Foundations In Strategic Management And Cengage Learning

Sales and Marketing Strategy

Discuss about the Foundations in Strategic Management and Cengage Learning.

The name of the company is Miteb Clothing Store, which will be offering trendy and classic clothing, shoes and accessories online, created especially for the female populace of Australia. The company will attract the women looking for the best clothing through the elimination of the middle men and get the perfect outdoor outfits online. The fashionable women will be happy to receive the best products easily delivered and available in cheap prices comparatively, thus making the entire process cost effective and functional (Monroe et al. 2015).

Miteb Clothing Store will offer fashionable and designer clothes, shoes from flats to heels, accessories such as bracelets, jewellery, bangles and many more in their online store. The online store targets the female inhabitants belonging to the niche section of the entire populace present in Australia. Therefore, it can be affirmed that the boutique store are creating an edge on delivering the finest quality goods.

There are various opportunities for the Store that includes the following:

Rentals of clothing: The store can aim in reusing the products used by the celebrities just for a single time in their whole lifetime. The stocks can be made available online for the common public to reach towards them. Hence, the company can make a hiring segment in the site published for the renting or buying the clothes of celebrities for some events or dates. This will attract a huge number of public as nowadays people are too interested in getting new and fashionable clothes i.e. cheap and best in nature.

Vintage clothing: The fashion has a revolving nature and thus the old ones have a tendency to become gold again. There are women who love vintage i.e. classic clothing as they have dissimilar characteristics and quality. Thus, the business plan must include the inclusion of such clothing to attract a huge group of public.

Wedding Cloth rentals: Like the rentals for the celebrity clothes, there can be a segment booked for the rentals of the wedding clothes as everyone do not like to spend a huge amount of money on a dress that serves only a single purpose. Though, for many girls it’s a dream dress, the major ones find it unworthy for investment purpose. Therefore, the business can earn leaps and bounds through this facility in their site.

Recycling of the clothing: People have the tendency to remove the clothes once or twice after the use as they do not love to wear the same thing again continuously hence, they must be recycled with the help of best technologies and researchers

Operational Strategy

Miteb Clothing Store will offer clothing, shoes and other accessories to the women residents. The policies in use will include the product differentiation as the new store will be rendering the unique, innovative and trendy products and services. The foremost attribute of the merchandise will be comfy stylish outfits that in reality will meet the requirement of the intended women populace. The store will provide services that comprises of the product shopping, replacements as well as specific regulation to the consumers. The designers will be always be present online in chat menu for providing assistance to women in the expansion of their personality and  styles (Bettis et al. 2015).

There must be a premium pricing strategy to be followed by the store as it will target the women of high income and also the fashionable ones that has an ability of paying any amount of price for the clothing with best quality. The customers have an eagerness in spending the cash on the important and excellent items and thus will try to chose the best ones from the ones available online (Eden and Ackermann 2013).

In the modern age, Miteb needs the utilization of the electronic medium such as commercials on internet, television and various fashion programs. The social networking sites being the major usage of every youngster and elders must be employed for the purpose of promotion such as Facebook, YouTube and Twitter etc.  Miteb’s eye-catching logo will be profoundly demonstrated in these advertisements. Miteb will also offer concessions at various period of time to level out the seasonality and also in creation of a preliminary consciousness of the website (Hollensen 2015).

The owners of Mideb should follow a line of investigation into the competition through the oppositions. With the ease of access of shopping online, the rivalry has now reached heights and the clothing store is supposed to detail out its advantage over each of the competitors in the present scenario (Goetsch and Davis 2015).

The store must have an efficient capacity of storage and organization of the required levels of the stock. The insufficient inventories lead to the inability of reaching the levels of required profitability. The online ordering people will not like the fact of the chosen clothing to be out of stock or unavailable at the required time. Hence, it must cover up the necessities and requirements of the maintenance of inventories (Bergh 12016).

The owners should also have a reflection towards the offering of discounts during the season endings to shift the leftover inventory that has a result of the lowering of the margins of profit. They need to be cautious in pricing the products in a manner that creates a situation of profitability for the store. Being a new business the owners may also have to bargain with the wholesalers of clothing to set up a program of buying back the left over stock of clothing present with the business (Nielsen 2015).

Financial Plan

The operating plan must have a detailed discussion about the plans of the market for the business, together with the inclusion of the policies to achieve appreciation within the market. The store could team up other organizations and work collaboratively; putting up fashion shows and unique events leads to benefit of both the organizations. The social media marketing can be too useful if implied in a proper manner. The internet is the main medium of reaching out to the market and hence the plan must include the various forms of internet applications.

Mideb Stores will have an involvement in the conducting of the market research for the owner to understand and interpret the current style and fashion necessities of the intended clientele (women inhabitants for the Mideb Stores). There will be an appointment of a research and development team for taking the responsibility of studying the size, market and commerce for the effectiveness in the operations of the business chosen by the owners i.e. an online clothing store for women.

The section of finance in the working plan will have an inclusion of the major financial statements of the company. The same will have an inclusion of the statement of income and balance sheet. These statements are not simply the guesses of the figures but also based on reality. The same can be attained through the research done in market, concerning the competition and also by paying particular attention to the companies preparing their financial statements go unrestricted for their investors and shareholders (Barney and Hesterly 2015). The financial statements of the company have included the statements of last three years.

