The purpose of this business plan is to clearly depict the idea about the Baubax jacket business, by moving with every aspect of it. The primary goal of the business plan is to offer the external investors with the insight about the company, which can make the favourable situation (Abrams, 2000, p. 6). It can even be used as the guide for the board of management, which can help them in coming with appropriate results.
The business idea is mainly to offer the premier Baubax jacket outfits, and that too at the low comparative cost and cater towards the market segment that holds desire towards purchasing Baubax jacket, but fail to afford it. Baubax has recognized the market for a jacket and has explored that, there is a tremendous potential for this product in the market. The company is into offering a quality product to their customers. In fact, the company has explored that the outlet store for travel jackets is high (Abrams, 2000, p. 7). No retailer in Australia can provide any of such items, and that too in fashion style, and with high quality at reasonable cost simultaneously. There is a big niche market for the quality items, as, except the UGGs, there is no retailer in Australia that can offer winter or travel jackets at the same quality. Through researching the travel market in Australia, the company views the potential of importing the fashion and high-quality products from other countries.
The business will be located within the store in Australia. The company will have retail outlets as well as an online store for their customers (Abrams, 2000, p. 7). The retail store will undertake limited stock for the purpose of reducing the labour, storage, stock, as well as store rental cost facility. Customers will also be encouraged to visit the website of the company if they require the different size colour and style of the product that is made available at the retail store outlet (Lynn, 2011, p. 23). The online outlet will provide the extensive product variety. Having the internet store would hold potentially outcome in significant savings at the operational cost that can, later on, enhance the profits. The Baubax long term goal is to mainly open the chain store for selling the travel jackets across Australia (Lynn, 2011, p. 34). As the product line, Baubax will provide the women and men jackets, accessories like boots, dress, pants, and shirts. It will also provide the winter jackets for both the young and middle age group.
Human Resources
A form of the ownership- the company will be a partnership between five members, and that too with the same investment, profit and loss. Every partner of the company will perform the duties as per the specialized area.
Management team background- Baubax Company is the partnership firm, and it’s based on five partners.
The total members will perform them all duties as per the specialization.
Principle authority- the authority of principle is provided to Mr. John, but they cannot withdraw or pay off the money, without getting the approval of Mr. Charles.
Through all these abilities as well as individual competencies, the business competence will emerge for offering the best service in Australia by their best travel jackets. These abilities will be different from the competitors. Furthermore, the company will gain advantage through the management skills by innovating and expanding the industry environment.
The vision of the company is to maximize the business, without even compromising over the quality. They will also be committed to meeting the changing demands of the company and aspire to innovate the quality norms and improve the product range (Scott, 2010, p. 5).
To become the premier manufacturing company in the travel jackets, by gaining the market competitiveness and diversify the value added products within the well maintained, clean and friendly environment.
PESTLE Analysis
Political factors- the company will gain success, trust, and good reputation if they fail to consider the political and legal sectors as included in the strategy. Both the legal and political sectors cover the requirement of the company for following the regulations and policies of the government, for the purpose of considering the authorized and legal business (Scott, 2010, p. 6). In this context, Baubax jacket should consider the legal and political aspects, for showing the policies and regulation value of the government in business operations. Other political factors include tax policy, political stability, employment laws, tariff and trade restrictions, and environmental regulations.
Economic Aspects- it is significant that specific company should be given with enough focus towards the economic stability. The economic goal of specific industry is just like an axis, in which objectives as well as goals are revolving (Scott, 2010, p. 8). The economic factors includes in context of the industry, such as the competition configuration of an organization operates with the active product demand, along with basic economic condition of region and nation, resource market situation, and state in context of industries. Other economic factors include, economic growth, financial stability, rate of interest, the rate of inflation and exchange.
Socio-cultural Factors- Culture and Society are the crucial factors that should be focused on the business, mainly the one, which are operating in the international arena (Silver, 2009, p. 11). It is significant that the organizations should function in the compliance of social systems, for the purpose of gaining a good reputation and striking image of public. On the other side, various cultural aspects are equally important for analysing the different requirements of different individuals, which belong to different cultures (Silver, 2009, p. 13). Various other cultural aspects include age distribution, the growth rate of population, consumer behaviour, career attitudes, and culture and religion.
