Develop your business idea into a viable business model, review your market / industry, competitors and your competitive advantage (who are your competitors and why are you different?). You need to demonstrate that you understand your market and who will buy your product or service and why.
My business idea is to open a new small scale boutique for women apparels. The purpose of this boutique is to concentrate on the clothing of the young ladies. The products which are going to highlight in this boutique are the trendy and fashionable outfits which grab the mind of the young ladies. Other accessories like handbags, wallets, ladies watches, rings etc are also planning to be displayed. The boutique is going to open in a prime location in London. Since the location selected is in the city center there will be more attraction for the shop which can enhance the inflow of the customers. A supervisor and three staff members are planning to allot in the boutique so as to help and assist the customers and make their purchasing experience satisfactory.
Ladies Apparels: coupon cabin, 2015
The apparels selected would be from the leading fashion designers so that quality and the design of the clothing can be ensured. The clothing which is displayed in the showroom would be trendy and handpicked by the expert fashion designers which can gather good fame and reputation for the organization. For making this business idea successful, it is essential to conduct a market research on UK market primarily in London as it is a small scale company. Other risk factors, opportunities, competitor’s analysis are also to be conducted so as to formulate appropriate business strategies (Navarro, 2015).
As far a new business plan is taken into consideration, market analysis is relevant for its success. For opening a new shop and to implement the business activities successfully it is very essential to identify the influence of the internal and the external business environment over the new business idea. The feasibility and reliability of the business idea women apparel boutique in the UK market can be determined by performing market analysis. Some of the scientific management tools which can be adopted for this purpose are the PESTLE analysis, SWOT analysis and Porter’s five force analysis (Basiri et al, 2016).
Political: As far as the UK market is taken into consideration, the political situation is highly stable. The organization can smoothly launch their new business without any political hindrance. Getting license and approval for the boutique will be easier under this political situation.
Economical: Since the UK is an economically stable market, finding the financial source for the investment for the boutique will be easier. Through providing the tax rates and other tariffs as per the regulation of the UK government the business operations of the boutique can be carried out smoothly (Carthy and Hay, 2015).
Social: The UK is a market with a good buying potential. The customers over there prefer new and standardized products. Almost all families have dual income which makes them potential enough to buy trendy apparels.
Technological: The UK population prefers technological up gradations and are quick adapters to the new products. Through providing online services, it will be easier to positively influence the sales and promotion of the new product line.
Legal: The legal issues can arise here as there are many competitors in this industry. Some complications can happen while entering into the contract with the fashion designers other suppliers etc. As the government of UK wants the small scale organizations also to follow the rules and regulations of the health and safety of employees, employee rights etc, it also becomes essential to stick on to those policies so as to avoid legal complications (Huizer et al, 2015).
Environmental: The nonseasonal periods can affect the sales and the promotion apparels.
This is an effective tool which can be utilized for the analysis of the external environment of the organization. Through this tool the risks associated with the external factors of the new business idea boutique for women apparels.
Bargaining Power of Customers: The bargaining power of the customers for this product will be very high. The customers are having lots of other options for buying the apparels they prefer. If the customer is not satisfied with the product quality or price, then they can opt for other brands easily (Mathooko and Ogutu, 2015).
Porter’s five force analysis
Bargaining Power of Suppliers: The demand for the suppliers will also be high as there is many small scale and large scale clothing showrooms in London. Getting the appointment and entering into an agreement with leading fashion designers are much difficult. For continuing the contract with the fashion designers and other suppliers, it is necessary to maintain a good relationship with them (Fitzpatrick, Nguyen and Cayan, 2015).
The Threat of new entrants: The probability that the new organization can rise in this industry offering the same product is very high. This can affect the sales and the profit generation of the organization.
The Threat of Substitute products: This threat is lower for this product as there is no substitute for the clothing and the women prefer to wear the trendy dress all times (Doyle and Windheim, 2015).
Competitive Rivalry: The competition is very high in this industry. There are many national and international companies who are offering quality and standardized clothing to the customers of UK.
