Discuss about the Srategic Management For A Business Start Up.
The study aims to do a complete research on the strategic management of an emerging business; it will include the SWOT analysis, management dimensions, goals and targets, competition and financial forecast of the business. A dry fruit company is starting up in Pakistan that is taking initiative to do a study on its strategic management system.
The company has a vision to focus on the strategic management and establishment of the business in the market. The newly started business focuses on the product quality and standard initially.
The mission of the company is to create a good name and position in the market. The company targets to compete with the rival companies and create their own position in the market.
The improved farming practises boost the output products and opportunities for the company to assure a better outcome in the dry fruit production. They target to give highest product quality and services to the consumers.
The organization is an emerging organization with a small capital investment. However, it targets to reach the customer in a loyal and efficient way by providing the best product quality to the customers. The organization processes for product betterment instead of focusing in high scale profit.
The initial investment is quiet low for the company. They have targeted to increase the business further with the business profit. The business is starting up with low investment where the maximum investment is focusing on the product quality so that they can provide the best quality product to the customer and make their position in the market.
The business structure is a pyramid structure where the top most block is considered to be the chair person who makes most of the decisions. The second block is consisting the HR, manager, operations manager. The third block is consisting the designer, taster, marketing head. The last block beholds the workers or the employees who is responsible for the product manufacturing process.
Strength:
Weakness:
Opportunities:
Threats:
The area that has been selected for the company is not too far from the city. The main reason for such an area is , this business production does not require too many chemicals neither it emits too many pollutants. The premise has been selected near the railway station so that it becomes easy for the company to send the products to the desired destination. It will also be easy to bring the raw material from this source. The location is not too far from the highway thus enhancing the workers ease to communicate and travel from the company(Jackson et al 2014).
The business has set plan to expand its territory after few years. However, initially it is trying its best to provide proper processing machines and using different methods to produce the best quality fry fruits to gain the customers trust. It plans to increase the price in the later future when the company will already have a fame of its own.
The company requires major equipment like cleaning and drying machines that will dry the products, processing machines that will process the products with proper blend of flavour and taste. It will require a packaging machine, a labelling machine.
Goals and market share-
The company has a primary goal for reaching the customers and spreading the brand name everywhere. It is an rising brand and thus the company requires a lot of effort to make its own position in the market. The market is already having a tough competition for dry fruits and thus they have to struggle a lot to create a market demand for the product.
Marketing:
The company is targeting to reach the customers initially by advertising in the public areas through banners and posters. The company is planning to give offers and discounts to attract the customers for trying the products. They are assuring that if the customers try the products once they will surely like it in future.
Sales:
The company has contacted the retail stores in various parts of Lahore and contracted them to give them a discount of 25% if they take the whole years product from this store (Saeed et al 2013.). They are also targeting to expand the retail store number by spreading the news of their offer to the other states in the country.
The company is targeting to provide the best quality to the customer and tries to make sure that they meet the customer demand. The company is dedicated to the customer and targets to maintain the quality product standard in the market. The business has kept a logic of less price high quality product in the market, thus attracting the customer to chose this product among the rest.
Pricing:
The company has kept a low price rate for the product at the first stage. The company targets to create a demand for the product in the market. This only possible if the product is of good quality and low price(Rehman et al 2015). The company targets to give a low price initially and as the demand will grow the prices will also rise in the market.
Suitable business strategy:
Their business strategy is very plain and simple. The company aims to create a demand in the market and then create revenue from there for further expansion dn stretch. The company is completely customer oriented and tries to satisfy the customer demand for dry fruit at every level.
The industry:
The export of dry fruit industry is increasing due to a rise in the farming practises that is boosting the output and increasing the opportunity of entering into conventional markets and exploring new industry to enter. The annual output of dry fruits has shown an increase in the past few years, which assures the market growth in later future also. In Pakistan, there is a huge quantity production for dry fruits in the market. The production of almond is only prominently seen in the market and apart from that, rest productions are either unavailable or too scattered in the market(Werth and Boeert 2013). The army led area has helped to recover the areas where dry fruits are grown. Thus, it has further supported the whole system of dry fruit industry in the market of Pakistan (SartajAli et al 2015). The export market is also opening up in china and in the other eastern countries. This is further extending the scope for the industry to survive and rule the market and economy of the country. The company will face a tough competition in the market as the business will face a huge competition. At the same time the company will face huge scope for the business to expand and extend in the export industry due to the new openings in the export gateway.
Target market-
The target market focuses on every variety of consumers as dry fruit is on high demand for every age and gender. The company will focus specially on consumers who are interested in health conscious steps. The company targets to export the products in countries, which has a deep concern for health care. The company is targeting the middle aged and young generation, however the old generation also has a position in their target list. The company is trying to reach the customers who have a strong health conscious concern and are regularly dependent on dry fruit diet. It also focuses on consumers who are involved in supports activities and travelling. The demand for dry fruit among such consumer is also extremely high as the consumers tries to keep such food stock with them during the journey which can be long lasting and highly energetic(Warner 2014). The company is targeting both the section of society, the middle class and the premium class. The lower class society generally do not involve such food habits and thus they do not have a demand in such society. The company is trying to reach the middle class country and society by reducing the price of the product and thus attracting the consumers with the quality products.
