Discuss about the business plan for a new venture of innovative product or service.
The idea which is developed to introduce a new business venture in the market is known as business plan. Under this term, various business processes are included such as forecasting, planning, raising fund, and using promotional and advertisement strategies etc. Along with this, business plan also includes aims and objectives set by the organization for the growth and success. This report discusses about the business plan for new entrepreneurial venture of a salon which will be introduced in Melbourne city of Australia. Because of the prime location of this city, organization has planned to use some strategies by which all the relevant operations can be executed in the effective way. Key objective of the organization is to provide proper salon services to the medium class people whose incomes are not capable to consume the salon services. Name of the salon will be Superior salon. The prices of the services provided by Superior salon will be appropriate for the middle income group (Martin, 2015).
Each and every organization develops objectives and goals to stay competitive in the dynamic business environment. Missions are being developed by Superior salon. There are some objectives and goals differ from the general organizations. Rather than doing business for the profit, Superior salon has decided to give good experience of salon services to the people who are not able to get the salon services. Along with this motive, the organization needs to have effective pricing tactics by which organization can operate effectively in the market as operating in the Melbourne are very expensive.
Under the Superior salon’s premises, various types of services and beauty products will be available. In order to achieve the business objectives, Superior salon will adopt proper quality standard by which the organization can satisfy the requirements of the customers. The products of the salon will be used for grooming the customers. Organization will sell the beauty products such as body lotions, face creams, hair serums etc for the customers. Superior salon will also provide some services like skin treatment, groom and bridal packages, massage services and hair treatment etc. The products and services are helpful for the organization to grow in the industry. Key service of the Superior salon is skin and hair treatment. By offering these services, salon will try to establish strong relations with the customers in the competitive environment (Lam and Harker, 2015).
Industry analysis
The salon industry of Australia can be analyzed by the five forces analysis and the analysis is as follows:
Threats of new entrants
In an industry, new business is the threat of existing business. so, existing companies can be the potential competitor for Superior salon in the Australian market. Risk of new entrants is high in this industry so the profitability of the established companies is being threatened. There are some barriers like investment cost, availability of the existing firms and some legal restrictions in the Australian market can impact the new business venture of salon.
Bargaining power of suppliers
In the salon industry, the presence of powerful suppliers reduces the profit potential in the industry. Suppliers are increasing the competition in the industry by providing quality of the products and services to the companies. To recover the costs, the companies increase the prices of the services. So, the bargaining power of the suppliers in the salon industry is high (Joshi, 2009).
Bargaining power of customers
In the salon industry, every organization provides similar service so the customers select the services based on prices offered by the salons. Buyers are very powerful and they put pressure on the industry profits. Due to availability of substitutes of other salons, customers have choice to switch to other salons. Products are undifferentiated so this provides power to the customers to select their desired products and services. So, the bargaining power of buyers in the salon industry is high.
Threats of substitute products
In the cosmetics industry, there are various competitors discussed. So, there are the high threats of substitute products. If manufacturers sell its products at the high prices, then customers have opportunity to switch on the substitute products provided by the competitors. So, it is essential for Superior Salon to be innovative if the company want to deal with the threat of substitute.
Competitive rivalry
The industry of salon is highly competitiveness. The industry has premium concept that exist today. In Australia, there is strong competition among the existing companies. So, it is easy for the customers to find substitute products and there will be high rivalry also.
There are number of salons available in Melbourne city but none of them carry the same idea as compared to Superior salon has invented. Major competitors in Melbourne are Billie Jean, Xiang Hair and Hoopla Salon and FourStar Salon services etc. All Superior Salon will try to provide the services which can achieve high competitive advantage in the market. In order to give strong competition to the competitors, organization will do competitor analysis in order to achieve relevant information of the other salon used for attracting the customers in the market. After reviewing the strategies implemented by the competitors, organization will adopt some unique strategies in order to beat the competitors. Along with this, by those strategies organization could attain the appropriate results and outcomes (Glowik & Smyczek, 2011).
Superior salon will target each of three groups separately. Salon will focus on men as they always have shorter hair and require a faster and simpler job. Along with this, female who cannot afford an upscale salon and young mother will children will be targeted. Superior salon will approach to its target audience from various promotional and advertisement mediums. Such mediums could be digital media and print media platforms.
