The business being considered for the study is Goldy Indoor Sports which will provide indoor sports related facilities and services. The business will focus towards providing sports facilities to young sports enthusiasts across New Zealand. The headquarters will be located around Wellington. The company will focus on producing quality sports facilities and accessories and make it available to sports enthusiasts at reasonable investments. The company will like to start with a facility that will be located in the Spreydon area of Christchurch. Initially the company will focus towards providing facilities for cricket, football and netball and also marketing sports accessories through the arena. However, the company wants to grow fast and within one year of the establishment of business engage in the provision of a wide range of indoor sports facilities corresponding to a large number of indoor sports. The company will mostly like to promote their facility among young sportspersons and sport lovers within the age of 13-20. The initial identified market will be in and around the city of Wellington. Moving forward, Goldy indoor sports will focus on opening new arenas the smaller towns of New Zealand. The company will like to mainly attract sports enthusiasts that do not have access to quality sports products or arenas in the different areas of the country (Gade et al., 2016). The company has an essential vision of becoming the largest indoor sports facility chain in the country.
New Zealand is a sports loving country and the market prospects of the general sports oriented facilities and accessories are large. The most important indoor sports played in the country are Netball, Indoor Bowls, Squash and Table tennis (Louvis et al., 2017). The indoor sports arena market is significantly large due to the fact that most people in the country take part in some kind or other sports and related activities. The sports goods market of the country is large with many companies competing in the market. Some of the sports goods manufacturers in the country are multi-specialist sports enterprises that essentially operate within a large scope concerning the sports oriented industry of the country (Bernstein, 2018). Thus, there are many existing companies with great experience in the sports industry. It is important to consider the combined value of the entire sports industry of the country as the business prospects of indoor sports are related to the larger sports market of the country. The indoor sports oriented market of the country is witnessing a steady rise over the past few years.
Some of the most important competing firms that can be strong rivals of the company are Howzat Indoor Sports, Pioneer Leisure Centre and Horncastle Arena. The companies have a reasonably large market reach and can pose serious competitive threat to the company. They provide excellent multi-sports facilities and are well known arenas in the region. The most important factor that guides the sports arena market of the country are associations with regional clubs and sports authorities (Zealand, 2015). The market is large and witnessing significant growth recently. The various regional sports clubs of the country often use the multi-sports arenas to train their athletes. It is important that mutually beneficial and long standing partnerships with the various indoor sports clubs are maintained for greater productivity of Goldy Indoor Sports. Competitive factors can be very much in the sports arena business. The major factors are quality of sports goods provided in the facilities, quality of the pitches and the maintenance staffs employed by the organization.
Netball is a very popular sport in New Zealand, especially among young girls and women. The popularity of Cricket is also large in the country (Debnath & Malhotra, 2015). Moreover, football is witnessing a steady rise in participation of kids and young adults. Thus, the sports facilities that will be offered in the arena can attract wide number of participants. Multi-sports complexes are rising in popularity in the country. However, there is greater demand for facilities that offer a wide range of indoor sports to the potential participants. For- example many young sports enthusiasts are getting attracted towards basketball and softball playing arenas. The industry is becoming larger as there is also a growing need for sports arenas where multiple kinds of sports facilities will be available. Christchurch is an important city of New Zealand in the context of sports and there is a large market that can be realized by the company. The Spreydon sub-urban region of Christchurch already has the Pioneer Leisure Centre which is a long running facility providing world class facilities for swimming and other fitness related recreational activities (Humphreys & Nowak, 2015). It will be an important competition for the arena, especially due to its long history. The major distinction for the Goldy Indoor Sports will be that it will provide customers with sports oriented fitness. This can be an important factor for the growth of the company as a large number of children and young adults are focused towards indoor sports. There is also a growing concern of childhood obesity in the country which is prompting many parents to send their children to various sports arenas and associate them with various sports activities (Zealand, 2015). It is important for the company to engage in effective marketing activities that will target young sports enthusiasts.
Large sports arenas are being built across the country for integrating budding sports enthusiasts under one roof. The growth of multi-sport arenas across the country are also being promoted by the sports ministry in order to educate children and teenagers about new sports. Moreover, there is also a growing trend among teenagers and young adults towards becoming multi-disciplinary athletes. The Arena can specifically address this need among the sports enthusiastic children in Christchurch. Providing a good environment and atmosphere is also necessary as multi-sports arenas across the country and the city are focusing more towards enhancing the ambience of their arenas (Leeds et al., 2018). The government authorities of Christchurch are also providing increased facilities to sport venues and arenas in a bid to improve sports participation rates among the children and youth of the region. Moreover, the authorities are trying to improve public health through the promotion of healthier lifestyles. This is important for the growth and development for the Arena. The Pioneer Leisure center is concentrated more towards providing swimming facilities to the people of the region. However, as a sports oriented arena the prospects of the company are good.
