PESTEL Analysis of AVA the Talking Elephant - Research Paper Example

AVA THE TALKING ELEPHANT Group 4: Nadia Azdem Kaynette Handy Erdem Cosgun Jennifer Harris Julio Fuentes Goldey-Beacom College Understanding the nature of business and the market to invest in has a significant importance for any prospective entrepreneur aiming at being successful during entry to market and also in acquiring an enormous market share and retaining it. We formulate this analysis to address the nature of the market we aim to encroach in as observed through intensive market research. The areas of analysis include; location, funding and both internet and external business environment. The market research reveals that our business has a chance of successful entrance into the market in Utah State through a joint venture with Munchkin Inc. The group members’ contribution is presented below. Name Index Number Section Provided Nadia Azdem Kaynette Handy Erdem Cosgun Jennifer Harris Julio Fuentes Content 1. Introduction 2. Strategic Diamond 2.1 Arenas 2.2 Vehicles 2.3 Differentiators 2.4 Product Features 2.4.1 Price. 2.4.2 Social Media. 2.4.3 Characteristics of our product. 2.4.4 Staging 2.5 Economic Logic 2.5.1 Price. 2.5.2 Cost. 3. Results Pyramid Strategy 3.1 Results – The Top of the Pyramid 3.2 Actions – the 2nd top level 4. PESTEL Analysis of AVA The Talking Elephant 4.1 Political 4.2 Economic 4.3 Sociocultural 4.4 Technological 4.5 Environmental 4.6 Legal 5. Vrine Analysis 5.1 Introduction 5.2 Value 5.3 Rarity 5.4 Inimitatibililty & Non-substitutability 5.5 Exploitability 6. Conclusion 7. Reference 8. Appendix 1. Introduction AVA The Talking Elephant is prospective business that seeks to market unique medicine dispensers. The medical dispenser is designed for infants and toddlers. Basically, our product is a plastic elephant toy with a built in medical dispenser. It also makes encouraging sound to motivate the children. The whole idea behind this product is the challenge for parents to give medicine to infants and toddlers. The product is designed to make the medicine giving time tear free and horror free for both the parents and the children. Market research is taken as the best tools to identify the best entry behavior of the business that will enable the business to survive avoid the huge competition. This paper seeks to present the best location for the medicine dispenser business to be located and the rationale for it. The paper will also present how the business will be organized internally. It is also imperative to analyze the external market based on PESTEL analysis to identify factors likely to influence the business. This is done with the intention of making the most appropriate decision required for the success of the business. 2. Strategic Diamond 2.1 Arenas It is fundamental to our business to determine where or in what specific segment and geographic location our business will be conducted. In this context we defined the babies’ accessories segment and Utah State as a part of our Arenas. With some four million babies born in the U.S. every year (Baby Center Website), the babies’ products market seems a very promoting market to start our business at. Our medicine dispenser puts us in the baby care accessories segment. Statistics show that the global sales in this segment will sum-up a total of 66.8 billion dollars by the end of 2017 (See supporting figure no.5 in appendix). Consequently, it will be easier for us to reach one million dollars as revenue in our first year in business (knowing that our initial investment was 50.000 dollars). Moreover, our business can benefit from the fact that parents want the best available products for their babies and then they are willing to pay for the best product in term of quality and liability. Since our market target is infants and toddlers, we decided to conduct our activities in the state that offers to us potential growth. Utah seems the best state where we can launch our adventure for many reasons. Utah is ranked top one in term of fertility with an average of 2.449 children per woman. Thus, the state will be an ultimate place where our sales can prosper, especially where the median household income is around 55 000 dollars (as shown in figure No.1 In appendix). A disposable income that makes parents financially more stable (compared to other states), and hence have money to spend on their baby’s care. Also, Utah’s population is characterized by its young median age (ibis), high level of education (Utah website) and large family size (Parents for choice in education). The people of this state exceed national averages by a large margin with a population median age almost eight years younger and households that are roughly 20% larger. The benefits Utah brings to our business are substantial, providing an abundance of highly educated, young individuals who are motivated to work and eager to succeed. The other advantage Utah has over other states is its strategic location. Thus, our business will have a central low cost distribution point for the major western cities and states with a 1- to 2-day access to half the nation’s population such as an enteral point for distribution along the Canada to Mexico corridor. Among the other pluses for Utah there is the energy costs that are 29% below the national average (Badenhausen, 2010), as well as Utah’s 5% flat corporate tax rate which is one of the lowest in the country (Tax foundation, 2013). 