The Business Scenario for the Development of the Start-up Fresh Juice - Case Study Example

?Business Evaluation for Fresh Juice Table of Contents Feasibility Part: 3 Introduction 3 Business Model 4 Key Partners 4 Value Proposition 6 Key Resources 6 Customer Relationship 6 Channels 7 Cost Structure 7 Revenue Streams 7 Target Customer Group 7 Technological Considerations 8 Technological and Legal Feasibility 8 Industry Considerations 9 Marketing Strategy 11 Operational Analysis 13 Risk and Financial Considerations 13 Personal Reflection 14 References 16 Feasibility Part: Introduction Team Pyramids represents an entirely new business form named as ‘Fresh’. It is an exclusive form of business which caters to universities and aims at providing customers with juices that are freshly made. This business has been established with a view to provide the customers a best form of refreshment (Rasheed, n.d.). The company’s mission is to use the best quality fruits along with vegetables that have been bought or delivered within the very same day. Fresh Juice, as the product name, will be a refreshing agent for the tired customers and it will entail strong fruit values that will provide high energy to the customers. Correspondingly, this study intends to provide a business evaluation and feasibility report in relation to the business idea of ‘Fresh’ juice in the market. Furthermore, the report intends to incorporate in the feasibility part business model evaluation, industry considerations, marketing strategy and operational strategy assessment along with a personal reflection section. Business Model Business model canvas facilitates to have an in-depth understanding of the dimensions needed to be analysed for deriving information regarding the future prospects of the product. In accordance with the business model canvas, it is determined that it represents a strategic management mechanism along with entrepreneurial tool. It is essentially used in the business model design and invention among others (Business Model Foundry, 2013). The detailed constituents of business model canvas have been briefly explained hereunder with reference the business of ‘Fresh’. Key Partners In relation to the key partners for Fresh, it can be affirmed that the prudent relationship with them fosters promotion of the product at large. In order to promote the business, the key partners being selected and their advantages have been discussed below. The Universities: In keeping with the universities as a partner, it can be said that as the key target audience of Fresh would be students thus universities consent and support will be valuable to proposer the business. It can be affirmed that with the consumption of juice offered by Fresh, the students will be able to gain valuable strength and they will be refreshed as well by a considerable extent. The students within the universities are primary required to possess more concentration and energy in order to participate in various college activities along with addressing the educational pressures in the midst of the competitive scenario. Herein, Fresh juice can act as a refresher for them to change their mood and provide them renewed vigour instantly. Freundcontainer.com: This organisation is one of the America’s leading suppliers of packaging along with industrial supplies. Partnership with this particular company will enable to get the materials associated with the products at a reasonable cost. Moreover, relationship with this company will ensure the availability of quality products within applied time frame (Freund Container & Supply, 2013). Sunseedorganics.co.uk: Owing to the fact that ‘Fresh’ has concentrated upon the mission of providing organic fruits and vegetables as the ingredients of juice, the company Sunseed Organics will be a better choice. This organisation is regarded as one of the leading providers of organic fruits and vegetables (Sunseed Organics, 2012). Fluidbranding.com: The organisation is an experienced and professional merchandise supplier that provides innovative ideas and concepts pertaining to the promotion of a product. Thus, this partner can facilitate in branding the offerings of Fresh in the long run (Fluid Branding Ltd, 2013). The other promotional partners such as the papercupsupplies.co.uk, a1coffee.co.uk and Paypal also contribute to the acceleration of the promotional activities of Fresh Juice. Value Proposition The product quality entails healthy ingredients that act as increased strength boosters for the consumers The product is placed within the bottle to attract the customers The consumers’ willing to consume the product will be offered with the facility of membership to enhance their loyalty towards the company. This membership facility will provide customers’ various dimensional benefits The products being offered by Fresh in the market comply with governmental programs Key Resources The various key resources being used in the product development include ingredients for juices, employees, saucers, bottles, cups, straws, juicers and blenders among others. These key resources ensure proper execution of the operations along with packaging. Customer Relationship In accordance with customer relationship, it can be stated that