Value Proposition of CK-E-LINK - Case Study Example

CK-E-LINK Table of Contents Introduction 3 Analysis of Industry and Business Environment 3 Industry analysis by Porter 5 Forces 3 Analysis of the organization by SWOT 5 Value Proposition of CK-E-LINK 6 E-Business Strategy of CK-E-LINK 6 E-marketing plan 10 Potential risks and downsides 11 References 12 Introduction The market of Chinese and Korean foods, clothes and accessories has witnessed remarkable growth in the preceding years both in terms of sales and revenues. This is mainly due to the changing life-style of the citizens of United Kingdom that created a huge number of opportunities for the dominant players operating in this industry. Due to which, the CAGR of the industry of Chinese and Korean dishes is increasing by 25-35 percent in the recent years. The prime reason that fuelled extensive growth and development of the industry of Chinese and Korean food dishes is due to high-level of preference over these food items, rise of female members within the workforces as well as presence of numerous nuclear families and many others. As a result, the market share and demand of these items are increasing at a rapid pace that enhanced the gross domestic product (GDP) and gross national product (GNP) of nation of United Kingdom. Apart from this, the business of Chinese and Korean food items as well as accessories witnessed a growth of 25 percent in the current years mainly due to rise in per capita income of the citizens of United Kingdom. Thus, due to these above mentioned causes, the consumption rate of these dishes is increasing significantly in the recent years that helped to flourish the total revenue and sales of these organizations among many other rival brands. Keeping these facts in mind, the organization of CK-E-LINK tried to increase its presence and position in the market with the help of online or e-business site. Analysis of Industry and Business Environment Industry analysis by Porter 5 Forces The industrial scenario of Chinese and Korean food dishes is extremely competitive. Such type of competitiveness is analyzed with the help of analytical tool, Porter’s Five Forces. It is one of remarkable analytical technique that may be used to evaluate the industrial scenario of CK-E-LINK in the market of United Kingdom. Bargaining Power of the buyers- The bargaining power of the buyers in the market of United Kingdom is extremely high. This is mainly due to the presence of numerous rival players such as Korean food supermarket, Oriental Mart, Matthew’s Food and many others (ESOMAR, 2008, pp. 456-467). Due to which, the switchover costs of the customers in the market of UK is also quite high that reduces the image and profitability of the organization of CK-E-LINK among others. However, in order to tackle the high bargaining power of the customers, the organization of CK-E-LINK always tried to offer inventive dishes as well as accessories to its customers in order to satisfy their changing needs. By doing so, the organization of CK-E-LINK might become successful in enhancing its image and position in the market of United Kingdom among many other rival contenders. Moreover, in order to retain the customers for a longer period of time, the organization of CK-E-LINK might offer varied types of inventive accessories, clothes and dishes to the target customers at a quite competitive cost. This might prove effective for the organization to retain its customers that may improve its sustainability and competitiveness in the market among other rival players. Bargaining power of the Suppliers- The bargaining power of the suppliers is also quite high in the market of United Kingdom. As a result of which the organizations like CK-E-LINK had to purchase the raw materials for the products at a quite high price. Due to which, the level of profit margin of the raw materials suppliers, operating in the segment of Chinese and Korean food item is extremely high as compared to others. Threat of Substitute products- As the market of United Kingdom includes numerous successful brands presenting, a wide range of Chinese and Korean dishes and accessories, the threat of substitute products is extremely high. As a result of which, the organization of CK-E-LINK might try to introduce varied types of innovative dishes in order to retain its portfolio in the market among others. By doing so, the organization of CK-E-LINK might easily retain its existing customers and attract a wide range of new customers towards it. As a result, implementation of such a strategy might prove effective for the organization of CK-E-LINK resulting in amplification of its brand image and reputation among other contenders. Furthermore, the competitive position and distinctiveness of the organization of CK-E-LINK within the minds of the customers might also get increased that may improve its total sale and net income (Drummond & Ensor, 2006, pp. 342-354). Threat of new entrants- The threat of new entrants is quite high for the organization of CK-E-LINK in the market of UK. This is mainly due to low economies of scale and low range of machinery requirement. As a result, the segment of Chinese and Korean food items attracts a wide range of new entrants. So, in order to preserve the competitiveness and dominance in the market of United Kingdom, the organization of CK-E-LINK try to maintain a very good relationship with its customers. Good relationship might be developed only if the organization of CK-E-LINK tries to offer qualitative food items at a