The inspiration of this business idea came about as a result of difficulties that I used to have in my relationship whenever it was raining and I had to share an umbrella with my partner. No matter how big the umbrellas we purchased, we always got rained on since the umbrella could not cover both of us and still manage to walk comfortably. As a result, I thought to myself that what if there were large umbrellas that could be used for couples. Since then, I decided to come up with a design for Couples Umbrella to solve the gap in the umbrella market targeting couples (Epstein 2018).
Vision
The vision of this business is to enhance love by encouraging togetherness through sharing an umbrella that protects couples from rain (Gabler et al. 2017). The business aims to provide this product through innovating high quality Couples Umbrella that will also assist the business to enjoy competitive advantage.
Mission
The mission of the business is to encourage creativity and promote healthy relationships between couples by encouraging togetherness through sharing among other attributes such as love. Moreover, the business hopes to reduce couples boundaries, conflicts and grow stronger relationships under the protection of Couples Umbrella.
Objective
The first objective of the business is to enter Malaysian market and promote Couples Umbrella to create demand. The second objective is to ensure that the business reduces cost of production in order to ensure it stays profitable (McKenzie and Woodruff 2015). Besides, it is the objective of the business to ensure that productivity is increased by training employees to develop various designs that appeal to the needs of the target market in Malaysia. Moreover, it is the business’s goal to determine future projections for evaluating growth of the business and market share in the short-term and long-term.
There is a huge market for Couples Umbrella in Malaysia as a result of statistics from average monthly rainfall in Malaysia. The most rainy months in in Kuala Lumpur are March, April and May and the last four months of the year. Most rainy month is November and the city receives an average of 195 days of rainfall in a year (Weather and Climate 2018a). The huge population in Malaysia is sufficient to sustain the business as well as significant in helping the business to grow to other parts of the country. The huge population in the city represents working class people who move from one place to another which implies that there is huge demand for umbrellas not only for couples but also colleagues (McKenzie 2015).
Impact of Macro-environment
The main objective for the business is to produce, manufacture and market Couples Umbrella in Malaysia. All these principles of the business are supported by macro-environment in Malaysia as a result of the country’s political stability, economic power and resources that can assist the business to grow and compete favorably. Besides, other elements such as liberal and supporting government policies, reliable infrastructure and a vibrant environment supports the business idea (Marked by teachers 2018). However, accessing market for foreign providers is limited as a result of government’s objective to encourage development of its domestic industry. Besides, the government encourages foreign investments and has a zero tolerance on discrimination against foreign investors. Also, the manufacturing sector is considered as the primary contributor to country’s economy. Moreover, foreign investors are encouraged by the government to form partnership with domestic companies in order to create a conducive environment for businesses to thrive in the economy. The government of Malaysia plays a significant role in bringing both foreign investors and local investors through a wide range of incentive that supports growth.
Industry Structure
The Umbrella market is divided according to type of product, consumer and location. The major players in the umbrella market who also represent the competition for couple umbrella include Kobold, James Smith and Sons, Hangzhou paradise umbrella group, Blunt umbrellas, Swaine umbrellas, Pickett, Francesco Maglia, Fox Umbrella, GustBuster and Lewis N. Clark. There are other competitors in the market but these represent the companies with significant market share not just in Malaysia but also across the globe (Million Insights 2018). These businesses will not directly compete with Couples umbrella but are likely to have an influence in terms of distribution and growth for Couples umbrella indirectly. This is because these companies focus on both collapsible and non-collapsible type of umbrellas in the market they serve.
Link to the industry
In order to penetrate the Umbrella market in Malaysia, the business will have to use main suppliers and manufactures in the market. The business can establish these links through patenting the Couples Umbrella to prevent other manufactures in the market from producing the product without the business consent (McKeever 2016). The business will then approach manufacturing companies in Malaysia and convince them of the demand for Couples Umbrella which can increase growth. The manufactures will then decide the percentages of ownership and rights to produce Couples Umbrella as well as using the manufactures distribution channel to move the products across the country.
Strengths
The business competitive advantage is that it intends to offer a unique product in the market which will help to differentiate it from other players as a marketing strategy (McKeever 2016). The design of the Couples Umbrella and technology will also give the business a competitive advantage in the Umbrella market in Malaysia.
