Introduction: Reason Rationale
The main reason that motivated me to formulate this plan is that I have a strong drive that pushes me to explore my entrepreneurial strengths. In addition, I feel that I have enough business skills which I need to use to grow my potential, skills and abilities. This speaks volumes about my passion to set up a company that sells different cornflakes brands to customers in Dubai because after a careful analysis, I discovered that some consumers in this market have unique needs which are not served well by existing retailers.
I intend to start the business as a sole proprietor to avoid any legal hurdles that may have a negative impact on my operations. Therefore, I am motivated to develop a business concept that will allow my company to change the lives of different people who consume its products. Consequently, I look forward to creating a valuable consumer experience for my customers to strengthen the loyalty they have for my company.
One of the key issues that will determine the success or failure of my business is a business plan. This will outline my goals and other aspects of my business that will be vital for its growth. The main purpose of this business plan is to develop a workable concept that forecasts different challenges and benefits my company stands to experience in the industry.
In the business plan, there is a section that discusses costs that are likely to be incurred by the company at the beginning of its operations. More importantly, I intend to use my personal savings as the initial capital to avoid exposing myself to unnecessary debts that may hold back my company’s growth (Hisrich 2010, p. 74). The company’s business strategies will focus on creating value for my products in the market to increase demand so that the company achieves positive results out of its operations. The main service point will be a convenience store where customers will be free to select from a variety of products on offer. In the long run, the company will consider selling additional products to grow its operations.
Dubai is a multicultural city that has people from diverse cultural, social and religious backgrounds. This diversity is beneficial to my business because it will allow me to sell diverse products which conform to consumers’ lifestyles and interests. As a result, I intend to come up with effective ways of creating important relationships with different categories of customers in the market. This business plan will therefore outline different measures that I will need to take to ensure the business has proper internal controls (Hisrich 2010, p. 81).
These controls will guide the manner in which various functions will be performed by the company’s employees to achieve its objectives in the industry. I intend to use creative thinking skills, I have acquired through my studies to review various business processes in my company to ensure they are aligned to its core business goals. My main aim will be to get back the capital invested in the firm in a period of not more than twelve months.
Description of Business
The company will be known as Crunchy Bites and it will specialize in selling cornflakes to different types of customers living in the city. I chose this name because it enables customers to understand the purpose of the company in the industry and how its products are suitable for their needs. The name makes customers aware that the company sells high quality cornflakes products which are responsive to their busy lifestyle patterns. Since it will be a sole proprietorship, I will be in charge of formulating important strategies that guide the company’s operations in the industry.
In addition, I will use a simple organizational structure comprising of two workers and I to save on unnecessary salary expenses before the business starts making profits (Hisrich 2010, p. 83). The strategic focus of the company is to establish efficient operating processes which enable it to survive in a very competitive market environment. As a result, all employees in the company will be made aware about this strategic vision to ensure they understand expectations they are required to satisfy as they perform their duties.
As a leader, I will use information gathered through various market studies to find out the most effective ways the company can engage with customers in the market to attain positive performance. This will help me to understand various factors in the market and how they are likely to impact on the long term stability of Crunchy Bites. A carefully planned marketing research process will enable me to evaluate the position my company is in and factors that I need to take note of to prepare it for positive performance (McAfee 2009, p. 33).
As a result, the company will be in a position to evaluate external relationships that are important to its long term survival and this will help me to make better decisions in the long run. I will attend various workshops within the city to learn new skills to make me well prepared to deal with various challenges I may face while running the company. Therefore, this will allow me to set up a strategic vision that focuses on increasing the value of the company’s brand in the industry.
After a careful assessment, I have realized that the business plan is well suited to conditions that exist in the market. Dubai can be described as a modern international city that attracts a lot of people from different international backgrounds. A majority of residents are foreigners, who are young, adventurous and willing to try new concepts. Using the company’s business plan, I will be able to estimate the amount of resources I need to develop efficient working systems that enhance customer satisfaction.