Male will be targeted by providing convenient and quick services. As men tend to have shorter hair so they usually need haircuts more often. If they get a cut every four weeks and in the normal business hours, the business of Superior salon will enhance positively. Superior salon will provide the services to male customers in the evening hours. For them, appointments are not necessary.
Generally, females prefer to use upscale salons but not everyone can afford this luxury. This is the reason, Superior salon will provide same quality hair styling on the affordable prices. Superior salon will target female customers by focusing on the sophisticated and ultra-hip styling that can be provided by the salon (Hill, Jones & Schilling, 2014).
Most of the young children are sometimes difficult when it comes to getting haircuts. So, Superior salon will also target mothers with children by offering them toys to play while they wait for the child-friendly stylists. Along with this, children’s hair grows so fast that it can be expensive for parents to keep up with regular cuts. It generally takes less time to cut hairs of a child so; children’s haircut would less expensive in Superior salon (Hoskisson, 2009).
Product
Superior salon is the unisex salon which provides grooming and beautification service products under one roof. The service products are for the specific target market. The services of the salon are developed with the perspective of the customers. The products of the salon not only satisfy the core benefits of the customers but also provide the augmented services. Some of the services provided by Superior salon are as follows:
There are bathe and closet services in the salon. After the haircut, taking shower is essential and it is irritated to go back to home without taking bath when someone has a stiff timetable. Salon will provide bathe service then customer can take a bath and then go to their destination. The customers have facility to keep the clothes in the provided closet which is available in the salon. After the shower, they can be dressed there. Further, the hair styling section will be in a separate section where customers will come and the staff of the salon will be responsible to provide them catalogue so that they can select a style (Chang, 2016).
In order to provide effective services, salon also has a training academy. They provide modern and creative learning atmosphere in practice. Salon will tie up with a consultancy company i.e. Employsure Company for hiring people and providing excellent career opportunities. Employsure will be helpful for salon in providing hair and beauty courses for the basic and advanced levels (Farahmand, 2011).
Pricing
Superior salon will follow premium pricing strategy. The salon will set the prices for the service based on the willingness of the target the customers to pay for the various services. The prices in the business are a big factor as the competitors will try to give fewer prices. Along with this, lower prices are always acted like advertisement among the customers. There will be various services that could be combined together and provided at the lower price (Glowik & Smyczek, 2011).
So, this is an effective tool to grasp the attention of the customers. Pricing tactics can be use in different ways.
Discounts to relatives: Occasionally fathers frequently go with their sons for the haircut and this occurs usually when they both take haircuts. So, Superior salon will provide ‘family discount’ to the families who will come together to salon and will utilize a service. This will basically target to middle income persons (Lymbersky, 2009).
Buddy’s discount: There are various people who like to recommend their friends and social groups to the salon so that they can discuss and chitchat while taking haircuts. For such customers, ‘Buddy’ discount will be provided when the customer will arrive with their colleagues and friends and they both need haircut and any other service. This will be helpful for the salon to promote its services.
Wedding packages: This will include a complete package for both male and female. This package will include shave, haircut, hairstyling, pedicure, manicure and facial for all the wedding rituals. Additional charges will be applied on more number of people taking services in the salon.
Weekend package: This is a package including the services of shave, haircut, manicure, pedicure, facial, body massage along with a coupon from a nearby restaurant (Farahmand, 2011).
Distribution
Superior salon, the name is the synonymous of quality services. Superior salon will open its 4 new branches in the famous city Melbourne in Australia. Superior salon will try to become the most happening chain of beauty care salon in Australia. The location will be given the highest priority while marketing the hair salon as it will be helpful in deciding the target market and pricing. The location will be best if there is the availability of residential area, few schools, colleges, offices nearby for the advertising. The housing region is always a most excellent choice as most of the people get haircut in the hair salon which are near to their house. Although there are various established salon in that area but the services provided by Superior salon will be satisfactory for the customers (Baker, 2014).
Promotion
Superior salon will follow two types of promotion i.e. above the line promotion and below the line promotion.
