The new business venture in Morocco would be an electronic commerce (ecommerce) company named ‘Far and Near Limited’ or FNL based in Rabat. The business of FNL would consist of receiving orders from customers on its own ecommerce website and delivering the products to the customers within minimum possible time. The name ‘Far and Near’ would be the very embodiment of the business operations of the company. The word ‘Far’ represents foreign markets whereas the word ‘Near’ would refer to the domestic market of Morocco. An interpretation of the name of reveal that the company offers consumers with both imported as well as local products.
Financial aspects:
The company would be listed on the Casablanca Stock Exchange and would be raise capital from the Moroccan Stock Exchange (Casablanca-bourse.com. 2018). FNL would employ human resources from the country, thus creating employment opportunities. The company would generate revenue by delivering high quality products or Moroccan as well as international origin. The company would aim to achieve MAD 1 million in the first year and aim to increase its revenue generation by ten percent minimum every year.
Products and customer relationship:
FML would market consumer goods namely cosmetics, home care, food products, lifestyle and apparels. The company would maintain strong relationship with customers by providing high quality goods and round the clock customer assistance. The customers would be encouraged
to provide their feedbacks which the management of FNL would consider in forming future strategies to the feasible extent (Khodakarami and Chan 2014).
S.W.O.T. analysis:
FNL before entering the Moroccan ecommerce market should conduct a SWOT analysis to identify its strengths and weaknesses which would in turn be outcomes of threats and opportunities the ecommerce market offers. Wu, Song and Kang (2016) mentions the external market conditions offer threats and opportunities which the companies entering the market should consider with utmost seriousness so as to form appropriate business strategies so as the adapt to the market conditions.
Diehl and Bishop (2017) adds to the opinion of the previous authors by mentioning that the entrepreneurial ventures need to locate the issues or gaps which refers to areas of customers’ needs not fulfilled by the existing firms. The new firms can capitalise on these issues by offering new products which would satisfy the issues or fill the gaps. As far as FNL is concerned, it can be pointed out that the firm first needs to conduct a SWOT analysis to recognise the gap in the Moroccan market it can capitalise on to enter sustain and profit in the market.
Strengths:
The following are the strengths which FNL would enjoy on entering the Moroccan market:
Strength 1. Financial strength:
One of the most important strengths which FNL would enjoy and thrive on right from its inception stage. The firm would be listed on Casablanca Stock Exchange which means the firm would be able to raise capital by floating shares in the Moroccan security market. The importance of this strength can be estimated from the work of Kwon and Ruef (2017). They mention that sole proprietor entrepreneurial ventures usually suffer from financial scarcity due to lack of access to the securities market which is the source of capital capable of supporting the immense business structures. The sole proprietorship ventures are dependent on the limited financial investments of the entrepreneurs which inhibit them from acquire talented staff members and acquiring large supply chains.
Thus, it can be pointed out that financial scarcity jeopardizes the entire business operation of the sole proprietorship ventures. The public limited entrepreneurial ventures on the other hand, have access to capital markets to raise capital by issuing shares. Plummer, Allison and Connelly (2016) mention that sole proprietors after exhausting their limited financial capital have to enter into partnership or collaborate with third party venture capital investors to thrive in the market. Thus, in this respect can be reinstated that the financial strength of FNL owing to public limited status and access to the Moroccan capital market is undoubtedly one of the biggest strengths. This strength can great be attributed to the first opportunity recognised which is economic growth of the country. The strength of FNL in terms of capital generation can also be attributed to the second opportunity namely, strong share market in Morocco.
Strength 2. Talent acquisition and retention:
The second strength which FNL would enjoy in the Moroccan market is undoubtedly in terms of talent acquisition and retention. Kwon and Ruef (2017) can again be reiterated to point out that sole proprietorship ventures owing to their limited financial capacity are held back from compensating their employees at par with their competitors. Armanios et al. (2017) point out that owing to financial scarcity, the business operations of the sole proprietorship businesses are restricted within limited areas.