The company needs to maintain a good cash flow in the first six months of its operations to help it perform its day-to-day functions without a problem (McAfee 2009, p. 56). The business plan has anticipated the possible sources of revenue the company will rely on to strengthen its presence in the market. A few months from now, I will start negotiating with different manufacturers of cornflakes products to encourage them to bring daily supplies to my store once it starts operating.
Product and Services
In the beginning, the company will focus on selling cornflakes to various customers to create demand for the product within the market. A recent report published in one of the city’s newspapers revealed that many urban customers are interested in consuming cornflakes for breakfast. The most common reason cited was that cereals boost their energy levels to help them deal with with the city’s high temperatures. The positioning strategy that has been adopted aims to make the company stand out as a retailer of food products that are responsive to customers’ lifestyles and wellbeing (McAfee 2009, p. 60).
The company will focus on providing high quality products to its customers by conducting frequent inspections to find out if there are any quality problems that affect its operations. As a result, the company will only purchase from food manufacturers that have been certified by health and safety regulators to protect the wellbeing of its customers. Therefore, this will enable the company to undertake important process improvements that are needed to make its operations more successful.
The company will undertake market research to identify some of the needs that exist in the market. It revealed that many customers in the city have busy lifestyles and they look for ways to save time to beat the morning traffic as they go to work. As a result, I have found out that the cornflakes sold by the store will target working class buyers and students who are interested in consuming a quick meal for breakfast. Many consumers who were surveyed insisted that they do not like to shop in large retail outlets because they do not stock fresh cornflakes products.
The store’s display and internal arrangement will be designed in a manner that offers consumers more convenience during shopping. They will be able to select products they desire from the shelf, after choosing from a wide variety of product options (Haberberg & Rieple 2008, p. 43). Therefore, in the beginning, the company will sell fresh cornflakes that have been sourced directly from food processing companies to ensure customers consume high quality products. This approach will allow the company to show customers that it has reliable supply chain systems that enable them to purchase high quality products as soon as they are brought in from the factory.
The company will mainly rely on products that are manufactured by companies located within the city, to speed up delivery and supply chain processes. The company intends to develop partnerships with manufacturing companies that sell popular brands in the market to enhance its status in the industry (Haberberg & Rieple 2008, p. 49). These relationships will allow the company to improve its systems to ensure they conform to customers’ needs and expectations.
This approach will allow the company to focus on core operations of obtaining goods from manufacturers and selling them to its customers. Consequently, this will allow the company to focus on its internal and external operations to offer long term value to customers who purchase its products. The first valuable service the company intends to offer to its customers will be advanced bookings. This service will encourage customers to pay for products they want to purchase by placing online orders to ensure they get served promptly whenever they purchase products.
Market Analysis
The market analysis will focus on various criteria. The SWOT analysis will be the first criteria to be conducted to determine strengths, weaknesses, opportunities and threats the company stands to gain by operating in this industry.
Crunchy Bites Company SWOT Analysis
Strengths
- The company has visionary leadership willing to make sacrifices to attain positive outcomes.
- A recent study showed that people have favorable attitudes towards cornflakes and other cereals and there is a strong demand for such products in the market.
- The firm will sign important agreements with large manufacturing companies and this guarantees that it will receive a constant supply of fresh products every morning.
- The company will be located in an area that has many working class residents whose lifestyle patterns will encourage them to consume the product being sold.
- The company relies on information obtained through marketing research to make decisions and business strategies.
Weaknesses
- Low capital may affect the company’s growth plans in the market.
- Slow uptake of products that are sold by the company in the market may limit its growth plans.
- High running costs are likely to affect the company’s cash flow situation.
- Unfavorable operating environment controlled by large retail outlets may impact negatively on the company’s market strategies.
Opportunities
- No taxes charged on locally owned businesses will enable the company to reduce operational costs.
- Low interest rates on credit by Islamic financial institutions will make it easy for the company to obtain external sources of funding to finance its growth plans.
- Customer diversity will create opportunities for the company to come up with new strategies to extend its operations into new markets (Panda 2008, p. 47).
