Jewellery Business in the Markets of Brazil - Essay Example

Business plan Executive Summary This essay highlights details about starting a new company, which is related to the manufacture and designing of artificial jewellery called Belle. The company will be located in the beautiful country of Brazil as it has the largest population of nearly 733-739 million, which is about 11% ( CHANGE....) of the total population of the world, availability of a number of talented artists and crave for beautiful jewelries, it would be very fruitful to start the business here. The business plan will Business Opportunity Market Gap: In 2013 there was an economic slowdown yet the jewellery business witnessed an excellent performance where there was a growth rate of 10% in terms of the current value. This category was based on performance of the real jewellery which. As the key consumers of real jewellery are the wealthy persons, therefore they appeared to be less sensitive to the sudden economic slowdown and as a result amongst the other personal accessories, jewellery performed the best. With the positive economic scenario, jewellery sales will continue to grow in the markets of Brazil over the period which is forecasted by the analysts ( ). A Compounded Annual Growth Rate (CAGR) of 10% in respect to this business is projected by the analysts over the forecasted period. The increase in sales value will be dependent on the rise in the unit prices, because sales volumes are likely to see a reduced amount of growth as compared to the value( Confusion). The number of jewellery stores have increased in brazil, Left.... CHANGE.... Product Offering: The business will be based on the production and designing of artificial jewellery in Brazil. The jewelleries will be designed as per the latest trends and based on the specifications of the customers as well. The products will have a variety of ranges and designs for customers belonging to various standards. There will be use of precious as well as artificial stones on the jewelleries offered by Belle, as per the need of the customers. Various metals will also be used by the company for making the jewelries. Unlike other jeweler stores, the products offered by Belle will have a sole motive to cater to the need of the people coming from different standard of living. It will have a variety of jewelleries on offering within affordable price ranges. Micro Market Analysis Target Market Size: The target market of Belle will be Brazil. It is the fifth largest country in the world. The standard of living of the people of Brazil is quite high. The company will open a shop in Brazil, as the country has a number of real jewellery based shops but lacks artificial jewellery shops. The shop will offer jewellery for people of all age groups and standard of living. The rich and the middle class people of Brazil will all be able to purchase jewellery as per their need and budget. Current Trends Artificial jewellery is a rage and the latest trend in the jewellery market which is popular among all age groups of consumers, especially women. Belle will have expert jewellery designers to cope up with the changing trends. Latest designs will be offered to the customers and the company will try to be a trendsetter by introducing fresh and eye catchy designs as often possible. The artificial, jewellery market is making huge turnover worldwide because of the variety and the diverse segments of price. As Brazil lacks on the count of the artificial or fashion jewellery based companies, Belle will be a much needed change here. Dynamics The dynamics in the artificial jewellery industry are increasing the pace in Brazil now. Brazil mostly has real jewellery based shops of gold, silver and precious stones. The number of artificial jewellery shops has increased in Brazil from the past, but they lack in the ranges of design, due to which the consumers are least attracted to most of these shops. Therefore, Belle will try and focus in these areas and hire the best of designers. Target profile The target profile is based on the primary research which is conducted by the distribution of survey forms to the various families in Brazil. This helped to understand the vogue and craze for artificial jewellery. Out of the 32 participants, 19 of them who made the highest expenditure on various artificial jewelries were chosen as the target audience. The reason for choosing them is because of the fact that these jewelries are most likely to suit their needs (Appendice 1). The similarities of these participants can be highlighted as follows: Age- 27- 65 years old Occupation- 12 housewives and 7 professionals Average expenditure on artificial jewelries- R$ 400. Number of times artificial jewellery purchased in a month- varies Number of times artificial jewellery purchased in a year- at least 5 Price of the jewellery- important factor Design of the jewellery- important factor Most of the women give importance to these jewelries design, price and quality. Variety is also considered an important criterion for their purchase. Target Behaviour The target behaviour of the customers of Belle can be described through the use of VALS framework: Figure: 1- VALS FRAMEWORK (Source: ) The customers should have a penchant for artificial jewellery. Left….. They should be able to welcome the fresh and new designs introduced to the artificial jewelries. They need not be rich and can belong to any class or strata. The customers may select any design for their jewellery. Therefore Belle would expect customers who are able to adapt to the fresh changes introduced to the existing designs of artificial jewelries. The designs will be sober, sophisticated yet trendy to suit the needs of all the customer types. Customer Profile The customer’s profile of Belle will consist of the customers of mostly between the age group of 27-65. The customers targeted will be people of all age groups and standard of living. They should have a penchant and love for the artificial fashion jewellery. The customers should be able to accept new and innovative designs introduced by the expert designers hired by the company. They should have a knack to experiment with variety of designs and are free to share their design requirements anytime with the company. Macro market and drivers PESTEL Analysis Politics – They are lack of help from the Government for the improvement if this sector. Instead the government charges high taxes from the traders for exporting these jewelleries. The government regulations on the mining of gemstones also added to the operational costs of the jewellery business. Therefore, it is important for the government to remove all the barriers on the jewellery business and support the traders to the best of their abilities. Economic – The economic factors of Belle can be attributed to the purchasing power of the people of Brazil. It is the seventh largest country in the world in terms of the nominal GDP and parity in the purchasing power. The GDP of Brazil in 2013 was $2.503 trillion of US dollar. The prizes of the products of this country are based on demand. The economy of this country is growing fast. Therefore, the standard of living of the people and the level of employment of the people of Brazil are quite high. Therefore, the