Abayas Website

Introduction

The proposed Abayas Website will be an online-based business in the form of a website that will enable Emirati women to order Abayas without going to the shop itself and delivering the Abayas direct to their homes. Within the website, customers will be able to choose the price by putting their budget limit, the material of the Abayas, the day of the delivery, and whatever design they like. The format of the business will be a partnership involving four friends who will contribute equally in financing and managing the online-based business.

Mission, Vision, and Strategy

Strategy

The entire business is based on the ability to simultaneously coordinate the online ordering and timely delivery of the Abayas to the customer at the comfort of their homes. The motto of the company is reliability and hustle free Abayas delivery at the comfort of your home.

Vision

The vision of the business is to be leading a reliable online platform of ordering Abayas and direct delivery at the most affordable price.

Mission Statement

The mission of the business will grow the online business platform to cover specific demands for Abayas among Emirati women by rolling out an easy to access, use, and personalized website. The business intends to increase its visibility within the next three years through digital marketing and website optimisation.

Potential Challenges

Since the business will be online-based and operating in the conservative Emirati society, the challenge of acceptance may hinder the growth of the business since this society is still suspicious of online businesses. Besides, the business may face the challenge of a potential competitor since the current market is still underdeveloped. In addition, since the business will be operating in an environment where customer inclination is the basis of successful operations, changing customer preference may greatly affect the business.

Situational Analysis

Company Analysis

Goals

The strategic goal of the business is to be the market leader in the online fashion market segment that targets the Emirati women within the next two years. The business also aims to build a successful customer referral business model through ensuring that level of customer satisfaction at any time is maximum to ensure that the annual expansion by 20% is maintained for the next five years. The business goal is to raise at least 150,000 AED within the next two months for a start-up. The business will also strive to increase its profits by 20% each year through the expansion of market coverage.

Focus

The business will focus on product differentiation in the form of three categories of Abayas services it offers to the clients. The first category will be premium Abayas consisting of ordering and delivery of grade 1 Abayas for the celebrity and high economic end customers. The second category will be the regular Abayas consisting of ordering and delivery of grade 2 Abayas for the middle-class customers. The third category will consist of the low price Abayas for clients who are looking for high-quality Abayas at the lowest price possible in the market.

Culture

The Emirate women are known for their attachment to different designs and sizes of Abayas since it is part and parcel of their dynamic and conservative culture. Abayas are a symbol of sophistication, taste, and social orientation in the targeted market. In fact, every female in Emirati society is a potential client since it is a must-have product for all women and girls. Therefore, the demand for a reliable and easy to use the website for ordering Abayas is very steady since it is an everyday product.

Market share

In order to establish the potential market share for the proposed business, a research survey was rolled out, and the results are summarized in the table below.

Category of customers Market share (Percentage)
Young women (0-20 years) 30%
Middle-aged women (21-50 years) 45%
Aged women (51 and above years) 25%

The findings from the above table are summarized in the table below.

Market share

Consumer Analysis

The business targets to reach 6,000 customers in the first year, 9,000 customers in the second year, and 12,000 customers in the third year totalling to 27,000 successful orders and deliveries at the end of the third year in the Emirati market. The business will target three types of customers, which are the aged, middle-aged, and youthful segments. Further, the customers will be segmented into regular clients and the first time clients in order to ensure that the needs of these segments are customized on the basis of the level of loyalty.

The main value drivers that the business will use in reaching out to the three customer segments are the current demand for flexible, fast, affordable and easy to use shopping methods to buy Abayas. Besides, the business will consider specific needs of customers in terms of design specifics, colours, and size of each Abayas to create a need-based marketing strategy through proactive customer participation in information search and product acceptance. This means that the entire business platform will be based on promoting the satisfactory value of each service offered online and the actual delivery of the Abayas to ensure that customer behaviour is positively skewed towards the business.

Competitor Analysis

Since the market is relatively underdeveloped, there is no major competitor that may threaten the existence and survival of the Abayas Website. However, if the business idea becomes a successful venture, there might be local and international competition from companies producing the Abayas within the Emirati community and beyond. In order to survive the potential threat of competition in the future, the business will adopt the product and market positioning strategies such as multiple-pricing and high quality of services. The multiple-pricing strategy will be applied through differentiating the online Abayas services by grade and assigning different prices for each category of customers.

This means that the company will serve the high-end, mid-end, and low-end customers without locking any potential client out. Besides, the website will have a series of services that customers can choose from in order Abayas and delivery timetable. For instance, customers who want their Abayas delivered within 12 hours may pay more than customers who want their Abayas delivered within 24 hours. This means that the business will create an environment of its own competition by locking out any competitor who might want to benefit within the unexploited customer segment.

