Strategic Business - Hillsom Mutual Fund Company - Case Study Example

STRATEGIC BUSINESS PLAN For Hillsom Mutual Fund Company For Period April to December 2020 Executive Summary Hillsom Mutual Fund Company is a private limited company that deals in the processing and the supply of cookies to its prospective customers at a reasonable price. For this instance, Hillsom Mutual Fund’s Mission is the process products that are unique, creative and of high quality at the plight of the customers use. In addition, the mission of the Hillsom Mutual Fund’s mission is to ensure the distribution of the cookies to the local customer’s at the most affordable prices to them. For this reason, the Values of the Hillsom Mutual Fund are to reach the community with quality products with their fair prices. Hillsom Mutual Fund’s has a financial objective of realizing an equally average of $5.00 from each customer. The instance will occur at the close of the fifth year and also to ensure the same increase in the profit margins by a tune of five percent. Consequently, the firm aims to maximize its revenues at an approximated value of $400, 000 annually so that to make it more sustainable in the next five-year financial projection plans of $2,000,000. From the financial projections, the business, expects to witness a positive trend in the cash flows for the first year of its operations from the expected return on the revenues. On the same note, the business will commence its operations with a capital worth $200,000 that it also projects to yield a net profit of $400,000 at the end of the first year. Situational Analysis Hillsom Mutual Fund Company aims at doing one particular activity to its perfection. There may be some barriers that the firm may meet on its course towards achieving its target goals; however, the firm will strive to contain them for the purposes of realizing quality production. Cookies’ production is such a necessity that is part of the diet for almost everyone in the society. As result, Hillsom Mutual Fund Company selected the field of production with the objective of tapping and retaining more customers for the commodity. Though, there may be many competitors in the sector, the firm hopes to devise some strategies enhance good competition in the sector, and if possible outwit the potential competitors in the sector (Pasher and Ronen, 2011). In relation to the aspects listed in above, there is a need for the development of the business plan. The essence of it is that will act as guidance to the Hillsom Mutual Fund Company on what particular tasks to implement and the costs needed for their implantation. For this reason, the business plan will have its coverage on the scope of the market, financial commitment, profit potential, and other aspects of the business and establish its viability (Pasher and Ronen, 2011). Hillsom Mutual Fund Company will begin its operations as private limited company. The instance will ensure the integration of the twenty-five members of the group in realization of the success during its operations (Pasher and Ronen, 2011). Marketing Plan Marketing plan for the company shall entail the inclusion of such elements as vision, slogan, mission, values, objectives, marketing mix, branding, and advertising strategy. Vision Production at the most affordable price to all Slogan One unit of production, the mother of the other units Mission Statement To engage in the production of unique, creative, high-quality milk products and provide them locally at a fair price to the prospective customers Values Community Quality Ingredients Fair Prices Objectives Achieve an average sales transaction of $ 5.00 per customer within the first year Increase profit by 5% in the second year of business (Pasher and Ronen, 2011). The Target Customer Cookies are such a commodity that almost everyone consumes. Similarly, Hillsom Mutual Fund Company expects to have the customers across all sectors of all regions and the denominations included. Added by the fact that the firm intends to reduce its prices, the firm, in this case, expects to tap a wide customer base win the shortest time possible (Pasher and Ronen, 2011). Hillsom Mutual Fund Company intends to locate the position itself in such a location that place that will make it much accessible to the targeted customers. Very far distant customers, in this case, the company will reach them by delivery of the products through the use of the company transport vehicles. The instance is essential since it is through the sale of the products that will bring revenues for the sustainment of business operations (Pasher and Ronen, 2011). The Marketing Mix With regards to secondary data research, it is essential for a company such as the Hillsom Mutual Fund Company to deploy the use of the below elemental features of the product, price, and promotion; Hillsom Mutual Fund Company Product Price Place Promotion Moist 1.50 each Good location for walking Good supply Fresh Buy 3 get one free; Yesterday’s @ 6 for $5 Storefront No lines Good chip ratio Careful with credit cards Good signage Free samples Good quality ingredients A good deal Good parking Watch production Buttery   Comfortable décor Delivery optional Good scent   Indoor seating Donate to charity Soft and chewy   Outdoor seating Excellent service Thick   10 am - 7 pm daily   Warm   Good music   Healthy options   Good Cleanliness   Not undercooked   Restrooms   5" or larger   No panhandlers   Good appearance   No microwaves   Firm edges   Air conditioning   Good flavor with 12+ choices for a variety       Custom orders       Variety of beverages       Creative       Table 1: Ideal Characteristics for Cookies Production Company Product Creativity will be the driving force here in the determination of the demand for the cookie from the customers. For instance, most customers tend to prefer the moist cookies since they have desirable quantities of ingredients with them. However, others