Company Analysis Thomann Online Retailer - Case Study Example

Company Analysis Thomann Online Retailer Executive Summary Thomann is an online retailer company designed to break the market in web-based ales of musical instruments and gear in Europe. Thomann Company sells everything that a musician would dream of owning including a vast selection of DJ equipment, guitars, pianos, drum kits, brass as well as recording equipment. The Major Agency has worked with the company for over three years and has had the responsibility for planning and buying their media campaigns in print and online. The agency handles Thomann’s advertising activities across many nations throughout Europe including Spain, France, Poland, Czech Republic and UK. Although numerous internet companies have failed recently, the internet is still dignified to support online retailers. Many e-businesses failed due to the easy access to capital as well as unproven business models that has no rue revenue streams. Thomann online retailer will overcome this problem through an easy to use website an efficient distribution system (Peterson, 2005). This report seeks to analyze the company’s business model in their attempt to create an icon e-commerce brand through a laser-focused marketing that would enable its growth to 400,000 dollars revenue within a three years period. Company Objectives Thomann music store’s objectives for the three years are: To develop a well-placed and an effective online site for sales of musical products To develop an infrastructure for the fulfillment of web-based sales Their Mission Thomann’s mission is to provide most reliable music an instrument using the internet to lower the customer has cost. Thomann exists to attract and establish long relationships with customers. Their services will be set to exceed the customers’ expectations. Keys to Success Thomann music store’s keys to success include: Marketing Product quality We design Service Company Summary Thomann music store’s goal is to become the online retailer market leader in marketing and sales of music and musical instruments. Their start-up Summary Business information legal fees Web development Office supplies Installation of telephone lines Filling cabinets, chair and a desk Computer systems with printer, broadband internet connection and QuickBooks Start-up Requirements Item Cost Start-up Expenses Legal £900 Stationery £300 Web Development £9,000 Total Start-up Expenses £10,200 Start-up Assets Required Cash £64,600 Other Current Assets £1 Long-term Assets £2,200 Total Assets £66,800 Total Requirements £80,100 Company Ownership Thomann music store is a private owned corporation. Musikhaus Thomann e.k will be the majority owner of the company. The company’s intention is to recruit sophisticated, devoted owner team members. Board members shall be granted shares of stock to provide a motivation for their performance on the board (Bidgoli, 2003). Products and Services Thomanns music store will market and sell a private label of advanced music instruments. The private label entails products from a company that places the retailer’s name on the packaging. The sale of all music instruments shall be done through the internet. The key products will include; a vast selection of DJ equipment, guitars, microphones, stage microphones, pianos, drums kits, brass as well as recording music and video equipment (Klebs, 2011). More equipment shall be added after the first year. Thomann Company will sell used and new musical instruments and accessories. Their key items will be orchestral and new band instruments, guitars, electronic keyboards as well as amplifiers and pianos. There will also be a full service repair of the worn out instruments like guitars and the band instruments (Osterwalder and Pigneur, 2010). Additionally, the company anticipates offering a state of the art music lesson program, which will feature skilled trainers, private, and group lessons. Offering school band and the orchestral instruments shall be their \’main competitive advantage. However, guitars shall remain the main revenue producers for the music instrument stores for their long-term plan (York, 2002). Market Analysis The market for music instruments and recording has grown to over $5 billion annually. Piano sales alone are growing by 15% every year. The vast growing market is led by the paradigm shift of the music perception. The traditional music instruments have been continuously used in various music industries. Positive music analysis from researches has legitimized the music instruments. In 2013, customers consumed $ 6.9 billion on musical instruments in Europe. The market achieved this despite the slow economy and the stock market in the transition period. Lower pricing was the key factor in the increased sales. However, this also lowered profits and decreased the yearly total from the industry top position of $6.9 billion in 2012 (Heyhoe and, 2004). In the musical instrument industry, individuals are looking for broad selections, prompt and knowledgeable service, music lessons and good product value. Consumers prefer to find music