Global Industry Review:
Sports arenas have been long existing in the global sports oriented market. The growth of major multi-sports facilities happened during the 1970s and 80s (Holmgren & Widmark, 2018). The global sports market was recently recorded to generate revenue figures of more than 90 Billion worth of US dollars. The market is growing along with the rise in sports viewership across the globe. It is important for the company to consider the rise of the global sports industry as sports affinity mostly develops due to major events and occurrences that take place globally. The rise in the global sports market was witnessed in the last few years majorly due to the hosting of various large sporting events by emerging world economies. The rapid growth of viewership in regards to various sports were witnessed across the globe. Events like the Summer Olympics and the FIFA World Cup further boost prospects of the sports industry across the world. The growing popularity of Rugby in the Southern hemisphere has resulted in the continuous growth of the sports oriented activities that are associated with it. This has given rise to greater enthusiasm and participation in the sport by young adults and children across this region. Similarly, there has been a steady rise in the popularity of indoor sports, which has increased the business proposition of indoor sports oriented businesses. Thus, the prospects of multi-sports arenas in the world sports business market has also significantly increased due to essential reasons. More youngsters are getting inclined towards indoor sports as a means to both engage in physical activities and socialize.
Concerning the world sports market North America, Asia and Europe are the leaders in generating revenue (Castellucci & Podolny, 2017). The countries from these continents are generally world leader in sports. There is also a great deal of interest among the sports fraternity of the countries from Oceana and Australia zones to catch up with them. Hence, the government of these countries are trying hard to catch up with the sports oriented industries of these continents. There is an emerging demand for sports arenas across Australia and New Zealand which can have a positive effect on the market growth of sports arenas in the countries. Multi-sport arenas are becoming widely popular among the young and old alike in the current sports scenarios (King et al., 2015). The rise of sport franchises around the world and the emergence of widely popular sports teams as highly profitable business ventures have given way to the rapid growth of the sports industry. The effect has been more prominent on the growth of multi-sports arenas across the world. Mainly this has been essentially enhanced through the participation of large sports franchises in building large multi-sports venues in order to nurture young talent and also get closer to their fan following (Søderlund & Berg, 2015). The rapid growth of the sports industry of the world has given rise to greater demand for sports oriented activities across the world. The participation rates of senior citizens in sports related activities are also rising across the world.
It is important to strongly consider both the regional and global market factors that can potentially influence the productive success of the organization. In order to effectively achieve the major goals and objectives the company has to operate considering how they can be influenced by the regional factors and how the factors can be influenced further by the greater global factors. In the regional context the major factors that can affect the business of the arena are sports inclination of the target public, established sports arenas in the area and quality of service provided in the facility. In the global context the major factors are related to the popularity of indoor sports and the increase in the promotion of these sports. Definitely the popularity of netball, indoor cricket and indoor football will matter for the arena to be optimally successful in business.
The report has been brought forward by consulting the most authentic sources. All the reports published in the report have ben ethically considered. The confidential financial information of companies have not been accessed in order to bring forward the report. No form of data manipulation has been done in the study research. No form of forced opinions have been gathered for bringing out the report. The report has been made by keeping all the legal and regulatory implications of the study research.
In order to succeed in any business venture, it is crucial to identify the opportunities in the market (Burns, Bush & Sinha, 2014; Reid, 2018). The Goldy Indoor Sports offers facilities for a range of indoor sports in New Zealand. Therefore, the parts of the population in New Zealand that can be identified as the potential market for the company are –
Every business has its own market and market needs. While starting a business, it is crucial to understand the needs of the customers of the target market so that the company can provide services that satisfy the needs and wants of the customers (Majava et al., 2014; Thorson & Moore. 2013). The identified target market of the company has a specific set of needs and wants.
In business, it is crucial to offer the consumers something that the other similar companies do not. Business is a world of competition and hence, it needs to have competitive advantages to achieve the goal of satisfying the customers (Hennig-Thurau & Hansen, 2013). In order to have competitive advantages, a company needs to identify and understand the competitors. There are two types of competitors – direct and indirect.
The direct competitors are considered to be those companies that offer similar products and services (Kemper et al., 2013). The direct competition can be both on international and local scale. Both Adidas and Nike offer sports apparel and therefore they are involved in direct competition to each other. Similarly, when two shoe shops are positioned at the same street or locality, they are the direct competitors of each other. The direct competition is the primary challenge of any company as this gives the customers opportunity to compare the offerings of different organisation based on their prices, locations, features of services, and service quality, before deciding. Different customers have different sets of preferences, and most likely to select the organisation whose offering is most suitable to them.
In the context of Goldy Indoor Sports, there are multilayers of direct competitors. The five star hotels offer supreme sports facilities in their premises, which are availed by the sports personas and upper class population of the society. Some multinational companies (MNCs) also offer facilities to their employees and clients where they can engage into indoor sports. The employees get membership for these facilities in a cheaper price, and in some cases even free. The government indoor sports arenas are huge competitors for the company. These facilities are located in convenient places and offer lower prices. The additional advantage of government facilities is that it provides the opportunity for the young sportspersons to enrol into government programs for future growth in sports. Housing complexes in today’s time have their own sports complex that offer indoor sports facilities to all the family members like parents, aged persons, and kids. It is easier for the residents of these complexes to avail the services within their home premises.