Weaknesses
The business is new and might experience challenges in manufacturing of the products in large scale. Also, the business might experience challenges in distributing the products to the market as well as difficulty in marketing the product to targeted consumers in Malaysia.
Opportunities
There is opportunity for Couples Umbrella in Malaysian market as a result of volatile weather. The country’s average rainfall per year is high which makes it a favorable location for the business to thrive (McKeever 2016). Besides, macro-environment of the country supports new businesses which will help the business to thrive in the market. There are no umbrellas for couples in Malaysia which presents an opportunity for the business to perform well and become profitable.
Threats
Political developments may harm the business growth as a result of change in polices. Innovation will also threaten the business idea since competitors are likely to introduce better technology and designs for Couples Umbrella in the market (McKeever 2016). Besides, it might be difficult to penetrate the market if the business does not have good relationship with stakeholders in the market.
Out of a population of over 30 million people, 65 percent is between 15 years and 65 years. Based on the department of statistics in Malaysia, an estimated number of 59.6 percent were married in 2010 (Department of Statistics Malaysia Official Portal, 2018). Assuming normal growth rate, the number is likely to be higher. These numbers represent potential market for Couples Umbrella in Malaysia (Country Meters 2018b).
Pricing strategy
The business will use premium pricing strategy because it is trying to introduce a new product which has distinctive competitive advantages than other umbrellas in the market. Therefore, the business will set its prices higher than other players in the market selling ordinary umbrellas. This pricing strategy is significant and effective in introducing a new product to the market. In order to use premium pricing strategy, the business has to make sure that it creates a perception among the consumers that the products are worth the price as a result of quality (McKeever 2016).
Communication Method
The communication method that will be adopted by the business is digital through creative campaigns that show the need for the products in order to create awareness.
Cash flow for the new business will reflect the amounts that come into the business as well as those amounts that move out of the business. Among the expenses that the business will incur include construction of new plant, hiring of new staff, purchase of equipment, rent for storage, cost for electricity and water, packaging and transportation cost, marketing and salaries. The total estimates of the amount required is amounts 143, 000(USD) for investments against a total of 200,000(USD) that will be generated through loans and proceeds from partners for the purpose of starting the new business (Inc 2018).
Expense Budget
The expense budget for the business will comprise the materials that the business will need in order to start operations. Among the expenses that are not reflected in the cash flow statement includes cost associated to research in Malaysia, flight and hotel cost of the partners who will tour Malaysia to determine the location for the new manufacturing plant. Besides, the partners will need food and transportation cost from moving from one place to another while in Malaysia. Moreover, partners will incur expenses for locations where several meetings will be held to discuss how operations will be conducted (Inc 2018). Lastly, the business will need legal fees to draft the contracts and ensure that the business is operating within the law.
Sales forecast
The projections for the sales of Couples Umbrella will be estimated based on the demand. The estimates will be projected on a quarterly basis in order to make it possible to calculate growth of the business. The projections of sales of the products is 2000 Couples Umbrella on a monthly basis. The capacity to be produced against the sales volume will play a significant role in determining when the business will break even (Inc 2018).
Breakeven Point
The breakeven point is when the business will have paid back all the loans and expenses that were incurred in setting up the business. Breakeven point will be calculated based on three months performance of the business to determine reliable estimates of when the business is likely to start making profits from its operations (Inc 2018). An estimate of 6000 Couples Umbrella are expected to be sold within the first three months. Each Couples Umbrella will cost 15 dollars which translates to 90,000 in sales before expenses in the first three months. Other factors will also be considered such as growth of the business and managing wastage to determine the optimum growth for breakeven point decision making.
The ownership of the business will take a partnership form of business where the business will involve other stakeholders. The partners of the business will lay down the operations procedure of how the business is going to be managed. Ownership through partnership is easy to establish, provides ability to raise capital, partners share both losses and profits and employees of the business can become partners (Editors 2018). However, there is likely to be disagreements since decision making is shared.
The leadership style to be adopted by the business is transformative leadership style where the partners in the business will create a structure that ensures that they are involved in every aspect of the business. This leadership style is crucial for the business because it is not only charismatic but also motivating and inspiring which encourages employees. Also, the leadership style is significant particularly in technology industry.
The management structure that the business will use is functional management style which follows bureaucratic organizational structure. Functional structure divides the business operations based on specialty (Alton 2018). In essence, the management structure will comprise a sales department, customer’s service department and marketing department. The significance of this form of management is that the employees are dedicated to clearly defined functions and requires elaborate communication structures.
