Enterprise and Business Development - Term Paper Example

Enterprise and Business Development To start a new business or to establish a new company owners should take into consideration theories, methods andmodels to analyze business perspectives, opportunities and possible threats. So, they should use business strategy, and strategic planning, as well as the main established theories. The purpose of a business is to get and keep a customer. Business plan aims to decide what companies should do to achieve that purpose and then to ensure that it is done. As companies are dynamically evolving entities operating within a dynamically evolving environment, some means of evaluation of the way in which the two interact has to be found to enable them to be better matched. Marketing plan for Laundry services Target Market Be in one of the most highly rated industries for stability and success, Laundry services offers an opportunity to everyone who wants to earn a high return. It is advantage is that laundry services can be located everywhere. It is possible to build a brand new laundry services. Being a laundry service is probably the most overlooked fashion-related career. They should maintain a friendly, fair, and creative work environment, which respects diversity, ideas, and hard work. However, more than ever, people need laundry services, including the rich and famous or simple people who simply need to look their best in their favorite outfit. Whether the clients own expensive designer garments or whether it's just simple cloths people trust their laundry services to remove spots, repair hems and make sure those garments looking their best (Boone, Kurtz, 1992). Customers The bargaining power of customers is great. The range of services is standardized, but on the other hand laundry services is the key industry in its group which secure it from decrease in services. Laundry services targets three main groups of customers: individuals, public sector and private sector companies (hospitals, beauty salons, universities, hotels, etc). For attracting new customers Laundry service can open an advertising campaign. Primarily, it will be oriented on the following groups of new customers: pensioners from the southern part of the city, families with children aged 5-12 years, students. Source of competitive advantage Laundry service is an expert in apparel and fabric cleaning and caring that utilizes the latest solvents, technologies and equipments to prolong the life of a piece of clothing or household item. Laundry services marketing challenge is to position service offerings as the high quality, high value-add alternative. Opportunities of Laundry service are evident. It is simple and economical. While the idea of Laundry services is not a new revelation, Laundry service provides a simple and economical means to start own business. Laundry service is one of the most needed cleaning businesses in the market today. The intensity of rivalry between competitors in an industry depends on the structure of competition. Rivalry is less because laundry service is a clear market leader. Degree of differentiation is not large (Porter, 1980). Laundry services belong to a service where competitors can differentiate their services and that is why have less rivalry. Rivalry is reduced where customers have high switching costs - i.e. there is a significant cost associated with the decision to receive service from an alternative competitor. Laundry services propose to its customers competitive prices and ensure customer satisfaction. Configuration of resources laundry services provide the finest equipment which can be installed within 800 to 2000 square feet. The equipment's compact size can be set up in a variety of business areas including a mall, shopping center, office building, parking lot kiosk, supermarket or any high traffic location. Laundry services make it simple and convenient for busy people to routinely have their clothes cleaned. From an economic perspective, however, a city does not represent a population within rigid geographical boundaries. To an economist or strategic planner, a city represents an area of dominant influence over markets in adjacent areas. This influence varies from one industry to another, but also from one period of time to another. Brand new thriving laundry services company consisting of a full size plant and a drop store. These are clean sharp stores in upscale locations. Needs and Requirements Laundry services target is on average as dependent on reliable information technology as any other businesses. They care more about reliable service and confidence than about the rock-bottom lowest price. They don't want to rely solely on their own expertise, so they choose instead to deal with us with our promise of service and support when needed. Laundry services use different solvents while washing based on types of fabric, and that is why there is no any limitations to buy required materials. Laundry services propose better cleaning than its competitors Dry cleaning, because they clean all types of fabrics, without any exception. The keys to success in Laundry services are: location: providing an easily accessible location for customers. environment: providing an environment conducive to giving relaxing and professional