also have their tastes and preferences on the other varieties of cookies produced by the company apart from the moist ones (Pasher and Ronen, 2011). Price Customers will always go for purchases where the deal is so nice. For this reason, the company will sell on the notion of buy three cookies and get one extra fee of charge. Place Hillsom Mutual Fund Company will ensure that its place of operations and setting is in such a place that all customers can reach any time of their need of the cookies products. Customers who hail from far places will not find it a problem in using the products since the company will ensure the delivery of the products to their nearest markets or sale points. For the sake of the customers who prefer buying in large quantities such as the wholesalers, Hillsom Mutual Fund Company will ensure there is good parking space for their vehicles at their site. Other amenities’ that the company will also put into consideration are the good ventilation, cool form entertainment and refreshment for the customers who will prefer taking the cookies within the company’s premises (Pasher and Ronen, 2011). Promotion As a way of enhancing the promotion of the product, Hillsom Mutual Fund Company will ensure that there is a continuity of supply of the product in the market. For this reason, the company will ensure the customers won’t wait for the product when they need them. In addition, to further enhance product promotion, the company will ensure the delivery of the products to the customers reach (Pasher and Ronen, 2011). Product promotion will also involve the use of the integrated marketing approach that includes sales, promotion, customers’ services and other selling techniques that ensure that the customers remain in touch with the company (Pasher and Ronen, 2011). Financial Plan Financial plan will primarily determine the revenue and the expenses that the company will meet during its operations with the aim of maximizing profits. The elements of the financial plan, in this case, will include; Financial Objectives Achieve an average sales transaction of $5.00 per customer within the first year. Increase profit by 5% in the second year of business. Revenue Forecast Hillsom Mutual Fund Company expects a revenue projection of $400,000 annually from the sales of cookies at an average of $1.5 each. To further enhance revenue maximization, the company will sell three cookies with the inclusion of one extra free in such occasions. Hillsom Mutual Fund Company has its intention of carrying its business operations for the next five years using the allocated fund of $2,000,000. For this reason, during the first two years alone the company expects to recoup at least fifty percent of the share within the first two years. In order to further enhance the realization of the financial objective of the company, the company will, in this case, expect the employees to work for ten hours during the day (Pasher and Ronen, 2011). For this reason, the calculation of the values of sales expected monthly took place as presented in the below table; Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 7% 6% 7% 7% 8% 8% 8% 8% 7% 7% 7% 7% Table 2: Sales per Month as a Percentage of Total Annual Sales Pro Forma Cash Flow Analysis Calculation of the gross profit will entail the subtraction of the total cost incurred by the company during its operations from the revenue accrued. For the reason, the calculations will take care of each cookie’s cost and the total cookies produced and sold (Pasher and Ronen, 2011). Market Research Market research will entail the process that will lead to acquiring the information that could lead to the places that could to the storage of the cookies in Northern Ontario. For this reason, market research will use the secondary research methods to know more about the target customers, product and current industry trends, sources of supply and competitive intelligence (Pasher and Ronen, 2011). Demographics Information The information source will from the US Census Bureau website from the year 2009 Census results that gives the areas for constructing the warehouse. Large population will provide the customers base for buying the cookies in large quantities. For instance, the below chart gives the total population who are sixteen years and above and working in the place where the company intends to construct the warehouse (Pasher and Ronen, 2011). Figure 1: Working population Industry Trends The below, chart represents the trend of production of cookies in Northern Ontario. Source of the data was from the Economic Census of the year 2007. Analysis of the data shows that there are over fifty companies in Northern Ontario engaging in the production of the cookies. The red shading represents the northern Ontario case while the blue case represents the other states (Pasher and Ronen, 2011). Figure 2: The Majority of the Cookie Manufacturing Industry in Ontario Industry Information Sources Industry has some challenges that they pose to the production of cookies. For this instance, the industries, the industries may other act as barriers or snack barriers instead of the cookie manufacturers. In addition, there are other small private companies that do not show their information relating to the production of cookies (Pasher and Ronen, 2011). Competitive Intelligence There is a need to enhance a lot of privacy in the information relating the sales especially from the privately managed companies. For this reason, a company should have the information relating finance and employment characteristics;   Uncle Biffs Seaport Cookie Co. The Carvery Girard Gourmet Location Type Single Location Single Location Farmers markets Single Location Annual Sales Less than $400,000 $400,000 to $1 million Unknown $400,000 to $1 million Employees 1 to 4 (D&B: 2) 5 to 9 Unknown 5 to 9 NAICS code 722213, Snack & Nonalcoholic Beverage Bars 445299, All Other Specialty Food Stores Food stands, desserts 311811, Retail Bakeries Years in Business 18 years Since 3/1/1993 17 years Unknown – est. 2009 Since 8/1/1987 23 years Business Owner John Ledgerwood Mike Baker “ Derek Jaeger, Adam Koven, & Nate Ransom Francois and Diana Goodhue Table 3: Competitive Intelligence about Financials and Employment A review of the business situation in the Northern Ontario shows that there is little business that deals in the manufacture of cookies. However, there are other successful businesses in the sector. There may also be high demand for the cookies through online applications so as to evade the long line of queuing. For this reason, the table below presents the online reviews of the competitions on the cookie selling business sector (Pasher and Ronen, 2011).   