competitive price. Competitive rivalry among the firms- Due to the presence of numerous rival players, the rate of competitive rivalry is quite high. Therefore, in order to cope up with type of rivalry, the organization of CK-E-LINK need to offer more concentration over the items, clothes and accessories in order to improve their image and market share among others (Keegan, 2002, pp. 512-524). Analysis of the organization by SWOT The internal environment of the organization of CK-E-LINK might be evaluated with the help of an analytical named, SWOT. Strengths- High market image and reputation of the organization of CK-E-LINK in ‘United Kingdom- high image and reputation of the organization of CK-E-LINK is mainly due to its wide range of inventive and trendy products and accessories. High market position- the position of the organization is also quite high as it desires to offer a wide variety of accessories and clothes to the customers of United Kingdom. High demand- in order to retain its sustainability in the market, the organization desires to offer its products at a competitive price. Weaknesses- Lack of numerous dishes- due to lack of numerous food items, the organization of CK-E-LINK might fail to retain its portfolio in the market. As a result, the customer may switch over to other brands that might reduce the total sale and profitability of the organization in the market of United Kingdom. Lack of online presence- as the organization of CK-E-LINK does not include any online site, so the level of awareness and demand of its products is extremely low. As a result, the net profit margin and total revenue of the organization of CK-E-LINK is quite low as compared to many other rival brands. Opportunities- Enhancement of the awareness of CK-E-LINK - in order to increase the market share and dominance, the organization of CK-E-LINK might try to develop online sites. This might prove effective for the organization to improve its brand image and awareness in the market among others. Wide range of customers- by developing online sites, the organization might become successful to attract a wide range of new customers of varying income groups and culture. Threats- Wide range of competitors- due to the presence of numerous competitors, the organization of CK-E-LINK may not position itself as the dominant market leader. Moreover, due to the presence of numerous substitute products, the bargaining power of the customers might be extremely high that may hinder the profitability and supremacy of the organization. Changing taste and preferences of the customers- in order to cope up with the changing taste and preferences of the customers, the organization of CK-E-LINK need to offer varied types of inventive dishes and accessories. Only then, the organization of CK-E-LINK might retain its brand value and image in the market among many other rival players. Value Proposition of CK-E-LINK The value proposition of the organization of CK-E-LINK is to offer qualitative and clean products at a competitive price so as to attract a wide range of customers of varying culture, caste and races. Along with this, the organization of CK-E-LINK might try to offer trendy and chic products with distinctive designs and shapes. Only then, the organization of CK-E-LINK might become able to create a unique position and image in the market among the other rival players (Bradley, 2007, pp.234-245). E-Business Strategy of CK-E-LINK In order to improve the dominance and image of the organization of CK-E-LINK, it might try to offer more concentration over the below stated key business strategic decisions. (Source: Marketing Insights Limited, 2004) Option generation- in order to increase the range of customers and total revenues, the organization of CK-E-LINK might try to introduce both online as well as traditional brick and mortar stores. By doing so, the organization of CK-E-LINK might attain varied types of customer feedbacks from both offline as well as online stores. As a result, the organization of CK-E-LINK might present the products as per the feedbacks or requirements of the customers so as to retain them for longer period of time. Apart from this, by offering both offline and online stores, the demand and awareness of the products of CK-E-LINK might get enhanced to a significant extent as compared to many other rival players. (Source: Marketing Insights Limited, 2004) Option Evaluation- after developing both online and offline stores, the rate of total sales and revenue figures need to be evaluated. Only then, the organization of CK-E-LINK might evaluate the best option for it. Other than this, by evaluating both offline and online stores, the range of traffics might also be analyzed that may improve the demand and brand value of CK-E-LINK in the market of UK. Option selection- after analyzing both the options, the best option is selected by the organization of CK-E-LINK. So that, it may prove effective in increasing the brand value and market share of the organization of CK-E-LINK as compared to many other rival players in the market of UK. E-business Channel Priorities- e-business channel priorities is essential to offer the products at accurate time ant to the accurate individual. However, this might be selected only after identifying the range of customers preferring the products of CK-E-LINK in the market of UK. Only then, the sales volume and total revenue of the organization of CK-E-LINK might get enhanced to a certain extent as compared to other existing rivals. Moreover, by