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Entrepreneurship is the key for the business organizations to provide unique and innovative products or services to the target customers. Entrepreneurship is the business strategy of undertaking financial risks by the business organizations in the hope of profit (Drucker 2014). This is because the target customers might not prefer the innovation in the product or service brought in by the company.
This report introduces the smart and technological LINX cycling helmet launched by COROS. The report highlights background, idea of the product or the service along with analyzing the market. The marketing plan of the target customers is also developed along with analyzing the critical risks of for the company and the product.
COROS aim towards launching a new product for the Australian market that will offer various services to the cyclists. The product aimed to be launched by the company is LINX smart cycling helmet. The company is located in Perth Australia. The company aim towards launching the LINX smart cycling helmet based on the demand of the Australian market. Cycling is highly preferred by the Australian population because the population is highly concerned about individual health and the environmental aspect. Moreover, mountain cycling is becoming highly popular among the youth and the tourist of the country. Therefore, the company is excited to launch the LINX smart cycling helmet due to the different innovative features of the product (Kirzner 2015).
The idea behind the launch of the LINX smart cycling helmet is to provide smart features to the cyclists along with ensuring safety for the cyclists. For example, mountain cycling provides opportunity of exploring the scenic beauty that riders wants to capture. Therefore, capturing and video recording of the scenic beauty while riding is a facility preferred by the cyclists. Alongside, measuring the heartbeat and calories burned are additional features that are preferred by the cyclists. The companies found the preferences by analyzing the Australian market and therefore, aim towards fulfilling the demand of the customers. The LINX smart cycling helmet launched by the company has various innovative features included in the helmet (Barringer 2012).
By launching the LINX smart cycling helmet, the company wants o increase the profit margin of the business. This will be a one of its kind-cycling helmet, as other helmets in the market only offers safety features to the cyclists. The company hopes to educate and enlighten the customers about the appropriate use of the smart helmet. Additionally, the company also aims towards giving fun and exciting features to the cyclist while cycling for the purpose of adventure, exercising and daily use. This will help in creating a unique image in the eye of the customers and they will look for the company and its products years after years for innovative service. The management of the company will find great satisfaction in regards to the way the population will live a healthy life as well as contributing to the community and the environment (Kelly, Singer and Herrington 2012).
The LINX cycling smart helmet has wide range of unique and innovative services to offer along with ensuring safety. The main priority of the company is to ensure safety for the cyclists. Thus, the helmet is manufactured by polycarbonate shell with EPS impact foam with aerodynamics-optimized ventilation up to 15 vents. For making the product available for wide range of customers, the helmet will be available in both medium and large sizes. This will helps in reducing the level of sound for the cyclist so that their level of concentration increases thereby, mitigating the probability of accidents (Sheard and Corsini 2012). The helmet also provides the facilities of receiving and making calls along with listening to music and voice navigation. Due to such features offered by the helmet, bone conduction transducers type of speaker was used with 100-decibel speaker sensitivity (ElHansy et al. 20117). The LINX smart cycling helmet can be used for daily used as well as mountain cycling. Considering this features, the company has used wind resistant microphone. The battery capacity of the helmet will be approximately 10 hours per day and is manufactured by lithium. As a result, the battery used for the helmet exhausted less battery in spite of using calling and music facilities. The compatibility of the helmet will include 4.0, iOS and android devices.
Additionally, the company has also considered that the weight of the helmet needs to be minimal. This will put less pressure for the cyclists thereby, mitigating the chances of neck and shoulder pain. Therefore, the weight of the helmet will be approximately 400 grams. In spite of having so many features included in the helmet, the product is certified by consumer product safety commission. For the customers, the company has kept one-year warranty period in case of emergencies such as breakage and disfunctioning of the features (Vdovin 2013).
Prior to the launch, the company needs to analyze the present market both in terms of industry and in terms of the competitors. This will allow the company to used appropriate marketing strategies in terms of promotion, distribution, innovativeness and pricing strategies. Analyzing the market will allow COROS to understand its position compared to the other companies in the market that offers similar products.