store that offer much music instrument benefits through word of mouth. Market Segmentation A market segmentation table based on findings that an estimated 46% of the total population is musicians. This means that the same number of individuals shall serve as potential customers of the advanced technological music company. The total musical instrument sales in Europe are listed as below (De, 2010). Sales Rank - National 40 2008 total music sales $39.4 million 2009 total music sales $40.9 million 2010 number of music stores 58 2011 number of music stores 60 2012 sales per store $679,694 2013 sales per store $700,789 2013 population 1,859,136 2012-2013 population change +.46% Market Analysis Year 1 Year 2 Year 3 Year 4 Potential Customers Growth musicians 34, 564 56,342 23,563 34.876 6% Other 45,764 45,123 42,321 45,651 8% Total 80, 328 101,465 65,884 80,527 7% Strategy and Implementation The company shall build strong relationships with customers through the production of personal service that would exceed the customers’ expectations on every visit. It shall provide unique programs intended to reward customers and gain a repeat business (Hargreaves, 1878). Thomanns Company intends to attract customers’ from the mail order firms and bring them back to the local market. This will not be an easy strategy. However, due to their total commitment to offer their customers an attractive educational environment with fair pricing and excellent after and before services, they shall succeed. The company’s main strategy is to beat the market. They shall accomplish this through strong sales and services as well as the educational aspects (Hill and Jones, 2012). Value Proposition Thomann music store offers the initiative to semi-professional musician the convenience of unique offers, skilled and experienced staff and an educationally focused community. There are much of an offset of lack of usefulness to the existing musician market segment (Hargreaves, 1878). Competitive Edge Thomann’s most crucial competitive edge shall be the way they shall treat their customer base. The company shall deliver greater interaction and satisfaction to customers than their competitors (Klebs, 2011). In order to win the customer trust and earn their repeat business, the company must work to deliver quality services and products to all consumers. Musicians and other musical instrument consumers in Europe have experienced poor services and apathy of local dealers. Thamman Company must break this chain if they would require making themselves different from the competitors and other local dealers. Their unique marketing plans and customization services shall make the company stand out from the crowd of competitors. The company plan is to go a step further through customer retention plans, by keeping their store in the minds of customers so that they will return (Pradhan and Pradhan, 2009). Marketing Strategy Emphasize superior service and support Expose competitors weakness so as to attract new clients Attract customers who have been kicked out of the market by local dealer boredom Educate customers and respect their requirements so that they may keep coming back. Always stand out from competition. Pricing Strategy The music instrument industry is experiencing adjustments on pricing. Some manufacturers have instituted the minimum advertised price that has strengthened margins to some extent. However, consumers have become brighter and continued to look for low prices. Many customers are found to buy items after price but on realization of the lacking after sale service, they look for alternative retailers who do not only produce low prices but high quality of sales. Many customers are mostly concerned with quality than low prices. Thamann will address these issues with a well-derived strategy for pricing (Osterwalder and Pigneur, 2010). Promotion Strategy The company will use some technological means to reach on to their potential customers. Customers will be reached through radios, mail and through the internet. The most targeted means of reaching customers is through the internet. The company shall posts adverts on their specific websites and on other social site such as on Facebook and on twitter. The company will promote itself as an education oriented music store, offering group and private lessons for all instruments available (Wyckoff, 1999). Projected Profit and Losses The current markets give out an advantage. If the company makes use of this, they shall achieve great gains during their startup year and beyond. References Bidgoli, H. (2003). The Internet encyclopedia. Hoboken, N.J: John Wiley & Sons. De, K. C. A. (2010). Fundamentals of global strategy: A business model approach. New York, N.Y.] (222). East 46th Street, New York, NY 10017: Business Expert Press. Directory of corporate affiliations. (1973). Skokie, Ill: National Register Pub. Co. Hargreaves, W. (1878). Our wasted resources: The missing link in the temperance reform. New York: The National temperance society and publication house. Heyhoe, K., & Hock, S. (2004). 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