In this type of promotion, Superior salon will use various media tools in order to advertise its services among the customers. For this manner, salon will give promotional advertisements in the famous newspapers i.e. The Age, The Australian and Herald Sun etc. Along with this, salon will also give advertisement to the famous magazines i.e. Australian Woman’s mirror, The Australian Women’s weekly and The Dawn. Further, TV and local radio channels will be used for the promotional activities. Social media platforms like FaceBook, Twitter, and Instagram will be used to make the customer aware about the services of salon (Armstrong et al, 2015).
In this type of promotional technique, Superior salon will sponsor college functions, and various events which will attract students and working people. Along with this, Superior salon will often provide gift vouchers and discount coupons to the customers (Drummond, Ensor & Ashford, 2012).
The major objective of Superior salon is to expand the business in the Australian market. The salon is providing various services under one roof. For the business operations, financial projection for first year is given below. For establishing a new business of salon, Superior salon will have various start-up costs. In order to fulfill the business objectives, salon will require funds and in order to raise the funds, investors, loan and advances are some sources. The basic expenses of the organization will be the start-up cost i.e. infrastructure, lasing of land, business activities, legal certificate to operate the business, hiring the professionals and advertisement and promotional expenses etc (Pardalos & Tsitsiringos, 2013). Along with this, Superior salon will hire an investment analyst who can guide the organization for raising the fund and achieving the objectives the business. it is expected that minimum 25% of growth will be achievable in Melbourne city with the idea of this start-up and this growth rate is quite attractive (Appnedix).
Superior salon can face some critical risk while starting this new venture. It is important for the organization to minimize the impact of the risk for the effective business operations. The identified risks are discussed below:
It is important for the organization to have trained and skilled employees in the salon for the effective business operations. In the new venture, there can be the risk of getting trained staff with the required skills. This can be managed by providing attractive packages and training classes to the new employees (Cool & Schendel, 2010).
Current market conditions and trends can create some risk for Superior salon. Market can impact on the new business of salon due to the nature of the market and location of the business. There can be reputational risk of the salon sue to negative publicity or comments by the customers on the social media platforms. The negative opinion of the customers can affect the business of Superior salon in many ways. To avoid this risk, management can correct the facts in the single response on the media platforms
References
Armstrong, G., Kotler, P., Harker, M. and Brennan, R., (2015), Marketing: an introduction, Pearson Education
Baker, M.J., (2014), Marketing strategy and management, Palgrave Macmillan
Chang, J.F., (2016), Business process management systems: strategy and implementation, CRC Press
Cool, K., & Schendel, D., (2010), ‘Performance differences among strategic group members’, Strategic Management Journal, 9(3) , pp. 207-223
Drummond, G., Ensor, J. & Ashford, R., (2012), Strategic Marketing: Planning and Control, (4th) London: Palgrave Macmillan
Farahmand, N. F., (2011), Organizational marketing planning by management educated managers, African Journal of Marketing Management, 3(8), pp. 178-187
Farahmand, N. F., (2011), Organizational marketing planning by management educated managers, African Journal of Marketing Management, 3(8), pp. 178-187
Glowik, M. & Smyczek, S., (2011), International Marketing Management: Strategies, Concepts and Cases in Europe, Page 301, (4th), New York: Physica-Verlag
Glowik, M. & Smyczek, S., (2011), International Marketing Management: Strategies, Concepts and Cases in Europe, Page 301, (4th), New York: Physica-Verlag
Hill, C. W., Jones, G. R., & Schilling, M. A, (2014), Strategic management: theory: an integrated approach, Cengage Learning
Hoskisson, R., (2009), Business strategy: theory and cases. (6th), UK: John Murray
Joshi, A. W., (2009), Continuous supplier performance improvement: Effects of collaborative communication and control: Journal of Marketing, 73(1), 133–150
Lam, W. and Harker, M. J., (2015), Marketing and entrepreneurship: An integrated view from the entrepreneur’s perspective: International Small Business Journal, 33(3), pp.321-348
Lymbersky, C., (2009), Market Entry Strategies: Text, Cases and Readings in Market Entry Management, (5th) Australia: Christoph Lymbersky
Martin, K., (2015), Keeping ahead in the beauty salon business. Professional Beauty, p.54.
Pardalos, P.M. and Tsitsiringos, V. eds., (2013), Financial engineering, E-commerce and supply chain (Vol. 70). Springer Science & Business Media.
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