2.2 Vehicles After deciding on the arenas in which the business will be active, our next step is to determine how to get there. In this context and tailing the old adage “If you cant beat em, join em”, we decided to conduct our business through joint venture agreement (JV). The JV is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task (Investopedia). A joint venture will enable us to significantly increase the market reach, break down barriers to entry to the market and to generate important revenues in a shorter amount of time. Our study of the baby care accessories market (Statista, 2013), led us to numerate four major manufacturers, who captured a share of over 50 percent of total baby care and safety accessory sales in the United States in 2013. Among these players there is Munchkin Inc., which we believe it’s the best one to start our business with. (See supporting chart No.2 in appendix). About Munchkin Inc. In 2013, Munchkin‘s sales accounted for 7.5 % among the leading baby care and safety accessory vendors in the United States. For the same year the company performed sales growth of 4.3 % compared to 2012. (See supporting chart No.2 and 3 in the appendix) (Statista, 2013). Munchkin Inc., is a designer, developer, manufacturer, and distributor of infant and toddler’s product. Since its creation in 1991, the company placed great emphasis on innovation and developed cutting-edge, market-leading new products. As a result, Munchkin owns over 100 patents and has over 40 additional patents pending. About our joint venture Our medicine dispenser is just an innovation of the traditional medicine dispenser already produced by Munchkin (the mediator). As a result, entering in a joint venture with Munchkin is extraordinarily helpful to our business in gaining access to the technology, machinery, industrial knowledge and expertise that Munchkin has already developed through the years. And consequently, our startup cost will be extremely limited. Also, forming a joint venture with Munchkin can enable our business to use the same retail partnerships of Munchkin and accordingly, ensure the presence of our product to consumers in the main giant retail stores as Wal-Mart, Target and Toys“R”Us. Moreover, our product can easily invade the international market through the 25,000 retail stores, which Munchkin has developed. Furthermore, the joint venture involving our business to Munchkin will be beneficial in term of limiting our cost of production. Our Business will simply use the same process of fabrication with a slight difference. Therefore, Munchkin will basically cover a big portion of the research, development, labor supply and administrative costs. 2.3 Differentiators After specifying where our business will be active (arenas) and how it will get there (vehicles), it’s the time to define how our business will win in the marketplace and how it will get customers to come its way. Knowing that in a competitive world, winning is the result of differentiators, we decided to deploy our product’s design, features and price to beat competitors in the fight for customers, revenues, and profits. 2.4 Product features. Most of the Medicine dispensers in the baby accessories market, if we don’t say all, are sterile and hospital-like. Theres nothing friendly about them. Thus, we had the idea to come out with a product that can bring fun to monotonicity. Starting from the fact that kids typically love animals but are often anxious when they see a syringe or dropper, our product put a sweet colored elephant face and voice over the scary syringe and takes the fear away. It is a friend to the child and a valuable tool for parents. Consequently, our product, which our competitors cannot easily match since it’s patented, adds unique features that will increase its perceived value in the minds of our consumers. 2.4.1 Price. Our market study shows that the price of Kids medicine dispenser hovers in the $1.99- $7.99 range (see supporting chart No.4 in appendix). Thus, we decided to sale our product for $9.99 and then be placed on the top of the range. Our high price is justified by the uniqueness of our product as well as its cost of production. Our customers will buy not only a piece of plastic as most of the medicine dispensers in the market, but also they will have a product that makes the child smile or laugh, hence the sweet voice! And last, but not least, praise them for a job well done. Consequently, the parents will pay the extra money in order to get the talking, elephant-shaped medicine dispenser that alleviates their kids’ fears of taking medicine (Nielsen, 2011). 2.4.2 Social Media. Also the social media could be an efficient aspect of differentiation. Most of today’s parent use social media like Facebook, Twitter and instagram in a daily basis. In a recent study conducted in 2011 by Nielsen, 71% of the parents use social media to read consumer reviews about goods and services on the market (Nielsen, 2011). Starting from this fact, we can easily and cheaply share our new product on social media, and then we will instantly learn what our customers think of it. Another way to gain customer perspective with social media is by learning how they use our product and how they want it to be. Thus, their feedback will be integrated in future improvements. And consequently, we will offer a product that leans with our costumers’ preferences, which will put us definitely on the top of our segment. 