Business Plan of E-Commerce Company in the UK - Case Study Example

Assignment on: Business Plan of E Commerce Company in U.K By: ABC Table of Contents Executive Summary: 3 Mission ment: 3 Business Description: 4 Business Environment Analysis: 5 Technological factors: 6 SWOT analysis: 7 Strengths: 7 Weaknesses: 8 Opportunities: 8 Threats: 9 Industry Background: 9 Competitor analysis: 10 Marketing plan/ marketing strategy: 10 Financial Plan: 11 Miles stones and attachments: 12 Conclusion 13 Bibliography 14 Executive Summary: We are aiming to establish the Nutrition Inc as an e-commerce company, which is directed towards becoming a market leader in the sales and promotion of nutritional supplements worldwide. It is a United Kingdom based company where there are many competitors when it comes to the online retailing, as easy access to internet and web based portals and enhancing the e-commerce capabilities and opportunities. We have analyzed that recently majority of the business venture have been failed to gin the desired response from the customers due to their ineffective business models and improper definition of revenue streams. Our business report is directed towards gaining the most attractive and beneficial investors to meet or funding requirements, and making it and developing the business links, and basis for gaining business loans if needed, to expand our business. The success of the Nutrition Inc is dependent upon the web designing, quality of products and features, services, and the marketing strategy to attract and retain the prosperous customers worldwide. With the effective and efficient implementation of the strategy, the companys objective is to become a well-positioned brand to potential customers. A well-integrated and reputed e-commerce site for the sales of naturopathic products, execution of the collaborative marketing strategy to capture the customer response and to develop an effective infrastructure to ensure a high rate of web-based supplements sales (Kuchler, 2012). Mission Statement: "We in Nutrition Inc are directed towards adopting the low-cost provision of natural supplements to our valued customers, with the efficient use of the Internet, with the aim of attracting and maintaining the loyal customers. “Striving hard to meet customer expectations with emphasis on their satisfaction." Business Description: Nutrition Inc is a privately held corporation aimed at delivering and promoting natural supplements to meet the health requirements of the customer, with the low-cost means of offering products. The companys senior management consists of sophisticated group of board members, who are granted with the companys shares of stock in the form of incentive offered to them, due to their active participation and control over the company operations, and strategy execution. The top management not only formulates strategies, but they are also responsible for allocation of resources for appropriate implementation and then strategic evaluation to make necessary corrective actions. Supplements manufactured by the company will be solved under its private label, with the retailers name on the products packaging, the most beneficial products offered are ginseng, antioxidants, and the Ginkoba, all of these products, are health beneficiary and does not include the unnatural elements (Simpson and Docherty, 2004). The startup costs includes the web development cost, business formations legal fees, telephone line installation, development of shelving units to store the inventory, the initial cost incurred upon the chairs, filing cabinets, desks. As it is offering the products with the use of internet, the sufficient amount is spent on computer system integration. Computer systems include Microsoft Office, CD-RW, printers, quick books pro and continuous internet connections. If we summarize the cost incurred on the startup requirements the start-up expenditures are almost 1200 pound, the legal fee paid to register our Nutrition Inc is 500 pound, and the computer and web based system development caused the expense of 15000 pound. The company came up with the idea of selling natural supplements as the market showed a growth of 7 billion pound each, in addition to this, the sales of herbal products is raising and meeting the level at twenty percent annual. The reason behind this business idea is the legitimization of these supplements and upcoming attraction towards the herbal and homeopathies drugs in resolving the big diseases without the surgical treatment. Business Environment Analysis: In order to conduct an environmental analysis for the Nutrition Inc we are going to use PEST analysis to reveal the trends in E-commerce in United Kingdom, where the opportunities and what are the external forces. Political Factors: in United Kingdom the governments imposes that during the implementation of e-commerce business, the manufacturers of the products must consider the important asset of intellectual property. The vision of the Nutrition Inc, the target market selection, and the current market in which it is operating should be considered consistent with the requirements to meet the societal norms and environmental wellbeing. The tax system in United Kingdom for e-commerce is under development, most of the transactions are tax inclusive, but there can be some situations where the organization’s