Discuss about the Business Plan for Emerald Group Publishing Limited.
After nearly two years of economic downturn, Russia has finally ventured on the path to recovery. With international trade and growth strengthening at the end of 2016, the country’s economy demonstrated signs of overcoming the financial crisis caused by the economic sanctions and shock of low prices of oil. Its economy shrank in 2015 by 3.7% and the real disposable income reduced by 10%. However, the economic outlook for 2017 has been brighter. The World Bank had indicated earlier this year that growing prices are driving the nation into poverty. The number of poor people grew to 19.2 million in 2015 (World Bank Group, 2016). It is estimated that the poverty rates are likely to go back to the 2007 levels, signalling “almost a decade’s worth of gains”.
Real GDP fell by .9% year-on-year (y-o-y) in the first six months of 2016 and the domestic demand also decreased by 2% y-o-y. Due to continued shrinking in real incomes, consumer demands remained depressed, and household consumption was the biggest negative drag on the growth of GDP. The GDP per capita (USD) was 8,947 in 2016. Public consumption also deteriorated as the government followed expense consolidation in the new policy of low oil price. In spite of the sustained economic stagnation, the country’s employment rates were at almost maximum levels. Absolute figures of employed and economically active people were nearly unfazed in the initial eight months of 2016 as against the same time-frame in 2015 (Kulikov & Porokhova, 2017). This is partially explained by the position of the country’s labour market, which reacts mostly via wages and not employment. Other reasons entail the outflowing of labour migrants from the nation, which has mitigated negative unemployment and wage pressures from local workers. The employment rates and labour force involvement even increased to levels over 66% and 70% respectively, compensating for the fall in population of working age. Resultantly, the unemployment did not rise considerably and stayed at 5.6% in the initial eight months of 2016 (Focus Economics, 2017).
The population of Russia as of July 2016 was 142,355,415. The population growth rate is -.06% (2016 est.). The median age is 39.3 years, with the median age of males being 36.4 years and that of females being 42.3 years. 74% of the total population is an urban population with 12.166 million people living in the capital city Moscow. The population distribution in other cities is St. Petersburg (4.993mn), Novosibirsk (1.497mn), Yekaterinburg (1.379mn), Nizhniy Novgorod (1.212mn), and Samara (1.164mn). The rate of urbanization is -.13%. The literacy rate in the country is 99.7% with a literacy rate of males being 99.7% and that of females being 99.6%. 3.9% of the GDP is spent on education-related expenditures (Index Mundi, 2017). The ethnic profile of the country is as follows:
Russian – 77.7%
Tatar – 3.7%
Ukrainian – 1.4%
Bashkir – 1.1%
Chuvash – 1%
Chechen – 1%
Others – 10.2%
Not-specified – 3.9%
The proposed company’s name is ABC Pvt. Ltd. It is a 3 years old start-up enterprise dealing in natural skin-care products. ABC Pvt. Ltd. plans to compete against Amazon. The reason behind choosing Amazon is that ABC Pvt. Ltd. is also an online platform for selling organic beauty products. It is an all-organic brand of beauty products which provides a skincare line made with herbs and other natural ingredients found in the ecologically clean region of Siberia, where nature is still untouched by genetic mutation and carries immense health potential. Siberian herbs and plants are renowned to possess incredible antioxidant properties that improve the well-being of human body and slow-down the process of ageing. ABC Pte Ltd. has taken these elements, expanded them with avant-garde technology and turned it into the state-of-the-art line of skincare products which can make the users look rejuvenated and younger in a matter of some days. The product portfolio of the company includes:
The entire portfolio of products comes in different varieties and suited for different skin types. The entire product line has been priced quite competitively, which in no way implies that it is subpar to those brands sold on Amazon. Moreover, unlike many of the skin-care products sold on Amazon, ingredients used in ABC Pvt. Ltd. products can only be obtained from nature, and cannot be made in a lab.
Though the biggest markets for organic skincare products are in France, USA and Germany, however, Russia’s marketplace for natural skincare products is increasingly growing. Organic and natural skincare items are amassing popularity among Russian customers. In 2014 the industry for organic and natural products for skin expanded by 10%. This is estimated to continue expanding, however, is at present led by international brands. Although, the financial crisis witnessed the Russian customers becoming more mindful about their expenses, however, they continued to prefer high value-added products like beauty and skin care. While young customers are more inclined toward innovative items containing UV protection, minerals, amino acids or proteins, the mid-30s and above Russians are appealed by-products that bear natural claims and contain organic ingredients (Muth, 2017).
Not only this, as per several market analysts, a large proportion of Russian customers feel that skincare merchandise made by domestic firms have less synthetic and artificial components and are more natural, thereby increasing their demand. This stereotype is being successfully utilized by ABC Pvt. Ltd. which is reflected in the gradual increase in its online sales. When purchasing goods bearing various claims, Russian customers do not tend to delve very deep in trying to identify the percentage of a herbal ingredient or essential oil in the products they purchase (Gurkov, 2016). Besides this, the company’s business is completely online just like Amazon. There is the feature of door-to-door delivery. The online retail trade in Russia is undergoing consistent growth as the higher number of customers are moving to the Internet for their shopping. With more than 60% of the country’s population accessing the Web, internet shopping is only hitting its stride as the sector matures (Yandex, 2017).