2.4.3 Characteristics of our product. Unlike our competitors, our product will be made in the U.S. This fact will probably influence our customer’s decision of baying our product rather than our competitor’s product (which are mostly made in China) .A second advantage we have over our competitors is that our product is organic it’s made from organic materials such organic plastic and organic paint. Also our product is BPA and phthalate free which. With these special characteristics our product is totally safe to be handled by infants and toddlers. As a result, parents will choose organic, safe and American made product over any other product in the market. 2.4.4 Staging The forth element of our business strategy is stagy or the speed and sequence of major moves that we have to take in order to succeed. Despite the fact that, our joint venture with Munchkin Inc. provides us huge opportunities to distribute our product globally, we decided instead, limiting our joint venture to enhance AVA the elephant first and in parallel develop customer’s loyalty toward our brand separately from Munchkin Inc. In this context, we planned three stages for our business growth. Stage one: One Product Company During our two first years, we will focus only on how to strengthen our business, how to gain costumers’ confidence and how to improve our product AVA the elephant. Our business agreement with Munchkin.Inc, will enable us to fill up our lack of industrial knowledge and move toward promoting our product. Our approach In this stage is to concentrate our effort on enhancing Ava the elephant by using organic ingredients, adding other characters besides the elephant like baby penda and dear bear and also by introducing other languages spoken by the animals such Spanish and Chinese. By combining the outcomes of our arenas, vehicles and differentiators, we will be able, at the end of this stage, to develop some popularity of our product, generating considerable profit and gaining some market experience. Stage two: Multiproduct Company From our previous stage we gained the industrial knowledge, we identified our customers’ needs and we generated some resources that we can use to diversify our products. Our joint venture was to develop one product but after gaining the market place its time for us to think about other products that lean with our philosophy of renovation. In this context, and separately from Munchkin, Inc., we are going to use our limited resources in developing new cutting age products, which can amplify our brand nationally. Consequently, we are planning to produce the thermometer stickers, the taking toothbrush and the taking dish for toddlers. In this context, we will invest aggressively in low cost advertising trough social media, we will boost our development department with funds as well as with qualified, skillful brains and also we will enlarge our distribution channels to hospitals and orphanages. Stage three: Build a corporation After strengthening our business in the U.S by offering more products, enhancing AVA the elephant and by developing a prestigious brand image for our business. It’s time to enlarge our activities globally. Accordingly, we would work in a variety of countries and cultures. We will commit ourselves to rapid international expansion, but only one region at a time. In general, our approach is to use our resources to establish an early foothold by operating with a single distributor in each targeted country. Such entry will be supported with aggressive public relations and advertising so we can lean in that market requirements. Later, we come back into each country and fills in with more distributors. In Parallel, we will look for opportunities to diversify our portfolio (but within the infant products) by acquiring companies in promoting markets such Chinese and European markets. This strategy will provide us a substantial footprint in these markets and from which we can accelerate our growing international distribution. Also, our vision in this stage is to develop our own distribution outlets, so we can deal directly with our final customers and then cut the fees or commissions charged by the retail stores in order to display our products. Thus, we will open our own stores in the most populated cities such New York, Los Angeles, Huston, and Orlando. Also, we will create an amusement pack in Utah so we can advertise our brand and broaden our operations. In this stage funding our operations will be very critical to our expansion, borrowing money will just complicate our financial situation, therefore we should consider going public. 2.5 Economic Logic At the heart of our business strategy we must have a clear idea of how profits will be generated. In this context our mission is to lower our costs and keep our prices higher. 2.5.1 Price. The economic key in this context is to obtain premium prices by offering to our customers a difficult-to-match product. Our product will be protected by a patent therefore its will be hard to our competitors to produce something similar. Another reason can make us charging premium prices, is the effect of our brand image. Our product is organic, BPA and phthalate free. Also it’s made in the US. These characteristics of our product increased its perceived value in our consumers mind and then they will accept to pay that premium price since they are buying not a product but a prestigious brand. 