Vision and Mission Statement: Malets Styling - Research Paper Example

Vision and Mission Statement: Malets Styling Executive Summary Malets Styling is looking forward to open a new business of fashion studio in South African market. The owner has chosen Sandton as the busiest place for the affluent nature of the area and it is the retail hub of Johannesburg. The business would offer stylish fashion wares to the mass target market of Sandton. The main objectives of the business are clear enough from the mission and vision statements of the company. The organizational structure would be simple without too much hierarchy. Marketing strategy of the organization has been created on the basis of STP analysis and marketing mix. Possible roles of the management have been discussed during the course of the business plan. The plan has described how the interests of the staffs should be taken care of. The five years financial projections for the business show that the business venture is a feasible and implementable venture that can be expected to generate suitable revenues and earn profits at a consistent manner. Briefing of the business This section of the business plan contains brief overview of the business. This business of Malets Styling is all about of offering stylish fashion wares for all men and women of the Sandton. The business will take care of all age group people of the city. This business would provide lots of stylish options to the people of Sandton. The area has significant verities in terms of skin tone of the local people. 34.7% of people are Black African, 49.8% of people are white, 11.1% of people are Asian / Indian and 4.4% are other. The stylish fashion products of the new fashion studio will consider different skin tones and would offer suitable colour combinations to the customers. It means products of the fashion studio would be designed on the basis of different races. Apart from the selling of the fashion products customers can hire different fashion products for their temporary usages. The business idea is highly inspired from the idea of Racheal Zoe. The business will target all range of customers. Prices of the products would be suitable for all income people. The business will open a new window in front of the customers of Sandton and people of the surrounding areas (Kahn, 2011). Population density of this area is 1,500/km2. It is one of the most affluent locations and retail hub in the Johannesburg, which will be suitable for the fashion studio. In US and Europe this kind of business is highly popular and there is a significant opportunity in South Africa also. Vision and Mission Statement The vision statement of the fashion studio is to provide stylish fashionable looks and a sense of beauty to the targeted customers of Sandton by offering them different kinds of fashionable stylish products. The business mission of the fashion studio is to design awareness in the minds of the customers about the different facets of the fashions, profitability earnings and the creation of strong loyal customer base in the Sandton market. Long term business sustainability, acquiring new customers and retention of old customers are also integral parts of the mission statement. Industry Profile Total population of South Africa is 52.9 million. There are 14.4 million households in the country which have a total household income generation of ZRA 1631 billion. South Africa is basically a developing country or an emerging economy. The retail industry in the country is one of the most functional segments in the economy. The retail industry in South Africa has evolved over years to become an increasingly functional industry segment. The improvement in the infrastructural capabilities of South Africa in the last 10-15 years has made it possible to carry out more rigorous and extensive economic activities in the country. The retail industry has been significantly benefited by the use of modern technologies and distribution systems that make it possible for the retail companies to distribute and services to townships, urban areas as well as rural areas. There has been a remarkable development in the establishment and subsequent popularity of the shopping centres and shopping malls in South Africa in the last 10 years. The retail areas have become concentrated due to the increasing demand levels fuelled by the rapid construction and urbanization of different parts of the country. A number of retail chains and stores operate in the cities of South Africa. However, the concept of retail stores is more popular than that of retail chains among the South African people. The retail outlets include a variety of stores including specialty stores, departmental stores, exclusive boutiques, cooperative stores, cash and carry retail outlets and fashion studios. The number of shopping centres in South Africa was only 238 in 2001 which has increased multiple times to become almost 1550 in 2012. According to the Global Retail Development Index (GRDI), South Africa scored a total of 49.2% in retail development with individual scores of 47% in market attractiveness, 15.4 5 in market saturation, 89.3 % in business and country risk and 17.2% in time pressure. The industry outlook seems to be optimistic and encouraging with more chances of participation in the industry which would be driven by increasing supply and demand relationships. Thus, the scopes for both buyers and sellers in this industry are likely to increase in the future simultaneous to the growth and development in the overall economy of South Africa. Market and Competitive analysis Johannesburg is a majorly developed city in South Africa. The retail industry in this city is comparatively more developed than in the other cities of South Africa. The retail industry is growing at a standard rate which is intensely driven by the growth in demands and increasing purchasing power of the consumers. Sandton is a highly developed area within the Johannesburg city. This region is also one of the most populated areas within the city. Sandton is an affluent location of South Africa with the population consisting of a widely heterogeneous group of people. Sandton is popularly known as the retail hub of South Africa. Many