Offering Wedding Products - Case Study Example

Introduction Wedding is one of the most important events in the life of a person and as such each individual fully attempt to make the wedding momenta most memorable moment of the life. It is because of this reason that the wedding is planned and substantial time and resources are invested to make purchases for the occasion. However, often the shopping for wedding goes over-budget and individuals tend to find ways to purchase inexpensive stuff in order to remain within their budgets. Purchasing wedding products online is increasingly becoming more important aspects of overall shopping made for the wedding and as such providing online facility to purchase the wedding products can serve as one of the most attractive business prospects for any new start-up business. Considering this as an opportunity, we are planning to start an on-line business offering wedding products. This facility will offer wedding products to online customers with special emphasis on the success of such business model in Saudi Arabia. The business model that we are proposing will be offering a customized and personal service to the clients based in Saudi Arabia and would further offer a state of art online facilities to customers facilitating them in deciding about purchasing different items. This report will present a comprehensive analysis of different factors especially the nature of business model, the organizational structure needed to implement such business model as well as the resources required to be considered while starting any such online services Business Model A business model is often described as set of planned activities that are undertaken in order to earn profit. The different functions performed by a business model includes driving value proposition for all the stakeholders, identification of a relevant market segment, defining the firm’s value chain as well as specifying revenue and cost generation mechanism of the firm and finally defining the overall competitive advantage of the firm.(Chesbrough,2003). The proposed business model will be based on the idea of providing online facility to customers in Saudi Arabia to purchase their wedding products through internet. These products will include but not limited to wedding dresses for both bride and groom, veils, shoes and other cultural items consumed during the wedding in Saudi Arabia. Our business model will be based on the simple assumption that the customers must have the ability and access to quality wedding products. Value proposition Value proposition of a firm defines intangible benefits that the business model can offer to both owners as well as the customers of the firm. To derive the value for all stakeholders, it is necessary that the business must have the capability to generate value and must offer more than what is expected by customers specially. Our business model will deliver intrinsic value to our customers by providing an easy, effective and cheaper form of purchasing the wedding products. By availing our services, the customers will be able to save their time and resources in searching for ideal combinations of different wedding products purchased otherwise through days of toil in visiting different markets in search for such products. Revenue Generation The basic source of revenue for this will be the direct sales made through our website. However, since we are considering forming different strategic alliances with different allied services such as car services, catering etc. This part of income will be our referral income as we will be sharing a certain % of revenues earned by our partners generating sales through our site. New Idea Every new business starts as a new idea which is materialized and transformed into new business. Entrepreneurs often take risks to try out their ideas and transform them into vibrant and successful business. Though selling wedding products online is not a new concept however, in Saudi Arabia, there are hardly any online services which are offering such facility. Further, this idea is unique in the sense that it is offering a novel and more flexible opportunity to customers to buy wedding products through online services. Current markets Currently we will be serving only Saudi Arabian market because of logistic constraints. We will be serving whole of the Saudi Arabian market with special emphasis on Jeddah, Damam, and Medina etc. New Markets Though this business has a very limited international potential because customers often tend to prefer local suppliers for purchasing wedding products however, we are aiming to tap neighboring areas of Saudi Arabia including Bahrain and Qatar. These two markets share the same demographic and cultural characteristics therefore the level of new investment required to expand in such areas will be limited. Implementation of the Model A level 2 business model would be adequate for this type of business and this model can be implemented through a brick and mortar business model in Saudi Arabia. List of sites using this business model There are different websites which are following this business model and have successfully implemented it within different business environments and settings. Some of the sites are: 1) http://www.weddingstar.com Wedding Star provides a large database of wedding-related products and services excellent for helping families and friends organize a wedding. 2) WedNet http://www.wednet.com this site is the ultimate resource for planning a successful wedding. Their in-depth database of wedding vendors can help everyone throw a beautiful and successful wedding. Success of Model in Saudi Arabia Saudi Arabia is one of the most conservative religious countries in the world with very strict religious codes in place. The overall population of Saudi Arabia is more than 28 million with almost 60% population falling within the age bracket of 15 to 64 years. (CIA.COM, 2009). This ratio of relatively young people in the country indicates that there is larger probability of young people getting married and with the increase in literacy rates and internet usage, chances are that more and more customers will be looking for such services. We therefore, strongly believe that given the current income levels of individuals and prevalent age structure, this business model will be a success. Possible causes of failure There are many reasons which can potentially fail the business model. Most common reasons are: 1) Complex navigation menus provided in the website i.e. consumers may find it difficult to find relevant information easily. 2) Inability to cater to the needs of the customers i.e. model may fail to actually anticipate the changes in the tests and preferences of the consumers. This is also critical because the tests and preferences change with the changes in the fashion industry therefore to maintain the grip over the market, it is really critical that the model must be robust enough to anticipate such changes. Failure to do so will result in the failure of the model itself. 3) Poor functionality of the website can also result into purchase dissonance because customers may face difficulties in actually locating the desired information and than making the purchases. Success in Saudi Arabia This model may require following changes in order to be successful in Saudi Arabia: 1) Make the model more customized to suit Saudi Arabian environment. This may include customizing website in Arabic etc. 2) Developing strategic alliances with the local suppliers rather than foreign suppliers. Organizational Structure A vertical organizational structure will be most suited for this type of business and as such few layers of management will be developed to run this business. In-house or Outsourcing In-house development of the system will require significantly more resources because not only requisite capital expenditure will be made but also a team of highly professional and effective I.T. experts will need to be developed. Considering the limited initial cost, we will be focusing on outsourcing the development of our model.(Lawser,2007). Data required Immediately, the data regarding customers include following: 1) Personal details of the customers. 2) Credit/debit card information. 3) Shipping information Competition We aim to compete with our competitors by delivering unique value to our customers. We will achieve this objective by focusing on following: 1) Providing lower prices. 2) Offering more innovative and pleasant shopping experience on our website. 3) Offering better and larger variety of products. 4) Streamlining our distribution network. Competitive advantage We will be one of the first movers in the market because our business model will focus exclusively on Saudi Arabia. We will derive our competitive advantage by customizing our business model according to the local needs of our customers and will focus more on disciplining our distribution network. Industrial Value Chain Our industrial value chain will be comprised of following actors: 1. Textile manufacturers manufacturing grey as well as other type of cloth. 2. Fashion designers/ready-made cloth manufacturers. 3. Other manufacturers manufacturing other allied products. 4. Shipping companies dispatching ordered goods to our customers. Firm Value Chain Our firm value chain will comprise of following: 1. Suppliers providing various products i.e. in-bound logistics. 2. Operations i.e. management of inventories, ordering etc. 3. Shipment to customers through courier services i.e. outbound logistics 4. Sales and marketing through online viral marketing and other techniques. This will be outsourced. 5. After Sales services facilities handling the customer complaints as well as dealing with post purchase dissonance. References 1. Chesbrough, H. W. (2003). Open innovation: the new imperative for creating and profiting from technology. New York: Harvard Business Press. 2. Lawser,, S. (2007, March 7). Making profitable outsourcing decisions: a new make vs. buy study sheds light on the latest.. Retrieved July 29, 2009, from http://www.allbusiness.com/computer-electronic/manufacturing-reproducing/3896692-1.html Read More