The strength, weakness, threat and opportunities of the new business idea boutique for women apparels are determined and highlighted here (Jaber et al, 2015).
|
Strength |
weakness |
|
Good demand for the trendy apparels The product selected is nonperishable provision of online services |
Lack of experience to deal with the new business. |
|
Threat |
Opportunities |
|
High degree of competition. Customer’s buying decision can change frequently |
The UK is a potential market for the clothing industry and the chances of growth are very high. |
For placing the products appropriately and to make the promotional activities more effective, it is essential to segment the markets according to the product. Here the UK market can be segmented and the target market segments can be identified for the new retail shop. The target market segments are considered as the right audience of the product who can buy the product or who is in need of the product (Görög, 2016). For this small scale organization, the target market can be segmented broadly into women segment. The product is primarily intended for women who belong to all age groups. The target audience women are also classified based on the income of the family. The target segments are specified below.
Target segment 1:
Business class women: This segment of customers requires executive collections which suit for their business activities. This category of women will have enough potential to afford costly apparels for their business purpose and also for other occasions. Hence, this segment is a potential segment and can be approached appropriately. These segment won’t be bothered about the money rather they provide importance to the quality of the product; hence, they are more potential customers (Millán, Fanjul and Moital, 2016).
Target segment 2:
High-class women: This segment of customers provides value only to quality not to the price of the product. As far as UK market is taken into consideration, the percentage of high-class women is huge, especially in London. These segments prefer costly and trendy apparels.
Target segment 3:
Young ladies: These segments prefer low cost and trendy clothing. They act as the frequent visitors to the shop as their mind changes as the trend changes. (Du et al, 2016).
The size of each target market segment in the UK market is statistically represented below
While launching a new retail shop, it is essential to adopt appropriate market entry strategy so that the customers can be attracted easily. For launching the new business in the market UK, the organization can adopt the following market entry strategy (Burton and Cross, 2015. A).
Strategic alliance: Entering into a partnership with the other leading retailers or wholesalers in the UK can be an efficient and a risk-free strategy. Under this strategy business risk associated with an investment, marketing, promotion, formulation of business strategies etc will be less. The main issue associated with it is the sharing of the business information and sometime this market entry strategy can delay the decision making process. It would be a better strategy if a credible partner is identified for implementing the strategic alliance (Ensign and Lunney, 2015).
Opening show-room in the UK: This is a good option for maintaining the quality policies, standards etc of the small scale organization. Through this the risks associated with the information sharing, damage in the reputation etc can be avoided. This strategy requires huge investments and political risks are required. The organization will have to undergo with many formalities to get sanction from the government (Li, Qian and Yao, 2015).
The business models of an organization can be considered as a strategic management tool or as an entrepreneurial tool which can be used to highlight and specify various methods which a firm adopts so as to make the revenue as per the plans and estimates. It involves various methods through which can be adopted for making a business successful or to run a business as per the plan (Solís, Masanell and Tatjé, 2015).
Business models, source: creative realities, PDMA, 2011
A business model can be developed for the new small scale organization for the launching of its new retail business.
|
Key Partners |
Investors, vendor or retailers in the UK market, regulatory agencies. |
|
Key Activities |
Branch operations, getting the license, making online facilities for apparels, providing training and development to staff members. |
|
Key Resources |
Financial resources for performing the international business, sufficient human resources. |
|
Value propositions |
Deposit products at lower interest rates and loan products at higher interest rates. |
|
Relationships |
maintaining public relations and providing high quality customer service |
|
Channels |
Product distribution channels like the retailers in the UK market, intermediate agencies. |
|
Customer Segments |
Target market segment involves the business class women, high class and the youth. |
|
Cost structure |
internal expense, construction costs, marketing costs, tax rates and tariff rates, labor costs etc. |
|
Revenue Streams |
Revenue from online sales, direct sales in the market, strategic alliance etc. |
Business model for new retail shop
Estimated Budget for opening the apparel retail show room:
Legal $1,000Logo,
Stationery $1,500
Utilities & Telephone $2,000
Packaging $2,500
Business Supplies $600
Real Estate Attorney $2,000CPA $500
Grand Opening Event $3,000
Signage $1,500
POS System $3,500
Bank Card Machine & Supplies $400
Build-out $15,000
Business & Inventory Insurance $2,500
Travel-Market Buying Trips $2,250
Total Start-up Expenses $38,250
Start-up Assets $18,200
Start-up Inventory $80,000
Other Current Assets $0
Long-term Assets $15,000
Total Assets $113,200Total Requirements $151,450
Identification of the competitors is very essential for an organization so as to remain competitive in the market. Through monitoring the activities of the competitors the organization can formulate efficient strategies through which they can gain competitive advantage. The competitors are involved in the external environment of the organization which can influence the smooth functioning of the organization. Here some of the competitors of the new small scale organization are identified and certain analysis is performed (Yu, Wang and Brouthers, 2015).
