Table of Contents
Introduction
Most business owners prepare business plans to guide and inform management of the nature of their operations while enhancing capital investment (Chambers, 2008). For a business to provide the best quality of goods and services, a good business plan should incorporate state of the art technology, premium quality products, highly trained and skilled work force, and consider a good ambiance (McKeever, 2016). Furthermore, it should also emphasize the basic business model elements such as geographical expansion, low investments costs, multiple revenues streams, and higher profit margins (Chungyalpa and Bora, 2015). This paper summarises the ideas of a proposed business plan and analyses its strengths and weaknesses.
Composition of the Business
The business proposed is composed of a four-member partnership with four executive positions, which are the financial manager, market research analyst, marketing manager, and the managing partner. The business partnership is the most appropriate form for this venture because it needs to raise enough capital from each of the four main stakeholders. Apart from the four positions, the business requires other sixteen staff members to fill the various positions and assist in the running of the business. The company intends to produce and supply ‘CHOCOLY,’ a new type of cereal chocolate that is delicious and healthy to children.
Competitive Advantage
The company will gain a competitive advantage because its staff are well trained, qualified, and with vast experience in the industry. Furthermore, the introduction of cereal chocolate to the market will allow the company to maintain the lead in the industry because currently none of the three chocolate factories in London specializes in the production cereal-based chocolates.
Company’s Objectives
For the company to achieve its objectives, it intends to incorporate several strategies into its management. Firstly, it intends to expand its operations by employing more qualified and experienced staff to run its online stores. Secondly, it aims at expanding its market segment to other continents like America, Asia, and every part of Europe (Drucker, 2017). The objectives of the company are:
- To find an appropriate location in Birmingham and open a cereal-chocolate factory
- To own and produce the most famous cereal chocolates in the world.
Strategies for Effective Marketing
The company will establish a good reputation in the UK and save enough money to enable it to expand to other market segments across the globe by using the market mix 4ps strategy and other effective strategies (Barton, 2016).
Design and Quality
CHOCOLY will be designed with a sharp yellow color with a chocolate flavor to attract children. The quality of the chocolate will be excellent with low-fat content making it a healthy product preferred for breakfast meal.
Product Branding and Packaging
The product’s distinctive design will make it unique and original. It will be wrapped in rectangular boxes that display the logo of the company, which will make it gain a unique selling point (Bushnell, Drucker, Abell, and Hammond, 2015). Since the target market of the product is children, its price set shall be sensitive and within the market piece of 2.99 pounds for every 500g of chocolate. The low price set will also help in allowing the product to easily penetrate the market by increasing sale volumes and enhancing market competitiveness.
Special Offer Pricing
To maintain loyal customers and attract new ones, the company intends to offer discounts on regular intervals and adopt new pricing tactics on special occasions. Examples of such strategies are ‘buy two get one free’ and ‘get 10 percent discount on your next purchase.’
Product Advertisement and Promotion
The company intends to use different promotional strategies to make the customers aware and convince them to purchase its product. Firstly, the company will advertise this product through children’s TV channels. The young will get an opportunity to convince their parents to buy the product for them. In addition, the use of cartoon-like promotion is essential in emphasizing the health benefits of the product (Nykiel, 2016). Secondly, the company will design its website to reach a vast number of people using online platforms. Customers will be required to sign up as members for them to regularly receive information on promotions and offers. This strategy will assist in the expansion of the brand while building long-term customers. Thirdly, the company will design newspapers and magazines containing detailed information about the product (Nykiel, 2016). Apart from using advertisements, the company intends to use product promotional strategies such as the introduction of loyalty cards for customers to earn purchasing points. Furthermore, to attract more customers on special days such as Christmas, the company will consider putting logo toys on cereal boxes to attract children (Jenkins and Williamson, 2015).
Distribution Channel
After manufacturing CHOCOLY, the company intends to pack and legally sell this product to customers through wholesalers and agents. They then distribute the product to retailers who in turn sell the product directly to the customers (Cavico, Orta, Muffler, and Mujtaba, 2014). The company will also distribute the product directly to major supermarkets across the UK such as Tesco, Sainsbury’s, Asda, Co-op, and Waitrose. Although the company’s factory is currently located a few meters away from Heathrow airport and Motorway network, it is considering expanding its stores across major cities in the UK to make the distribution process convenient for its customers (Hill, Jones, and Schilling, 2014).
Financial Overview
The four executive partners of the company will be responsible for equally contributing starting capital to operate the business. The startup capital is $634,171, meaning that each partner will contribute approximately $158,542. The break-even point will be achieved after a year and a half and the total capital invested must last approximately the same time. The company expects to sell products worth approximately $1,091,350 in one year thus giving back a net profit of approximately $402,428 per year. After paying employee’s salaries and catering for other expenses, the profit generated by the company will be shared equally amongst the four executive members of the company.
SWOT Analysis
SWOT analysis of the company will assist in determining its strengths, weaknesses, opportunities, and threats (Brooks, Heffner, and Henderson, 2014). It helps the company to develop strategies that would make it more competitive and successful within its market segment (Brooks, Heffner, and Henderson, 2014).
Strengths
Only three companies in London produce different kinds of cornflakes. In this regard, the company faces little competition in the industry, and it will specifically enjoy a monopoly in the production of cereal-based chocolate. Consumers have the liberty to choose their favorite flavor of the cornflakes depending on the company producing the product. Since Cornflakes and other cereals are gaining popularity amongst UK population, the demand for these cereals will always be high. Research shows that 96% of the UK population eat or drink something for breakfast and 49% start the day with eating cereals. For this reason, the demand for CHOCOLY will be higher than expected. Since the demand for cereals is higher in children of particular age group, the company will ensure that its marketing strategies and promotional campaigns target young children and teenagers.
Weaknesses
This product will be negatively affected by the high costs of production, market research development, and investment. For the company to enhance growth and increase its profit margins in future, it intends to open up new markets and acquire more customers. To improve its brand power, the company should invest more time and resources in research and product awareness campaigns through advertisements and offering of promotions (Brooks, Heffner, and Henderson, 2014). Thus, the company will be able to grab opportunities from its competitors who sell unhealthy cereal to customers.
Opportunities
Since one of the objectives of the company is to become a leading producer and supplier of chocolate flavored cereal in the world, it will have an opportunity to expand to international markets and develop new products whenever its profit margins increase (Brooks, Heffner, and Henderson, 2014).
Threats
The growth of the company is dependent on the strength of its competitors. If its competitors become stronger and innovative, the company might cease enjoying monopoly control leading to a reduction in profit gains. Furthermore, a negative change in the economy is likely to influence the company’s stability and dominance in various market segments (Brooks, Heffner, and Henderson, 2014).
Conclusion
A strategic business model plan offers an opportunity for organizations to identify their strengths and weaknesses and provides them with direction on how to achieve their set objectives (Deloitte & Touche, 2003). Organizations can achieve their objectives by consistently and adequately following the laid out plans. Furthermore, the businesses must fulfil and implement all the basic strategic elements such as business vision, mission statement, and define their success factors (Chambers, 2008). A good business plan allows employees of business entities to work in unison in meeting organizational objectives by setting out the clear business picture (Blank, 2013). In addition, a growth plan is important to these organizations because it helps them expand by attracting a variety of consumers. Moreover, it outlines essential steps to be taken to enhance efficiency (Brad, 2014).
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