prestigious retail outlets including fashion and food retail outlets and shopping centres are located in Sandton. The retail companies focus on Sandton as one of the most preferred locations for opening up their business due to the dense population and the conglomeration of retail stores and shopping centres in this area. The retail industry in South Africa is not a largely concentrated industry. There are a few players which are the owners of a number of stores and outlets operating at various levels of the industry. The industry has seen growth in the recent years. As such, the scope of new entrants in this industry is high. Many international fashion retail stores have already entered this market or are planning to enter the market of South Africa through a number of international expansion methods including the opening up franchisees, the setting up of individual stores, joint ventures with local companies etc. Retail sales is increasing consistently in South Africa and it is expected to gain a momentum with an improvement in the economy as a whole (Prinsloo, 2010). The market is controlled and dominated by few key players. Though the entry barriers are low, yet not many companies have opened up their stores in the country earlier due to the less scope of profitability and revenue generation. However, this scenario is changing rapidly with the developments noted in South Africa, especially in the urban regions of the country. The key players existing in the South African retail industry which can give tough competition to the Malets Styling fashion studio are Edcon Private Ltd., ShopRite Holdings, Spar Group Ltd., Massmart Holdings Ltd., Woolworths Holdings Ltd., and Pick and Pay Holdings Ltd. These are the fashion retailers which operate with major shares of the retail industry in South Africa. These retailers are also operational on an international platform and most of these retailers have strong global presence. All the retail companies that are direct and indirect competitors of Malets Styling are very strong competitors because they are included in the lists of the global top 250 fashion retailers. The number of consumers in the fashion retail segment is limited. But the needs and demands of the customers for fashion related items are increasing due to the emergent image consciousness of the people. This in turn is driven by the developments noted in the overall economic position of South Africa. Organizational structure Organizational structure indicates how the business decisions and operational controls flow across the company. Here in this case the fashion studio of Malets Styling would go by a simple organizational structure without too much hierarchy. It is a privately owned organization. At first there would be two floor executives to control the operations of the business. Those two executives would directly report to the owner of the company. The business would be at its introductory phase, so there is no need of too much hierarchy in the organization structure. The short and simple organizational structure would create a better coordination between the owner and the executives. Due to this kind of organizational structure owner of the fashion studio would be able to control the business directly without depending on anyone else. The lean nature of the organizational structure would save lots of costs for the owner. Market is changing day by day. It is very important for the owner of the Malets Styling to change according to the changing dynamics of the Sandton market. It requires continuous information flowing across the company. Information flowing across the organization would be fast and uninterrupted with the help of this organization structure. Simple organization structure would provide free flow of information sharing across the company. This kind of organizational structure would help the fashion studio to take prompt decisions related with the business as there would no one to create any resistance. The numbers of the subordinates are less within this organization so owner would not be too much dominating. Legal formalities The Malets Styling Fashion Studio will be established as an entrepreneurial venture by a single individual. As such the business would be set up as a privately owned company. There would be one single owner of the fashion studio who would be liable for all the management and decisions of the business. Also, though the fashion retail segment in South Africa is not controlled by a formal regulatory authority or board. There are a number of institutions and associations that operate with the aim of regulating and controlling the various functions and entities within the retail industry in various parts of the country. All the retailers operating in South Africa have to avail the membership of some of these associations. Therefore, the owner of the Malets Styling Fashion Studio would also have to gain the membership of the retailer associations that work in the country. Some of the common associations in the retail segment of South Africa are the Consumer Goods Council of South Africa, The Franchisee Association of South Africa, The South African Retail Council and the Council of Shopping Centres South Africa. The owner has to mandatorily register the new fashion studio with some of these councils in order to operate in a legally complaint manner in the South African market. Apart from this, the owner would have to ensure that it conducts the operations of the Malets Styling Fashion Studio in accordance with the existing legal principles of the country so that he can continue operating the fashion studio in a successful, sustainable and compliant manner (Finch, 2013). Products and services Products and services would be the game makers for the fashion studio in the new market of Sandton. All these would create a significant brand image in the minds of the customers. The products of the fashion studio would cater the demands of both high and low end people. Pricing of the products would be done in that way only. Initially the fashion studio would offer stylish and fashionable products like shoes and dresses. It would also come up with swimwear lines, t-shirts and caps. The organization would give significant