selecting the best distribution channel, the rate of retention of the customers might get enhanced that may improve its reputation and dominance in the market. Organization restructuring- in order to improve the image and market share of the organization of CK-E-LINK, it might either implement the strategy of joint venture or strategic partnership. Such type of ventures or strategic partnership helps an organization its reputation and demand in the market of UK. Determination of revenue models- prior developing an online presence, the organization of CK-E-LINK might try to develop the best type of revenue models such as sale of accessories, sale of Chinese dishes and sale of Korean dishes and sale of varied types of trendy clothes. Marketplace restructuring- restructuring of the target market is extremely essential for the organization of CK-E-LINK in order to improve its effectiveness and reduce its threats and business risks to a considerable manner (Beall, 2010, pp. 123-134) Market and product development strategies- this might be possible only by introducing trendy and fashionable products so as to attract a wide range of customers. Along with this, diversification into new segments in order to improve its portfolio in the market among others. By doing so, the level of customer loyalty and reliability over the brand of CK-E-LINK might get enhanced, which is extremely essential in this age of aggressiveness. (Source: Marketing Insights Limited, 2004) Other than this, the organization of CK-E-LINK might try to utilize various revenue streams such as accessories, Chinese dishes, Korean dishes as well as clothes to earn its profitability and net income. Apart from this, the organization of CK-E-LINK might try to analyze the target customers for its product, i.e. youths and fashion conscious individual of varying age-groups, young individual. Moreover, the potential cost of the CK-E-LINK to start up its e-business is presented below: Start up expenses: Computer hardware and software- $4000 Office suppliers-$2000 Business registration -$200 Wages- $2000 Electricity- $200 Internet expenses- $200 Domain expense- $20 Repair and maintenance- $200 Total expense: $8820 Start up assets: Current assets- $2000 Long term assets- $6000 Total assets: $8000 Total capital requirement: $12820 E-marketing plan In order to develop an e-marketing plan for the organization of CK-E-LINK in the market of UK comprises of certain below mentioned stages. Firstly, the organization of CK-E-LINK needs to identify its target customers, i.e. the individual of all age-groups (15- 45 years). After determining the target audience, the organization need to understand the policies and strategies of its competitors like Oriental Mart, Matthew’s Food so as to remain competitive among them. Moreover, by analyzing the pricing policies of these competitors, the organization of CK-E-LINK might develop its pricing strategy such as competitive pricing. So as to increase its brand value and market share in the market among other rival players. Then, the organization need to plan its objectives and tactics such as offering discounted pricing in order to attract a wide range of customers of various income groups and standards. By implementing this type of policy, the organization of CK-E-LINK might enhance its brand image and reputation in the market among other rival players. Moreover, implementing such type of policies, the profitability and net revenue of the organization of CK-E-LINK might get enhanced to a significant extent. This might prove extremely effective for the organization of CK-E-LINK in future as compared to other rival players. Furthermore, proper budgeting is essential in order to reduce the extra expenses that may improve the profit margin and net income of the organization of CK-E-LINK in the market. Potential risks and downsides The potential risks and downsides that may appear due to the introduction of online sites for the organization of CK-E-LINK are worse feedbacks of the customers. As a result, the reputation and image of the organization of CK-E-LINK might get reduced in the market. Along with this, the profitability and demand of the products of the organization of CK-E-LINK might also get reduced that may hinder its sustainability and competitive advantages in the market. Other than this, unauthorized disclosure or hacking of the information of the organization of CK-E-LINK may prove dangerous. As disclosure of sort of important information from the site, might destroy the entire image and popularity of the organization of CK-E-LINK in the market among other rival players. Moreover, data alteration might also create varied types of problems in the organization of CK-E-LINK. As a result, the sales targets or financial targets might get hindered significantly in the coming financial years resulting in downfall of its productivity and portfolio. References Beall, A. E. Strategic Market Research: A Guide to Conducting Research to solve problems, 2010. Boston: Harvard Business School Press. Bradley, N. Marketing Research: Tools & Techniques, 2007. New York: McGraw-Hill. Drummond, G. & Ensor, J. Introduction to Marketing Concepts, 2006. New York: Cengage Learning. ESOMAR. Market Research Handbook, 2008. London: Sage. Keegan. Global Marketing Management, 2002. London: Pearson Education. Marketing Insights Limited. Elements of Strategy definition for e-business, 2004. [Online]. Available at: http://www.marketinginsightslimited,2004.08/?A=1. [Accessed on March 13, 2014]. Read More