clear transaction as tax free, we can take the operation of e-Bay under consideration, it avoids the tax by holding individual transactions as the private auctions and save tax payments. There are many regulations managing the online retail system to provide legal protection to transactions. There is a sales act dealing with the issues of quality assurance, warranty of the products sold and the public liability imposed on sellers. As our product is a sensitive product for health, it is governed by Medicines and Healthcare products Regulatory Agency (MHRA, 2014). Economic environmental forces: if we consider cost element in this context, the initial investment required for establishing Nutrition Inc is high, the cost of software, hardware, web maintenance the staff trained all are costly. Although, when the business starts operating, it is most cost effective technique to set up company offering natural supplements globally. However, in the beginning the returns are likely to remain uncertain. Ten internet accesses are cheap enough to facilitate the economic concern of nutrition Inc and meet the organizations concentration of cost efficiency. To ensure the growth of Nutrition Inc, the telecommunication infrastructure has significant importance. In the United Kingdom, the network is well integrated facilitating the companys ability to excel (Hugh Wilson, 2008). Social factors: the biggest impact of the social norms here is the trust in e-commerce companies. According to a research conducted by Planet Al in year, 1998 almost half of the participants of research did not reflect their trust in undertaking transaction with the e-commerce firms, as they perceive this process as unreliable. However, with the emerging world trend for e-commerce and the well-reputed global online retailer the perception is now changed. The Amazon.com, Pay Pal , EBay all are trusted retailers, although they are US based retailers but still contributing to generating positive perceptions about e-commerce in the United Kingdom, which can have a positive impact on our sales of natural supplements with an online retail techniques (Gov.uk, 2012). Technological factors: There are numerous security risks associated with the extensive use of internet-based portals, there are many programs to mitigate the impact but still they are prevailing. As Nutrition Inc is online e-Commerce Company, the entire business process is web based, in which the problems and challenges of technology cannot be ignored. It is aiming at using virus checking, firewalls, and the data encryption to secure the information and addresses provided by the customers to gain their trust and reliability concern. Todays based transactions are valued by customers, but they cannot eliminate the risk associated with the nature of business practices. Here the customer order-taking and complaint, response system needs to be fast enough to make eth attention and satisfaction of the customer involved. Therefore, we are in nutrition Inc considering the importance of bandwidth, which can be a major issue in e-commerce practices. Bank width is based on determining the speed and accuracy of communication between the customer and our company. As it is a natural supplement and is directed towards health benefits, the customers are expected to be careful in understanding what product is made for in such a case. What advantages it offers, and is there any elements that might harm the health of the consumer. In such situation, we have to respond quickly, or our bank width should be efficient to give timely responses. It might be possible that we have to deliver video, photograph, and the instructions on heavy media, and here limitation on bank width can create a disturbing environment (Shemi and Procter, 2013). A completely integrated information system and the management information system are required to manage all of the global, vast customer bases and meeting their requirements. In order to accumulate the data and the accuracy of the information will be having direct impact on the decision-making accuracy. SWOT analysis: Strengths: It is capable of offering top quality natural supplements, including ginseng, antioxidants, and the Ginkoba, all of which are free from unnatural elements, and successful in gaining customer attention It has an attractive feature of users’ review, which effectively and efficiently delivers the information and receives useful feedback, ensuring stimulation in total sales. Capable of meeting the aging population driving use of homeopathic and naturopathic medicines, the demographic segment consisting of 80 million people is attractive enough to cater the product. It is harnessing eth efficiencies by low cost of servicing its customers with excellent business models and marketing plans. Have integration of distribution channels including the mail order, catalogs, mass marketing retailer, direct sales. Strategy is carefully designed to gain homeopathic and natural supplement market share, which is capable to develop it as a premier brand in the mind of a customer in broad geographic areas. Weaknesses: It’s a system to ensure that customers are receiving services from eth sales staff, which Nutrition Inc is expected to provide, but the control system is not sufficiently strong to measure the quality of communication between the customer and service