Operations management for the business will be centered on satisfying resources, materials, equipment and technology involved in manufacturing of Couples Umbrella. The specific responsibilities will involve determining the size of manufacturing required. Other activities include managing inventory, work in progress, acquisition of raw materials and maintenance of business processes. The operation manager is required to manage supply chain and logistics by understanding customer demands and trends in the market.
The purpose of human resource planning is to ensure the business will maximize its valuable assets by ensuring that it avoids shortages and surpluses in order to achieve its optimum potential (Bratton and Gold 2017). For this reasons, the business’s human resource planning will focus in four crucial aspects which include analyzing the current labor supply, forecasting the demands of labor. These efforts are aimed at balancing projected labor demands and supply to support the vision of the organization.
The business will use knowledge, skills and abilities which is an effective traditional selection method that is not only effective but also reliable (Small Business 2018). This selection strategy will begin with job analysis to match the skills with the right job description. To realize this objective, the human resource department will be tasked with analyzing skills required to determine job specification (Goldstein et al. 2017). Further, the human resource will come up with selection criteria before processing all the applicants.
Reference List
Alton, L. (2018). 4 Common Types of Organizational Structures [online] Available at: https://www.allbusiness.com/4-common-types-organizational-structures-103745-1.html [Accessed 8 Sep. 2018].
Bratton, J. and Gold, J., (2017). Human resource management: theory and practice. Palgrave.
Country Meters, (2018b). Malaysian Population [online] Available at: https://countrymeters.info/en/Malaysia#age_structure [Accessed 8 Sep. 2018].
Department of Statistics Malaysia Official Portal. (2018). Department of Statistics Malaysia Official Portal. [online] Available at: https://www.dosm.gov.my/v1/index.php?r=column/cthemeByCat&cat=117&bul_id=MDMxdHZjWTk1SjFzTzNkRXYzcVZjdz09&menu_id=L0pheU43NWJwRWVSZklWdzQ4TlhUUT09 [Accessed 8 Sep. 2018].
Editors, A. (2018). Forms of Business Ownership. [online] Available at: https://www.allbusiness.com/forms-of-business-ownership-674-1.html [Accessed 8 Sep. 2018].
Epstein, M.J., (2018). Making sustainability work: Best practices in managing and measuring corporate social, environmental and economic impacts. Routledge.
Gabler, C.B., Panagopoulos, N., Vlachos, P.A. and Rapp, A., (2017). Developing an environmentally sustainable business plan: An international B2B case study. Corporate Social Responsibility and Environmental Management, 24(4), pp.261-272.
Goldstein, H.W., Pulakos, E.D., Passmore, J. and Semedo, C. eds., (2017). The Wiley Blackwell handbook of the psychology of recruitment, selection and employee retention. John Wiley & Sons.
Inc. (2018). How to Write the Financial Section of a Business Plan. [online] Available at: https://www.inc.com/guides/business-plan-financial-section.html [Accessed 8 Sep. 2018].
Marked by teachers. (2018). An Analysis of Macro-Environmental Factors and Their Impact on Company in Malaysia – University Business and Administrative studies – Marked by Teachers.com. [online] Available at: https://www.markedbyteachers.com/university-degree/business-and-administrative-studies/an-analysis-of-macro-environmental-factors-and-their-impacton-company-in-malaysia.html [Accessed 8 Sep. 2018].
McKeever, M., (2016). How to write a business plan. Nolo.
McKenzie, D. and Woodruff, C., (2015). Business practices in small firms in developing countries. The World Bank.
McKenzie, D., (2015). Identifying and spurring high-growth entrepreneurship: experimental evidence from a business plan competition. The World Bank.
Million Insights. (2018). Umbrella Market Size & Share 2018 [online] Available at: https://www.millioninsights.com/industry-reports/umbrella-market [Accessed 8 Sep. 2018].
Small Business. (2018). Selection Strategies for HR. [online] Available at: https://smallbusiness.chron.com/selection-strategies-hr-30795.html [Accessed 8 Sep. 2018].
Weather and Climate, (2018a). Climate in Kuala Lumpur [online] Available at: https://weather-and-climate.com/average-monthly-Rainy-days,Kuala-Lumpur,Malaysia [Accessed 8 Sep. 2018].
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