P- Australia is governed by federal constitutional monarchy under the parliamentary democracy
E- They have a strong economy with variety of natural resources. Their trade is based on the five principles of unilaterism, non discrimination, separation, transparency and indivisibility of trade policies.
S- Aborigines were the first people of Australia. English is the most common language spoken in Australia.
T- The access to internet by the Australian households has grown over the years. Expenditure on research and development has also reached the highest level.
E- The continent has a large portion of unique plants and animals that cannot be found anywhere. The challenges include global warming, conservation of marine fauna, ocean dumping, and so on.
L- The legal system is based on the rule of law, justice and independence of judiciary. They have eight state and territory systems and one federal system (Kremer and Symmons 2015).
From the PESTLE analysis of the Australian market, it can be suggested that the country has a strong and stable political scenario that facilitates the growth of business organizations along with launching new products by the existing business organizations. The country has one of the growing economies and GDP in the world favoring business ventures. The legal system is also stable facilitating the growth of business in the country. Based on the above analysis, it can be suggested that the launch of LINX smart cycling helmet by COROS is appropriate.
In order to analyze the current market, the company will use Porter’s five forces. This will help in determining the attractiveness of the industry. According to (E Dobbs 2014), Porter’s five forces includes industry rivalry, threat to substitutes, and bargaining power of the buyers, suppliers, and barriers to enter the market.
As mentioned by (Yunna and Yisheng 2014), the entry barriers of the market is the potential threat for the new products entering the market. This combines the economy and the operational scope such as cost structure, product differentiation, customer loyalty and the switching cost. The helmet manufacturing industry is a large industry globally that includes high capital costs that indicates high total and fixed costs. High amount of economies scales is noticed in the helmet manufacturing industry due to which the cost capital needs effective management. This will allow effective management of project resources for manufacturing helmets in terms of finance. The main aim of the company is to provide additional facilities to the customers along with ensuring safety while cycling. The factors that will help the product are the innovative features. The latter factor is dependent on the management of the company as the expansion of the helmet manufacturing industry is slow, as it is not favored by most of the population.
As mentioned by Porter and Heppelmann (2014), except recession the purchasing of products are not hampered. Theoretically, the role of substitute products aims towards reducing the cost or charging higher price for the product. The organizations in the hotel manufacturing industry can compete with each other based on the innovativeness of the product. The competition between the manufacturers is also based on the unique facilities they can provide along with safety for the cyclists (Fischberg et al. 2013).
The suppliers of the helmet manufacturing industry might become powerful if the company emphasizes more on the demand of the customers rather than considering the the command for the business shares. The customers are vulnerable to product differentiation and costs of the product. Therefore, the customers will not prefer spending extra amount due to the market demand of the product. In addition to, if the features affect the image and quality of the LINX smart cycling helmet (Lee, Kim and Park 2012).
The helmet manufacturing industry might be affected by the bargaining power of the buyers, as they are concerned in purchasing the product. The group of buyer for the LINX smart cycling helmet includes the health fitness individuals, customers for using cycling daily and the tourists. The strategy is restricted for the aforementioned group as targeting other customers will incur loss for the organization (Marshall 2013).
The level of competition is based on the size and the number of competitors that are present in the potential market. The market competition is fierce when it comes to product differentiation and switching the cost that are rather low. The competition emphasizes costs that are more fixed (Rothaermel 2015).
In order to launch the unique and innovative product, COROS needs to target the potential customers. As commented by Liao et al. (2012), targeting customers allows the business organizations to emphasize on the needs and demands of the customers thereby, implementing operational, pricing and promotional strategies accordingly. The customers targeted by the organization are the children, young adults and the tourists. The Australian population suffers various complications in terms of health due to unhealthy lifestyle and diet. Therefore, they suffer from disorders such as obesity and other diseases. Therefore, targeting the children and the young adults are justified selection by the company. The additional features incorporated by the company within the helmets will attract the children and the young adults to exercise and use cycling for daily use. Features such as listening to music, making calls and video recording will influence the target customers for cycling.