This limits the sole proprietorship ventures in bringing about career development of their employees. These two limitations limits the capacity of the sole proprietorship ventures from acquiring and retaining talents, especially experienced employees. FNL on the contrary to this sorrowful condition of sole proprietorship ventures would be able to both acquire and retain talents owing to its public limited company status.
Strength 3. Revenue generation:
The third opportunity which the market of Morocco would offer the ecommerce companies is revenue generation. This strength of the ecommerce companies like FNL can be attributed to the third opportunity which Morocco is enjoying, namely, more consumer population. Far and Near Limited can take advantage of this increase population and deepening internet penetration in the country to market more products (Export.gov. 2018).
Leyshon et al. (2016) draw a clear relationship between market penetration and revenue generation. They mention that increase in the internet penetration and enables the ecommerce companies to sell large number of products, thereby generating higher revenue. Thus, in this respect it can be inferred that FNL can take the advantage of the growing consumer base in Morocco coupled with increased disposable income to market goods among a huge consumer base and generate maximum revenue.
The following are the weaknesses which FNL would face in the Moroccan market:
Weakness 1. Weak reputation:
The first weakness which FNL would face in the Moroccan market is its weak reputation. Shim and Yang (2016) in this respect point out that both capital generation and revenue generation are dependent to a great extent on the reputation of business organisations. It can be pointed out that FNL being a public company can sources more capital than sole proprietorship ventures. Brammer (2015) contradicts this fact and point out that new public limited companies have to face competition from established public limited companies both to attract investors as well as customers.
The new public limited ventures like FNL require to brave tough competition from established public limited companies in the market in order to source capital owing to the already strong reputation of the latter. Wang (2017) mentions that customers too prefer to purchase products from established ecommerce companies like Amazon. Thus, it can again be pointed out that generating business and earning high revenue are also challenges which new ecommerce companies like FNL would face in Morocco.
Weakness 2. Weak supply chain management:
The second weakness which FNL would suffer from at least in the initial years would be a weak supply chain due to its newly status and low reputation. Chin, Tat and Sulaiman (2015) mention that supply chain management is directly linked to goodwill. This is because established public limited companies owing to their strong market reputation are able to attract more customers and investors. This means that they can generate more revenue and capital respectively. Paulraj, Chen and Blome (2017) mention that established public limited companies owing to their goodwill are able pressurise the suppliers to offer products at lower rates which newly established public limited companies cannot do. Thus, in this respect it can be pointed out that FNL in its initial stage would be facing challenges in acquiring supply chains in Morocco.
Opportunity 1. Economic growth of Morocco:
The graph shown below throws on the first opportunity which public limited business ventures entering Morocco can enjoy-economic growth. The graph shows that the GDP product in Morocco has grown to USD 109.14 bn in 2017 from a USD 103.61 bn in 2016. Fraumeni (2017) points out that GDP is the monetary value of all the finished goods and services produced within a country.
Thus, it can be interpreted on this basis that Morocco is experiencing an increase in the values of the final products it manufacturing. This means that the companies in Morocco are producing more goods and services. This increase in productivity is a great opportunity for ecommerce companies like FNL. This is due to fact that more goods produced within Morocco would mean that ecommerce companies like FNL would be able to market more goods manufactured within Morocco. This would lead to the third strength, revenue generation and economies of scale operations.
Opportunity 2: Strengthening share market of Morocco:
Morocco is the house to one of the strongest securities markets in Africa and home to the third largest stock exchange in the continent namely CSE (Casablanca-bourse.com. 2018). The graph below shows that the share market index in the country fell below 9000 points post 2016. The index again recovered and showed a bullish trend in 2018 but is showing a bearish trend. However, considering the overall trend, it can be predicted that share market in Morocco though volatile, it recovers fast.
