Identifying Business Ideas - Report Example

Work Book of Groups Members XXXX XXXX 2. XXXX XXXX 3. XXXX XXXX 4. XXXX XXXX Step Identifying the Business Ideas: There have been several ideas discussed in the meetings. The following were shortlisted to carry out a feasibility study and to finalize a business. Developing an Art Gallery Green Dry Cleaning Online Apparel DVDs and Books Step 2: Ideas discarded: Art Gallery: The main reason for discarding this business idea is due to the heavy decline in the demand for the high end art products in the last few years. The decline has been mainly due to the global economic slowdown and the art products were losing their demand. Green Dry Cleaning: Green Dry Cleaning was to provide an online booking system, where the customers can book for collection and delivery within 10 miles of the business location. The idea was discarded, as most of the operations involved required high labour and machinery and online medium can only be used as a booking system and forecasting demand will be a problem. DVDs and Books: Setting up an online shop for DVDs and Books were also discarded due to the prevailing competition in the market. It will be highly difficult to provide economic prices similar to the other stores, as they enjoy the benefit of economies of scale. Step 3: Justifications for choice of Business: Online Apparel: The idea for an online apparel shop was finalized. On researching the market, it was evident that there was a market gap – cheap and quality apparel were not marketed significantly online. Hence the Apparel business was finalized. Step 4: Re – examination of Ideas: All the potential businesses were re – examined with more focus on the apparel shop. The re – examination provided valuable input regarding the online apparel shop and the potential issues that might arise. These issues were discussed to figure out whether they can be overcome. At the end of this stage, the team members unanimously agreed on taking up the online apparel business idea. Section 3: Market Segments: Markets are heterogeneous and are created by reasons of different values, needs wants, constraints, beliefs and incentives. Customers differ in their values and perceptions and want to purchase things that have value for them. Value is not just the monetary part, but also the usefulness and emotions that with go with it. The need and want play a great role in determining this value. The price actually determines the location from which this purchase will be made. Service and reliability are other important determining factors. Therefore a market segment is a set of customers that have a common approach to above questions and have a common desire to purchase a common set of goods and or services. They also respond to such offers in a common way. Marketing segmentation would therefore cover the process of dividing customers who have a common need for common variety of products whose preferences vary in very narrow bands for these items. Marketing success depends largely upon the ability to divide the segments of different class of customers and catering to their particular and peculiar requirements at the ideal cost. Bonanza has studied this and has devised plans for different segments of customers to ensure that they are offered what is most suitable for them on the above basis. The main segment will however be the youth between 20-30 years who are highly mobile and cost conscious. They are also fashion conscious but have limited budgets. They begin to have families around this age group and prefer their child to be well dressed too. This class of customers travels a lot and is not averse to fashions from foreign lands. Work Book 2 Section 1: The Size of the market: The market size for an apparel industry is quite vast. Since our target market can be very vast, the size of the market for Bonanza can be considered to be as at least half of the population of Europe. This is mainly because our target market has been set as both men and women of all ages and children. Section 2: Direct and Indirect Competition: The Competition is quite vast. There are a number of companies which use the online mode of marketing and selling for their products apart from the physical stores. Come of the indirect competition could be classified as Marks and Spencer, Tesco, Zara and many more. However the direct competition includes a wide variety of websites like eBay, Amazon, Marisota, Simply be.com. These provide for wide range of clothing which could cause a high level of competition for bonanza.com. Section 4: Product Offering: Bonanza will be fulfilling the aspirations of the people and will have its office in Edinborough which is the undisputed commercial hub of the entire region. The novel feature of this business will be that it is an on-line B2C business venture which will have a virtual shopping space on the World Wide Web. Section 5: Strengths and Weaknesses of the Business STRENGTHS 1. The chosen business of Apparels is one of the basic requirements this industry is already well established 2, The idea of an on-line shop is not new but there is novelty that it is specific to the area of operation 3. The business has an advantage in having founders who are young and understand the needs of this large group of buyers 4. The founders have experience and exposure in the Apparel business as well as the model of the business venture 5. The excellent logistic support is the mark of excellence and assured deliveries bring customer loyalty 6. A new design every week and a fresh catalogue every quarter keeps the customer interest at a very high levels. 7. Connection with less expensive Asian manufacturing ensures quality as well as control on timely deliveries 8. Implementing an online solution will increase planning capabilities 9. The convenience of anytime shopping is a great attraction for otherwise busy customers with hectic schedules 10. Something for everyone, from Adults to children and all under-one-roof shopping is a sure winner WEAKNESSES 1. Infusion of capital at the right time is important to keep the momentum. If the company fails to invest it will loose its market share 2. Since customers cannot visit the e-shop in person, their interest can wane if new designs or styles are not presented regularly therefore the designers have to be able to cope up with this 3. Timely deliveries are essential and any logistic failure will spell disaster and blow out of proportion 4. Since the e-shop never closes it is imperative that an excellent system for booking and delivery is required 5. In absence of customer contact development of customer relations is difficult and cannot match the rapport that a salesperson can develop in a brick and mortar store 6. Constant communication and ability to attract new customers is a demanding task on the web. The company needs to keep up innovative methods to attract eyeballs Work Book 3 Section1: Value Proposition: Step 1: Target market segments: Bonanza has studied this and has devised plans for different segments of customers to ensure that they are offered what is most suitable for them on the above basis. The main segment will however be the