Mega Sports - Online Sports Goods Store - Business Plan Example

BUSINESS PLAN MEGA SPORTS: ONLINE SPORTS GOODS STORE INTRODUCTION Starting a business requires comprehensive exercise that enables business to determine the business details that are capable of attracting planned target market. The underlying business plan is developed on the aforementioned guideline. The business plan is based on the establishing an online store for the sports goods with the name of Mega Sports. The plan includes a discussion based on the requirements and essential for opening an online sports goods store. The overall plan is divided into two sections: first, in depth review of the business and the second section is based on the providing detailed information about the target market. Collectively, the plan includes the description of the business, analysis of the environment; the market analysis, customer segment etc. SECTION I This section, as mentioned above, is aimed at providing the in-depth assessment of aspects that are considered in developing the plan for the business. The section also outlines the attributes of the business considered to make the business sustainability on economic as well as environmental fronts. DISCRIPTION OF BUISNESS The online stores are very popular in this technological age. The customers prefer shopping online due to ease of accessibility for 24/7. The Mega Sports is developed based on mentioned rising trend. Mega Sports will make sports shopping convenient. The idea behind opening an online sporting goods store is to provide quality and low cost sports goods to the shoppers. This store will provide convenience to the shoppers, ease in comparing the product and prices, and gathering accurate information of the product through online research. The customers have become time conscious and surveying a product online provides them with accurate information and saves their time too. Hence, Mega Sports will provide low cost sports goods with first grade quality of sports goods to sports lovers. The online store will be headquartered in New York while will offer home delivery of sporting goods to customers across USA through delivery services. The online retail venture from the suppliers of sports goods is planned considering adding value to the society. Mega Stores is a social entrepreneurship as it aims to revive the out-door sports passion among people. Its importance lies in reviving the healthy life style among USA people who are now affected by many diseases due to indoor technology based sports. Triple Bottom line planned components of the business are as follows: PROFIT: Online system of businesses will generate attractive profits as business model has cut initial investment required for the retail store. Also Online business trend is increasing in USA at an attractive rate. PEOPLE: Less number of people with high level expertise to manage business will enable business to compensate all employees effectively. PLANET: Low frills products of sporting will save earth’s scarce resources from being used excessively used. FOUR ANCHORS OF THE BUSINESS The four strong anchors for the proposed business idea are as follow: It will provide home delivery of the sporting products and goods to the customers who are looking for time saving alternates of shopping through traditional retail stores. The business will provided the tech savvy and busy customers with an easy solution of online shopping of the sports goods which will be delivered at their doorsteps. The business has high chances of growth as the online shopping is increasing rapidly in USA. At the same time the company will be able to reduce the overall costs by avoiding the fixed investments and costs associated with brick and mortar retail outlets The management team consists of tech savvy persons who specialized in ecommerce and online marketing. At the same time the marketplace offers high growth potential as more and more people are shifting towards online shopping. SUSTAINABILITY PLAN The business has considered the sustainability aspect for the long term growth. Online platform does not require physical presence. This will reduce the electricity and other utility consumption to a great extend. Also this setup will not require customers to visit store; hence, saving the earth and air from pollution. SECTION II This section of the plan provides review of the target market in detail. The section highlights the overall industry and market related aspect of the business. Market analysis enables business to carve its target market in distinction and create competitive advantage. INDUSTRY ANALYSIS Sporting goods have significant market in the USA. The trend of purchasing sports goods and equipments has shown decline over past five years. Initiation of decline can be noted since 2009 when the country was hit by the economic pressures. Though after decline in 2009 it has revived; however, the revival did not gain the momentum. 10 years trend of customers purchase pattern of the sports goods is as follows: (Statista, a) The channels from which these sports equipments are sold are dominated by sporting goods stores, specialty stores selling sports items, discount stores, family foot wear stores and many other sources. The trend of sales from top five sources is presented below: (Statista, b) The target market of this Mega Store business will be online buyers of sport goods. The online industry in US has been growing at exponential rate. Yahoo Finance research cites the online channel of the sales of sporting goods is not picking up despite exponential growth of online industry. Hence, the Mega Stores is aimed at providing services to the online buyer of the sporting goods. The assessment of the target market based is conducted as follows: Demographics: Sporting goods are less affected by the changing demographics as person passionate about certain game carry the passion across. The relevant demographics for Mega Sports include both genders of age 18-35. This age group has been selected as people of this age group are tech-savvy and spend considerable time online surfing. Also most of the people of this age are students or working which require products to be delivered at