Moreover, the business plans to create a strategic and affordable delivery system through contracting a delivery firm to do the product delivery to customers within the specifications of the contract. The outsourced delivery service will be integrated into the business model to ensure that lapses or customer feedback are tracked in real-time. This will protect the business and the customers from any mistakes or underperformance by the contracted product deliverer. Besides, the business will not need to spend so much on advertisement since the contracted distribution agency will do a face-to-face advertisement on behalf of the business.

Since the entire business platform is based online, the Abayas website will be designed to capture the right colours and images of Abayas as they are in the real world. The packaging of the Abayas will be done in a colourful and classy design to appeal to the feminine taste of the targeted clients. Besides, the packaging of each product will be done in branded boxes that are designed to engage the imagination of the female population towards associating with idealness.

SWOT Analysis

Strengths

Strategic distribution system

Outsourcing the distribution and delivery aspect of the business to an already established business will give the company a competitive advantage of reliability since the proposed partner has a well-developed delivery network within the Emirati community. This means that the business will benefit from being a reliable venture that does what it promises the customers.

Strong brand name

Since the website will be called the Abayas, the customer will not have difficulty in locating it online or associating it to their Abayas. This means that the Abayas name will be easy to sell since it is already associated with the product the company wants to specialize in. The name Abayas is a reflection of the Emirati women culture, way of life, and social orientation in line with the business goal of promoting the Abayas as a culture in the targeted market.

Provision of a variety of services

The business is positioned to gain from different customer segments since the online platform has been positioned to serve the interests of all customers through the provision of stratified services that matches the demands of these clients. This means that the business will gain from the self-competition and may even grow further as the product lines are embraced by the targeted clients.

Diverse service branding offers

The business will produce online Abayas magazines that will help in self-promotion among the targeted clients, thus, increasing the market coverage at a very low cost. The success of the e-magazine may increase the number of referral customers interested in the services that the business will offer. The business brand is aimed at providing excellent services to customers. The business has a well established a differentiated strategy that distinguishes its services from competitors. Moreover, the business has adopted flat, decentralized structures that ease management and reduces costs. The business also enjoys a strong reputation within the market because of quality, reliability, and exemplary services offered to its clients as the first of its kind in this form of business.

Weaknesses

Breakages during delivery

Since the business is both online and offline, there may be breakages during delivery of ordered Abayas to the customers. The breakages may increase the cost of doing the business and if frequent, may motivate the customers to form a negative opinion about the business. This might affect the sustainability of the business, especially when the breakages and other damages are substantial.

Delay in delivery

Since the delivery of the Abayas ordered by customers will involve moving from a store to the location of the customers, there might be delays, especially when customers made urgent delivery request during peak hours. Frequent delays may lead to loss of business.

Single market focus

The emphases on the female segment leave the firm susceptible to several possible large-scale economic downturns. In addition, the single market focus on urban setting reduces the firm’s competitive edge. The urban population represents only forty-five per cent of the total market share. Moreover, the growth and expansion of similar superfluous services offer alternative services to the targeted clientele. The business has not yet fully developed to allow speedy delivery of the product to the consumers.

Difficulty in convincing the customers

Many targeted customers have had a bad experience with online ordering of services since there are many scammers and false advertisers who do not adhere to the ethical code of remaining faithful in representing the product as it is a reality. Despite the fact the proposed website will be based on sincere business, it may take a very long time to convince the suspicious Emirati women that the proposed business is different. The suspicion because the business is based online may negatively affect expansion and penetration strategy for the online-based business.

Limited access to customers

The entire business platform depends on the ability of a potential customer to access the internet. This means that many potential customers who do not have access to the internet will be locked out. Currently, only 35% to 55% of the potential customers within the Emirati society have access to the internet or are literate in its use. Locking out nearly half of the women population because the business is based online may affect future expansion strategies since they are limited within half of the female population who have access to the internet. As a result, expansion of the business will not be as fast as that of a potential traditional or hybrid business offering the same services. This means that the business is likely to lose to such competitors.

Opportunities

Integrated technology as an expansion tool

Since the business is based online, there is an unlimited opportunity for the creation of a mobile app that can be used to access the website from mobile handsets since the majority of the targeted clients have Smartphone. Besides, the business might benefit from integrating technology further in tracking the delivery schedule through pop up messages to ensure that customers can follow up the progress of their order through the mobile phone. In addition, the business might create an SMS service to order the Abayas for customers who cannot access the website. Through this, the business has an opportunity for expansion beyond the current target market.

Growing current target market

The most probable opportunity is the vibrant growth in the middle and upper-class female market segments. In addition, developments in economic conditions and infrastructures that support the growth and development of businesses as well as growth in the Emirati society presents new opportunities for the business. The growing purchasing power of younger women, which is regarded as the most active customer demographic presents a new opportunity for the business to exploit. The younger women generations between the ages of twenty to forty-five are the largest purchasers of Abayas services that the business will offer. The business is in a position to capitalize on this customer segment.