2.5.2 Cost. To get a significant competitive situation, we have to keep our fixed, variable and finance costs as low as possible. As a manufacturer our main cost is the cost of good sold. In this context and because of our joint venture with Munchkin.Inc., we will have the ability to negotiate the prices charged by suppliers and we will keep them to the minimum possible. Our capital cost was very limited since we used the Munchkin’s machinery to produce our product. Consequently, we limited our debt and lowered our financial burden. Finally, we maintained a very low cost for advertising since we opted for the social media channels as a support for our marketing strategy. 3 Results Pyramid Strategy When using the Results Pyramid strategy, what an organization is doing is attempting to change the culture of the organization. This is done by changing how employees think and act. The pyramid is designed to work from the bottom level up, the experience up to the results. To do this or to produce the outcome that the company desires, it must create a positive experience for the people (employees). However, it still works from the top level down, the results down to the experience. The reason being, at the top level, the results level, is where the Vision and Mission statements are defined. See figure 1. Additionally, The General’s View which is discussed in the Strategic Management textbook is closely related to the Results Pyramid strategy. The General’s View only has two levels. At the top level of the General’s View is the battle plan and the lower level are the officers (Strategic Management textbook, 2007, page 9). Therefore, for purposes of the business plan for Ava the Elephant Talking Medicine Dispenser, I will be working from the top of the Results Pyramid downward. I think that it’s necessary to layout the vision, mission, and goals and trickle them down to through all the levels of the organization. As I work through this strategy I will be using my personal work history experiences to formulate the business concept. 3.1 Results – The Top of the Pyramid Vision Statement: To be the top designer, developer, and manufacturer of infant and toddler products by expanding our arena base and product base. To go about this we will first market the product in the state of Utah, then other Western states, and eventually target global arenas. According to data from the U.S. Census Bureaus American Community Survey, more women in the western United States are having children, while the East and Northeast have lower birth rates. Three metropolitan areas in Utah, as well as three in California and one in Nevada, are among those with the highest rates in the country, according to census estimates (Kurtzleben, U.S. News and World Report, October 12, 2011). Mission Statement: Empower employees to be diverse, innovative, and to think outside of the box. This will be accomplished by always encouraging employees to think ahead to the future, to be different and distinct, and to look for raw, untapped resources. In my opinion, diversity can be managed from a hiring perspective, as well. By individuals from various backgrounds, age groups, genders, and ethnicities will help to demonstrate to employees the culture that the organization wants to build, while also, producing the desired results of the organization. 3.2 Actions – the 2nd top level Goals: Once the goals are defined it’s up to each department head to communicate department specific goals which will help meet the organization’s overall goals. 4 PESTEL Analysis of AVA The Talking Elephant 4.1 Political The United States is a stable country. It is key for our childrens medicine dispenser, and any other product, to enter a market in a country that has political stability. Politically stability offers security and confidence that our product will not be affected by any political turmoil that may affect its sales negatively, such as revolutions, coups, civil wars, etc. The United States is a representative democracy and a federalist country made out of fifty states and several territories (see Chart 1). People elect their president, federal, state and local officers through voting, which is voluntarily. Federalism is a political system that can be defined as a national government that shares power with local governments (state governments). This means state governments have a special protected existence and the authority to make final decisions over many governmental activities (Wilson, 2010). The United States has access to both the Atlantic and Pacific Oceans, which are highly commercial for the import and export of goods. It is a big country with a big market that has a lot of possibilities for our product. However, each state and other local governments, such as cities, have their own additional laws and regulations that may differ from one another, and our childrens medicine dispenser to be compliant with each of those laws and regulations. The United States is a capitalist country. Capital is used in the development of new businesses and products. The United States also has a strong monetary system. Its currency is the US Dollar (USD). The U.S. Federal Reserve Bank regulates the monetary system, and it has jurisdictional regions and branches throughout the country. A strong monetary system is good for the introduction of our product in the US because it generates consumer confidence. 