service. convenience: offering clients a wide range of services in one setting, and extended business hours. A Laundry services has the privilege to decide the level of services they want to offer and there will always be customers to use those services. With "wholesale" Laundry services opportunities can grow any business whether it offers services to consumers or corporate clients. Another opportunity is to become a consultant to other Laundry services. Market research Laundry services market are very fragmented in terms of supply, with a large number of smaller operators being characteristic. The majority of businesses offer services to a relatively small geographical area, particularly in the retail segment. Consolidation is an ongoing process in the sector. A frequent complaint is marketing's preoccupation with short-term thinking, and an almost total lack of 'strategic thinking', or considering the longer-term implications of external and internal influences on the organization. Another complaint is that marketing plans consist largely of numbers, which bear little relationship to, and offer little insight into, current market position, key opportunities and threats, significant trends and issues, or indeed, how to meet sales targets. Financial objectives, while being essential measures of the desired performance of a company, are of scant practical help, since they say nothing about how the results are to be achieved. The same applies to sales forecasts and budgets, which are not marketing objectives and strategies. Basing company plans on a combination of forecasting and budgeting systems can only work if the future is going to be the same as the present or the past (Welford, Gouldson, 1993). Bear in mind Porter's 5 P's or five "competitive forces" which include: the threat of entry of new competitors (new entrants); the threat of substitutes; the bargaining power of customers; the bargaining power of suppliers; the degree of rivalry between existing competitors, it is possible to evaluate the effectiveness of marketing plan (Porter, 1985). New entrants to an industry can raise the level of competition, thereby reducing its attractiveness. Laundry has competitors, but they do not have a great influence on the company's revenue. The presence of substitute services like washing, etc can lower service attractiveness and profitability because they limit price levels. The market is divided into groups according to standard lassifications used by market research companies: individual customers and companies. The Company cannot survive just waiting for the customer to come to it. Instead, it must get better at focusing on the specific market segments whose needs match our offerings. Therefore, Laundry service needs to focus the marketing message and its service offerings. The marketing mix consists of the way in which the various component parts and techniques of the marketing effort are combined and varied in order to achieve marketing objectives (Sterman, 2000). Product/Service Laundry service is a full service dedicated to consistently providing high customer satisfaction by rendering excellent service, and furnishing an enjoyable atmosphere at an acceptable price relationship. The problem is that many companies are specialized on innovative dry cleaning techniques which are not appropriate for many types of cleaning, and the price of their services higher than in comparison with traditional laundry services. Convenience is not the only reason customers will frequent Laundry services business. Laundry service is creating a niche in the market today. Most Laundry services needs will be taken care of quickly, easily and for one economically low price services. Price. Laundry Company proposes different services and the price for each varies. Service Charges - Wash & Dry Small Machine 1.75 Dry Only 1,99 Large Machine 2,00 Delivery (Each Way) From - 1.50 Complete laundry services Shirt, Dress Shirt 1.30 Sweatshirt 1.20 Trousers 1.99 Polo Shirt 1.10 Jeans 2.20 Large Table Cloth 2.60 T Shirt 1.10 Small Table Cloth 1.50 After service wash and ironing Shirt, Dress Shirt 1.10 Sweatshirt 1.00 Trousers 1.50 Polo Shirt 1.10 Jeans 1.40 Large Table Cloth 1.00 T Shirt 1.10 Small Table Cloth 0.80 Promotion The armory of communication techniques at the organization's disposal, which might be used singly or in combination, can be blended together into an effective and persuasive communications mix. The choice of communications mix should be the most cost-effective solution for achieving the organization's communication objectives. Direct Marketing via the media, call centres or the Internet gives laundry service new opportunities. This may allow lower costs or higher margins, thus gaining either a competitive edge or matching the new service. With the Internet the customer will be "online" with the brand services. Current inefficiencies and thus the cost-burden of sales and distribution systems of the old economy can be overcome (Johnson, Scholes, 1998). The used media, ranked in order of importance are: 1. Telemarketing, Telemarketing is currently the leading direct marketing medium by spend. Spend on direct mail continues to increase, despite the advent of new media and the use of TV as a direct-response medium. The database takes a pivotal role in communications and it is an important budgetary consideration. An advertisements are placed in the Press, on TV or radio and consumers are encouraged to order directly by telephoning. The use of demographic descriptors can be helpful in identifying commonalities. For consumer markets, these include age, sex, education, stage in the family, life-cycle, and socio-economic group. 