A Business Plan Based on an Innovative Product: Sunny Phone - Essay Example

?Sunny Phone Table of Contents Executive Summary 3 2.Introduction 4 3.Company Overview and Its Mission, Vision and Objectives 4 4.Product Overview 5 5.Market Analysis 6 6.SWOT Analysis 9 7.Identification of Target Market and Consumers 10 8.Marketing strategy and Market entry 10 9.Management Plan 12 10.Financial Plan 14 11.Recommendations and Conclusion 16 12.Reference 18 1. Executive Summary Green-Tech is a start up venture which aims to penetrate the Australian mobile phone market by offering unique mobile phone, called Sunny Phone. This phone is the key success factor for Green-Tech as it is very unique and innovative which is able to attract large number of consumers. Sunny Phone has all the advanced features of latest available mobile phones with attractive designs. Its uniqueness is that its battery can be charged using solar power. Australian mobile manufacturing industry is highly competitive and matured as most of the market leaders are present in this market. With favorable economic condition, the Australian telecommunication industry is growing and there are significant opportunities for Green-Tech. To penetrate the market, Green-Tech’s marketing strategy will focus on enhancement of consumers’ value and its core generic strategy will be differentiation focused strategy. For controlling and planning, Green-Tech has developed management and financial plans. There will be expert management teams for each department. As per the market analysis, the sales forecast for Sunny Phone is determined 3600 units during first year, and using this figure, the financial planning has been projected. Initial start up cost for Green-Tech is around AUD 24 million and the company is expected to earn AUD 97200 in its first operating year. 2. Introduction In the post-modern age of trade and business, starting a new venture is very challenging task as prevailing market is very competitive. Besides, the risks associated with a new venture are always higher than existing business. Therefore, it is very necessary to develop a business plan forecasting entire business activities before starting the venture and business plan is also helpful in convincing investors for generating necessary funds (Peterson, Jaret and Schenck, p.13). This paper will attempt to present a business plan based on an innovative product. There will be brief descriptions regarding the overview of company, product, market analysis, major strength & weaknesses, management plan and financial plan. This paper will also offer a set of plausible recommendations for successful product launch. 3. Company Overview and Its Mission, Vision and Objectives ‘Green-Tech Private Ltd’ is privately held company which is engaged in manufacturing an innovative mobile phone and it will be owned by a number of shareholders who will make significant financial contributions. The primary aim of this company is to manufacture and offer eco-friendly mobile phones. The company has realized the importance of practising green business in reducing the negative impact of business activity. The fundamental business value and ethics of Green-Tech involve value maximization of its stakeholders by developing growth oriented organisational and work culture. The company will operate in Australian market by setting up its manufacturing plant, research and development center and a corporate office. The location of plants, office and R&D center will be selected by as per the market viabilities. The shareholders will be legal owners and responsible for managing and controlling business activities. In order to develop a growth orientated business structure and strategies, company’s mission, vision and specific objectives are developed and given below Mission statement: Green-Tech is committed to offer products which will have least negative impact on environment and society. Therefore, the company’s mission statement is to offer eco-friendly products that will enhance the value of consumers and their environment by using innovative technology. Vision Statement: Green-Tech’s vision is to achieve a respectable position in market by maximizing wealth and value of stakeholders and it strives to bring betterment in peoples’ lives with healthier technological innovations. Objectives: 1. Capture 5% of the market share by end of second financial year. 2. Create brand awareness and build identity of company as an ‘eco-friendly’ organization. 3. Develop ethically valued and growth oriented organization culture. 4. Achieve 15% to 20% return on investments within nest three years. 4. Product Overview Product is the main essence of business and it must be able to attract significant number of consumers for generating sufficient amount of sales revenue. Green-Tech is staring its new venture with an innovative product which is able to meet expectations of target consumers especially, the environmentally conscious people. Green-Tech will offer an innovative mobile called ‘Sunny Phone’. This phone is different from other available mobile phones in market and it is more efficient with attractive designs and features and with better applications. Sunny Phone is touch screen phone with both sides 12 megapixel with high definition video recording. It also provides high speed mobile browsing and GPS application covering 70 countries’ maps with voice guided navigating facilities. The USP of Sunny Phone is that its battery can be charged using solar power. It will take 40 minutes to be charged fully and its stand-by time is around 36 to 48 hours depending of usage frequency. 