staff. It is an important element to be considered as service-staff is the contact point for customers in health supplement discussion As we are targeting 80 million people with the demographic segmentation. It requires a huge financial investment to continue, providing excellent customer order fulfillment and shipping activities; here the company might face some funding difficulties to carry its effective operations to gain customer loyalty The cost of transportation is high because we are in a relationship with external delivery companies, which can also impose the risk of uncontrollable level of services delivered Opportunities: In United Kingdom, e-commerce sales have been reached 403.8 pound, which is a 24.9 percent from the previous six years. Reflecting that this trend is accepted by the residents, at the same time, the purchases of businesses over the computer networks reached the value of 466.3 billion pound (Dudovskiy, 2012). More investment in order-fulfillment process is likely to enhance the level of customer satisfaction from eth service delivery, repeat business, and longevity are closely monitored by customers in evaluating eth alternatives The baby boomer is expected to value the purchase of Ginseng that is the large market in the United Kingdom, these aging people are attracted by the importance of natural supplements and antioxidants, we can stimulate the demand by offering supplements to this market segment We are focusing on availing the opportunity of gaining customer commitment for repurchasing, by introducing prime deliveries to regular customers on special occasions and seasons, the member will be benefited by sales promotions to realize a substantial growth in sales Threats: The shift of high street brand towards technological facilities with low prices can easily shift the customer to the competitors The increased transportation cost and external delivery companies might raise the prices, as they are few in numbers and can generate price stimulation and exhibit bargaining power Industry Background: This market for the natural supplements beneficial to the health is exhibiting high growth rates in the coming years. Currently the market is semi-mature, the barriers to the entry are medium in nature, and there exists only a few, but strong competitors offering similar products like our company Nutrition Inc. The major competitors of Nutrition Inc are the GNC; natures sunshine, Rexall Sundown, and international Vitamin Company. Competitor analysis: General nutritional companies Inc is the famous provider of vitamins, minerals, and the special supplements for the sports, the companys network is vast enough as having almost three thousand stores. The sections major competitor is International vitamin company which is a IVC manufacturer, sells and packages the privately label vitamins like Nutrition Inc. the Natures Sunshine Products Inc offers unique variety of health beneficiary supplements and promotes its health supplements with the use of multi-level marketing techniques. Rexall Sundown Inc offers the vitamins, nutritional supplements, health-related supplements. It is involved in manufacturing, marketing and selling activities reflecting its vast network the revenue exceeded 370 million pound last year. This competitive analysis reflected that Nutrition Inc has well established and well-reputed competitors already successful in the market, so it has to implement and target the strategy in a manner that satisfy its competitive requirements to maintain its desired position in the market. Its competitive advantage is the user-friendly easy to use web site, and top quality customer services, when there will be easy user interface, and design it is likely to experience high rate of search, and ordering online. Nutrition Incs business approach is to serve the customer in any way possible to gaining their loyalty and commitment, increasing the futures sales to those customers. The competitive advantage also includes the personal attention provided to the customer so that they feel valued and recognized. Marketing plan/ marketing strategy: The companys aim in its marketing strategy is not only to the sale the homeopathic and natural supplements, but it is aiming at developing the superior brand image in the e-commerce market of the United Kingdom. It is going t o generate the product awareness and the benefits of all of the health supplements it offers including the antioxidants with the help of web based advertising and marketing. The cheap cost of advertising at the websites makes the processed more cost effective. This type of online advertising is generating high exposure and frequency of advertising to the targeted customers at lowest possible method. Another technique is involved in marketing strategy, which is making use of outdoor advertising channel. We are advertising through the billboards and placing banners at the major crowded areas especially the food courts to gain the attention of customers(Patino, Pitta and Quinones, 2012). Through these advertising techniques, we are estimated a high sales and order level that will be facilitated by the use of easy to navigate and easy to order website. The sales expectations are not considered in the first month as we will start establishing out customer relationship, from eth second month onward we are expecting rapid growth