Technological Aspects- the complexities for attaining the success of the business is accomplished through a rise in efficiency, competitiveness, effectiveness, by combining the innovative applications of the present technology (Silver, 2009, p. 13). These factors have heightened the awareness of technology and business managers to go strategical approaches for both management, and planning of the industry. Therefore, it is significant that company should consider technological aspects, such as technology incentives, communication and distribution channels, technology change rate, automation, barriers to entry, ecological and environmental issues, the level the of production, and decision about outsourcing (Silver, 2009, p. 13).
Environmental factors- Water being the most scare resource within Australia, issues of water availability and quality are the primary concern. In the year 2001, the country used to have around 352 cu km of the renewable resources of water. Although it is noted that safe drinking water is made available in mostly rural dwellers and urban areas (Silver, 2009, p. 14). The primary cause of its concern is enhancement of salinity, which is caused through the diverting water inland through the irrigation coast and increase in saline water in Australia, due to the increased land clearing for all the dry land. Other important environmental issues is related with inland damages caused due to erosion of soil. The soil quality is also impacted through salinization. In the year 1993, Australia used to have around 145 million of hectares of woodland and forest (Nicholas, 2010, p. 21).
Legal Factors- Companies in Australia are required to make sure that they have cross a check all the credentials of the foreign partners as well as buyers. Companies in Australia are also needed to be aware of the some operations, which are going in few markets and attain the emphasis over the requirement to conduct the background checks (Nicholas, 2010, p. 12). Before signing or either accepting the contracts, it is in the interest of the company to seek their professional’s legal advice.
5 Forces Model
The level of competition in the travel jacket industry is quite high, as there are various players, which are competing in industries like Country Roads, Yakka, and Millers (Porter, 1985, p. 34). The new entry threat is also high, as it needs less investment and efforts for the purpose of entering the industry; where else buyers bargaining power is quite high, as there are extensive options available for them (Porter, 2008, p. 9). Supplier power is low, due to the existence of huge number of sellers, and the threat of substitute is mainly low, as there is no alternative to it.
Threats- the company face threat from the various part of the industry, which is unorganized; challenges in collecting bank loans, which results in the private borrowing at high cost, limited scope in case of mobilizing the funds by private placements as well as public problems, as various businesses are family owned, strict global standards; lack of skills and communication facility, and increased competition from the Europe and Asian countries (Boone & Kurtz, 2015, p. 16).
Opportunities- the company gain opportunity through the growing potential in the local market; growth in fashion consciousness internationally; use of e-commerce within the direct marketing, and use of IT as well as decision support software, that can assist in reducing the production cycle length for various items (Boone & Kurtz, 2015, p. 16).
Weaknesses- the weakness of the company lies in their lacking warehouse support from the government; large workforce, which results in high charges of labour; global price fluctuation; unawareness about the global standards through various players, and lack of strong presence in the international fashion market.
Strengths- The strength of the company lies in its high growth; huge raw material base, availability of cheap workforce and highly skilled labour; policy initiatives, which are adopted by the government; continuous focus on the development of product and up gradation of design, and assimilation of capability of new technology and massive projects (Boone & Kurtz, 2015, p. 17).
Core competencies
Employees-All employees will get training so that they can provide good customer experience and service.
Retaining customers- customers often visit stores, and therefore the company has the chance to take feedback.
Constant development of the product- it is done through introducing new types of jackets and constant change in its design features.
Minimized overhead cost- overhead cost will continually be reviewed and will maintain the continuous objective (Boone & Kurtz, 2015, p. 18). Reducing cost through reducing insurance cost, and various other unrequired supplies are essential for business success.
Competition in Australia is not intense but face different challenges. Different companies have shifted towards the manufacturing operations in various other countries like Asia and Europe, where the benefit of cheap labor is an attractive option. Therefore, in the Australian geographic boundaries, competitor within the manufacturing is not that intense, but still in selling competitor lies, and one believes that business strategy related to dealing with customers as per their demand can provide an edge to jackets. Simultaneously, the company emphasizes over attaining bulk production quality for the business customers. The company believes to have a two-dimensional strategy, which can provide a competitive edge to the competitors (Entrepreneur Press, 2011, p. 23). The company has also tried to divide the market into two segments, such as local and national markets, in which emphasis will be given to changing trends and requirement and supply accordingly.