Additionally, the company has also targeted the tourists that prefer adventure and mountain cycling. The helmet will be extremely beneficial for the tourist as they will be able to record the areas they are exploring. Targeting the tourists is a business strategy implemented by COROS to invade the secondary markets as well. If the features and the benefits of the helmet will spread among the tourists, the company will be able to promote the helmet to other countries by word of mouth. Therefore, the company can prepare for international expansion in future.
As commented by Ananda, Hernandez-Gracia and Lamberti (2014), marketing helps the company in communicating the products and its features to the target customers. Therefore, appropriate marketing will help COROS in communicating the unique and innovative features of the product to the target customers. This will help in making the product known among the target customers along with maximizing the sales. Sales maximization will help COROS in earning profit and expand the business.
The product launched by COROS is LINX smart cycling helmet. The helmet differs from the normal cycling helmets as it offers wide range of services. The helmet weighs only 400 gms and is manufactured by polycarbonate shell with EPS impact foam. The helmet has the facility of video recording that will help the customers to capture the scenic beauty for leisure purpose. On the other hand, the helmet also offers facilities such as making calls, listening to music and audio GPS navigation. Therefore, the helmet can also influence the decision of the customers for using cycling at a regular basis for work purpose. This will be beneficial for the individual customers as well as the environment.
Based on the target customers and the wide range of facilitates offered by the helmet the company has implemented penetration pricing strategy for the helmet. The starting cost of the helmet for the Australian population is minimum $200. The company has kept low price for the product initially, as this will help in convincing the customers for buying the helmet. The low price will not make the target customers think much before investing or purchasing the product. Comparatively low price of the helmet will help in attracting more customers when the product will be launched.
COROS has decided to distribute the product from the stores. The product will be sold from various shops that are selling bicycles and the shops that are selling exercising equipment. Distributing the helmet from the store will allow the customers to evaluate the product physically. This will provide an opportunity for the customers to understand the features of the helmet thereby, influencing the purchasing decision. Apart from the distributing the product from the stores, the company will distribute the helmet online. Selling the product online will provide an opportunity for the company to reach out to customers even in the absence of the stores (Meng and Chatwin 2012). Therefore, this will provide opportunity for COROS to invade the secondary market as well.
COROS has used various types of promotional strategies in to order to communicate the product to the target customers. As a promotional strategy, the company displayed displayed the features of the LINX smart cycling product by organizing a grand opening of the product. Keeping in the the innovative features that can influence the target customers for using the product, COROS has decided to associate the product with one of the youth icons or celebrities. This was a psychographic segmentation used by the company for attracting the customers. Alongside, as the promotional strategy, the company will be releasing the videos concerning the product by broadcasting it through social media (Bakshi and Gupta 2013). This allowed the company to promote the product by livestreaming videos related to the product and attracting the customers.
|
Legal |
$1,300 |
|
Brochures |
$3,580 |
|
Consultants |
$3,000 |
|
Insurance |
$2,400 |
|
Rent |
$4,400 |
|
Store setup |
$10,000 |
|
Other |
$2,500 |
|
Cash required |
$67,123 |
|
Startup Inventory |
$16,027 |
|
Other current assets |
$0 |
|
Long term assets |
$59,170 |
|
Startup expenses to fund |
$27,680 |
|
Startup assets to fund |
$142,320 |
|
Non-cash assets |
$75,197 |
|
Cash requirement |
$67,123 |
|
Additional cash raised |
$0 |
|
Cash balance on starting date |
$67,123 |
|
Current borrowing |
$10,000 |
|
Long term liabilities |
$20,000 |
|
Accounts payable |
$0 |
|
Other current liabilities |
$0 |
|
Planned investment |
$140,000 |
However, there are some significant risks of launching the LINX smart cycling product. The company predicts that the product might fail in attracting the potential customers. This is because the company might fail to create a unique image in the eye of the target customers. The children and the young adults might not consider the beneficial aspect of the cycling both in terms of the environment and in terms of individual. Therefore, the target customers might not prefer to buy the LINX smart cycling helmet.