The companies that offer products and services that are slightly different, and target the same market group to satisfy the same needs are categorised indirect competitors (Bengtsson & Kock, 2015). These kinds of competitors are also referred as substitutes. Clothes are basic needs of humans. While some customers prefer to buy readymade clothes, some prefer to buy clothing materials and tailor them as per personal requirements. In both these cases, the need of the customer is same but the product to satisfy that need is different.
The primary indirect competitor of Goldy Indoor Sports is the companies that provide outdoor sport services. The need of the customers to stay healthy and fit can also be satisfied by various outdoor sport activities. There are facilities that offer both indoor and outdoor services, which is a double threat to the company. Another trending offering is adventure sports. It has become quite popular among the young and middle-aged population. Many of the customers seek excitement in their sport activities, which directs them to the adventure sports such as skydiving, canyoning, scuba diving, trekking, and climbing. Therefore, these kind sport facilities are potential indirect competitors of the company.
|
Strengths |
Weakness |
|
· Dedicated sports facilities · Sport facilities for older people |
· Only indoor sports · Exclusion of rugby |
|
Opportunities |
Threats |
|
· Government investment · Favourable climate · Enthusiastic people |
· Outdoor sports facilities · Adventure sports · Organisations that offer similar facilities |
Strengths: The company offers sports facilities, which has a growing demand. Therefore, there would always be customers who need this facility. Along with the young and middle-aged customers, Goldy Indoor Sports also offer services to the senior citizens of the society, which gives them a competitive advantage.
Weakness: The company only offers indoor sports facilities like cricket, net ball and football, which narrows down the services and increases the competition. The exclusion of the most popular sports of the country, rugby also is a huge competitive disadvantage of the company.
Opportunities: The government of New Zealand has been taking crucial steps to promote the culture of sports for a long time. The recent investment programs of the government provide the community sport facilities to grow. The climate of Australia is favourable for the sports companies to grow further. The citizens are also very enthusiastic about participating in various kind of sports.
Threats: The company has considerable market competitions, both direct and indirect. Competing with the outdoor sports facilities is the greatest challenge of Goldy Indoor Sports. There are also organisations that offer both indoor and outdoor sports facilities, which is a double threat to the company. In addition, other organisations like five star hotels, housing complexes, MNCs, and government organisations offer the similar services.
The indoor sports facilities should keep on expanding the sports facilities on regular basis. they should maintain the quality of facilities at all costs.
Idea generation:
Ideas generation enable entrepreneurs to introduce products more aligned with the needs and expectations of market. As per Salter et al. (2015) generation of new ideas enable entrepreneurs to strengthen their product strategies. The entrepreneurs, both individuals and business firms can align their new product development more with the market, thus gaining greater acceptance among customers. This also enables them to generate more revenue and capture stronger positions in the market, thus boosting their competitive advantages.
The idea generation towards development of product strategies would be divided into sections namely, ideas regarding merchandising and delivery of the products.
The product merchandising facility would consist of three sections each consisting a game namely, cricket, net ball and football. The three sports would be available to customers on all days of the week, expect Tuesday. The customers would have to buy tickets at the counter to avail the indoor facilities. The customers would be provided the articles to play with bats and balls. Each customers would be able to avail the facilities for maximum one hour at a stretch. Further, in order to enable several customers use the indoor game facilities simultaneously, no customers would be use the facilities more than once in a given day. The following would be the availability rules of Goldy Indoor Sports:
|
Availability Rules |
|
1. Three sports facilities available-cricket, net ball and football. 2. Timings-9 am to 11 pm on all week days expect Tuesdays. 3. A customer can use the facilities once in a day for an hour at a stretch 4. Playing with branded goods would attract extra charges. 5. The sports articles would be subject to facility 6. The rules/rates of the indoor are subject to changes without prior notice. Customers are kindly being requested to check the website for any change in rules/rates. 7. Your cooperation is highly appreciated. |
Goldy Indoor Sports would have several sports items like bats and rackets from reputed companies like Nike on display. Customers can avail those sports items on payment of extra charges as applicable. The aim of this facility would be to add value to the expenditure customers would be incurring to avail the facilities. This availing of playing with branded sports articles would enhance the level of the customers’ satisfaction. This would allow the indoor sports facility to attract both middle and upper class consumers.
Goldy Indoor in addition to availability and display strategies would also have merchandising facilities. The sports facility right from launch of business would have an official website. The website would enable viewers to gain complete and accurate information about the facilities available and book slots. The interested customers can also purchase for indoor sports facilities online.