The competitors for this new small scale retail shop in the UK are to be identified so as to formulate strategies to achieve competitive advantage. Some of them include the Pretty Eccentric a British clothing retailer (Pretty Eccentric, 2011), Hobbs, ASOS etc.
These three organizations are the leading retail shops in UK market which holds a good customer base. These organizations remained successful in achieving good sales and revenue from the UK market. Now competitor analysis is performed on these organizations to identify its strength and weakness which will contribute to the gaining of opportunities and identifying threats for the new retail shop (Kim, 2015).
|
Competitors |
Strengths |
Weakness |
|
Pretty Eccentric |
Good customer loyalty and reputation. Have traditional and heritage value |
Lacks online facilities |
|
Hobbs |
Trendy product lines highly savvy |
less product differentiation |
|
ASOS |
Branded product High quality and standards. |
High cost Less product differentiation. |
The identified strength and weakness can be considered for building up competitive advantage for the organization. So as to achieve competitive advantage, the new boutique should focus on the promotion of the online service and purchase effectively as the UK customers prefers online purchase. New trendy and innovative apparels and other accessories can be introduced which enhances the convenience of the customers to compete with the market giants. Providing better customer service and satisfaction can also help the organization in achieving competitive advantage (Bharadwaj, Varadarajan and Fahy, 2015).
Value proposition can be considered as a promise from the firm concerning the delivery of the value of the product or service and the belief of the customers regarding the value expectation from the firm. When these promise and the expectations are balanced, customer loyalty, satisfaction, sales, revenue etc can be generated (Osterwalder et al, 2015).
Value selling proposition, source: peterjthomson, 2013
So as to maintain effective value proposition for the new organization I will have to identify the wants, fears, and needs of the target customers. The target segment business category women expect high quality, executive model apparels and other accessories which suit their occupation. Hence to maintain a value proposition the products matching their expectations should be displayed. Similarly the expectations of the high class as well the young ladies should also be met so as to gain more customer loyalty and revenue. The success of the new business remains in maintaining a balance between the customer expectations and the service provision. Providing high quality dress material, high quality customer service etc can add value to the success as well as the reputation of the organization.
Basiri, A., Moore, T., Hill, C. and Bhatia, P., 2015. Challenges of Location-Based Services Market Analysis: Current Market Description. In Progress in Location-Based Services 2014 (pp. 273-282), Springer International Publishing
Bharadwaj, S.G., Varadarajan, P.R. and Fahy, J., 2015. Sustainable Competitive Advantage in Service Industries: A Conceptual Model and Research Propositions. In Proceedings of the 1992 Academy of Marketing Science (AMS) Annual Conference (pp. 441-443). Springer International Publishing.
Breaâ€ÂSolís, H., Casadesusâ€ÂMasanell, R. and Grifellâ€ÂTatjé, E., 2015. Business model evaluation: quantifying Walmart’s sources of advantage. Strategic Entrepreneurship Journal, 9(1), pp.12-33.