in orders. As the use of smart phones for web search and the regular use of social networking website are the emerging trends in the market, so we are also advertising on Yahoo and Google, which are known as the most searched websites to increase the brand exposure (Greenley, 1989). Financial Plan: In our financial plan, we are not expecting and calculating sales in the first month, from the second month onwards the orders will take place. The current interest rate is 10% where we are also fixing the long-term interest rate at10 percentage so streamline our future financial estimations. Our expected monthly cost is almost 15000 pounds where the average variable cost will be 25%. To compensate this and achieve a break-even point in the nutrition Inc we need to collect the revenue from the sales of natural supplements at minimum 20000 pounds. In our first year of online retailing in United Kingdom, the sales are expected to be 150000 pound annually, where the cost of sales in total will be 50000 pound. After deducting all of the interest expenses, payroll taxes the net profit will be only 8% as, it will be the first year of business establishment and in the first year gaining 8 percent of the sales is favorable enough(Gaskel and Ashton, 2008). The estimated cash flows on the monthly basis are as under Miles stones and attachments: Our first and the most important milestone are the achievements and completion of the business plan following the roadmap towards success of the business. In order to realize long-term success of nutrition Inc with sales of natural supplements and homeopathic products in the United Kingdoms e-commerce industry. Office set up, and the necessary provision is a milestone, the complete execution and working on nutrition Incs website and eth recruitment and selection of most capable and important human capital. As the service staff is the customer contact point, and they are increasingly important because our e-commerce companys competitive advantage is the excellent service provision, to gain the customer satisfaction and loyalty (Wallace, 2007). Conclusion It can be concluded that nutrition Inc is striving hard to become a leading e-commerce online retailer in United Kingdom, offering top quality ginseng, antioxidants, and the Ginkoba. It is a privately held corporation aimed at delivering and promoting natural supplements to meet the health requirements of the customer, with the low-cost means of offering products. Nutrition Inc is dependent upon the web designing, product quality and features, services, and the marketing strategy to attract and retain potential customers worldwide. The e-commerce industry has stiff competition, when it comes to the natural supplements Rexall Sundown Inc, General nutritional company Inc, and Natures Sunshine Products Inc, but its strong strengths to offering top quality natural supplements, including ginseng, antioxidants and the Ginkoba. All of the products are free from unnatural elements, and successful in gaining customer attention and enabling it to avail the opportunity to target baby boomer. The aging people are attracted by the importance of natural supplements and antioxidants; we can stimulate the demand by offering supplements to this market segment. The only large threat of lack of funding to meet the customer requirements can be fulfilled by maintain the business relation and the investment funding as it is a reliable business venture as reflected by its financial estimation and enhance emphasis on satisfying the customer. Bibliography Dudovskiy, J. (2012) E-Commerce Industry Analysis in UK, [Online], Available: http://research-methodology.net/e-commerce-industry-analysis-in-uk/ [19 november 2014]. Gaskel, J. and Ashton, .J. (2008) Developing a financial services planning profession in the UK: An examination of past and present developments, Journal of Financial Regulation and Compliance, vol. 16, no. 2, pp. 159 - 172. Gov.uk (2012) Classifying herbal medicines, supplements and tonics for import and export, [Online], Available: https://www.gov.uk/classifying-herbal-medicines-supplements- tonics [19 november 2014]. Greenley, G.E. (1989) European Journal of Marketing, An Understanding of Marketing Strategy, vol. 23, no. 8, pp. 45 - 58. Hugh Wilson, E.D..I.A.D. (2008) The diffusion of e-commerce in UK SMEs, Journal of Marketing Management, vol. 24, no. 5-6, pp. 489-516. Kuchler, H. (2012) UK ‘leads the world’ in e-commerce, [Online], Available: http://www.ft.com/intl/cms/s/0/ef3e1a04-71b4-11e1-8497- 00144feab49a.html#axzz3Jdv4WzL7 [19 november 2014]. MHRA (2014) Herbal medicines regulation, [Online], Available: http://www.mhra.gov.uk/Howweregulate/Medicines/Herbalmedicinesregulation/ [19 november 2014]. Patino, A., Pitta, D.A. and Quinones, .R. (2012) Social medias emerging importance in market research, Journal of Consumer Marketing, vol. 29, no. 3, pp. 233 - 237. Shemi, A.P. and Procter, C.T. (2013) Challenges of E-Commerce Adoption in SMEs: An, Botswana Journal of Business, vol. 6, no. 1, pp. 17-30. Simpson, M. and Docherty, A.J. (2004) "E‐commerce adoption support and advice for UK SMEs", Journal of Small Business and Enterprise Development, vol. 11, no. 3, pp. 315-328. Wallace, K. (2007) “Corporate Governance of Pension Plans: The U.K. Evidence”: A Comment, Financial Analysts Journal, vol. 63, no. 3, pp. 1-10. Read More