Delivery of products:
The delivery of the indoor sports products of Goldy Indoor Sports would be creative and aim to maximise the satisfaction of the customers/users. The customers can buy tickets to avail the specific sports like cricket and football. They can buy tickets to avail one or all the three sports facilities. The customers which want to order indoor game facilities online can place orders and pay online. They can also avail the facility of cash on delivery and can make the payments on receiving the merchandise ordered.
The customers besides enjoying sports facilities, can also avail food products at the in-campus food court. The food court would serve pizzas, burgers and non-alcoholic beverages like milk shakes and energy drinks at reasonable rates. This creative combination of core(sports facilities) and additional products and/or facilities (food court) would enable Goldy Indoor Sports maximise the customer satisfaction of the customers (Chang & Taylor, 2016).
The service strategies of Goldy Indoor Sports would aligned to the product strategies and aim to maximise the satisfaction of customers. The service would enable the indoor sports facilities to acquire a loyal base of customers who would use the indoor sports facilities, thus generating perpetual business and revenue for Goldy Indoor Sports.
The service availability of Goldy Indoor Sports would be designed creatively to ensure maximum customers’ satisfaction. The following are the services which would be available at the Goldy Indoor Sports:
Nine sports arenas:
Goldy Indoor Sports would offer nine sports arenas, three assigned to each category of games. There would three arenas each for football, cricket and net ball. Each of the arenas would be dedicated to three customer groups namely, minor, children and senior citizens. This service would enable the customers of all the three segments to avail the sports services without the fear of getting hurt.
Waiting area:
The indoor sports facilities would provide a waiting area service where the customers can wait if the sports arenas are fully occupied. The waiting area would have a television and magazine stands so that the customers waiting in engage themselves in watching television or magazines.
Food services:
Goldy Indoor Sports would have a dedicated food court where the customers can avail food products while they wait for their turns to play or after the finish playing. This customers can either opt for receiving their food orders at the food court or enjoy delivery services at the waiting area.
Medical facilities:
Goldy Indoor Sports would provide medical facilities and health assistance facilities. The aged and customers suffering from locomotion issues would be able to avail wheel chair facilities throughout the premises. The indoor sports facilities would offer health check-up services to its customers at subsidised rates. Thus, it can be inferred from the discussion besides offering indoor sports services, the Goldy Indoor Sports would also aim to enhance the overall wellness of its customers by offering monthly medical services. This would enable it to ensure value creation to customers and enhance their customer satisfaction (Zhang et al., 2017).
The delivery of services should be designed to streamline the entire customer service offering process and enhance customer satisfaction. The service delivery of the services would start once customers buy tickets to avail the facilities. The customers can approach the playing arenas to avail the indoor games facilities. If the facilities are preoccupied, they would have the option of either relaxing at the food court or at the waiting area. Goldy Indoor Sports should train its employees to ensure high level of services delivery to customers. The following are the service delivery steps:
Ideas for business concepts:
The ideas of the business concepts of Goldy Indoor Sports would revolve around the facilities and the services discussed above. Laszlo and Zhexembayeva (2017) mention that business organisations in their business ideas need to consider both core business concepts and value added concepts.
The core business concepts of Goldy Indoor Sports would revolve around the provisions of sports arenas comprising of the three games namely, football, cricket and net ball. The aim of the core concepts would be generation of revenue by offering indoor sports facilities to customers. It can also be pointed out that the core business strategies comprising of the sports facilities would be actual products which would attract customers. However, Rosemann and vom Brocke (2015) points out that business organisations are required to provide the customers additional facilities which are covered by the value added business concept. The value added services enhance the customer satisfaction of the customers and boosts revenue generation.
The value added business would enhance the customers’ experience of availing the core business facilities of Goldy Indoor Sports, the indoor sports arena facilities. As value business concepts of the business would setting up a food court and a waiting area for the customers. The value added concepts would also include customer assistance services like wheel chairs and medical check-up facilities. These value added services would maximise the convenience of customers and enhance their rates of customer satisfaction. It can also be pointed out that the core and the supporting businesses should be considered while planning the very layout of the indoor sports complex.
The management of Goldy Indoor Sports should at a later phase implement other ideas towards business expansion. The new ideas can consist of expanding the existing product line of cricket, football and net ball can be expanded to include indoor games like billiards. Similarly, as far as value added services are concerned, the management of Glody can expand in this case as well. For example, the management can include a roof top food court or a spa. However, it can must be pointed out that implementation of other ideas would require more investment. The priority of the management should be to earn healthy returns on the amount that it would invest in the initial phase (Kowalkowski, Gebauer & Oliva, 2017). Then, they can reinvest a portion of the return towards expanding the business by implementing new ideas.