It can be pointed out on the basis of this analysis that the strong share market is an opportunity to the public limited companies. This is because an in general bullish trend in the market means that investors are investing in the share market. This in turn means that the public limited companies like FNL would be able to raise more capital from the securities market which would attribute them with immense capital strength. Nimtrakoon (2015) mentions that capital generation is directly proportional to financial strength. Thus, it can be inferred that the bullish trend in the Moroccan stock market is an opportunity which public limited can use to strengthen their capital base by raising immense capital.
Opportunity 3: Growing consumer base due to growing population:
The statistics below shows that Morocco is experiencing an increase in population which means that the country can offer the ecommerce companies more consumers to market their products. Bilgihan (2016) in this respect points out that more GDP and consumer base results in more consumers buying goods online. This fact is validated by an article published by the Moroccan daily, Morocco World News. The daily reports that the ecommerce websites registered with Electronic Banking Centre generated a sale of MAD two billions in the first nine months in 2017 which was jump by 51.4 percent of the sales generated in 2016 (Moroccoworldnews.com). Thus, it can be inferred from the discussion that increase in population is a driving factor for the ecommerce companies like FNL.
The product line of Far and Near Limited would be the very interpretation of its name. This means that the company would offer both Moroccan as well as foreign products. The product line of the company would consist of beauty products, apparel, home essentials and food products. The beauty products would be divided into male, female and baby segments. The male product line would consist of male grooming accessories which would include soaps, shaving accessories, fragrances, shower gels, hair colours and bear creams.
The female beauty products would consist of beauty products like fragrances, soaps, shower gels, makeup products, lotions and hair colours. The baby care products would include baby soaps, creams and nappies. The apparel sections would include apparel like traditional as well as Moroccan traditional apparel for men and women. The children’s apparel would consist of dresses of different kinds for children.
The home essentials would include cleaning products, furniture and show pieces. The food products would consist of a wide variety of food items right from beef, chicken, mutton, mushroom and dairy items. Similarly, the food items would include snacks, drinks and confectionary items. Customers would also be able to order customised dishes like salads and fruit bowls. The entire product line would consist of products both from Morocco as well as other nations.
Sales/marketing personnel:
Far and Near Limited would employ sufficient number of sales persons to market its products in the Moroccan market. Each of the products line would be under the ten marketing personnel. Five personnel would take care of the Moroccan operations while five personnel would be in charge of the foreign operations. The marketing personnel would operate under the stewardship of the apex management.
The Future:
FNL would enter the Moroccan market as a Morocco based Ecommerce Company. The company in its initial stage concentrate on offering Moroccan consumers with high quality products both of domestic and international origin. The company as a part of its medium term strategy would target entering South Africa and Middle East. The company would then enter the European market in the long run.
Vision statement:
The vision of Far and Near Limited would be offering its customers with high quality products of both domestic and foreign origin. The company envisions to protect the interests of the stakeholders and create value for the environment.
Mission statement:
FNL seeks to offer high quality products to its customers to generate revenue by creating value for the latter. The company also aims to provide its stakeholders with positive returns.
Goals/objectives:
The following are the goals or objectives of FNL:
The Market
Unique selling position:
The unique selling proposition of FNL would be its large product line of both Moroccan and international origin. The second USP of the company would be its affordable and legitimate prices.
Your customers/clients:
The customer segmentation of FNL would consist of geographic, demographic and psychographic segmentation. Geographically the market of FNL can be divided into domestic customers as well as international customers. Demographically the customer segments would consist of men, women and children. Financially the customer segments would be segmented into upper and middle class income group. The customers of FNL would consist of both high class customers consuming premium international brands as well as middle class customers consumers products available at more affordable rates. The customer segments of FNL would be segmented into working customers as well as home makers.
Your competitors:
The main competitors of FNL would be the Moroccan ecommerce companies. The competitors would also consist of international players like Amazon.
FNL in order to enter the Moroccan market should conduct a thorough market research of the Moroccan market. The company while entering foreign markets like South Africa should conduct market research of the same.