National markets might provide a significant share in the context of jackets. So mainly, one decide to focus towards jackets manufacturing for the market of Australia, other areas like size, jacket color will also be referred, that will concentrate towards electric jacket manufacturing for the domestic market. The company will contact the global customers with the help of websites as well as the online facility (Abrams, 2003, p. 17). The company has also planned to take part in the exhibitions all over the world. Although it is challenging to have fewer resources, which might create a barrier, it is necessary for the business development to have direct access to the customers (Abrams, 2003, p. 17). Therefore, the plan of the company is to expand by enhancing the product demand within the market. Future trends have shown that there is no demand and supply shortage.
Product value proposition
The new perception about the jackets is achievable. The company offers the new era of the jacket, which offers various design features in it, and the same relates with the atmosphere of Australia (Abrams, 2003, p. 18).
The marketing strategy is mainly designed according to the personal interview, which is conducted with the help of staff in the target market. The travel jacket market has huge customer base (Abrams, 2003, p. 18). The target market for the production will move in every age. In the context of industry analysis, the company requires initiating various ventures in the sector of production in the context of meeting huge demands.
Develop the brand awareness, and increase the customers
Enhance the revenue by 10% every month and reduce expenses on marketing activities.
Develop brand reputation and increase franchises for the long term.
The company offers the high-end items, and services, which is good design, quality material for the customers. On the other side, the location of the stores is placed near to upper middle as well as high-class market, having the reasonable cost and high quality.
The critical needs of the travellers are jacket, and in the context of demography, 18-60 years age group is targeted (Fiore, 2005, p. 19).
Product- the product will be a Baubax jacket, which is advantageous for travellers.
Price- pricing strategy of the company will be income per capita. The prices will be economical, which is affordable (Abraham, 2015, p. 19).
Promotion- Promotion will depend extensively on word of mouth
Place- the store will be situated in the central city of Sydney. It will also offer websites to customers and delivery services (Fiore, 2005, p. 20).
Physical evidence- it includes well design products and store, having a friendly environment.
People- the store will have educated sales person that will introduce to best colours, size, and designs of jackets (Fiore, 2005, p. 20).
Partners – partners will support in the business, including the revenue and brand loyalty.
The company will establish a budget for their marketing activities, which will be $10000, before starting the business. Furthermore, the company recommends spending massively $2000 for promoting the brand by emphasizing over social media (Fiore, 2005, p. 32).
One month will be required for starting the business, and after one-month marketing activities and production will be initiated. Delivery, store decoration, and construction will take place in next month. Besides programs for staff training, shareholders will also be emphasized.
Order flow for jackets- organization will attain their orders through the customers by websites and through the telephone. It will be ensured that delivery is done by the courier service (Entrepreneur magazine, 2012, p. 35).
Use of technology- the company will be using Japanese machines for the purpose of stitching the jackets (DeThomas & Derammelaere, 2008, p. 7). The technology will help in enhancing the efficiency towards the product manufacturing.
Break-even Analysis
The average expenses for the month are shown in the below table:
Having the low average cost of the direct unit, one require creating the monthly sales, which is displayed through breakeven. The company expects to pass the break-even point by the month of May (Boone & Kutz, 2014, p. 18).
Baubax jacket will also make use of 40% of the amount in purchasing the raw material and for establishing the business. Around 30% of the value will be used as operations and for managing the whole expenses of the factory (Hiduke & Ryan, 2013, p. 14). Around 20% of the fund will be used for promoting, and distribution of the fund, the and for maintenance, and around 10% will be kept in hand, during the time of risk.
The Baubax jacket is the profitable business, having the cash flow in short term; therefore, the capital required will include negative operating cash flow, which will be around $55000. The operating cash flow is significant for avoiding the surprises. Not holding the correct amount for covering the expenses by the first year of the business is considered as one of the highest reason behind the failure of business (Curtis, 2014, p. 19). The complete amount required for straying the business will be $186850. The amount comes through the total of $55000 for equipment, $25000 for the inventory, $55000 for meeting the first month expenses, and $51850 for the basic expenses (Lee, 2011, p. 19).
Conclusion
From this business plan, one can easily assume that we discuss business, by considering the profits. The business is built around the various sustainable issues, and it is environment-friendly, which promote fashionable products for short and long run. Baubax jacket will more than a business; it will an experience for the travelers. Australia is the current target of the store, and later on, it will be expanded worldwide.
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