Summary:
The idea generation phase of the business establishment plan of Goldy Indoor Sports in city of Chirstchurch revolves around two main aspects. The first aspect is that the products or facilities should be aimed at value creation of customers. The value added services along with the core services and facilities should play important role in achieving this aspect which is also the first aim. The second aspect is that the management should aim to generate profits on its initial initial investment and then reinvest the profit towards business expansion (Rennung, Luminosu & Draghici, 2016)
The management of Goldy Indoor Sports should evaluate the production and service strategies. The body should judge the actual viability of the strategies mentioned above against the market conditions like customer preferences. For example, as far as cricket or football is concerned, they are largely regarded as outdoor games and moreover, playing them within closed spaces presents more chances of the players getting hit due to limited space (Woollings, McKay & Emery, 2015). Again government policies like promotion of outdoor sports should also be considered while evaluating the choice of the indoor (newzealandnow.govt.nz. 2018). This is outdoor cricket and football are capable of attracting more people compared to their indoor counterparts. It can be inferred that the management of the indoor sports facility should consider evaluation of not only the sports offering but also the facilities and product strategies in the light of prevailing market context and profitability.
|
Idea Generating Areas |
Implementations of Creative Ideas |
Pros |
Cons |
Cost vs Benefits (On a scale of 1 to 10) |
Ease of Execution (On a scale of 1 to 10) |
Reversibility (On a scale of 1 to 10) |
|
a) Product Displays/Availability/Merchandising |
Core products and value added products. Customers need to buy tickets to avail facilities. Limited access to sports facilities |
This stringent process would enable better control of the business in the initial phase. |
Might affect customer satisfaction. |
6 |
7 |
8 |
|
b) Product Delivery |
Both core and value added pro |
Enhance customer satisfaction, thus in a way counteracting the con of the previous row. |
Would lead to more initial expenditure |
6 |
7 |
8 |
|
Idea Generating Areas |
Implementations of Creative Ideas |
Pros |
Cons |
Cost vs Benefits (On a scale of 1 to 10) |
Ease of Execution (On a scale of 1 to 10) |
Reversibility (On a scale of 1 to 10) |
|
a) Service Availability |
Service availability should be expanded as Goldy Indoor Sports gains financial strength |
Would boost revenue generation |
Initial investment towards facility expansion would be high |
7 |
6 |
7 |
|
b) Service Delivery: |
Service delivery should be more customer centric |
Would boost customer satisfaction and revenue generation |
Initial investment towards floor layout in the direction |
8 |
7 |
8 |
|
Idea Generating Areas |
Implementations of Creative Ideas |
Pros |
Cons |
Cost vs Benefits (On a scale of 1 to 10) |
Ease of Execution (On a scale of 1 to 10) |
Reversibility (On a scale of 1 to 10) |
|
a) Core Concept |
Indoor games arenas |
Would encourage healthy lifestyle |
Initial investment would be high because continuous expenditure in ensuring customer safety around arenas has to be ensured. |
7 |
6 |
6.5 |
|
b) Value Added Concept |
Food court, waiting room and medical services |
The concept should support the core business concept |
Initial investment towards quality standards would be high |
9 |
8 |
8 |
It can be justified that the core and the value added business ideas would combine to maximise business growth in short term which is within 3 years within New Zealand and abroad in the long run.
Short run (1 to 3 years within New Zealand):
Goldy Indoor Sports in the short run within three years to try to expand into other cities within New Zealand. The centres in the other cities should provide both core and value added products. It can be justified that it would enable the indoor sports facility to ensure satisfaction of customers and generate revenue which would provide base to its long run business growth.
Long-run (4-7 years):
Goldy Indoor Sports should aim to expand into foreign market starting with with Australia, its nearest foreign market and economic partner (mfat.govt.nz, 2018). The indoor sports facility should maintain the high quality parameters of the facilities all across its international branches. The sports facilities can however alter the gaming options to adapt to the local market conditions of the host country. Similarly as far as value added services are concerned, the offerings of the food court can be altered to suit the taste of the customers of the host country.
Market feasibility according to Sutopo et al.(2016) can be defined as the study of testing of the market infrastructure conditions in supporting a business. The business can both be initiated by an existing business company or by a new entrepreneurial firm. For example, Goldy Indoor Sports is a new venture which seeks to enter the market of New Zealand by laying its base in Christchurch. This means that the firm is required to examine the market conditions like availability of financial services and expert human resources.
Applying Market feasibility:
|
Innovation Type |
Idea Fits with the Innovation Type |
|
1. Incremental Innovation |
Yes (The indoor sports facilities already exist in the market and can be utilised to offer services.) |
|
2. Disruptive Innovation |
Lack of finance |
|
3. Breakthrough Innovation |
|
|
4. Sustaining Innovation |
Summary:
The appropriate `innovation category would be incremental innovation. This is because bringing about about disruptive innovation in case of indoor sports would require immense investment and the initial budget amount of NZ$ 80000 is insufficient. However, at a later stage the firm should use disruptive innovation as it gains strength in the market.
|
Life Cycle Stage |
Description |
Scope of Innovation |
|
Start-up/Introduction Stage |
Innovation in value added srevices |
Limited |
|
Growth |
Innovation in sports offering and value added services offering |
High |
|
Maturity |
Innovation in both, even in foreign market |
Very high |
|
Decline |
Disruptive innovation in all of the above |
High |
The target market would be Christchurch in New Zealand at the initial phase and later on incorporate other cities in the country as well. The three market segments which the firm should aim would be children, adults and senior citizens.
