Marketing Strategies - Report Example

Reflection Table of Contents Reflection Table of Contents 2 Introduction 3 Marketing Strategies 6 Financial Analysis 7 Conclusion 8 Reference 10 Introduction This report articulates the personal experiences while carrying out the project on yacht shipping company. In retrospect it seems that there were some segments which could have been done in a better way. This paper presents the effort that has been put forward to prepare the business plan. While making a business plan, a proper analysis of the respective market is very much necessary. In a group assignment, market analysis is done using secondary analysis. The sources were taken from various online resources and news articles. However, a primary analysis would have been more appropriate for gaining a proper idea of the respective market. The group report consists of five force analysis of the market. However, a PEST analysis of the market will also be appreciated. PEST Analysis Political Factors Europe is quite stable from the political point of view. With the advent of globalisation, buying and selling of yachts also registered raise. Certain tax regimes have encouraged the market and enabled it to flourish in the global market. Economic Factors The European economy is still on its recovery stage. Undoubtedly, the recent recession has cut down the purchasing power of the prospective customers. This has made the customers more diligent and careful while buying goods. They are looking for more advanced yachts and ensuring that a good value is earned from their deals. From the analysis of economic factors, it is recommended for the company to introduce different range of yachts for different niche of customers. Strategies are required to combine product differentiation with cost effectiveness. In this way the company would be able to expand its customer base to a larger one. Social Factors Europe is known for its affluent population who not only have the required wealth, but also possess the passion for a luxury life style. Yacht racing competitions are often organised in Europe and America, which are popular and are assumed to be a status symbol of affluence. Apart from this, yacht racing itself has been growing at a fast pace. All these factors have influenced the yacht industry. Technological and Environmental Factors Technology is a significant factor in today’s competitive business environment. With technological advancements, customer requirements have also undergone a sea change. The customers of this industry would like to buy more technologically enabled advanced yachts. In the wake of recent environmental awareness, the customers are now looking for yachts which are environment friendly. All these factors have changed the focus of this industry on new product development. Companies are trying to put their best step forward to meet the changing needs of the customers. PEST analysis is capable of revealing more about the changing needs of the customers along with providing an insight on the rationale behind the same. All these above mentioned factors have influenced the strategies of the companies operating in this industry. A business plan may also require a proper internal analysis of the company. A company must carry out SWOT analysis before preparing its business plan. The company must strengthen its strengths, remove weaknesses, reduce its threats and explore the opportunities. SWOT Analysis Strengths The company has a strong financial condition. The liquidity position of the company is quite strong. Apart from that, the profitability of the company also demands an appreciation. The company has positive cash inflow which can be used to explore the opportunities it is supposed to face in near future. Weaknesses From previous analysis, it is noticed that the company’s inventory management system is not quite efficient. The inventory level of the company is quite alarming. The company is required to look into this matter with greater caution to optimise its inventory level. The cash and cash like assets of the company are quite low. This demands an increase in the amount of quick assets of the company. This will reduce the company’s probability of default. Threats The current recession has emerged as a significant threat for the company. The financial downturn has reduced the purchasing power of the company. This has definitely slowed down the sale of yachts. Moreover, there are few affluent people in today’s society. These factors have emerged as significant threats for the industry as well as for the company. Opportunities The yacht racing has been experiencing a fast growth. So, the company has enough opportunity to explore this market. It has been noticed that the customers are looking for more advanced and new yachts. The company can involve itself by developing new products in an environment friendly, technologically enabled and cost effective way. The SWOT analysis of the company reveals a lot about the company’s internal condition. Analyses of the weaknesses and threats will help the company to frame a strategy in a more effective way. In the group assignment this process was not included which may result in an inappropriate analysis of the company’s internal conditions. Marketing Strategies As the recession has just passed by, the industry is still facing a slowdown in the demand. The customers are looking for new enhanced yachts and are quite diligent in the purchasing process. The company is required to invest in the new product designs and development. However, before that, the company is required to do a primary research to know the specific attributes which the customers would like to see in their luxury and sports yachts. Adding to it, the company must enhance and renew its strategies to meet the changing customer demands. An intensive promotional strategy can make the customers aware of the new and enhanced products. As yachts are luxury products, the company is required to promote its products in a place where the affluent people visit often. The company can even sell off its products to luxury hotels and large tours and travel organisations. In many places like Saudi Arabia, events have been carried out to show case these luxury products. The company can take part in these kinds of events to reach out to the prospective customer base. This previous report lacks this kind of analysis. Financial Analysis In the group assignment, a financial analysis has been carried out to analyse the condition of the company. However, few ratios have been calculated to draw the conclusion. For instance, in the efficiency ratios only the inventory turnover ratio has been calculated to measure the efficiency of the company’s inventory management system. However, the efficiency of the company’s receivable management has not been calculated. As a result, there was no analysis carried out for the company’s receivable management system. Even in other key financial ratios, there are more ratios which could have been measured for the betterment of analysis. Ratios like interest coverage earned, long term debt- equity ratios are needed for an enhanced analysis of the company. While carrying out the analysis of company’s liquidity position, only the current ratio has been calculated. However, there are certain other ratios which are required to analyse the liquidity position of the company. The analysis has revealed that the current ratio of the company is quite high. So it can be assumed that the liquidity position of the company is quite good. However, this may not be the case. The current assets include the cash, cash equivalents, inventories and receivables. The company has a higher inventory amount. This increases the current asset ratio. However, calculation of the remaining liquidity ratios like quick and cash ratio reveal more about the company’s liquidity position. The company’s net profitability margin has been calculated. However, the investors may be interested in other financial ratios like EPS, Return on Equity etc. In the group assignment report, these ratios have not been calculated. One must not forget that any business requires a considerable amount of capital to fund its operation. If the investors are not satisfied, the company may find it difficult to finance its projects. Moreover, one year financial data may not be sufficient for conducting an appropriate analysis. One year’s data will only reveal the present condition of the company. However, an appropriate analysis can only be done by comparing the results for a much longer period. A comparison of financial data between different periods reveals more consistent and reliable information about the company. There are different factors which influence the financial data of one year. However, assessment of the financial data in different periods would reduce the effect of those factors. The significance of the financial ratios can be realised by comparing the same with the average industry ratios. In the group assignment, the financial ratios of one year have been calculated. However, there are no standard values of the financial ratios (Taparia, 2004). That is why the ratios are required to be evaluated against the industry ratios to reveal more about the financial condition of the company. Conclusion This study has given me relevant exposure both to the marketing as well as the financial dimensions of a business. While carrying out this project, I learnt the relevant theories related to marketing and the manner it can be used in a real business plan. Adding to it, the industry has been one which operates in a niche market. Hence, the market strategies should be such that the company’s messages are communicated effectively to the prospective customers. Moreover, it acquainted me with the process of financial data analysis. Preparing financial statement was tough. However, it was interesting enough to attract my attention. In the future reports, I would like to include an analysis of potential risks faced by the business. This is significant as it helps in framing the operational strategy of a company more efficiently. The group has been extremely supportive and helped me out with the analysis part. The entire project was an enriching experience for me and I now feel more confident in applying my theoretical knowledge to a business undertaking. Reference Taparia, J. 2004. Understanding financial statements: a journalists guide. Marion Street Press, Inc. Read More