The major considerations of the financial plan include the following:

• Maintenance of a profit margin at an approximate of 15 to 20% and also paying close attention to the everyday expenditure along with the cost of goods sold.
• To turn stock at an approximate of five times as well as generation of sales.
• To augment the alertness as well as constructing the sales through the use of the social media and other modes of advertisements.

The financial plan must include the following:

The Profit and loss i.e. the income statement:

PROFIT AND LOSS FORECAST
Year	0	1	2	3
Revenue	0	480,000	520,000	625,000
Cost of sales	0	330,000	375,000	460,000
Gross profit	0	150,000	145,000	165,000
Gross Margin		473,070	512,265	608,725
Expenses/overheads
Premises (rent, rates)		18,000	18,000	18,000
Wages and salaries		8,000	10,000	12,000
General expenses		2,250	2,450	2,600
Accountant Fees		20,000	20,000	20,000
Payroll Tax		3,800	4,100	4,400
Utilities		15,000	17,500	20,000
Sales and Marketing		18,000	20,000	22,000
Postage and Telephone		1,650	1,850	2,150
Repairs and Maintenance		2,500	2,750	3,000
Website Development Expenses		35,000	35,000	35,000
Preliminary  expenses		1,900	2,300	2,600
Lease Payments		14,000	16,000	19,000
Total expenses/overheads		140,100	133,950	141,750
Profit before tax		9,900	11,050	23,250
Tax @ 30%		2,970	3,315	6,975
Profit after tax		6,930	7,735	16,275
Transfer to reserves		9,900	11,050	23,250

 

Balance Sheet
Assets	FY-1	FY-2	FY-3
Current Assets
Cash	$106,050	$137,050	$124,650
Accounts receivable	$480,000	$520,000	$625,000
Total current assets	$586,050	$657,050	$749,650
Fixed (Long-Term) Assets
Vehicles	$25,000	$25,600	$22,400
Furniture	$32,000	$16,000	$12,800
Equipment	$35,000	$22,400	$17,920
(Less accumulated depreciation)	$15,200	$12,800	$10,880
Intangible assets	$50,700
Total fixed assets	$127,500	$51,200	$42,240
Total Assets	$713,550	$708,250	$791,890
Liabilities and Owner’s Equity
Current Liabilities
Accounts payable	$24,000	$25,000	$27,000
Accrued Rent	$18,000	$18,000	$18,000
Bank Charges Payable	$3,000	$3,000	$3,000
Short-term loans	$10,000	$10,000	$10,000
Income taxes payable	$2,970	$3,315	$6,975
Accrued salaries and wages	$8,000	$10,000	$12,000
General Expenses	$2,250	$2,450	$2,600
Lease Payment	$14,000	$16,000	$19,000
Current portion of long-term debt	$150,000	$140,000	$130,000
Total current liabilities	$232,220	$227,765	$228,575
Long-Term Liabilities
Long-term debt	$75,000	$90,000	$80,000
Less: Loan Repayment		$7,500	$7,500
Deferred income tax	$189,500	$154,200	$176,290
Total long-term liabilities	$264,500	$236,700	$248,790
Owner’s Equity
Owner’s investment	$200,000	$225,000	$275,000
Net Profits	$6,930	$7,735	$16,275
Reserve and Surplus	$9,900	$11,050	$23,250
Total owner’s equity	$216,830	$243,785	$314,525
Total Liabilities and Owner’s Equity	$713,550	$708,250	$791,890
		{42}
Common Financial Ratios
Debt Ratio (Total Liabilities / Total Assets)	0.70	0.66
Current Ratio (Current Assets / Current Liabilities)	2.52	2.88
Working Capital (Current Assets – Current Liabilities)	353,830	429,285
Assets-to-Equity Ratio (Total Assets / Owner’s Equity)	3.29	2.91
Debt-to-Equity Ratio (Total Liabilities / Owner’s Equity)	2.29	1.91

Therefore, the Mideb clothing store must take into account the above scenarios in mind for the effective and efficient management of the company’s business and novel endeavors on a daily basis. The trends along with the shift in the ratios and other important data must be checked and controlled effectively.

References

Barney, J. B., and Hesterly, W. (2015). Strategic management and competitive advantage concepts and cases. Pearson.

Bergh, D. D., Aguinis, H., Heavey, C., Ketchen, D. J., Boyd, B. K., Su, P., … and Joo, H. (2016). Using meta?analytic structural equation modeling to advance strategic management research: Guidelines and an empirical illustration via the strategic leadership?performance relationship. Strategic Management Journal, 37(3), 477-497.

Bettis, R. A., Gambardella, A., Helfat, C., and Mitchell, W. (2015). Qualitative empirical research in strategic management. Strategic Management Journal, 36(5), 637-639.

Eden, C., and Ackermann, F. (2013). Making strategy: The journey of strategic management. Sage.

Goetsch, D. L., and Davis, S. B. (2014). Quality management for organizational excellence. Upper Saddle River, NJ: pearson.

Harrison, J. S., and John, C. H. S. (2013). Foundations in strategic management. Cengage Learning.

Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.

Monroe, K.B., Rikala, V.M. and Somervuori, O., 2015. Examining the application of behavioral price research in business-to-business markets. Industrial Marketing Management, 47, pp.17-25.

Nielsen, L., 2015. Product Positioning and Differentiation Strategy. Hearst Newspapers.