in order to derive greater valuation amid the customers, the drink is being made in front of them. Moreover, to build up a trust based relationship with the customers the drink being made is directly served to them. Moreover, regular customers are given the offer of membership card that enables them to avail special discounts and benefits accordingly. Online forum is also made available to build customer relationship in the long run. Channels The channels of marketing that has been applied for delivering the products include on campus along with peer-to-peer options. Campus as a distribution channel ensures the acceleration of the product promotion. Furthermore, peer-to-peer distribution channel reflects the promotion of the product by using the internet as a medium. Cost Structure In terms of cost structure, it can be affirmed the key areas that would bring about an incurrence of cost in the business activities include purchasing bottles, cups, juicers, juice ingredients along with fees to be incurred to avail licence for selling the juice in the universities. Revenue Streams The revenue would be mainly earned by selling freshly prepared juice. Furthermore, selling up of the bottled juice would also assist in earning of revenue. The membership forms and cards also reflect as a crucial source of revenue earning. Target Customer Group The product being launched in the market segment incorporates the customers’ in two group i.e. lifestyle and socio-economic. Mainly, Fresh juice targets the customers within the age group of 18-30 years that represents single-bachelor group. This particular segment mainly focuses on leisure and recreation. ‘Fresh’ also aims at to segment its target market based on the social group that includes consumer-to-business. Technological Considerations In keeping with the legal structure that has been adopted in order to launch the product in the market, it complies with legal rules and regulations. Health along with safety laws have been taken into concern. Moreover, trade license has also been framed and signed for effective running of the product within the market. In order to use the universities as the promotional tool, permission has also been taken form the higher authorities. The legal structure being framed pertaining to the product enables to safeguard it from legal and health complications. Technological and Legal Feasibility License finder ensures the necessity of the legal structures for a small business. A ‘temporary Event Notice’ is considered as the licence required for carrying out legal activities within the ‘unlicensed premises’. In accordance with the aspect of ‘Occasional Licence’, it is basically required in case of the sale of alcohol. Furthermore, ‘Food Business Registration’ is required for carrying out food operations within premises. Financial feasibility frames an important part of the legal feasibility in case of the ‘Fresh Juice’. In keeping with the financial feasibility, it essentially includes start-up-budget along with cash-flow. In relation to the funding of the business, it has received its primary source of fund from the family savings. Furthermore, fund for the start-up of the business has been collected from the government. There are few governmental loans for initiating new business that ultimately will contribute for the societal development. Funds received from the government range around ?1,000 -?2500. Moreover, the fund for the business has also been contributed from the personal savings account. In relation to the cash flow statement, it would be analysed in details in the section of risk and financial consideration. Industry Considerations With regard to the industry analysis, the PESTLE analysis has been taken into consideration. For the sustainability and progress of the business being established, the aforementioned analyses frame a necessary part. Considering the political aspects, it has been observed that the prevailing changes along with the advanced laws related to licensing have been aligned with the governmental legal regulations. Moreover, the planning of staff design and implementation of the wage structure has been decided by considering the National Insurance and Minimum Wages. European Union along with the National Government guidelines that reflect the health issues associated with the type of business also need to be considered in relation to the operations of Fresh. Eventually, concerning the political aspects compliance with the Local and National Government healthy eating schemes needs to be ensured by Fresh in order to smoothly conduct its operations (Kaiser, 2008). Environmental elements have been considered for the effective execution of the business. Recycling is an important matter related to the concerned business. As the primary product offered is fresh juice, it is supplied in the bottles that are required to be recycled for the environmental benefit. The company has to ensure that it incorporates advanced measures for recycling of the by-products and waste materials to protect the bio-system from harmful effects. Furthermore, the production of the wastes, refuse and litter among others within the local area has to be properly monitored. Proper drainage system has to be ensured