2. Direct mail. A company can reach a widely dispersed target market, it can help Wendy present its message in a very personalized way, it offers the opportunity of informing consumers in details about the complete range offered. The disadvantages are: too much direct mail is currently is used. Press advertising and magazine display, The advantages of National Press are: Cost-effective media where offering has broad appeal; Can create an impact and be persuasive; Allows more scope for testing than TV. The disadvantages are: Not personalized; High fixed cost per ad; run risk of low response levels; Best times to advertise are also best times for competitors to advertise -message can be diluted alongside competitor ads (McDonald, Christopher, 2003). The Choice of Press issues should be based on readership. It refers to the total number of people who probably will read the publication. For example trade and technical publications are often read by people other than the purchaser at the purchaser's place of work. Sunday newspapers and colour supplements are invariably passed around the family for reading. The choice of communications mix should be the most cost-effective solution for achieving the organization's communication objectives. Wendy will need to use: 1 Bonusing This should take the form of monetary discounts or 'free goods', or special quantity rate terms. 2 Incentive schemes These should be tailored to the needs of a retailer's sales staff and may also include competitions, particularly for sales staff. 3 Dealer loaders Instead of money, gift incentives may be offered; 4 Provision of display materials These can be either free of charge or on a shared cost basis 5.Tailor-made promotions These are custom designed to the outlet's individual requirements, often promoting their own name and corporate. Thus it can be seen that trade promotion can be an extremely important dement within the total market strategy in helping to ensure that stocks are available in the right distribution channels and at the right time - and are actively promoted at point of sale (McDonald, Christopher, 2003). The advertising comparing will include TV, Cinema, Press and Internet as well as written and broadcast advertisements, brochures, leaflets, presentations and face-to-face or telephone communications, bonds, gilts, futures, collective investment schemes, structured deposits, deposits and general insurance. Using "Immediate benefit promotions" Wendy's consumers reward for purchasing is immediate, and, as with most incentives, the sooner the reward can be expected and received after the qualifying action, the greater will be the positive effects of that incentive in stimulating purchase action. Included in this promotion category are: price reductions; free gifts banded pack offers (service plus discount); economy (special proposition). It is necessary to use repetition in promotion campaign because it is as important as the promotion itself. Research has shown that over 95 percent of people forget the exact message within six weeks of seeing it. Management HR Laundry Company should employ professionals in cleaning industry which is created to achieve specific organizational objectives and are concerned with the co-ordination of work activities. In this company people will be brought together on the basis of defined roles within the structure of the organization. The nature of the tasks to be undertaken is a predominant feature of Laundry Company. The demand from the owner's clients, and the procurement of highly professional staff to support the service, has made this business one of great potential. Maintenance of high standards is a key factor to maximizing customers satisfaction. The purpose of maintenance of high standards is to attempt to maximize the performance of service by ensuring that it performs regularly and efficiently. Service, however complex or simple, however cheap or expensive, is liable to breakdown. The effective operation of any system is dependent on the maintenance of all parts of the system, e.g. buildings, services. Indeed, company welfare or personnel practice is designed partly as a maintenance activity, e.g. training and retraining to maintain the availability of appropriate skills, facilities to maintain human capacity, counseling to maintain interest and motivation (Harris, 1989). Specification in the laundry company is determined as a result of an organization's policy, which in turn resulted from decisions on its market policy, which in turn resulted from its consideration of the market or customer needs, requirements, and the activities of competitors. This is the process of designing quality into the service. Sales strategy is on a one-to-one basis.All customers will feel they are a valued friend of Laundry Company, and that all employees care about their clothes (Harris, 1989). Financial forecast (see appendixes 1,2,3 ) To achieve