scope of the artificial jewellery business will be wide for Belle. The lack of fashion jewellery companies will help Belle to operate with more flexibility and expand faster. Social – There are a number of people in Brazil who are no more interested to purchase gold, silver and platinum jewellery at high prices any more. Many people are gaining interest to purchase artificial jewelleries at reasonable prices and with variety of designs in the offering. The craze for fashion jewelleries like trendy neck pieces, earnings, bracelets, anklets are increasing all over the world including Brazil. People are ready for experimentation at the least cost. Therefore, with the change in culture, it would be profitable for the company to open a store in Brazil. Technology – There is lack of support from the government which is detrimental to the growth of this sector. Government charges huge taxes from the traders of the artificial jewellery business and the increase in the labour cost, is adding to the operational cost of this sector. There is lack of support by the government towards the Research and Development (R&D) needed for the expansion of this sector. The import of the latest technology for designing the jewellery and stone cutting can enhance and accelerate the flow of work. Therefore, the initiation of the government for the technological development is much needed. Environment – The healthy environment of the place of work can enhance the quality of work. In the same way, the jewellery shop of the company should also have a traditional Brazilian environment which is rich in culture. The employees of the shop should be presentable and helpful. The presentation of the jewelleries should be done in an attractive manner as well. Legal – Belle will abide by all the legal formalities before starting the company so that it need not face any legal hazards in future. Competitive Environment & Direct Competitors Porter’s 5 Forces- It is a very important planning tool for any business. It helps to underline the strengths and overcome the weaknesses of any business. This model helps to increase the competitive efficiency of any business. Fig: 2- Porter’s 5 forces (Source: ) The five important threats that Belle can face in this business can be described as follows: Substitute products - This threat can be attributed to the competitor’s ability to attract the customers of Belle. This threat can be overcome through improved designs, quality of the product of the company. The jewelleries should be designed as per the trends. The designs should not be replicated by the designers to the best of their ability and the cutting and designing of the precious stones should also be unique. Therefore, the designers for Belle will be selected bundle of educated designers from the best designing schools. The ambience of the shop will be touchy and the staffs will be trained so as to provide the right presentation to the customers. Discounts will also be given to the customers to attract them towards the shop but there will be no compromise done on the quality of the product. Therefore, it will difficult for other companies to get hold of the customers of Belle. New Entrants – Belle will always upgrade the designs and the quality of service given to the customers. It will also try to maintain the economies of scale at the same time so that it need not compromise on the profitability. It will try and adapt to the changing trends in the artificial jewellery producing and designing business. Therefore, it will difficult for the competitors to take the position of Belle in this business. Competitive rivalry – There are very few competitors in the artificial jewellery business. Even if there are competitors Belle will overcome the competition through the world class designs of necklaces, earnings, bracelets, anklets and rings it has. It will diversify the business and export the products to different parts of the world. The excessive production will help it to reduce the cost and increase the revenue margin. Thus it will be tough for the competitors to take away the market of Belle. Power of Suppliers – Belle will have multiple sources of supplies. There will be no single supplier to the company. A presence of a single supplier might be harmful for the company as they can influence the price of the product considerably. The precious stones and metals will be taken from a variety of suppliers. The company will maintain healthy relation with them and provide them incentives at times. Power of Consumers – The consumers will be attracted to the company by the best of the designs, quality of the products and the services provided by the company. Sometimes, the products will be sold at heavy discounts and delivered to their home free of cost. The consumers might have number of choices in the market but due to the quality of the product and services of Belle along with the ambience of the shop, it will, be difficult for the customers to switch their loyalties to the other companies. Sustainability Unique Selling Point (USP) – The USP of the company can be jotted down as follows: The expert designer from the top jewellery designing schools The ability of the customers to provide designs of their choice and get the jewellery done as per their specification The in-depth presentation and services provided by the staffs Free delivery of the products if needed by the customer immediately The traditional ambience of the store Critical Success Factors (CSF) – The critical success factor of the company can be directly attributed to the factors as described below: Start up capital The company will start the business with a startup capital of Ambience The ambience of the company will be of top class, with a traditional effect of the Brazilian culture so that the customers can feel connected right from the beginning to the store of Belle. Design- The design of the jewelleries will be different from each other. Each design will be quite unique and intricately made with the proper usage of the precious stones wherever needed. Designers The designers will be selected after proper examination of their skills from the best jewellery deigning institutes. Staffs The staffs will be given formal training so that they have in-depth knowledge of the work they are doing and can present the products to the customers in the best of their abilities. Racks in which the jewelleries will be kept The jewelleries will be kept in the racks and will be focused by proper lights so that it can grab the attention of the customers immediately. Accounts The accounts of the company will be maintained by the finance department in the headquarters of Belle. Human Resources The human resources will be controlled by few efficient Human Resource manager of the company. Start‐up Finances – The startup finances of the company will be taken from bank and half of it well be taken from personal sources. Excessive debt of the company can be harmful for it in the long run. Hence the Belle will partly Rs. Amount baki…. Post Start‐up Finances – The SWOT analysis – The usage of this method of analysis helps the company to determine its Strengths, Weaknesses, Opportunities and Threats. This can be effectively explained in details in the following manner: Strengths – The Read More