youth between 20-30 years who are highly mobile and cost conscious. They are also fashion conscious but have limited budgets. They begin to have families around this age group and prefer their child to be well dressed too. This class of customers travels a lot and is not averse to fashions from foreign lands. Step 2: Core Benefits of product being offered: Bonanza also has tie-ups with far eastern manufacturers who are willing to support us at this stage as their own labels are far cheaper than the western labels. These manufacturers are also willing to offer supplies directly from their manufacturing plants to the logistics company who will then forward the goods to the ultimate consumers. This will save both on storage as well as logistics as shipment will be made directly by them to the customers. We understand the requirements, we understand the values and we are aware of the specific needs. For us it is easy to blend the two far apart concepts and produce clothing that is suitable yet modern and still within budget for use by our customers. We also offer the customer the convenience of shopping from homes and other locations of their convenience and at times of their choice. Thus the core benefits of the products offered is that it has a wide range, includes a cross cultural collection and also provides the customers with a chance to choose between a numbers of brands. Step 3: What are the unique capabilities that you consider your company will need to have in order to deliver the core benefit of the company to your customers? Bonanza will have a strong connection with its suppliers. This is mainly to provide the customers with the goods ordered in time. However we will be able to save on the expenses of buying and storing the products as we will have a contract with our sellers for ‘drop shipping’. Also the other essential capability that the company requires to have is the marketing ability to market products of various countries. For this the members of the group need to have a good knowledge of the style of clothing that is being included in the company along with a through knowledge of the durability and compatibility with the use in the countries it item is being sold. Step 4: Value Proposition of Business: The business will gain its value proposition from the competitive edge that the company has, i.e. the variety of choice. Also the main feature of the product that it will cater to the needs of the low cost and lower budget customers in a way is strength for the company. Also the idea of mixing the trends and providing the customers with a variety of products from across the world is a beneficial feature for the company as it will bring a higher variety along with the fact that the company will be able to easily provide cheaper branded dresses as well. The cost of clothes in countries in Asia is relatively cheaper and thus it will be still be profitable for the bonanza.com Section 2: Product Offering: Step 1: Unique Characteristics of the Product: The Bonanza advantage is that right from the management down to the designers we are all young people. We understand the requirements, we understand the values and we are aware of the specific needs. For us it is easy to blend the two far apart concepts and produce clothing that is suitable yet modern and still within budget for use by our customers. We also offer the customer the convenience of shopping from homes and other locations of their convenience and at times of their choice. Bonanza also has tie-ups with far eastern manufacturers who are willing to support us at this stage as their own labels are far cheaper than the western labels. These manufacturers are also willing to offer supplies directly from their manufacturing plants to the logistics company who will then forward the goods to the ultimate consumers. This will save both on storage as well as logistics as shipment will be made directly by them to the customers. Step 2: Core product offer, Basic product, Augmented Product: Core Products offered: Wide range of clothing from various places across the world. Basic Product: Low end cheap and quality clothing for both men and women. Augmented Product: The Augmented product that the company provides is a variety of offers and free items along with the items. Also the possibility for gift wrapping facilities and other consumer friendly facilities is provided as the augmented products for bonanza.com. Section 3: Resources for business The main need for the business is development of a well designed site. To do so, we would require recruiting a developer, a designer and another person who could provide a complete detailed process flow needed for the smooth working of the website. Apart from this the rest of the processes like finance, marketing and all other processes will be handled by the partners of the company. Section 4: Revenue Model: Step 1: What is the revenue model? The main revenue of the company is earned through selling the apparels online. This is the main source of income for the business. The business in some ways is one which is more of a commission based business. This is majorly because of the inclusion of drop shipping facilities. Here we act only as intermediaries. Thus most of the revenues earned is from the ecommerce website that will be developed. Section 5: Summary Value proposition The main segment will however be the youth between 20-30 years who are highly mobile and cost conscious. They are also fashion conscious but have limited budgets. They begin to have families around this age group and prefer their child to be well dressed too. Bonanza also has tie-ups with far eastern manufacturers who are willing to support us at this stage as their own labels are far cheaper than the western labels. Bonanza will have a strong connection with its suppliers. This is mainly to provide the customers with the goods ordered in time. However we will be able to save on the expenses of buying and storing the products as we will have a contract with our sellers for ‘drop shipping’. Product offering Bonanza will be fulfilling the aspirations of the people and will have its office in Edinborough which is the undisputed commercial hub of the entire region. The novel feature of this business will be that it is an on-line B2C business venture which will have a virtual shopping space on the World Wide Web. Resources The main need for the business is development of a well designed site. To do so, we would require recruiting a developer, a designer and another person who could provide a complete detailed process flow needed for the smooth working of the website. Apart from this the rest of the processes like finance, marketing and all other processes will be handled by the partners of the company. Revenue model The main revenue of the company is earned through selling the apparels online. This is the main source of income for the business. The business in some ways is one which is more of a commission based business. This is majorly because of the inclusion of drop shipping facilities. Here we act only as intermediaries. Thus most of the revenues earned is from the ecommerce website that will be developed. Read More