4.2 Economic Media outlets and the federal government have reported that The United States economy is steadily recovering and growing after the recession of 2008. The recession of 2008 left the country with poor economic confidence, and this translated into lower sales of products. Because the economy is recovering and growing, consumer confidence is also coming back. This is positive for the sales of new products, such as our childrens medicine dispenser. Therefore, economic growth is also key to introduce a new product in a new market (see Chart 2). Although the United States economy is labeled as a “free market,” it is heavily influenced by politics, laws and regulations coming from the Federal, State and local governments and their respective jurisdictions. Governments also influence in the economy by spending their money nationally and abroad, and by collecting taxes. Governments also influence in the markets by creating surplus and debt. High levels of debt have created serious problems for state governments and the Federal government (Fishback, 2007). Consequently, we need to also study how Federal, state and local politics and regulations affect the economic to enter the markets of their jurisdictions. This will affect the success or failure to launch our childrens medicine dispensers in those markets. It is also important to know that some regional markets in The US are doing better than others. Therefore, it will be safer to sell our product to those regional markets first. For example, the State of Texas reports it has very low unemployment compared to other states and the national average. E-commerce platforms are trending in the United States. Stores such as Amazon and Ebay generate lots of revenue. Out product can also benefit from sales via e-commerce. 4.3 Sociocultural The United States has a consumerist culture that is beneficial for the sales of our product. People are constantly buying and selling products. And they are willing to try new products. People also buy products and gifts to others during birthday celebrations, Christmas and other holidays, and baby showers. Certainly, our Ava The Elephant childrens medicine dispenser will be the perfect and target gift for baby showers. The American society and culture has a legacy of consumerism (see Chart 3). Most Americans are not likely to abandon their consumerist course, except, perhaps, during an economic or environmental catastrophe. They held to their consumerist ways tenaciously during the Great Depression and the inflation / energy crisis of the 1970s. Furthermore, Americans became more attached to goods during those two periods (Cross, 2000). The American consumerist culture is excellent news for sales of our childrens medicine dispenser product. The United States is currently undergoing demographic changes. This means that we may need to market our product targeting different ethnic groups and subcultures to gain every possible consumer we can get. This also means we may need to target and focus on niche markets. For example, it has been reported by different media outlets that the Hispanic population of the United States will continue to grow rapidly throughout the 21st century. Most of them continue to speak Spanish at home, and their understanding of English is limited. Consequently, we should seriously target this growing demographic and market our childrens medicine dispenser in Spanish. Perhaps, we could create a new Spanish sounding name for our Ava The Elephant childrens medicine dispenser. Furthermore, our product should be bilingual, and we should produce commercials and advertising in Spanish as well. 4.4 Technological Technological innovation is crucial in order to improve and compete against similar and new products. Technology moves fast, and therefore, new products can make other products obsolete. The United States does well on innovation and has the technological means and capital to develop and improve new products. Our Ava The Elephant childrens medicine dispenser will be favored by these technological conditions. . The United States is strong in research and development, which means we will be able to research and develop newer and better versions of our children’s medicine dispenser. Science and technology progress depend on the United States ability to absorb (make economic use of) recent innovations made at home or abroad. The rise of research & development, R&D (see Chart 4), and innovation in other countries outside of the United States will also benefit the United States, rather than hurt it (Galama, 2008). Therefore, our childrens medicine dispenser will not be affected negatively by the current R&D and innovation trends currently going abroad. On the contrary, these advances and innovation will enrich our product and will add to the R&D and innovation that will be put in place for our childrens medicine dispenser in the United States. Speaking of technological talent, there is a large pool of United States national and outsourced talent coming to the United States. This talent continues to grow. Consequently, there will not be scarcity of talent, and we can pick and choose those who will be producing technological advances for the benefit of our childrens medicine dispenser product. Moreover, the United States has many reputable universities where we can recruit talent for the development of our product and benefit from the talent that is already there. 