Porter’s Model:
The Five Forces analysis is a tool created by Michael Porter which delves into the market competitions which firms are likely to face. E. Dobbs (2014) mentions that Porter’s Model is not only helpful in the competitive analysis of business organisations but industries to which these organisations belong as well. The five forces model by Porter takes into account five macroeconomic forces which affect business organisations and their competitive advantages in the market. The following are the five forces according to Porter’s model which would affect Goldy’s Indoor Sports in Christchurch:
Target market attractiveness and profit potential:
|
Potential Threat/Threats |
Diagonals |
Degree |
Favorable/Unfavorable |
Explanation |
|
Threat of Rivalry |
· Higher number of existing competitors |
High |
Unfavourable |
Threats to revenue generation |
|
Threat of New Entrants |
New Indoor games facilities |
high |
Unfavourable |
Threats to revenue generation |
|
Threat of Substitutes |
Outdoor sports |
high |
Unfavourable |
Threats to revenue generation |
|
Buyer Bargaining Power |
High |
High |
favourable |
High revenue generation |
|
Supplier Bargaining Power |
low |
High |
Unfavourable |
Eats into profits |
The threats of rivalry to Goldy Indoor Sports would come from the similar indoor games parlour. These indoor sports arenas also comprise of similar facilities in hotels, housing complexes or any other location. These rivals would compete with Goldy for customers, thus eating into its profits.
Threats of new entrants:
The new entrants consist of similar indoor sports facilities which would enter the market of New Zealand after Goldy. These firms are threats because they would compete for customers and revenue.
Buyers’ power is high in New Zealand. This is due to large number of available sports and entertainment options.
Suppliers power is low.
|
Dimensions |
Scenario Analysis against Monetary Contribution(Projected) |
Competition1 |
Competition 2 |
Competition 3 |
|
Price |
· Will be reasonable · Different price for different products · Customized pricing options |
Lower Price Range Constant Pricing |
Additional Quantity in the same price range Value Added Price |
Offers Pricing Features like discount vouchers, coupons. |
|
Core product offerings |
Reasonable |
Similar facilities |
Substitutes |
Extra time |
|
Value added product offering |
Reasonable |
Similar facilities |
Substitutes |
Vouchers, discounts |
According to table of part 5.3.2
|
Features |
Advantages |
Disadvantages |
|
a. High quality |
Customer satisfaction and revenue generation |
Initial investment high |
|
b. variety |
Customer satisfaction and revenue generation |
Initial investment high |
|
c. Facilities |
Customer satisfaction and revenue generation |
Initial investment high |
|
d. Social media communication |
Customer satisfaction and revenue generation |
Initial investment high |
|
Time Frame |
Potential Consumer Adoption (%) |
Measures to Achieve the Consumer Adoptions |
|
1st Year |
10 |
High quality of customer services and affordable value added services within Christchurch. |
|
2nd Year |
20 |
Expansion of sports facilities and adoption more innovative product offerings(both core and value added )(Figure 5) |
|
3rd Year |
30 |
Expansion within New Zealand into new markets |
|
4th Year |
40 |
International expansion into Australia |
|
5th Year |
50 |
Expansion into new markets outside Australia like Asia and North America |
Note: The above table would be based on part 4.2 as well.
|
Strengths: 1. Innovative sports facilities. 2. Strong yet customer centric value added services. 3. New identity would attract customers. 4. Safe environment. |
Weaknesses: 1. Limited financial capabilities. 2. Limited human resources. |
|
Opportunities: 1. Extension of product line. 2. Expanding into new markets first, within New Zealand and into foreign markets thereafter. |
Threats: 1. Competition from similar indoor facilities. 2. Government promotion of outdoor sports. |
The strength of the indoor sports facilities would be its new identity and safe environment. Its weakness would be limited financial strength in the initial phase and opportunities would be expansion both in short and long run as described below. Moreover, the indoor sports facilities would be able to attract limited human resources due to its limited financial resources in the initial stage. The business opportunities which Goldy Indoor Sports would enjoy would consist of expansion of product offering and expanding into new markets. The market expansion would initially take place within New Zealand and then into new foreign markets starting with Australia (table 9). The threats would come from similar indoor facilities. Government support to outdoor sports facilities would also prove to be a threat for the indoor sports facilities (Sportnz.org.nz, 2018). This is because this government support to outdoor sports would encourage more people to involve into outdoor sports, thus leading to reduction of customer football figures at the Goldy Indoor Sports.