importance towards the contemporary styling and modern fashionable trends for all age group men and women. Simultaneously the fashion studio would take care about the superior quality of the products. The fashion studio would maintain and collect raw materials from the good quality suppliers for ensuring the superior quality of the products (Lee, 2011). At any point of time the company would not compromise with the quality of products. Considering the introductory phase of the business the fashion store would provide a wide range of products backed up by the superior quality of services. Customers would be able to hire the products from the fashion studio. It is a unique service that the organization would provide. In future Malets Styling would come up with more products like accessories and shoes which would help the organization to gain more competitive advantages in the Sandton market. Online shopping has significant impacts on fashion retail industry. In future the fashion studio can provide their services to the customers through online. Apart from all the above product and services Malets Styling would give significant focus towards the image consultancy services, wardrobe wedding services and personal shopping. Currently the organization significantly focuses on these services in their UK market. Image consulting services of the organization would suitable with the mission and vision statement of Malets Styling. Wardrobe wedding services would provide unique customise personal services to the brides and grooms of the Sandton. Marketing strategies STP analysis would be significantly important for the marketing strategies of the organization. A proper STP analysis would help the organization to come up with appropriate marketing mix. The business would target mass market consisting people from different age groups, races, incomes and genders. As Racheal Zoe is the inspiration of the owner so the business would try to position itself as one of the most leading fashion brands in South Africa. Designing the marketing mix of the products is significantly important for fashion house to establish their business in the South Africa. A proper marketing strategy would be utterly fruitful for the organization to earn profitability and customer loyalty. The marketing strategy of the fashion studio would be done on the basis of 4 P’s. Products of the Malets Styling fashion studio would be stylish fashionable shoes, dresses, swim wears, caps and t-shirts. All these products would help the organization to attract different age group of people in Sandton (McKeever, 2012). The fashion studio would come up with different ranges of colours which would be suitable for people belong to various races. Prices of the products would be done for all end people it would help the organization to attract all the people with different income backgrounds. Both higher and lower end customers would create a huge loyal client base for the organization. Place would be an important part of the marketing strategy for the company. Busy location like Sandton would attract lots of customers at a time and large numbers of the customers would be aware about the new brand. Chances of footfalls into the fashion studio would be higher in the busy area like Sandton. Activities related with promotion would be traditional. As the business would be in the introductory phase there would be very little scope of promotional experiments. The fashion studio would use banners and billboards around the city of Johannesburg as the medium of promotion. Advertising through the electronic and print media would be a suitable option for the company to promote their products. Management Team Management is an unavoidable part of the business. Being a privately owned single owner organization there would not be any management team as such. All the business related decisions would be taken by the owner of the fashion studio (Blackwell, 2011). As the business would be on the introductory phase the owner of the organization would play both operational and managerial roles together. Owner of the Malets Styling has previous experiences in this industry as she has existing business in the UK market. It indicates that the management of the company is vastly informed about the different factors of the industry. All those experiences would be helpful for the two staffs and the business (Schnaars, 2000). Experienced nature of the management would help the business to identify different issues in the new market and it would help the business to grow. Strategic implementation would be an important task for the management of the company. The owner of the fashion studio would have to make sure that different strategic decisions are implemented properly at the ground level in Sandton. The management of the organization would take all the decisions related with source of funding, promotional techniques in the new market and how much money would be spend for different purposes of the business. Resources allocation would be an important task for the management of the fashion studio. It would help the company to use its critical resources like human resources and financial resources in justified manner. Human Resource Management Human resource is the back bone of any organization. Here in this business plan managing the human resource is also significantly important. Although the numbers of the staffs would be very less but still different operational activities would be highly dependent on those two staffs only. It makes HR management more important for the business. Different surveys have categorically stated that satisfied employees are the key success factor for any organization. The management of the fashion studio would have to take care about the compensation packages of the two staffs. To retain the staffs the management of the company would have to offer suitable compensation packages according to the industry standards. The safety and the welfare of the staffs are also important. The owner of the company would have to focus towards this aspect also. Management of the organization would have to increase the number of employees’ strength in future for managing the extended products. Training and personal development of the