4.5 Environmental The United States is overall conscious about the environment. Some states and local governments have more initiatives towards the wellness of the environment and have stricter regulations and policies for the environment than others. For example, California has laws and regulations towards the environment that are not found in other states. The United States Federal Government created the Environmental Protection Agency (EPA) to incorporate formal regulations into its rule-making procedures. Previously it was the United States Congress that came with federal initiatives of laws, regulations and policy towards the environment. The EPA and state agencies worked together for the prevention of environmental pollution (Florino, 2006). Companies and environmentalists work sometimes along the government for the environment. Not only does it help the environment, but it also affect the image of the company and its products. Furthermore, people who are for the environment will prefer those products than others that are not environmentally friendly. A biodegradable children’s medicine dispenser will be a great product to consider in the future, so that it can degrade in the environment, preventing the accumulation of waste and toxic pollutants in the environment. As children grow, our childrens medicine dispenser will no longer be needed and be disposed as waste. Thus, we need to think green (see Chart 5), and make a biodegradable product version will make sure this waste is degraded by the environment. Also, our company should volunteer and participate in activities that benefit the environment and the community altogether. In addition to helping the environment and the community, this is also good public relations and image for our company. 4.6 Legal The United States has federal, state and local laws. The law in the United States is often represented with the image of a balance scale (see Chart 6). Laws in Delaware may differ from those in Utah. Those laws in Utah may be different from those in California, and so on. Local governments, such as cities, also have laws and regulations that may not exist in other cities and states. The United States overall judicial system, which is made of Federal, state and local judicial courts, is regarded as efficient. The United States has developed a complex and influential corporate law and justice system, which is perceived highly and looked upon as an example by other countries around the world. Some states offer advantages to companies that incorporate in their states. For example, many 500 Fortune companies are incorporated in the state of Delaware. Corporate law and its corporate judicial system is perceived as friendlier and more efficient by big companies. As our company grows into a bigger corporation, we should consider incorporating there. Perhaps, the most important field in the legal system that will benefit and protect our Ava the Elephant childrens medicine dispenser is the United States intellectual property law. Intellectual property law protects the results of human creative endeavor. Intellectual property law is generally divided into four sub-fields: trademarks, copyrights, patents and trade secrets (Bouchoux, 2008). Our Ava the Elephant childrens medicine dispenser will especially benefit from the protection of its trademark, copyright, and patent. Since our childrens medicine dispenser is unique, a patent will prevent other companies to offer and profit from a similar product. From this analysis, it is imperative to note that the United States offers a stable country that offers a good economic outlook for our children’s medical dispenser. The consumerist culture is beneficial for the sales of our product. The country is currently undergoing a demographic change, and this can be exploited for our product competitive advantage. Research and development are accessible and top-notch. Talent is always supplied domestically and also from abroad. The judicial system in the United States is efficient, and intellectual property laws will protect and benefit our product and its sales. Therefore, the PESTEL analysis for our childrens medicine dispenser (see Chart 7) in the United States describes an excellent market to successfully introduce, sell and maintain our product. 5 Vrine Analysis 5.1 Introduction Companies can achieve superior performance and gain competitive advantage by using the VRINE model emphasizing value, rarity, inimitability, non-substitutability, and exploitability. These five factors influence a firm’s resources and capabilities to compete and achieve superior performance (Carpenter & Sanders, 2009). First, a resource must add value to meet demand in the market. The ability to compete by itself does not offer an advantage, but can produce a normal profit. The value added assumes the firm can control costs and the product or services offer potential to consumers. Second, scarce (rare) resources can add competitive advantage at least temporarily. Until competitors can normalize this competitive advantage, the firm can achieve above normal profits. Third, if the products or services added are incapable of reproduction by competitors, the firm can achieve a sustainable competitive advantage earning above normal profits for an extended period. These products or services are such that competitors cannot imitate or substitute for them. Last, a firm has to have the capability to exploit the above four characteristics to achieve competitive advantage. The ability to exploiting these resources allows the firm to achieve improved financial performance than if it can only control them (Carpenter & Sanders, 2009). 