Summary: New Zealand is politically stable and economically strong. The society in New Zealand would drive the business and the country is technologically strong as well. Moreover, the facilities would be viable.
|
Competitive Gap/Advantages |
Explanation |
Strategies to Address the Gaps/Proceed through the Advantages |
|
One Advantages based on6.1 and 6.2-The most important advantage |
High quality |
Quality development and innovation |
|
One Gap based on 6.1 and 6.2-The most vital gap |
Customer service |
Training and innovation |
Summary:
Assumption 1.
Target Market Size and Growth Rate:
The growth rate of the sports market in New Zealand is high. The government support to the sports industry is promoting the industry to a high rate (Nzherald.co.nz, 2018).
It would be assumed that the Goldy would enjoy steady growth in the future. This is because with the growing awareness about health benefits of sports, the firm can achieve steady growth in the future (Tait et al. 2016).
Assumption 2.
Market Penetration.
The country of New Zealand has a population of more than 46 lakh people as per census of 2016 (Archive.stats.govt.nz, 2018). This means that the sports industry of New Zealand can attract immense number of consumers as the population rise.
It would be assumed that Goldy would be able to achieve market penetration first within New Zealand followed by foreign markets starting with Australia. This would lead to expansion of its business within the country and abroad (Mfat.govt.nz, 2018).
Assumption 3.
Consumer Purchase Size, Frequency and Preferences:
The country of New Zealand is experiencing rise in population which means that sports companies can seek big purchase sizes. The increase in awareness among the people about importance of sports would also boost frequency of customers’ visits to sports facilities like stadiums and indoor sports arenas.
The business of Goldy Indoor Sports would be aiming to get a big purchase size right from its very inception. It would be assumed that the current purchase size would limited with NZD 80000 and expand in future.
Assumption 4.
Resource Requirement:
From the review of foreign restaurant business in New Zealand like Indian restaurants and other business like retail, it can be assumed that Goldy would be able to acquire resources from the local market in the initial phase (Pio & Dana, 2014). It would be assumed that the sports facility would acquire the resources with NZD 80000 in the initial stage from local markets and then from international markets at a later stage.
Assumption 5.
Price:
Assumption 6.
It would be assumed that the prices of both core and value added facilities would kept low to gain market penetration.
|
Startup Expenses |
|||
|
Year 1 |
Year 2 |
Year 3 |
|
|
Buildings / Real Estate |
|||
|
Purchase |
$ 55,000 |
55000 |
55000 |
|
Construction |
4,500 |
4500 |
4500 |
|
Remodeling |
– |
0 |
0 |
|
Other |
500 |
500 |
500 |
|
Total Buildings and R / E |
$ 60,000 |
60000 |
60000 |
|
Leasehold Improvements |
|||
|
Item 1 |
$ 5,500 |
5500 |
5500 |
|
Item 2 |
$ 5,500 |
5500 |
5500 |
|
Item 3 |
$ 5,500 |
5500 |
5500 |
|
Item 4 |
$ 5,500 |
5500 |
5500 |
|
Total L / H Improvements |
$ 22,000 |
22000 |
22000 |
|
Capital Equipment List |
|||
|
Furniture |
$ 25,000 |
25000 |
25000 |
|
Equipment |
$ 25,000 |
25000 |
25000 |
|
Fixtures |
$ 25,000 |
25000 |
25000 |
|
Machinery |
$ 15,000 |
15000 |
15000 |
|
Other |
$ 1,500 |
1500 |
1500 |
|
Total Capital Equipment |
$ 91,500 |
91500 |
91500 |
|
Location and Admin Expenses |
|||
|
Rental |
$ – |
0 |
0 |
|
Utility Deposits |
2,500 |
2500 |
2500 |
|
Legal and Accounting Fees |
2,500 |
2500 |
2500 |
|
Prepaid Insurance |
2,500 |
2500 |
2500 |
|
Pre-opening Salaries |
2,500 |
2500 |
2500 |
|
Other |
5,500 |
5500 |
5500 |
|
Total Location and Admin Expenses |
$ 15,500 |
15500 |
15500 |
|
Opening Inventory |
|||
|
Category 1 |
$ 1,500 |
1500 |
1500 |
|
Category 2 |
$ 1,500 |
1500 |
1500 |
|
Category 3 |
$ 1,500 |
1500 |
1500 |
|
Category 4 |
$ 1,500 |
1500 |
1500 |
|
Category 5 |
$ 1,500 |
1500 |
1500 |
|
Total Inventory |
$ 7,500 |
7500 |
7500 |
|
Advertising and Promotional Expenses |
|||
|
Advertising |
$ 1,500 |
1500 |
1500 |
|
Signage |
$ 1,500 |
1500 |
1500 |
|
Printing |
$ 1,500 |
1500 |
1500 |
|
Travel & Entertainment |
$ 1,500 |
1500 |
1500 |
|
Other / Additional categories |
– |
0 |
0 |
|
Total Adv and Promo expenses |
$ 6,000 |
6000 |
6000 |
|
Payroll and payroll taxes |
|||
|
Expense 1 |
$ 25,000 |
25000 |
25000 |
|
Expense 2 |
25,000 |
25000 |
25000 |
|
Total Payroll and payroll taxes |
$ 50,000 |
50000 |
50000 |
Summary:
It can be summarised that Goldy should aim to gain market penetration with high quality sports and supporting facilities. The prices as pointed out in the sixth assumption, should be kept low and the sourcing would be local. The pricing should be increased to meet the increasing revenue needs in the future.