Uncle Biffs Seaport Cookie Co. The Carvery Girard Gourmet Designer Cookies Product         1. Moist or dry? Moist Moist Moist Dry 2. Fresh or stale? Fresh Fresh Fresh Sometimes stale 3. Chip ratio? Good Good Good Good 4. Quality ingredients? Good Ok Good Ok 5. Buttery or oily? Buttery Oily Ok Dry 6. Scent? Good Good Good Good 7. Soft or hard? Soft Chewy Soft Hard 8. Thick or flat? Thick Flat Thick Flat 9. Warm? Warm Warm Not Not 10. Healthy options? Oatmeal Oatmeal Gluten Free Oatmeal 11. Undercooked? Sometimes No No No 12. Size? Too small (3") Good (5") Good Good (5") 13. Appearance? Good Average Average Excellent 14. Firm edges? Yes Yes Unknown Yes 15. Flavor/Taste? Good – 15 flavors Average – 10 flavors 950 custom, Nine signature, & 3 monthly cookie flavors Average – 12 flavors 16. Custom orders? Yes No Yes Yes 17. Beverages? Few Yes No Yes 18. Creativity? No No Yes Yes Table 4: Competitive Intelligence about Product   Uncle Biffs Seaport Cookie Co. The Carvery Girard Gourmet Designer Cookies Price         19. One cookie? $1.75 $1.50 $2.00 $4.00 20. Deals? Yes (day old 6 for $5) Yes (buy 3 get one free) Yes (6 for $10) No 21. Credit Cards? Yes ($5 minimum) Yes (problems) Unknown Unknown 22. Reviews? Too expensive Good deal Worth it Overpriced Table 5: Competitive Intelligence about Price   Uncle Biffs Seaport Cookie Co. The Cravory Girard Gourmet Designer Cookies Promotion         23. Supply? Sometimes wait Good supply Run out quick Good supply 24. Wait? No lines No lines Long lines Long lines 25. Samples? No No Free samples No 26. Watch production? Yes Yes No No 27. Delivery? Unknown No Yes Yes 28. Donate to charity? Yes Unknown Yes Unknown 29. Service? Ok Ok Excellent Ok Table 6: Competitive Intelligence about Promotion   Uncle Biffs Seaport Cookie Co. The Cravory Girard Gourmet Designer Cookies Place         30. Location? Hillcrest Downtown Farmers markets in La Jolla & Scripps Ranch La Jolla 31. Store? Yes Yes Not yet Yes 32. Signage? Good Good Poor Good 33. Parking? Yes- their own lot Validated Street Street 34. Décor? No frills Average N/A Average 35. Indoor seating? Yes No No Yes 36. Outdoor seating? No Yes No Yes 37. Hours? Unknown 10 am- 10 pm Sat/Sun 9-1 7am - 7 pm 38. Music? Unknown Yes Unknown Unknown 39. Cleanliness? Ok Ok Ok Sometimes poor 40. Restrooms? No Outside Outside No 41. Pan Handlers? Unknown Unknown Unknown Sometimes 42. Microwaves? Unknown Unknown Unknown Yes 43. Air conditioning? Unknown No No No Table 7: Competitive Intelligence about Place Strengths and Weaknesses There are competitors in market system of any form of business operation. Hillsom Mutual Fund Company, in this case, can evaluate the strengths and weakness of these companies with the objective finding ways to compete them out in the market structure. Strengths and weakness of the company come as a result of the unique differentiation of these competitions from firms in the market structures. For instance, each business has its unique challenges as well, and that leaves room for opportunity (Pasher and Ronen, 2011). With a perfectly sized, double-window booth in the heart of Seaport Village, Hillsom Mutual Fund Company could not ask for a better location. The double-window booth eliminates long lines, and fresh baking lures plentiful tourists with yummy aromas. As if that was not enough, their ‘buy 3 get one free’ deal is the perfect value. Weaknesses include that the cookies are flat rather than thick, parking must be validated, and there have been problems with credit card mischarges. Table 8: Summary of Competitive Intelligence Findings. Opportunities A business has wide opportunities for operation. For instance, the market where the business operates does not usually ends with intense competition from other firms. A company such as the Hillsom Mutual Fund Company, in this case needs to evaluate on the potential competitors so that it could thrive in the in the sectors. For instance, the Hillsom Mutual Fund Company decided to build five stores cookies and the other three for the franchise locations (Pasher and Ronen, 2011). Threats The principal threat to Hillsom Mutual Fund Company is the location of the company in a place that may seem not profitable in some situations. Though, there may be some benefits that may come with the location of a company in a particular place, their surrounding population may not favor the development of the business. Other possible determinants of the operation of a business in a given demographic area the knock-offs that could hamper the growth and the development of infrastructure (Pasher and Ronen, 2011). Summary Secondary market research is the most value component that forms the ideal marketing mix. In addition, it reveals the level of saturation of the market with the consideration of handful, well-established competitors in the production industry. For this instance, knowledge on the established companies before the formation of new ones help in avoiding the current problems those companies during their normal operations Reference List Pasher, E. and Ronen, T. 2011. The Complete Guide to Knowledge Management. Hoboken, N.J.: John Wiley & Sons. Read More