5.2 Value Creating value means innovatively bundling and leveraging the resources and capabilities of the product. Resources can be classified as tangible and intangible resources. Tangible resources include company warehouse, financial resources, human resources, vehicle and also value chain line, suppliers and so on. Intangible resources include experience, popularity. Some tangible resources can also be intangible. In our case, our product is a medical dispense. Though it is a new product, it cooperates with another company called Munchkin Inc. This company has been producing baby accessory for years therefore we also gain intangible resource such as experience form our cooperation with Munchkin. The features of this product make it user friendly and children friendly. It has a compact and durable BPA free plastic material. It is also light weight. .Having a toy-like appearance makes it more appealing to children. It is a unique gift for baby showers and one another feature is it is healthy as it does not contain any dangerous chemical materials. Last but not least is our product prevents medicine waste, too. Like many parents, I have experienced the challenge to give medicine to my toddler son many times with no luck and have ended up wasting the valuable antibiotics. Our product will definitely help in these cases. Since our market target is infants and toddlers, we decided to conduct our activities in the state that offers to us potential growth. 5.3 Rarity Rarity feature of VRIN marketing means the company uses unique resources or material or advantage over the other products. In our case, we cannot talk about the rarity of AVA Elephant because of the great availability of the used material and other competing products. Our product is patented to protect the features such as talking animal sound and shape. 5.4 Inimitability and Non-Substitutability The test of inimitable and non-substitutability capabilities is closely tied to product’s rare capabilities. The product’s sole unique feature is talking animal feature. Although it can be easily imitable, the product is patented. Without a patent, any other company can produce a similar item. 5.5 Exploitability AVA Elephant has launched a new product in children medical field. The new product is called AVA the Elephant Thermometer Stickers. With liquid crystal technology, it allows parents to accurately monitor their child’s temperature for 24 hours. We will keep exploring new ideas and adding new products vertically in the market. 6 Conclusion Results Pyramid strategy is influential in modifying the culture of the organization. This is because it produces the outcome that the company desires by creating a positive experience for the employees. For purposes of the business plan for Ava the Elephant Talking Medicine Dispenser, I will be working from the top of the Results Pyramid downward. The top of the pyramid will include the vision, mission statement and the goals of the business. Our business has identified the Utah State as a part of our Arenas for marketing of our medicine dispenser. Our medicine dispenser puts us in the baby care accessories segment. The rationale for this segment is attributed to the millions of babies being born annually in the U.S, and therefore, the segment is very lucrative going by the statistics. The rationale for the choice is Utah state is due to the fact that this region offers ours business potential for growth as it is ranked top one in term of fertility with an average of 2.449 children per woman, high disposable income, young medium age and strategic location. We plan to encroach the market through a joint venture in order to break the barriers to entry into the market. The business that is more plausible to start our business with is Munchkin Inc. as it is a designer, developer, manufacturer, and distributor of infant and toddler’s product. The joint venture is viable given the fact that our medicine dispenser are an innovation of those already produced by Munchkin Inc. thereby making it easy for us to use the same retail partnerships of Munchkin in marketing and also ensure that we limit our cost of production. Product differentiators will be explored as a strategy to beat competitors in the fight for customers, revenues, and profits. Our products have unique features that add to our competitive advantage; it is made in the U.S, they are organic, BPA and phthalate free, thus safe for the toddlers. As such, we will be able to price our products at the top of the range. Due to the increased use of technology, social media has been identified as the most efficient aspect of differentiation. There will be three stages of our product growth; one product company, multiproduct company and building a corporation. The economic logic of our products is based on the price of our products against costs of production. The PESTEL analysis indicates that the United States is a stable country and therefore strategically suitable for launching our children’s medicine dispenser. The economic performance of the United States is highly enhanced thereby providing a great market for our products. On the sociocultural perspective, the United States is endowed with cultural diversity which allows us to target specific demographic region. Furthermore, the technological innovation will be influential in improving and producing new versions of our children’s medicine dispenser. Our biodegradable medicine dispenser will be in compliance with the laws regarding environmental conservation. With respect to the legal perspective, we have complied with