Publishers. Bodychef, 2013. Low GI [online] Available at [Accessed 16 July 2013]. Cole, G.A., 2002. Personnel and human resource management. Connecticut: Cengage Learning EMEA. Durisin, M., 2013. Here's why healthy dining will be the next big thing in fast food. Business Insider [online] Available at [Accessed 16 July 2013]. IBISworld, 2013. Gyms, fitness centres in the UK: Market research report [online] Available at: [Accessed 16 July 2013]. Johnson, J. and Aldhamland, M., n.d. Organisational finance. Select Knowledge Limited Lacey, M.D., 2013. The shopping workout! 30-minute exercise routine that builds crucial bag-carrying (and credit card-swiping) muscles. Mailonline [online] available at < http://www.dailymail.co.uk/femail/article-2347265/The-shopping-workout-Gym-routine-Londons-Oxford-Street-shopaholics--easyGym-budget-gym-easyJet.html> [Accessed 17 July 2013]. Luther, W. M., 2001. The marketing plan: How to prepare and implement it. New York: AMACOM Div American Mgmt Assn. Masterson, R. and Pickton, D., 2010. Marketing: An introduction. London: SAGE. Shakespeare, K., 2011. Trade for good - The essential guide to business and finance in UK and international trade. Herts: Ecademy Press. Sutherland, J. and Canwell, D., 2008. Essential business studies a level: AS student book for AQA. Buckinghamshire: Folens Limited. Read More