On the other hand, the target customers might not prefer buying the smart helmet due to its various technological features. Such as the parents might hesitate in allowing the children to use the helmet while cycling due to features such as making calls, video recording and listening to music. The parents might think such technological features will restrict the target customers from concentrating while cycling. As a result, the chances of accidents while wearing the helmet is more compared to normal cycling helmets.
Conclusion
In this report, it can be concluded that the new, unique and innovative product COROS wants to launch for the Australian market is the LINX smart cycling helmet. The helmet is one its kind as it provides various other services along with ensuring safety for the cyclists. The helmet had facilities such as measuring the heartbeat, number of calories burnt along with making calls, video recording and voice GPS navigation. Keeping in mind the daily needs and health of the population, the company has selected the young adults and children as the target customers. A financial plan for the launch of the cycling helmet is done for estimating the overall budget. The market and competitors analysis highlights that Australia is a stable company and favors the launch of the new product. Additionally, a marketing plan is devised for the company to launch the product that includes product, price, promotion and place.
References
Ananda, A.S., Hernández-García, Á. and Lamberti, L., 2014, June. RENL: A framework for social media marketing strategy. In 1st Annual EDIM PhD Conference, Milan, Italy (pp. 11-12).
Bakshi, G. and Gupta, S.K., 2013. Online advertising and its impact on consumer buying behavior. International Journal of Research in Finance and Marketing, 3(1), pp.21-30.
Barringer, B., 2012. Entrepreneurship: Successfully Launching New Ventures, (2012).
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
ElHansy, M.H., Boules, M.E., Farid, H., Chrystyn, H., El-Maraghi, S.K., Al-Kholy, M.B., El-Essawy, A.F.M., Abdelrahman, M.M., Said, A.S., Hussein, R.R. and Rabea, H., 2017. In vitro aerodynamic characteristics of aerosol delivered from different inhalation methods in mechanical ventilation. Pharmaceutical development and technology, 22(6), pp.844-849.
Fischberg, D., Bull, J., Casarett, D., Hanson, L.C., Klein, S.M., Rotella, J., Smith, T., Storey, C.P., Teno, J.M., Widera, E. and Force, A.C.W.T., 2013. Five things physicians and patients should question in hospice and palliative medicine. Journal of pain and symptom management, 45(3), pp.595-605.
Kelley, D.J., Singer, S. and Herrington, M., 2012. The global entrepreneurship monitor. 2011 Global Report, GEM 2011, 7.
Kirzner, I.M., 2015. Competition and entrepreneurship. University of Chicago press.
Kremer, P.D. and Symmons, M.A., 2015. Mass timber construction as an alternative to concrete and steel in the Australia building industry: a PESTEL evaluation of the potential. International Wood Products Journal, 6(3), pp.138-147.
Lee, H., Kim, M.S. and Park, Y., 2012. An analytic network process approach to operationalization of five forces model. Applied Mathematical Modelling, 36(4), pp.1783-1795.
Liao, S.H., Chu, P.H., Chen, Y.J. and Chang, C.C., 2012. Mining customer knowledge for exploring online group buying behavior. Expert Systems with Applications, 39(3), pp.3708-3716.
Marshall, S., 2013. Evaluating the strategic and leadership challenges of MOOCs. Journal of Online Learning and Teaching, 9(2), p.216.
Meng, S.K. and Chatwin, C., 2012. Measuring e-marketing mix elements for online business. International Journal of E-Entrepreneurship and Innovation (IJEEI), 3(3), pp.13-26.
Porter, M.E. and Heppelmann, J.E., 2014. How smart, connected products are transforming competition. Harvard Business Review, 92(11), pp.64-88.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Sheard, A.G. and Corsini, A., 2012. The mechanical impact of aerodynamic stall on tunnel ventilation fans. International Journal of Rotating Machinery, 2012.
Vdovin, A., 2013. Investigation of Aerodynamic Resistance of Rotating Wheels on Passenger Cars.
Yunna, W. and Yisheng, Y., 2014. The competition situation analysis of shale gas industry in China: Applying Porter’s five forces and scenario model. Renewable and Sustainable Energy Reviews, 40, pp.798-805.
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