the strong patent and intellectual laws that will protect our product. VRINE model is an effective tool of assisting the business achieve great performance and gain competitive advantage. The model emphasizes on how a business can redirect its resources and capabilities in order to achieve great performance by focusing on value, rarity, inimitability, non-substitutability, and exploitability. Corporation with Munchkin Inc. through a joint venture is effective in adding value to our business since it is an established business enjoying economies of scale. With respect to rarity, our products are unique with features such as talking animal sound and shape that are already patented. Inimitability and non-substitutability has been achieved by the talking animal feature. AVA Elephant has achieved exploitability by launching other products in the market. 7 References 1. Bouchoux, D. (2008). Intellectual Property: The Law of Trademarks, Copyrights, Patents, and Trade Secrets for the Paralegal (p. 3). Cengage Learning. 2. Badenhausen, Kurt (October 13, 2010). "The Best States For Business And Careers". Forbes. Retrieved from: http://www.forbes.com/pictures/mli45efejk/3-utah/ 3. Carpenter, M., & Sanders, W. G. (2009). Strategic Management: A Dynamic Perspective Concepts and Cases(Second ed.). Upper Saddle River, NJ: Prentice-Hall. 4. Cross, G. (2000). An all-consuming century why commercialism won in modern America (p. 247). New York: Columbia University Press. 5. https://www.indiegogo.com/projects/ava-the-elephant-thermometer-stickers 6. http://www.csus.edu/indiv/h/hanY/Teaching/GM105%20Slides/Resources%20and%20Capabilities.ppt. 7. http://ibis.health.utah.gov/indicator/view/AgeDistPop.Ut_US.html 8. http://www.academia.edu/2766563/An_Evaluation_of_a_Company_s_Resources_and_Capabilities_Achieving_and_Sustaining_Competitive_Advantage_in_Nigerian_firms 9. http://www.business.illinois.edu/josephm/BA449_Fall_2007/Handouts/BADM%20449_09. 10. http://www.strategicmanagementinsight.com/tools/vrio. 11. Fishback, P. (2007). Government and the American economy a new history (p. 558). Chicago: University of Chicago Press. 12. Fiorino, D. (2006). The new environmental regulation (p. 5). Cambridge, Mass.: MIT Press. 13. Galama, T., & Hosek, J. (2008). U.S. competitiveness in science and technology (p. 122). Santa Monica, CA: RAND. 14. Investopedia. Joint venture definition. http://www.investopedia.com/terms/j/jointventure.asp 15. Medicine dispenser prices. Retrieved from : /www.amazon.com/s/ref=sr_pg_4?rh=i%3Aaps%2Ck%3Amedicine+dispenser&page=4&keywords=medicine+dispenser&ie=UTF8&qid=1415720748 16. Nielsen. FRIENDS, FOLLOWING AND FEEDBACK HOW WERE USING SOCIAL MEDIA.(2011). Retrieved from : http://www.nielsen.com/us/en/insights/news/2011/friends-following-and-feedback-how-were-using-social-media.html 17. Package fact. Baby supplies in the USA. (2010). Retrieved from : http://www.packagedfacts.com/babycare-supplies-2604910/ 18. Parents for choice in education .Utah’s graduation rate 2005 and 2007. Retrieved from http://www.choiceineducation.org/tomorrows-workforce/the-achievement-gap/587-graduation-achievement-gap 19. Statistica. Baby care market size worldwide. Retrieved from : http://www.statista.com/statistics/250853/global-baby-care-market-size/ 20. Statista. Sales share of the leading baby care and safety accessory vendors in the United States in 2013. Retrieved from: http://www.statista.com/statistics /193151/category-share-of-top-baby-care-and-safety-accessory-vendors-in-2013/ 21. Statista. Sales growth of leading baby care and safety accessory vendors in the United States. Retrieved from: http://www.statista.com/statistics/193142 /us-sales-growth-of-baby-care-product-vendors-in-2013/ 22. Surprising facts about birth in the United States. Retrieved from : http://www.babycenter.com/0_surprising-facts-about-birth-in-the-united-states_1372273.bc 23. Tax foundation. 2013 State Business Tax Climate Index. Retrieved from: http://taxfoundation.org/article/2013-state-business-tax-climate-index 24. United States census bureau. 2010 Census Demographic Profiles. (May 19 2011). Retrived from: http://www.census.gov/newsroom/releases/archives/2010_census /cb11-cn139.html 25. Wilson, J., Dilulio, Jr., J., & Bose, M. (2010). American Government: The Essentials (12th ed., p. 19). Cengage Learning. 26. Wikipedia. Total fertility rate. Retrieved from http://en.wikipedia.org/wiki/Total_fertility_rate. 27. Wikipedia. List of U.S. states and territories by fertility rate. Retrieved from: http://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_fertility_rate 28. Wikipedia. List of U.S. states by income. Retrieved from: http://en.wikipedia.org/wiki/List_of_U.S._states_by_income 29. http://ibis.health.utah.gov/indicator/view/AgeDistPop.Ut_US.html 8 Appendix Figure No.1: List of US. States by fertility rate The Total Fertility Rate of a population is the average number of children that would be born to a woman over her lifetime. Figure No.2: Sales share of baby product in the US market Source :www.statista.com Figure No.3: Sales Growth rate of baby product in the US market Source : www.statista.com Figure No.4: 0ur price compared to competitors Source :Amazon.com Figure No.5: Baby care market size worldwide Source: www.statista.com Figure No.6: What is social media used for in the U.S? Source: www.nielsen.com Figure No.7: Our Business staging. Original Supporting Charts (Julio Fuentes) Chart 1 Chart 2 Chart 3 Chart 4 Chart 5 Chart 6 Chart 7 Read More