for the passing of wastes into the pool without harming the society and environment. The delivery of goods and cost incurred in the production and packaging also frames a part of environmental measures. With the acceleration of products using eco-friendly measures to combat environmental harm, ‘Fresh’ juice’ has to incorporate measures that contribute to the reduction in the carbon emission. Furthermore, in order to sell freshly made juices to the customers the packages or cups are required to be made of biodegradable elements (Kaiser, 2008). In order to efficiently execute the business of ‘Fresh’ juice, economical aspects have to be considered for the analysis and feasibility. In this regard, the gap has to be comprehended between the marginal propensity of the target consumers to spend and actual spending power of the customers. Furthermore, cut price offers for other kinds of juices in the supermarket promotion need to be comprehended by Fresh. The transportation cost pertaining to the delivery of the products has to be fixed considering the fuel prices. Taxation of the water rates, electricity and gases among others has to be duly considered that frames a crucial economic aspect in order to attain economies of scale (Kaiser, 2008). The latest technology being incorporated consists of quality production of juices. It entails production of differentiated forms of juices to provide a variety to the end customers. Latest promotional techniques such as multimedia, websites, social networking and blogs among others can play a vital role in promoting Fresh juice. Accelerated advertisement is required to be conducted to make the community aware of the product and its uses (Kaiser, 2008). The product being developed focuses on exhibiting its credentials amid especially the students within the campus along with various places where friends meet to socialise. Moreover, the products ‘Fresh’ have been prepared with a view to make it easily accessible to the society. It is quite convenient for the end customers. Correspondingly, initiatives ought to be taken to convey the society about the positivity and goodness of the product. This will ensure to abolish the negative perspective of the media in relation to the carbonated drinks. Moreover, the company has taken initiative to create awareness amidst the society related to health concerns and effectiveness of the fresh juice. As there are a wide variety of alcoholic drinks within the supermarkets for consumers’, it has increased the risk pertaining to health issues. In order to execute the business effectively within the competitive market scenario, it is necessary to have proper PESTLE analysis effectively (Kaiser, 2008). Marketing Strategy Fresh Juice has considered extensive market research for deriving target customers and positioning the product in the market. Marketing research analysis entails 7P’s of marketing context that ensures effective positioning of the product. The 7P’s of the marketing include product, promotion, place, price, people, physical evidence and process. Place as a key dimension of marketing mix to attract the key partners for positioning the product. Place frames a vital part for starting up a business. For the execution of ‘Fresh’ juice business such a place is required that will attract more targeted customers for the product. As determined in the business model canvas, university is the prominent place that has been selected to start up the business. Furthermore, it has been ascertained that in order to produce juices within the university premises approval of the government along with local authority is required. Promotion of any product is vital as it assists the company in making aware the general public about the product. In order to promote ‘Fresh’s’ offerings, various promotional channels have been applied. Radio station, social media and word-of-mouth among others are a few key promotional media being implemented. Provision for discount along with membership schemes among others are also a part of the promotional activities being undertaken by the company. The offered products include fresh juice that has been developed with a focus on providing the society with health drinks. Moreover, quality has been considered as the major area of focus with respect to the delivery of the products and services. Therefore, the raw materials i.e. fresh fruits and vegetables are used to prepare the juices. Availability of blenders makes it easy to handle multiple orders. These are the value propositions being applied with respect to the product being established. Price of the product has been fixed in accordance with the cost structure of the required elements for the product. The packaging materials such as bottles, glasses and ingredients and blender machines are considered for preparing the price structure of ‘Fresh’s’ offerings. Targeted group being selected for the product incorporates younger population within the age group of 18-30 years. Customer relationship has been taken into consideration as a major concern. In order to foster effective customer relationship, the fresh drink is prepared in front of them. Moreover, the presence of online forum and the membership facilities also ensure to build up