The start-up organization of my choice will provide services of a gym and yoga center, a beauty and skin clinic, a slimming center and an Ayurvedic massage clinic under one roof. The start-up organization will start as a small and medium size enterprise (SME) and will be first opened in Sydney. The organization will operate in service industry. Once the organization makes profit in Sydney, it will be started in different other parts of Australia like Canberra, Perth, Brisbane and Melbourne. The strategy of the organization will be to cater to the holistic beauty and fitness requirements of the emerging segment of population who wants to stay fit and look youthful. The vision of the organization will be to provide best-quality services to clients by adopting the best innovation from technological research in the arena of beauty and fitness (Lim, Husain & Zakaria, 2013).
In a developed country like Australia the most common business structures are sole trader, partnership, company and trust. The organization structure that will best suit my business start-up will be general partnership. In general partnership, the management of the business is equal responsibility of each partner; each partner will share unlimited liability for the obligations and debt incurred by the business. The beauty and fitness center will adopt a flexible structure with less hierarchical level. Like any other service industry, the front-office operations of the start-up will be managed by reputed doctors who will provide consultation services to client and will be able to suggest the best fitness and beauty therapy for them after an in-house clinical analysis of their body and skin. The therapists and trainers will be the front-line employees who will provide services to clients. The back end operations of the organization will be managed by a marketing and finance team. Each team will have its business head, manager and executives. Thus the organization structure will comprise of staffs of the start-up like doctors, massage therapist, gym and yoga trainer as front-line employees and marketing and finance employees as back-end employees (Rummler & Brache, 2012). The organization will be opened in New-Zealand on franchise mode once it beaks-even in Australia. The structure of the organization will be general partnership, strategy will be to provide premium, innovative and holistic beauty and fitness services to clients and systems will cater to an open organizational model((Lim, Husain & Zakaria, 2013).
The external environmental forces of the organization can be analyzed by two models called the PESTEL model and the Porter’s 5 forces model. The prime arenas of external business environment are political, economic, social, technological, environmental and legal factors. PESTEL analysis will help an organization to analyze its position with respect to external business environment. The political factors of Australia that will affect the start-up are political stability, sound governance and transparent regulatory system. The service sector dominates the Australian economy. Economic policies which favor ease of doing business in Australia and open market and fewer restrictions are economic factors that will impact the start-up. The Australian society is open to try new beauty services and customers are willing to pay premium price to stay fit and look younger. The technologies that will impact the start-up are innovative procedures like Botox, derma-fillers, chemical peels and various other cosmetic procedures. The Porter’s 5 forces models analyze the barriers of entry, the power of supplier, the threat of substitutes, the power of buyer and the rivalry of competitor. This model helps to analyze the market and industry in which the firm operates. For the beauty and fitness center threat of new entrants and substitutes are high, buyer power is moderate because buyers are willing to pay premium price to avail premium quality beauty services, bargaining power of suppliers is moderate and degree of competitor rivalry is medium because the start-up organization will cater to holistic beauty and fitness requirements of clients (Boxall & Purcell, 2011). The internal environmental forces of an organization can be measured by the Mc-Kinsey-7-S model (Tushman, Lakhani & Lifshitz-Assaf, 2012). The structures, strategy and systems are the hard Ss of an organization. The soft-Ss of the organization are Staff, Styles, Skills and Shared Values. The SWOT analysis analyzes the internal strengths and weakness and external opportunities and threats and the TWOS matrix can be useful to indentify four strategic alternatives of Strength-Opportunities(SO), Strengths- Threats(ST), Weakness-Opportunities(WO), Weakness- Threats(WT). The styles and shared values will be to provide customized and premium services of highest quality to clients. The internal strength of the start-up will be that it will adopt modern and innovative technology in the field of beauty and fitness, the weakness will be difficulty in hiring skilled staffs, the opportunity will be a growth in number of clients who want to avail beauty and fitness services and threat will be from substitutes and new-entrant (Boxall & Purcell, 2011). The start-up will adopt a strength-opportunities strategy (Tushman, Lakhani & Lifshitz-Assaf, 2012).
It is important to analyze the probability or likelihood of risks and the impact or consequence of risks. The most common risks of a business organization are risks related to poor market research; risks related to poor management of supplier relationship, risks related to change in economy, risk associated with change in law of government and risks related to poor monitoring of activities of competitor. The risks that my organization might confront will be from competitors (David, 2011). There will be threat from new entrants and high competitive rivalry in this service sector. Thus it will be important for the start-up to benchmark the business practices against the best practices of the industry (Meredith Belbin, 2011). The start-up can do so by carefully studying the business practices of competitors and implementing a highly innovative service to clients. The benchmarking of business practices against competitors will help in risk management (David, 2011). The risk mitigation, avoidance, acceptance, limitation and transference are common strategies to manage risks of a firm. For the start-up the risk from competitive rivalry can be mitigated by focusing on client retention. Client retention is one of the best ways to mitigate risks from competitive rivalry for my start-up because repeat purchase from loyal clients is much more effective than gaining new clients which involves more cost (Beardwell & Thompson, 2014). The organization will mitigate risk by adopting the strategy to provide services to clients by implementing modern and innovative technological development in the field of beauty and fitness (Boxall & Purcell, 2011).