The major external environmental forces which can influence ABC Pvt. Ltd. include:
Political and legal environment – The government of Russia is pro-investment and encourages business ventures. However, growth opportunities for the forecast period of 2013-2018 were bleak prior to the geopolitical crisis began with Ukraine in 2014. The consumer goods safety laws are quite stringent and the products of ABC Pvt. Ltd. would have to satisfy the outlined safety requisites in order to avoid penalty (Elo, 2017).
Economic environment – Figures show that growth slowed a bit in personal care and beauty market in Russia in 2011 compared to growth rates before the financial crisis, however, the market is very far from saturation and post 2011 there have been many developments. Nonetheless, the tightening macroeconomic situations are not likely to be very advantageous, plus a rise in customers’ disposable incomes is not estimated to be high. Nonetheless, growing budget spending and low rates of unemployment are likely to trigger consumption in the nation, and skincare is estimated to experience a consistent value CAGR of 2% over the forecast period (Worth, 2017).
Social environment – Organic skincare products are a bit on the expensive side, however, not as expensive as international brands like Estee Lauder and the likes. There is a growing awareness among the Russian customers about the positive effects of natural products on their skin, and the females are especially becoming very conscious about the quality of their skin. This is the reason, they are willing to spend on high value-added natural products (Tyrimou, 2014).
Technological environment – The technological innovations regarding the development of more organic and healthier products for the skin are prevalent and companies are using the latest technology to embed in their products. Growth in research and development in this area has now made it possible to fill the skin care products with different proteins, amino acids, minerals etc. after experimenting their chemical properties together. Similarly, the herbal and natural use of several Siberian plants and herbs in skincare products are being identified and incorporated in products (Loh, 2016).
Environmental – Russia lies in a high-altitude region where the UV radiation is higher compared to low-altitude regions due to the thinness of the Ozone layer. Greater exposure to UV rays leads to dark spots and ageing. This triggers the demand for products which are made from natural ingredients and have UV protection abilities (Kudrin & Gurvich, 2015).
|
Strengths · High quality · Products made from completely natural and organic ingredients which cannot be replicated in lab · Continuous exploration for finding better ingredients · Certified by the European standard EU 834 · Wide product portfolio with competitive pricing |
Weaknesses · Low brand awareness · Low penetration in smaller cities of Russia · Chances of customers becoming allergic due to natural constituents · Tag of Russian brand |
|
Opportunities · New technologies and R&D · Swiftly growing online market · Growing loyalty toward eco-brands · Growing personal and skincare market |
Threats · Geopolitical crisis · Unfavorable economic condition due to which some customers are controlling their spending · High competition from established global brands |
The main objectives of ABC Pvt. Ltd. are:
References
Elo, M. (2017). Against All Odds–A Diaspora Entrepreneur Developing Russian and Central Asian Markets. In The Challenge of Bric Multinationals (pp. 481-502). Emerald Group Publishing Limited.
Focus Economics (2017). Russia Economic Outlook. [Online]. Available through: <https://www.focus-economics.com/countries/russia>. [Accessed on 2nd October 2017].
Gurkov, I. (2016). Oriflame CIS: The Successful Evolution of a Regional Subsidiary’s Mandate. Global Business and Organizational Excellence, 35(4), 44-54.
Index Mundi (2017) Russia Demographics Profile 2017. [Online]. Available through: <https://www.indexmundi.com/russia/demographics_profile.html>. [Accessed on 2nd October 2017].
Kudrin, A., & Gurvich, E. (2015). A new growth model for the Russian economy. Russian journal of economics, 1(1), 30-54.
Kulikov, D. & Porokhova, N. (2017). Russian Economy: Recession Knocked Out. What Next? [Online]. Available through: <https://www.acra-ratings.com/research/191>. [Accessed on 2nd October 2017].
Loh, X. (2016). Polymers for Personal Care Products and Cosmetics. Royal Society of Chemistry.
Muth, S. (2017). Russian as a commodity: medical tourism and the healthcare industry in post-Soviet Lithuania. International Journal of Bilingual Education and Bilingualism, 20(4), 404-416.
Tyrimou, N. (2014). The Impact of Russia’s Sanctions on Global Beauty Players. [Online]. Available through: <https://blog.euromonitor.com/2014/10/the-impact-of-russias-sanctions-on-global-beauty-players.html>. [Accessed on 3rd October 2017].
World Bank Group (2016). The Russian Economy Inches Forward: Will that suffice to turn the tide? [Online]. Available through: <https://pubdocs.worldbank.org/en/429441478647721427/Russia-RER-36-Eng.pdf>. [Accessed on 2nd October 2017].
Worth, O. (2017). Hegemony, international political economy and post-communist Russia. Taylor & Francis.
Yandex, M. (2017). Assessing Russian Online Shopping Behavior 2016. [Online]. Available through: <https://www.thegrinlabs.com/assessing-russian-online-shopping-behavior-2016/>. [Accessed on 2nd October 2017].
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download