The target markets of FNL would be divided into small, medium and long term on the basis of its business operations. The initial target market of FNL would be Morocco where the company would sell both Moroccan as well as foreign goods using its official websites. The medium target markets would consist of South Africa and Middle East. The long term market objective of Far and Near Limited would be Europe.
Environmental/industry analysis:
The company should conduct a thorough market analysis of Morocco. The market of ecommerce is expanding with Morocco having one of the fastest growing ecommerce markets.The company should use an omni-channel marketing strategy to gain access to maximum number of consumers. This would allow it to generate maximum amount of revenue.
References:
Armanios, D.E., Eesley, C.E., Li, J. and Eisenhardt, K.M., 2017. How entrepreneurs leverage institutional intermediaries in emerging economies to acquire public resources. Strategic Management Journal, 38(7), pp.1373-1390.
Bilgihan, A., 2016. Gen Y customer loyalty in online shopping: An integrated model of trust, user experience and branding. Computers in Human Behavior, 61, pp.103-113.
Brammer, S., Agarwal, V., Taffler, R. and Brown, M., 2015. Corporate Reputation and Financial Performance: The Interaction between Capability and Character. In European Financial Management Association. 2015 Annual Meeting: The Netherlands.
Casablanca-bourse.com. 2018. Retrieved from https://www.casablanca-bourse.com/bourseweb/en/index.aspx
Chin, T.A., Tat, H.H. and Sulaiman, Z., 2015. Green supply chain management, environmental collaboration and sustainability performance. Procedia CIRP, 26, pp.695-699.
Diehl, K. and Bishop, B., 2017. Strategic Analysis of Amazon Madison Morgan November 16, 2017 MGMT 275.
Export.gov. 2018. Retrieved from https://www.export.gov/article?id=Morocco-eCommerce
Fraumeni, B.M., 2017. Gross domestic product: Are other measures needed?. IZA World of Labor.
Khodakarami, F. and Chan, Y.E., 2014. Exploring the role of customer relationship management (CRM) systems in customer knowledge creation. Information & Management, 51(1), pp.27-42.
Kwon, S.W. and Ruef, M., 2017. The imprint of labor markets on entrepreneurial performance. Journal of Business Venturing, 32(6), pp.611-626.
Leyshon, A., Thrift, N., Crewe, L., French, S. and Webb, P., 2016. Leveraging affect: Mobilising enthusiasm and the co-production of the musical economy. The production and consumption of music in the digital age. London: Routledge, pp.248-62.
Nimtrakoon, S., 2015. The relationship between intellectual capital, firms’ market value and financial performance: Empirical evidence from the ASEAN. Journal of Intellectual Capital, 16(3), pp.587-618.
Paulraj, A., Chen, I.J. and Blome, C., 2017. Motives and performance outcomes of sustainable supply chain management practices: A multi-theoretical perspective. Journal of Business Ethics, 145(2), pp.239-258.
Plummer, L.A., Allison, T.H. and Connelly, B.L., 2016. Better together? Signaling interactions in new venture pursuit of initial external capital. Academy of Management Journal, 59(5), pp.1585-1604.
Shim, K. and Yang, S.U., 2016. The effect of bad reputation: The occurrence of crisis, corporate social responsibility, and perceptions of hypocrisy and attitudes toward a company. Public Relations Review, 42(1), pp.68-78.
Tradingeconomics.com. (2018). Retrieved from https://tradingeconomics.com/morocco/gdp
Wang, T., 2017. Long-term orientation, marketing and technological capabilities, and social responsibility in new ventures. In THE WORLD SCIENTIFIC REFERENCE ON ENTREPRENEURSHIP: Volume 3: Sustainability, Ethics, and Entrepreneurship (pp. 249-273).
Wu, F., Song, D. and Kang, L.S., 2016. The Development of Commercial Bank E-Commerce Finance’s SWOT Analysis. DEStech Transactions on Environment, Energy and Earth Sciences, (peee).
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