Attractive online modelling to increase product visibility

The business has the opportunity of increasing the visibility of current services it offers through search engine optimisation to ensure that the website is very easy to access. The search engine optimisation is strategic in increasing the traffic of customers who visit this website. When the search engine optimisation is integrated as part of the marketing communication strategy, the visibility of the services that are offered by the business will increase beyond the targeted market.

Increased customer loyalty through a quality brand

The business has the potential of maintaining a good reputation among its clients since the entire venture is based on reliability, affordability, and usability of the website to order and receive Abayas. Through the provision of high-quality services, the business may track the reputation of its clients through their feedbacks in order to make adjustments to guarantee sustainable customer satisfaction levels.

Threats

Competitors

It is easy for new competitors to enter this market with similar services and brand. The new entrants pose a potential threat to Abayas website. For instance, the competitors may ape the business idea or roll out a better strategy for reaching customers to the disadvantage of the venture. Another threat is losing staff as some competitors might try to attract them by offering higher salaries and allowance.

Economic swings in the fashion industry

The probable economic slump that has a greater effect on the business conditions and consumer confidence presents a greater threat to the operations of the business. These economic swings might affect the purchasing power among the targeted clients, thus, reducing the demand for the services that website offers.

Changed customer preference

The entire business platform operates on customer preference since wearing Abayas is a fashion statement among the Emirate women. Therefore, any negative change of preference among the customers would translate into a loss of business, especially now that business has a virtual perspective attached to it.

Marketing Mix

In order to ensure that the proposed Abayas website is successful, the business will be marketed via a mixture of traditional and social media in order to penetrate the expansive Emirati market and reach the targeted Emirati women. The marketing mix for the proposed business will consider the aspects of product, place, price, and promotion, as discussed below.

Product

The Abayas website is an ideal online platform for shopping for different designs, colours, and sizes of the traditional Abayas attire, which is worn by all women in the Emirati society. The website will incorporate a series of services such as the Abayas select button, view different options button, customize order button, make order button, a select region of a delivery button, and make follow up button. These online buttons will allow potential customers to make orders for the Abayas from the comfort of their home just by a click. This means that the aspect of comfort and proper time management is guaranteed as opposed to making a series of trips in the market to look for Abayas. Customers will also have a variety of choices in payment and product grades with the premium grade costing greater than the ordinary grade.

The Abayas will be stratified and sold in three brands consisting of the high-class Abayas, Middle-class Abayas, and low-class Abayas with each class having different prices. The website will also guarantee customer faster and reliable delivery, depending on the delivery option selected after making the order. It is important to note that the customer will only pay for the product upon delivery and verification of the product quality. This means that the Abayas website will encourage the targeted clients to opt for the online selection and ordering of different Abayas as opposed to the tedious and time-consuming alternative of visiting the traditional markets.

Place

The business will create a watertight distribution strategy to ensure that the orders placed online by customers are delivered as promised. The distribution program for the business will be carried out through an outsourced company that is already in the distribution business within the Emirati community to guarantee efficiency and reliability. The selling of the Abayas products will be done via an online portal through the business before the distributor is contracted to do the delivery. The Abayas will be sold directly to the customers just by a click of an order button and confirmation of the same within six hours after placing the order.

In the first year of operations, the business will be proactive in using social media and website through search engine optimisation to roll out the e-commerce portal for the customer within the city of Khalifa. The online portal will be expanded during the second year of operation to cover other regions such as Abu Dhabi as a market expansion strategy. The logistics involved in the delivery of the products will be handled by the outsourced company as a department within the business to ensure that the customers are protected from any negative eventually between product request and actual delivery. The business will ensure that the contracted company has comprehensive insurance to cover any cost as a result of delays and damages on transit.

The Abayas website will be very easy to use and flexible for modifications that customers may recommend. Besides, the website will be able to collect and analyse responses from the customers in real-time to ensure that the recommendations or complaints by the clients are addressed within the shortest time possible. The website will also have an icon for online chat with the support staff as part of the short term and long term customer relationship development and management strategies. In addition, customers who are not satisfied by the online chat service will be allowed to request the support staff to call them at a toll-free rate. Each support staff has been trained on proper communication etiquette to ensure that the level of satisfaction among the clients is optimal.

Promotion

The business will use social media and website optimisation to promote the services that are available at the Abayas website. Under social media, the business will build Facebook and Twitter fan pages to allow the clients to interact freely and share the Abayas fashion culture within the Emirati market. Through client-business interaction through these sites, the customer base for the Abayas website will grow within a very short time since the fans pages are ideal for building a community following. The social media sites will allow the business to directly reach the customers by the expensive traditional alternatives such as print media.