home. Psychographic: Various sports players carry different psychographic characteristics for example some are passionate to buyer sportswear identical to the favorite player at any cost while some carry other traits. The sports goods buyers with tech-savvy psychographics are target of this business since business aims to attract the customers online. Mega Sports is targeting those customers who avoid going to retail outlets because of lack of time and at the same time are looking for low price products which can be delivered at their doorstep. The percentage pattern over 10 years of in figure two reflects growth in the tech-savvy characteristics among the sports goods buyers in the USA. This has dual implications; first, sports lovers are diverting towards online and arcade games. Second implication refers that those who are buying sports products are moving towards online channels. Behavioral: Statistics in image one reflects the declining behavior of buying sports goods over past five years. Contrary to this trend, the buying behavior from different channels in accordance with image II has undergone change. The percentage of customers buying from family foot wear and discount stores are falling while buying trend is on rise from online channels. Additionally, to the cut in the purchasing power due to economic pressures, customers have curtailed discretionary spending including sports goods. Hence, low cost sports goods will provide sports lovers an opportunity to buy sports items at comparatively low cost as compared to high priced branded goods. DIFFERENTIATION FACTORS OF MEGA STORES FROM COMPETITORS Mega Stores has developed comprehensive plan to differentiate itself from the competitors. Online sports stores has not developed as an industry and various platform are adding value to their respective platforms by offering range of sports products. Competitors of Mega Stores are specialty sports goods stores. Due to overall low response to online sales of sports goods, sports companies have outsourced the online business section to the technological companies. Hence, Mega stores will provide its own brand at comparative low price on its own online platform. Mega Sports will enjoy the first mover advantage in the industry. Online stores offering its own sports products at low cost than competitors will strengthen the position of the company. Offering its own product, Mega Stores will ensure quality warranty to customers for its products to increase customers’ attraction. Due to only online existence as retailer, Mega Sports has not incurred investment in physical retails outlet. This cost saving has enabled business to hire technological experts for making online business expert. Mega Stores is also faced with certain weakness. Mega stores lack experience as being new to industry. Not having physical existence, business will not be able to engage customers as online business cannot offer the testing opportunity of the product. Like other online businesses, Mega Stores will have lack loyalty of the customers. Opportunities available to the Mega Stores include increasing percentage of online buyers of the sports items. Declining economic conditions has curtailed buying power of the customers offering opportunity to the Mega Sports to expand market of low cost sports goods. Mega Sports have invested heavily in developing the product process that incurs low cost. Also, Mega Sports have invested in developing capability of conducting online business with success. Additionally, firm has also invested in developing brand equity for Mega Stores as sustainable sports goods at low price. Hence, all these along with Mega Store’s competitive edge of only online business will create unique position of the Mega Sports in market. The competitors of the Mega Sports include Galyan’s Trading Company and Dick’s Sporting Goods of higher end sporting goods along with other general sports goods and equipments (Yahoo Finance). Other competitors include chain owners like Foot Locker, along with other brands like Adidas, Nike and Reebok (Yahoo Finance). Competitive pressures exerted by flexing muscles by high-end brands and already existing sports stores against Mega Stores are huge treats. Economic downturn if prevails for longer period then market for discretionary products are at threat and Mega Stores’ ability to invest in marketing its products will be affected as compared to other competitors. Competitors with long existence in market will en-cash long term loyalty. Also high end brand can attract the market by offering plans such as installments and huge discounts to attract the market of low cost products of Mega Sports. Being an online store, Mega Sports have hired an expert for the online marketing of the products. Online medium employed for the marketing includes the Twitter and Blogs. Blogs on sports website as well as other platforms are considered highly effective for such products. Also tickers on the sports channel such as Ten Sports during high sporting seasons will be used as marketing tool. Additionally, the price of each product will be with an average discount of nearly 25% as compared to prices charged by other competitors. Mega Stores have developed contract with delivery service facilitators for delivery within two days across USA while the payments mode will be cash on delivery. Hence, offering maximum benefit to customers. POSITIONING STATEMENT The positioning statement is as follow: “For the tech savvy and eventful sports lovers buying sports good and items from Mega Sports online store is a quick way of satisfying their sporting needs because it provides high quality and low price sports goods at their doorsteps.” Works Cited Statista. (a). Sporting goods: consumer purchases in the U.S. 2012. Online. 9 Oct. 2013. http://www.statista.com/statistics/200773/sporting-goods-consumer-purchases-in-the-us-since-2004/ Statista. (b). sporting goods sales by channel of distribution in the U.S. 2011. Online. 9 Oct. 2013. http://www.statista.com/statistics/201225/sport-equipment-sales-by-channel-of-distribution-in-the-us-since-2006/ Yahoo Finance. Sporting goods industry profile. Online. 9 Oct. 2013. http://biz.yahoo.com/ic/prof/39.html Read More