the objectives, the owner is needed 24, 000 pounds approximately. The objectives for Laundry Company are: To be viewed as a premium Laundry in the particular region. Expand to one locationafter first year of operation, and two locations after the third year of operation. Rent on the location has been negotiated and will be 1,000 per month.In addition, insurance for the business will be approximately 150 per month and will be paid by direct debit on a monthly basis. All of the equipment will bedepreciated over three years. Financial data shows that the laundry company will be profitable and will receive high revenue a year (See appendixes 1,2,3). In addition, it will be possible to open new stores (one store in the next year, and two in two years after successful market activity). Laundry services operate in the local market. Sales are seasonal in this industry, tending to be higher in the summer months, and to drop off in the winter. However, we will aim to flatten sales across the sales cycle by targeting segments. Sensitivity analysis The appraisal of almost any investment project in the real world will involve the making of a great number of estimates. For example, the outlay required to undertake the project, its life, the annual cash inflows and outflows it will generate, the scrap value it will have, and even the correct rate of discount to reduce the cash flows to present values. Estimates will be made for all these factors and the project will then be appraised by calculating an expected net present value. If this NPV is positive then the appraisal is in favour of acceptance. But, in terms of down-side risk, the decision maker is also interested in how sensitive the advice is to changes in the estimates made about the project. In other words, he is likely to be interested in the margin of error that there can be in the estimates made about the individual components of the project (i.e., outlay, life, etc.) before the advice that the appraisal gives (in this case to accept) becomes incorrect. The advice to management is that the decision given by the NPV calculation s insensitive to changes in most of the estimated variables. However, if the revenues were the fall by 10% of their estimated value the original decision advice would turn out to be incorrect, Hence it may be worthwhile to re-examine the estimates of annual revenues tc see if the company's confidence in their accuracy can be improved (Mott, 1993). It is possible to conclude that with the changing economic environment, factors such as globalization of markets, international economic integration, removal of barriers to business and trade and increased competition have enhanced the need of transportation. It is one of the most important infrastructure requirements, which is essential for the expansion of opportunities and plays an important role in making or breaking the competitive positioning. Laundry Company should follow marketing plan, because organizations without effective marketing planning systems, while it is possible that they are profitable over a number of years, especially in high-growth markets, will tend to be less profitable over time and to experience problems that are the very opposite of the benefits referred to above. Furthermore, companies without effective marketing planning systems tend to suffer more serious commercial and organizational consequences when environmental and competitive conditions become hostile and unstable. References 1. Berry, A. Jarvis, R. Accounting in the Business Context. 2.edn., Chapman & Hall, London, 1994. 2. Boone, L.E., Kurtz, D.L., Management, 2nd Edition, McGraw-Hill, New York, 1992. 3. Cravens, D. W., Strategic Marketing, Homewood, Irwin, 1982. 4. Hodgetts, R.M., Management: Theory, Process and Practice, 4th Edition, 1986. Academic Press, College Division, Orlando. 5. Johnson, G., Scholes, K. Exploring Corporate Strategy. Hemel Hempstead: Prentice Hall. 1998. 6. McDonald M., Christopher M. Marketing: A complete Guide. Palgrave Macmillan, 2003. 7. Mott, G. Investment Appraisal. Pitman, London. 1993. 8. Porter M.E. Competitive Strategy: techniques for Analyzing Industries and Competitors. New York, Free Press, 1980. 9. Porter M.E. Competitive Advantage. New York, Free Press, 1985. 10. Harris N., Service Operations Management, Cassell, 1989. 11. Welford, H. Gouldson, K., Environmental Management and Business Strategy, Pitman, 1993. 12. Sterman, J. D. Business Dynamics: Systems Thinking and Modeling for a Complex World, Irwin McGraw-Hill, New York, 2000. Appendixes Appendix 1 Monthly forecast for 1st year: Month, 1 2 3 4 5 6 7 8 9 10 11 12 Total Receipts from sales 5.000 5,000 6,000 6,000 6,000 6,000 7,666 7,666 7,666 7,666 7,666 7,666 80,000 Payments to suppliers etc. 4.000 4.000 4.200 4.200 4.200 4.200 6,323.5 6,323.5 6,323.5 6,323.5 6,323.5 6,323.5 61,941 Net cash flow ($000) 1,000 1,000 1,800 1,800 1,800 1,800 1,121.5 1,121.5 1,121.5 1,121.5 1,121.5 1,121.5 18,059 Cumulative net cash flow ($000) 700 700 800 800 800 800 800 800 1,000 1,000 1,000 1,000 10,200 Appendix 2 P&L account for the 1st year. , a year Sales 80,000 Cost of sales 48,000 Gross profit 32,000 Net Operating Expenses 14,290 Profit on ordinary activities before taxation 5,710 Taxation 1,941 Profit for the financial year 3,769 Appendix 3 Read More