The second strategy that the business will use to promote the website will be through search engine optimisation. This strategy will be carried out through installing a series of plugins with features such as thumbnail, page customisation, and page navigation. The plugins will consist of a customisable client account that will serve as the platform for shopping, making modifications, and ordering different designs of Abayas. The button categories that will be optimised include ordering menu, brochures, request confirmation, approval of product after delivery, and feedback placement.

Price

The multiple-pricing strategy that will be adopted for the business will address the objectives of profit maximization, increasing market share, meeting sales targets, guaranteeing a return on investment within the second year of operation. The price of 200 AED and 20 AED for three classes of the products will allow the customers to make choices from a variety of alternatives that are pocket-friendly. This is a guarantee that the business will serve the pricing needs of the lower and upper economic ends to match the status of each category of clients. In fact, the superior quality of the different Abayas products will empower the business to offer large discounts to regular customers after benefiting from the economies of scale.

Implementation/Action Plan

Structural issues

The business will hire four salespersons to participate in social media marketing for ease of market penetration within the Emirati community.

Tactical marketing activities

The business will develop a flexible implementation module that is expected to be operational within the first month of establishment up to the end of the second year. The marketing activities will then be done regularly but at a lower cost.

Budget

Cash Flow Projections

Cash flow projections are critical in estimating the net present value of the business against future projections. This is indicated in the table below.

  • Total revenue (P * Q) = total cost [Variable (C *Q) + fixed cost]
  • Price per unit of Abayas (P) = 110 AED
  • Units produced (Q) = to be estimated
  • Total fixed cost = 34,000 AED (as shown in the table below)
Item Annual costs (000 AED)
Fixed costs
Salaries and wages 21,000
Advertising 10,000
Administration 3,000
Total fixed costs 34,000

Financial Projections

Before deducting expenses

Abayas Website: Business Balance sheet statement As of 31 December 2015.

Amount (AED)
Current assets 26,000
Long term assets 23,000
Total assets 49,000
Total current liabilities 18,000
Additional paid-up capital 16,000
Retained earnings 11,000
Total stockholders’ equity 10,000
Total liabilities and stockholders’ equity 91,000

Abayas Website: Business Income statement As of 31 December 2015

Amount (AED)
Net sales 13,717
Cost of sales 9,083
Gross profit 4,634
Net profit 4,634

After deducting expenses

Abayas Website Business: Balance sheet statement As of 31 December 2015.

Amount (AED)
Current assets 25,416
Long term assets 10,000
Total assets 35,416
Total current liabilities 10,000
Ordinary common stock 1,000
Additional paid-up capital 10,000
Retained earnings 15,000
Total stockholders’ equity 13,416
Total liabilities and stockholders’ equity 40,416

Abayas Website Business: Income statement As of 31 December 2015.

Amount (AED)
Net sales 23,717
Cost of sales 9,083
Gross profit 14,634
Sales marketing 4,924
General administrative 8,464
Amortization 1,046
Other expenses 34
Total expenses 15,468
Income before taxes 19,166
Taxes 8,750
Net profit 11,416

Abayas Website Business: Statement of changes in equity As of 31 December 2015.

Common stock Additional paid-in capital Retained earnings Other comprehensive income Treasury stock Total stockholder’s equity
Opening balance 1,000 16,000 15,000 0 0 31,000
Changes 2,416 2,416
Closing balance 1,000 16,000 17,416 0 0 30,416

Return on investment = Gains – (Investment costs/Investment costs)

Return on investment for the business

  • Gains 160,000 AED
  • Investment cost 120,000 AED
  • Gains – Investment costs = 40,000

Therefore, return on investment is 40,000/120,000 = 37.5%

The promoters are assumed to be in the 9-10 (25%) score while the passives are assumed to be in the 7-8 (55%) score. The detractors are assumed to be in the 0-6 (20%) score. Thus, the Net Promoter Score will be +5 for the business plan within the UAE market. Therefore, the satisfaction score is estimated at 90%, while the recommendation score is estimated at 80%. In addition, the social conversation score is estimated at 80%.

Market share table

Year 2014 2015 2016 2017 2018 Total
Sales 221,800 415,998 452,700 495,998 535,998 2,122,494
Market share growth 10.4% 19.59% 21.3% 23.4% 25.3%

Monitor/Evaluation

Formal controls

The formal controls proposed for the Abayas website as a business will include a success evaluation channel and systematic, objective tracker that will review the functioning of the venture against the initial objectives.

Informal control

The business will create a dynamic communication system that has live feedback to ensure that the support system between business and the delivery channel are balanced.

Implementation schedule and timeline

There will be a series of periodic systems for tracking the success of the business after every three months and at the end of each marketing strategy for the next two years in the Emirati market.

Marketing audit

The business will create a marketing audit function within its current success evaluation strategy to ensure that the formal and informal controls are supported in the process of penetrating the Emirati market.