5. Market Analysis Australian economy is stable and developed. Favorable political conditions and government’s efforts have been able to bring economic prosperity in this country. The country’s GDP as per purchasing power parity was nearly $889.6 billion and per capita GDP was around $41,300 during 2010 (CIA, “Australia”). Better economy condition of Australian people has enhanced their purchasing power which attracts a number of multinational companies. Government also encourages multinational companies for bringing FDI in country. Australian industrial sectors contribute 24.8% to the country’s total GDP (CIA, “Australia”). Total population of Australia was recorded nearly 22.3 million with 2.1% growth rate in May 2010. The literacy rate is over 99% that indicates the awareness in Australian consumers is very high and they have enough knowledge regarding the market activities. Major workforces are engaged in retail trade (10.7%) and in manufacturing industries (9.1%) (U.S. Department of State, “People”). The infrastructural development is another major advantage for the growth of trade and business in Australia. Transportation services and communication systems are well developed and Australian Government strives to bring constant technological advancements by encouraging research and developments programs. Currently, the country has 465 airports with 326 meters and 139 meters of paved and unpaved runways respectively. In 2009, nearly 24.22 million people were using mobile cellular securing 37th position comparing to other world economies (CIA, “Australia”). The telecommunication industry has a significant importance for Australian economy and hence, the government and other regulatory organizations are trying to control, manage for bringing developments. Australian Mobile Telecommunication Association (AMTA) is “the peak industry body representing Australia’s mobile telecommunications industry” and its members include “mobile Carriage Service Providers (CSPs), handset manufacturers, retail outlets, network equipment suppliers and other suppliers to the industry” (AMTA, “About AMTA”). The handset manufacturer in Australia offers advance features as Australian consumers are becoming more tech-savvy. Motorola, Samsung, Sony Ericsson, LG Electronics, Sharp and i-Mate etc are the leading handset manufacturers in Australia. This industry has realized the negative impact of telecommunication industry on environment. Hence, AMTA is trying to encourage people for recycling and reuse their old phones and it has developed recycling program called ‘MobileMuster’. The Australian consumers have also become more environmentally concern. The following table show key performance indicators of MobileMuster’ programs for last five years. Table 1:  2009?2010 MobileMuster Key Performance Indicators (Source: AMTA-a, “MobileMuster’) 6. SWOT Analysis SWOT analysis for the new venture, Green-Tech is given below. Strengths: The innovative mobile phone, Sunny Phone is itself is major strength that offers high quality and latest technological handset features. It will be able to attract a large number of consumer especially tech-savvy and environmentally conscious consumers. Weaknesses: As Green-Tech is a new start up venture, low brand awareness is its major weakness. Besides, initially, due to less economies of scale, it will not be able to offer lower price. Opportunities: The increasing concern for environment among Australian consumers and telecom regulators is the major opportunity for Green-Tech to penetrate the market. It is expected to receive support from government as it will offer eco-friendly mobile phones. Besides, the increasing number of mobile phone users and enhancing economic condition of consumers are major advantage for Green-Tech. Threats: Presence of leading mobile handset manufacturers is the greatest threat for Green-Tech. The leaders have already captured the market shares and developed brand image in market. Besides, Green-Tech needs to properly to communicate with market to spread the awareness regarding Sunny Phone as consumers may developed negative perception. 7. Identification of Target Market and Consumers The target consumers for Sunny Phone will include male as well as female consumers as mobile handsets with high features are becoming more popular among all kinds of Australian consumers. As Sunny Phone is an innovative product with better technology and features, the price will remain higher at initial period. Therefore, target consumers will be focused and specific as given below. Income: People with average household income of AUD $83,677 and more. Age: Teenagers to middle aged i.e. 16 years to 60 years old. Geography: The major cities including Brisbane, Melbourne, Sydney, Gladstone, Dampier etc (preferably the regions with high income group). Demography: Consumers who are environmentally conscious and tech-savvy. 8. Marketing strategy and Market entry In order to penetrate the competitive market, Green-Tech must have an effective marketing plan that will help it for market penetration. As per the above marker analysis, major internal strengths & weaknesses, and external opportunities & threats have been identified. Identification of consumers’ perceptions and buying behaviors are also very important in developing marketing strategy. The marketing plan consists of four Ps i.e. product, price, promotions, and place. These four components are major fundamentals for effective marketing plan. Each of the four Ps strategies is described below. Product: Green-Tech’s Sunny Phone is unique mobile phone which has all the necessary and advanced features with creative and attractive designs. Besides, battery charging with solar power is its exceptional quality. Therefore, Sunny Phone strives to offer high value to its consumers. Price: Price of Sunny Phone has been determined considering total cost, competitors’ price and target consumer. Sunny Phone will focus on consumers with high purchasing power. Multiple variants and designs of Sunny Phone will be offered and accordingly, price will vary. Its price will be around AUD 150 to AUD 400. Promotion: Sunny Phone is unique phone with extraordinary features. Therefore, it is very necessary to promote Sunny Phone in market for spreading awareness. Integrated marketing communication is the best approach for promotional strategy. Commercial ads in TV, newspaper, radio etc will be used and promotional programs will also be conducted in major places. Place: The distribution channels are very necessary for reaching to the target consumers. Australian retail sector is highly developed and it plays very important role in consumer awareness. The primary market for Sunny Phone is the Australian cities with high income and hence, Green-Tech will attempt to partner with major distribution agencies in those regions. In order to penetrate market, Green-Tech will follow focused strategy. The following figure shows the matrix of generic strategy. Figure 1: Generic Strategy (Source: Stonehouse and Campbell, p.175) Currently, Sunny Phone is a unique phone and hence, it is differentiated with other available products with high price. Therefore, the differentiation focused strategy is best suited for Green-Tech in penetrating the market. 