Burton, F. and Cross, A.R., 2015. A Reappraisal of Franchising Across National Boundaries in Foreign Market Entry Mode Analysis, In Proceedings of the 1993 Academy of Marketing Science (AMS) Annual Conference (pp. 638-642). Springer International Publishing
Du, F., Yang, F., Liang, L. and Yang, M., 2016. Do service providers adopting market segmentation need cooperation with third parties? An application to hotels. International Journal of Contemporary Hospitality Management, 28(1)
Doyle, M.W. and Von Windheim, J., 2015. Environmental Management Strategy: Four Forces Analysis. Environmental management, 55(1), pp.6-18
Ensign, P.C. and Lunney, A.R., 2015, Struggling With Market Entry and Expansion: Parlance Communications in Mexico. Entrepreneurship Theory and Practice, 39(3), pp.701-721
Fitzpatrick, B.D., Nguyen, Q.Q.A. and Cayan, Z., 2015. An Upgrade To Competitive Corporate Analysis: Creation Of A “Personal Finance Platform” To Strengthen Porter’s Five Competitive Forces Model In Utilizing. Journal of Business & Economics Research (JBER), 13(1), pp.54-78
Görög, M., 2016, Market positions as perceived by project-based organisations in the typical project business segment. International Journal of Project Management, 34(2), pp.187-201
Huizer, Y.L., Kraaij-Dirkzwager, M.M., Timen, A., Schuitmaker, T.J. and van Steenbergen, J.E., 2015. Context analysis for epidemic control in the Netherlands, Health Policy, 119(1), pp.66-73
Jaber, J.O., Elkarmi, F., Alasis, E. and Kostas, A., 2015, Employment of renewable energy in Jordan: Current status, SWOT and problem analysis. Renewable and Sustainable Energy Reviews, 49, pp.490-499
Kim, K.H., 2015. Competitor Identiï¬Âcation Through Vicarious Learning. Research Journal of Business Management, 9(2), pp.308-318
Li, J., Qian, C. and Yao, F.K., 2015. Confidence in learning: Interâ€Âand intraorganizational learning in foreign market entry decisions. Strategic Management Journal, 36(6), pp.918-929
Millán, A., Fanjul, M.L. and Moital, M., 2016, Segmenting the Business Traveler Based on Emotions, Satisfaction, and Behavioral Intention, Psychology & Marketing, 33(2), pp.82-93
Mathooko, F.M. and Ogutu, M., 2015, Porter’s five competitive forces framework and other factors that influence the choice of response strategies adopted by public universities in Kenya, International Journal of Educational Management, 29(3), pp.334-354
McCarthy, A. and Hay, S., 2015, Negotiation Planning in Practice, In Advanced Negotiation Techniques (pp. 57-60), Apress
Navarro, F., 2015, Business plan: A preliminary approach to an unknown genre. Ibérica, 30, pp.129-154
Osterwalder, A., Pigneur, Y., Bernarda, G. and Smith, A., 2015. Value Proposition Design: How to Create Products and Services Customers Want. John Wiley & Sons
Pretty Eccentric, 2011,”Sussex Life, https://www.prettyeccentric.co.uk/
Yu, C.L., Wang, F. and Brouthers, K.D., 2015, Domestic and foreign competitor identification and firm performance, European Journal of International Management, 9(4), pp.463-483
The modern business environment is highly competitive and it becomes essential for each and every organization to expand its business to remain competitive and to enhance its profit margin. Product differentiation is an effective strategy for achieving the competitive advantage in the market. This paper speaks about the launching of a new business plan, a retail apparel show room exclusively for women. The plan is to launch this shop in the UK market. Various analysis are performed so as to ensure a successful launch for this small scale organization.
Market analysis is the primary procedure before implementing product differentiation or for launching any new product or services. Various tools like PESTLE analysis, porter’s five force analysis, SWOT analysis etc can be performed for analyzing the market. Through these scientific management tools, the external and internal environment of the organization as well as the market can be analyzed. This will enable the organization to identify risks associated with the new launch, political, economical, social, technological, environment and legal factors which can influence the new business. The outcome of this analysis will enable the management to find solutions for various problems associated with the business plan. They can formulate effective strategies for making the new business successful. Here the target market is taken as UK for launching the new apparel shop, hence market analysis is performed based on UK. From the analysis it has been identified that UK is a potential market for new retail shop which is exclusively for women. The market condition is also identified as perfect where they can run the business smoothly.
Identification of the target market segment and promoting the products appropriately can enhance the sales and the profit generation. Hence understanding the needs and requirement of the customers are necessary. Here based on the product market segmentation is performed for focusing the sales specifically based on customer requirement. The target market is segmented the target market into three different categories. They include the business class, high class and youth. This classification is performed based on the clothing requirement, income, life style etc of the target customers. This makes the promotional activities easier and customer specific.
Adoption of the appropriate market entry strategy is relevant. This should be selected based on the current situation of the organization and the risk associated with the business. The market entry mode selected for the organization is strategic alliance and opening new show room. For the maintenance the reputation and standardization of the organization these two strategies are identified as appropriate. Developing of business model is practiced in almost all organizations for ensuring a systematic and hindrance free implementation of business paln. The business model has been developed for the retail shop highlighting the key resources, key activities, cost, revenue etc.
The competitors of the organization are identified and an analysis is performed so as to identify its strength and weakness. This has enabled the management to formulate appropriate strategies to gain the competitive advantage. The value proposition of the new product and that of the expectation of the customers are analyzed which enabled in the identification of the unique selling point of the new business.
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