Market competition-
The prices of dry fruits have increased in the country as the market demand for dry fruit has increased in a huge scale. The country prices of dry fruits differ on their product types. The country exports a huge quantity to the countries like Europe, Russia, Asia, India, and China. There is a clear demand for the product in national and inter-national market. Thus, the company will face a huge competition in the market and has to struggle among the already existing companies to make their own demand in the market. Being an emerging company the company has to make useful strategies to meet such competition and make necessary changes to create a place in the market.
Bargaining power of supplier: (high)
The bargaining power of the suppliers is very high for this new emerging company. Many companies manufacture these products thus the suppliers have a variety of choice to alter their customer (Shahzad, Iqbal and Gulzar 2013).
Bargaining power of customer: (high)
The bargaining power of the customer is also high as the country has a huge collection of companies that manufactures the same product. The customers can shift the brand whenever they feel like.
Threat to substitution: (high)
The threat to substitution is also high as the country has many companies that are producing similar products and hence the brand can be easily altered by any other brands in the market.
Competitive rivalry: (high)
The competitive rivalry is extremely high for the company as the country has a huge stock for dry fruit producing companies and all the companies are bringing new strategies to create their own place in the market.
Threat to new entrants: (high)
The chances of new entrant are also high in this market. The market has huge scope for expansion and new entrants to enter. The demand will increase in the further future thus the companies will also enter the market to transact business in this field.
Set up cost:
The set up cost will be as such:
|
Particular |
Amount |
|
Machineries |
523.235 |
|
Chemicals |
320,000 |
|
Packaging cans |
450,000 |
|
Plastics |
325,000 |
|
Labour cost |
121,000 |
|
Building |
600,320 |
|
Rent for land(deposit+monthly) |
200,000+80,000 |
Profit and loss forecast:
The profit and loss forecast will be as follow:
|
Expenditure |
Amount |
Income |
Amount |
|
Packaging |
50,000 |
Online sale |
180,000 |
|
Labour |
65,000 |
Retail store |
100,000 |
|
Electricity |
20,000 |
Commission |
70,000 |
|
Chemicals |
15,000 |
||
|
Rent |
80,000 |
||
|
Total |
230,000 |
350,000 |
It is expected that if the target of the company is achieved then the company will meet a profit of Rs.120, 000.
Cash flow forecast:
|
Particular |
Amount |
|
Rent |
80,000 |
|
Tax |
35,000 |
|
Chemicals |
30,000 |
|
Labour |
65,000 |
|
Electricity |
20,000 |
|
Total |
230000 |
Balance sheet forecast:
|
Assets |
Amount |
Liabilities |
Amount |
|
Current asset: |
Loan |
500,000 |
|
|
Cash |
70,000 |
Salaries |
65,000 |
|
Rent |
80,000 |
Tax |
35,000 |
|
Raw materials |
15,000 |
||
|
Non-current asset: |
|||
|
equipments |
523,235 |
||
|
Total |
688,235 |
600,000 |
References:
Anjum, A.S., Zada, R. and Tareen, W.H., 2016. Organic farming: hope for the sustainable livelihoods of future generations in Pakistan. Journal of Rural Development and Agriculture, 1(1), pp.20-29.
Blank, S., 2013. Why the lean start-up changes everything. Harvard business review, 91(5), pp.63-72.
Brooks, G., Heffner, A. and Henderson, D., 2014. A SWOT analysis of competitive knowledge from social media for a small start-up business. The Review of Business Information Systems (Online), 18(1), p.23.
Jackson, J., Asif, M., Bradford, B. and Zakria Zakar, M., 2014. Corruption and police legitimacy in Lahore, Pakistan. British Journal of Criminology, 54(6), pp.1067-1088.
Rehman, A., Jingdong, L., Du, Y. and Khatoon, R., 2015. Banking role and loan schemes for agricultural development in China & Pakistan. Global Journal of Human-Social Science Research.
Saeed, R., Mussawar, S., Lodhi, R.N., Iqbal, A., Nayab, H.H. and Yaseen, S., 2013. Factors affecting the performance of employees at work place in the banking sector of pakistan. Middle-East Journal of Scientific Research, 17(9), pp.1200-1208.
SartajAli, T.M., Abbasi, K.S., Ali, A. and Hussain, A., 2015. Some compositional and biochemical attributes of jaman fruit (Syzygium cumini L.) from Potowar region of Pakistan. Research in Pharmacy, 3(5).
Shahzad, F., Iqbal, Z. and Gulzar, M., 2013. Impact of organizational culture on employees job performance: An empirical study of software houses in Pakistan. Journal of Business Studies Quarterly, 5(2), p.56.
Warner, M., 2014. Culture and management in Asia. Routledge.
Werth, J.C. and Boeert, P., 2013. Co-investment networks of business angels and the performance of their start-up investments. International Journal of Entrepreneurial Venturing 1, 5(3), pp.240-256.
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