9. Management Plan Green-Tech is a privately held company and therefore, the major shareholders will be the board of directors who will be responsible for decision making and managing the organization. Green-Tech is a manufacturing firm and hence, it has to manage different types of activities. Therefore, it is necessary to determine the value chain of the company for developing specific teams for each department. The flowing figure portrays an ideal value chain model for a manufacturing firm. Figure 2: Value Chain (Source: Ward, p.89) As per the above value chain model, the management teams will be formed. The following figure shows the organizational chart for Green-Tech. Figure 3: Organizational Chart for Green-Tech As per the above chart, there will be three shareholders who will act as directors. These three directors will manage the organization with the help six departmental teams. Each of these department will controlled by managers expert in domain areas. HR, Administration and Legal: This department will manage the employees’ affair and daily administration tasks. It will also handle the legal affairs. In this respect, experienced HR personnel and legal advisers will be hired. Finance: Finance team will be responsible for financial planning, accountings, auditing and fund generating activities. For financial activities, chartered accountants, financial analysts, and financial advisers will be recruited. Research & Development: This is very important for Green-Tech as Sunny Phone will be manufactured using high technology. Therefore, the company must try to bring further technological developments in its offered product for enhancing consumer value. Purchasing and Procurement: This team will procure material through cost effective and quality conscious suppliers. Sales & Marketing: This team will be responsible for sales and marketing activities. Primarily, it will deal with distribution channel and promotional activities for increasing sales revenues. Logistic and Operation: This department will control and manage the primary operational activities like manufacturing, inventory management and supply chain management etc. This department is very important as it is responsible for quality maintenance. 10. Financial Plan Success of any venture is determined by its financial viability and profit, and for financial success, financial planning is one of the most necessary tasks. Based on the increasing popularity of innovative mobile handsets among the Australian people and as per the market analysis, the sales forecast for Sunny Phone has been determined. Green-Tech is expected to achieve the 300 mobile hand set per month i.e. 3600 units of Sunny Phone during first year. In case of new venture, the financial planning is more important as it requires high capital investments. Major capital investments are for manufacturing plant, machineries and equipments, Land and building for office, equipments (computers, printers etc) for office. The following table shows the costs for capital expenditures. Table 2: Capital Expenditure Currently, standard cost for per square meter of land in Australia is nearly AUD 500, and for office and manufacturing plant required land is 1500 and 2000 square meter respectively. The flowing table shows projected income for the first years as per the sales forecast. Table 3: Projected Income for First Year in AUD As per the above table, Green-Tech expects to earn AUD 97200 and total return on revenue is nearly 9% in the first operating year and the growth rate in next year is expected to increase further as demand will be higher. 11. Recommendations and Conclusion This report has described a business plan for an innovative mobile phone called, Sunny Phone. In order to achieve success through market penetration, proper planning is very necessary for controlling and managing. However, risks associated with a new venture are always very high and hence, the company should take necessary steps for overcoming these issues. Some recommendations have been given in this respect. Sunny Phone is new and unique product and Green-Tech must conduct effective promotional programs to spread awareness among target consumers. Green-Tech must identify consumers’ needs and feedbacks for incorporating further improvements in new products through R&D. Existing competitors are major entry barriers and hence, it must aim to offer better consumer value to target consumers by effective marketing plan. Quality maintenance and consumers services are very vital to gain consumers loyalty and trust. Therefore, it must maintain proper public relation with consumers. Green-Tech must develop a growth oriented organization culture by encouraging team work. Transparency and two-way communication within the cross-functional teams will enhance efficiency of operational activities. 12. Reference AMTA. About AMTA. No date. AMTA. February 14, 2011. . AMTA-a. MobileMuster. 2009?10. Annual Report. February 14, 2011. . CIA. Australia. January 19, 2011. The World Factbook. February 14, 2011. . Peterson, S. D., Jaret, P. E. and Schenck, B. F. Business Plans Kit for Dummies. 3rd ed. For Dummies. 2010. Stonehouse, G. and Campbell, D. Global and transnational business: strategy and management. 2nd ed. John Wiley and Sons. 2004. U.S. Department of State. People. November 24, 2010. Background Note: Australia. February 14, 2011. . Ward, J. Principles of information systems management. Routledge. 1995. Read More