|
Year 1 model inputs |
||||
|
Use this area to capture key components of the Profit and Loss Statement and the Balance Sheet for the first year only. |
||||
|
1. Year-one revenue expectancy |
||||
|
<Product 1> |
<Product 2> |
<Product 3> |
<Product 4> |
|
|
Number of units sold annually |
600 |
600 |
600 |
600 |
|
Average sales price per unit |
$35.00 |
$35.00 |
$35.00 |
$35.00 |
|
Annual revenue per product |
$21,000 |
$21,000 |
$21,000 |
$21,000 |
|
Total year 1 revenue |
$84,000 |
|||
|
2. Year 1 cost of goods sold |
||||
|
<Product 1> |
<Product 2> |
<Product 3> |
<Product 4> |
|
|
Expected gross margin per product |
5.00% |
0.00% |
0.00% |
0.00% |
|
Annual cost of goods sold per product |
$1,050 |
$0 |
$0 |
$0 |
|
Total year 1 cost of goods sold |
$1,050 |
|||
|
3. Annual maintenance, repair, and overhaul |
||||
|
Factor (%) on capital equipment |
0% |
|||
|
4. Number of years for straight-line depreciation |
5 |
|||
|
5. Annual tax rate |
30% |
|||
|
6. If long-term debt is being used to finance |
95,000 |
|||
|
Startup Expenses |
|
|
Buildings / Real Estate |
|
|
Purchase |
$ 55,000 |
|
Construction |
4,500 |
|
Remodeling |
– |
|
Other |
500 |
|
Total Buildings and R / E |
$ 60,000 |
|
Leasehold Improvements |
|
|
Item 1 |
$ 5,500 |
|
Item 2 |
$ 5,500 |
|
Item 3 |
$ 5,500 |
|
Item 4 |
$ 5,500 |
|
Total L / H Improvements |
$ 22,000 |
|
Capital Equipment List |
|
|
Furniture |
$ 25,000 |
|
Equipment |
$ 25,000 |
|
Fixtures |
$ 25,000 |
|
Machinery |
$ 15,000 |
|
Other |
$ 1,500 |
|
Total Capital Equipment |
$ 91,500 |
|
Location and Admin Expenses |
|
|
Rental |
$ – |
|
Utility Deposits |
2,500 |
|
Legal and Accounting Fees |
2,500 |
|
Prepaid Insurance |
2,500 |
|
Pre-opening Salaries |
2,500 |
|
Other |
5,500 |
|
Total Location and Admin Expenses |
$ 15,500 |
|
Opening Inventory |
|
|
Category 1 |
$ 1,500 |
|
Category 2 |
$ 1,500 |
|
Category 3 |
$ 1,500 |
|
Category 4 |
$ 1,500 |
|
Category 5 |
$ 1,500 |
|
Total Inventory |
$ 7,500 |
|
Advertising and Promotional Expenses |
|
|
Advertising |
$ 1,500 |
|
Signage |
$ 1,500 |
|
Printing |
$ 1,500 |
|
Travel & Entertainment |
$ 1,500 |
|
Other / Additional categories |
– |
|
Total Adv and Promo expenses |
$ 6,000 |
|
Payroll and payroll taxes |
|
|
Expense 1 |
$ 25,000 |
|
Expense 2 |
25,000 |
|
Total Payroll and payroll taxes |
$ 50,000 |
|
Long-term debt from loan payment calculator |
95,000 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
Other long-term debt |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
Total debt |
$160,000 |
$65,000 |
$65,000 |
$65,000 |
$65,000 |
$65,000 |
Summary:
It can be pointed out that Goldy should increase its revenue generation in the long run. It must aim to gain financial sustainability.
Mowforth and Munt (2015) can be defined as the way of utilising resources making the product hard to replicate, customise and yet ensure sustainability.
Summary:
The facility should aim to ensure high quality indoor games at affordable pricing.
Conclusion:
It can be concluded that Goldy should enter the market of New Zealand and expand into Australia at a later stage. The management should maintain high high of facilities through its business operations. The indoor sports facilities should also try to gain market foothold in Christchurch at a very early stage. It should promote its business aggressive in the market to expand its revenue generation. It must also acquire power to adapt to the market needs of host countries at its expands overseas.
It can be recommended that Goldy should acquire similar firms outside New Zealand. It can also be recommended that the indoor sports facility should aim at acquiring more sports arenas. It can also be recommended that the sports facilities should use marketing to outpace new competitors.
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