a positive relationship with the customers. Physical evidence is possible in case of tangible products, where the customers’ are allowed tasting, smelling or touching the product before buying it. When the customers buy a product, they do so, on the basis of trust. In order to accelerate their trust, it is necessary for the seller to provide evidence pertaining to quality of the product. In case of ‘Fresh Juice’, it can be ensured that the customers’ will be provided with instant made juices at a low cost for tasting. This will act as a physical evidence for building up the trust of customers’ (Akroush, 2011; Clarity Marketing Ltd, 2005). Process in marketing mix dimensions includes the value chain process that makes the work easier for the employees. In an effective process mechanism, it becomes easier for the staff to receive and deliver the order with efficiency. Operational Analysis In keeping with the operational analysis as a part of the strategic decision, it entails the key resources along with key activities. Key resources reflect about the elements that frame the necessity for the sales of the product such as bottles, cups, juice ingredients and staff among others. Concerning the key activities, it includes the collection of resources and major operational processes that are important for the product sale. In relation staff, initially the number of required full time staff would be around 10. As the business grows and more universities and locations are served this number would rise up considerably. In terms of scheduling, the business start-up would require around 6 months to establish itself amid the target market segment. Risk and Financial Considerations Cash Flow: Amounts in (Pounds) Year 1 Year 2 Year 3 Cash Received from Business Cash Sales 52500 58000 61000 Additional Cash Received 5000 5900 6400 Total Cash Received 57500 63900 67400 Telephone & Electricity Expenses 1200 1800 2100 Payroll 1448 1600 1800 Websites 360 500 550 Juicer 960 1200 1400 Blender 600 800 1000 Gas rate 60 90 120 Water Rate 20.5 30.5 40.5 Rent (10%) 5250 5800 6100 Cups 900 1000 1400 Straws 59.4 64 75 Other Storage Equipment 400 800 1000 Total Expenses 11257.9 13684.5 15585.5 Cash Balance 46242.1 50215.5 51814.5 In relation to the aspect of risk, assessment of risk dimension needs to be followed by Fresh in order to evaluate the prevailing market scenario and take corrective measures. The key risks that the business might face include the threat of competition, quality related issues concerning the offered juices and lack of product development to address the evolving customers tastes and preferences. Personal Reflection In order to start-up any business, entrepreneur skills are an important requirement. By analysing the type of business and product, I would definitely like to pursue this particular business opportunity. In this business scenario, the initial investment is not as much as compared to any other business. Moreover, in case of ‘Fresh Juice’, the customers will be enabled to consume health drinks at a reasonable cost. Freshly made juices remain always in demand within the younger generation. This business opportunity will allow me to develop my entrepreneurial skills to a greater extent. Development of my personal traits and attitudes will enable me to become a successful businessman along with enduring innovative skills, motivational skills, and self-esteem among others. In this business scenario, I can apply my innovative skills in attracting more customers for the product. Moreover, by entering into this business, it will enable me to enhance my self-esteem to a greater extent. In the similar manner, I endure the attribute of motivating others into action. This will enable me to keep the entire process on track and effective. Thus, from my point of view, this business purview is the best option for development and growth. References Akroush, M. N., 2011. The 7Ps Classification of the Services Marketing Mix Revisited: An Empirical Assessment of their Generalizability, Applicability and Effect on Performance - Evidence from Jordan’s Services Organisations. Jordan Journal of Business Administration, Volume 7, No. 1, pp. 116-147. Business Model Foundry, 2013. The Business Model Canvas. Canvas. [Online] Available at: http://www.businessmodelgeneration.com/canvas [Accessed December 12, 2013]. Clarity Marketing Ltd, 2005. The Marketing Mix 7Ps of the Marketing Mix… …A Framework for Complete Marketing. The 7Ps of the Marketing Mix, pp. 1-4. Freund Container & Supply, 2013. About Freund Container. Home. [Online] Available at: http://www.freundcontainer.com/about/a/2/ [Accessed December 12, 2013]. Fluid Branding Ltd, 2013. Promotional Partners You Can Trust. Home. [Online] Available at: http://www.fluidbranding.com/company/ [Accessed December 12, 2013]. Kaiser, U., 2008. A Primer in Entrepreneurship. Chapter 5: Industry and Competitor Analysis, pp. 2-17. Rasheed, H. S., No Date. Developing Entrepreneurial Characteristics in Youth: The Effects of Education and Enterprise Experience. International Journal of Entrepreneurship Education, pp. 5-24. Sunseed Organics, 2012. About Us. Home. [Online] Available at: http://www.sunseedorganics.co.uk/ [Accessed December 12, 2013]. Read More