The engagement of employees is an important business practice in the modern era of competitive business environment. The cognitive, emotional and behavioral aspects of employee engagement are important. The power, rewards, knowledge and information are four aspects of employee engagement. For our start-up the doctors will be the first point of contact who will suggest best treatment for client after analyzing his skin and body. The cosmetic procedures like chemical peels, anti-aging services like Botox and Derma fillers which will be provided to clients by doctors. The therapists will receive training related to Ayurveda and the gym trainers will provide customized training and diet-chart to clients (Rummler & Brache, 2012). The front-line-employees of the start-up will be rewarded based on quality of service to each customer and feedback from customers will be taken to improve the quality of service (Hendry, 2012). The start-up will focus on customer retention by implementing customer loyalty programs. The customers of the start-up will be retained by below-the-line promotional activities like in-store promotions. The business practice of the start-up will focus on rating of the front-line executives by customers. This will help to measure customer satisfaction level and thus improvement in service delivery process can be implemented (Lengnick-Hall, Beck & Lengnick-Hall, 2011). The organizational structure will be flexible with open communication model (Hollensen, 2015). In the employee engagement process, the front-line employees will receive professional training from industry experts and the process of employee engagement will be implemented by involving front-line employees in participative decision making (Guest, 2011).
The four important functions for a business organization are operations, marketing, finance and human resource. The most important functions for my start-up will be operations and marketing. The front-line operations will provide high quality beauty and fitness services to clients. The employees of the start-up will be skilled in delivering services related to yoga, Ayurvedic massage and beauty services like Botox and derma-fillers and train clients for physical activities at gym. The marketing activities will be a back- end operation which will focus to increase footfalls of customers in the beauty and fitness center. The marketing department will focus on both above-the-line promotional activities using local media, below-the-line promotional activities like in-store promotional activities for clients and promotion using digital media. An Integrated-marketing communication model will be adopted by the marketing department (Hollensen, 2015). The operations department will focus on training of employees so that they can operate modern machinery related to beauty and services and can deliver an incredible service experience to clients. Each client will receive a personalized service based on his individual requirement of beauty and fitness. The start-up organization will focus on customer loyalty and retention program. The organization will do so by introducing a customer loyalty card by which loyal customers will be allotted bonus points each time they avail services in the start-up. The clients will be retained by introducing a pre-paid card valid for a minimum of 2 years. The clients can make a one-time payment in these cards and can avail services throughout a specific time-period (Hendry, 2012).
Conclusion
It can also be recommended that the organization should tie-up with local movie halls and restaurants so that loyal customers of the start-up can receive discounts in those retail outlets. This will be a win-win situation for both the start-up and retail outlets because this process helps in co-branding and increases customer footfall. This process will also facilitate in retention of customers and the customer loyalty program will enhance the competitive advantage of the organization. It can be recommended that the start-up should manage business process using technology like Enterprise Resource System. It can be concluded that though this start-up will face competitive rivalry yet it can achieve business process excellence by implementation of innovative technology in beauty and fitness and focusing on customer service and retention.
Reference List
Beardwell, J., & Thompson, A. (2014). Human resource management: a contemporary approach. Pearson Education.
Boxall, P., & Purcell, J. (2011). Strategy and human resource management. Palgrave Macmillan.
Guest, D. E. (2011). Human resource management and performance: still searching for some answers. Human resource management journal, 21(1), 3-13.
Hendry, C. (2012). Human resource management. Routledge.
Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.
Lengnick-Hall, C. A., Beck, T. E., & Lengnick-Hall, M. L. (2011). Developing a capacity for organizational resilience through strategic human resource management. Human Resource Management Review, 21(3), 243-255.
Lim, T. P., Husain, W., & Zakaria, N. (2013). Recommender system for personalised wellness therapy. International Journal of Advanced Computer Science and Applications, 4(9), 54-60.
Meredith Belbin, R. (2011). Management teams: Why they succeed or fail. Human Resource Management International Digest, 19(3).
Rummler, G. A., & Brache, A. P. (2012). Improving performance: How to manage the white space on the organization chart. John Wiley & Sons.
Tushman, M., Lakhani, K. R., & Lifshitz-Assaf, H. (2012). Open innovation and organization design.
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