staffs are also important factor for the Malets Styling. It would increase the efficiency and productivity of those two staffs. Efficient staffs would be a significant competitive advantage for the company in the new market. Operations Management A number of initial capital investments would be required for setting up the Malets Styling fashion studio. The owner would choose a prime location in Sandton area. The location would be chosen such that the visibility of the fashion studio is high. Also, the location would have proper connectivity with all other parts of Johannesburg city. The owner plans to rent a store area in a building at a premium location in Sandton. The rents would be high for the prime location but it would ensure high visibility of the store and its window displays and thus, would encourage the passers-by to take notice of the new fashion studio (Pinson, 2008). There would be adequate capital expenditure required for buying the necessary equipment in the store and for furnishing the store. Several equipment like display racks, mannequins, artefacts, decorative items, furniture, furnishings etc. would have to be bought for use in the fashion studio so that the fashion studio can be made attractive in appearance. The products sold and rented in the fashion studio would include a wide range of men and women’s wear that would mostly be imported from suitable locations. The owner would evaluate and select efficient suppliers of garments and accessories to ensure that the procurement process of the fashion studio business is flawless and cost effective as well. This would add to the effectiveness and consistency of the operations in the business. Financial analysis Source and use of fund The establishment of the new fashion studio of Malets Styling in Sandton, South Africa would require an approximate initial expenditure of ZAR 500,000. The main source of fund for the new establishment would be the investment from venture capitalists. The owner will present the bsueisns plan to the potential venture capitalists for obtaining the funds required for setting up the new fashion studio. The owner will collect ZAR 500,000 from the venture capitalists in the new location and use it for funding the initial expenditures, fixed cost and working capital requirements of the new fashion studio. In case a gap is found in the funding of the business activities, the owner would obtain additional financing by availing a bank loan. The capital would be used for funding the initial start-up costs of the fashion studio. The main costs incurred while setting up the store would include fixed cost like rent expenses, salaries of the two personnel appointed on the store, material sourcing costs, tax expenses, advertising cost, and cost of online services etc. and certain variable costs as well. Projected Financial Statements The projected financial statements are prepared with a view of forecasting the financial viability and profitability of the fashion studio in the new country. The financial projections include the balance sheet, income statement and the cash flow statement of the fashion studio prepared for a period of 5 years from the inception of the business. All the financial statements of the Malets Styling Fashion Studio can be used to establish that the new business venture is a feasible business idea that can be implemented to generate high sales, profit margins as well as cash flow (Pandey, 2006). It can be found from the projected income statement that the business would be able to maintain a standard profit margin from the first year itself. Also, the sales from the boutique are forecasted to be quite good at ZRA 520,000 in the first year. The gross profit of the fashion studio is ZRA 378870 in the first year which means that the business would be able to earn a generous amount of profit starting from the first year of its operation. The cash flow statement indicates that the company will be able to maintain proper cash flow balances in the business. Break even analysis The new Malets Styling fashion studio is likely to take some time to recover its initial expenses and start making profits. The break-even point for the styling studio is achieved within an acceptable period of time. The break even analysis for the business shows that the break-even point is reached in 2.2 years of its operation. This indicates that the business venture is likely to be a feasible as well as profitable entrepreneurial venture (Jury, 2006). The required sale for achieving the break-even is ZRA 686251 which the fashion studio is forecasted to attain in 2.2 years. The contribution margin for Malets Styling is 73% which means that the profit earned as compared to sales is 73%. Breakeven Point Total Fixed Cost (A) 500000 Gross Profit (B) 378870 Sales (C) 520000 Break Even time (years) 2.2 Contribution margin 73% Break even sales 686251 The overall financial analysis indicates that the business venture for opening up the fashion studio in Sandton is likely to be a successful and profitable business venture. References Blackwell, E., 2011. How to Prepare a Business Plan: Create Your Strategy; Forecast Your Finances; Produce That Persuasive Plan. New York: Kogan Page Publishers. Finch, B., 2013. How to Write a Business Plan. UK: Kogan Page Publishers. Jury, T., 2006. Cash Flow Analysis and Forecasting: The Definitive Guide to Understanding and Using Published Cash Flow Data. New Jersey: McGraw Hill. Kahn, K., 2011. Product Planning Essential. USA: M.E. Sharpe. Lee, J., 2011. The Right-Brain Business Plan: A Creative, Visual Map for Success. Novato: New World Library. McKeever, M., 2012. How to Write a Business Plan. New York: Nolo. Pandey, I., 2006. Finance: A Management Guide For Managing Company Funds And Profits. New Delhi: PHI Learning. Pinson, L., 2008. Anatomy of a Business Plan. USA: Aka associates. Prinsloo, D. A., 2010. Classification and Hierarchy of Retail Facilities in South Africa. [Pdf]. Available at www.urbanstudies.co.za/pdf/New-Retail-Classification-2010.pdf. [Accessed on 11 September 2014]. Schnaars, S., 2000. Marketing Strategy. USA: Simon and Schuster. Appendices Appendix 1: Income Statement Appendix 2: Balance Sheet Appendix 3: Cash flow Statement Read More