- The company may expand its product categories to include other food products such as crisps, fries, bread, cakes and doughnuts, to attract new customers.
Threats
- Competitors who source similar products from abroad and sell them at cheap prices.
- Strict government regulations in form of licensing, health inspections and unfriendly labor laws may end up making the business unviable.
- High rental costs may have a negative impact on the company’s long term operations.
- High costs of obtaining merchandise and additional transport costs may have a negative impact on the company’s cash flow in the short term (Panda 2008, p. 51).
Marketing Segmentation
The industry is highly competitive and consumers show loyalty to specific brands. However, the company will stock cornflakes products that are highly valued by customers in the market to raise its own profile. The market has room for new organizations that are willing to differentiate their products to satisfy unique consumer needs in the market. The company will target multiple segments to help it sell large volumes of its products to different consumers in the market (Pride 2008, p. 67). Therefore the segmentation variables that will be used by the company in its operations are as follows:
Demographic segmentation
The company’s products will mainly target working class people aged 18 to 44 with active lifestyles. A good number of people from this target group are either employed or in school and they have to wake up early to go to different places.
Lifestyle Segmentation
The product and service strategy will be formulated in a manner that makes it attractive to the modern consumer. Therefore, the product will seek to capitalize on popular attitudes that focus on individual freedoms, convenient lifestyles and general consumption patterns. This will make it appropriate for different categories of consumers (Pride 2008, p. 68).
Behavioral segmentation
Many consumers in this category do not always get time to prepare breakfast. Crunchy bites will market its cornflakes products as the perfect solution to their needs. Sales promotions will be used to inform customers about the qualities of products sold and how they are beneficial to their lives. This will encourage consumers to have positive perceptions towards the products (Pride 2008, p. 69).
Marketing Mix and Four P’s
Product/ Service
The cornflakes products will be obtained soon after manufacturing in reasonable quantities to ensure they do not stay on the shelf for long periods of time. The logo to be used by Crunchy Bites in the industry will be a C with rough edges to make the brand memorable in the minds of consumers (Pride 2008, p. 71).
Place
The company will be based in a location that is in close proximity to a middle income residential area. It will resemble a medium shop where various products will be placed on shelves to encourage customers to pick specific brand which suit their interests. The two employees will help customers to explore different sections in the store to locate where different items are placed easily (Pride 2008, p. 73). The company will rely on distributors of various manufacturers of cornflakes to bring the products to the store every morning from Saturday to Thursday.
Price
The company will set retail prices that are marginally lower than those of other retailers because it will focus on selling large volumes of merchandise to get back its investment costs. In the long term, the company will increase prices for customers who may want to have cornflakes products delivered to them in their homes. This will help the company to get money from the additional value it will be offering to consumers that want products to be delivered to them.
Promotion
Crunchy Bites will use road shows, adverts and social media to reach out to its customers. Road shows will be done during the weekends in the first two months of operations to make customers aware about the company. The company will also take part in local community initiatives to make customers understand what its brand stands for and the benefits it offers to consumers.
Sales and Revenue
In the first year of operations, the company will mainly focus on obtaining revenue through selling its products to different categories of buyers in the market. As time goes by, the company will look for other ways it can expand its operations to increase its market share. After six months, the company will provide delivery services to its customers who live within a forty kilometer distance at an additional fee.
This will allow the company to offer high quality services to its customers who will be interested in paying a premium price to for the value they get from consuming the product. In addition, the company will create additional points of sale in future as part of its growth plan to increase its brand appeal in the market (Cameron & Sine 1999, p. 10). However, this will only be done after a careful analysis of additional products that need to be included on its product portfolio to grow its operations in the market.
More importantly, I will set up various controls to enhance accountability to ensure all revenues and expenditures are recorded effectively. Crunchy Bites will rely on both cash and cashless payment systems which will be closely assessed to ensure they satisfy strict operational requirements that have been established. Some of the cashless methods the company intends to use include credit cards, debit cards and online payment systems.
Since I have good financing knowledge, I will be able to evaluate the effectiveness of various payment systems in the company to find out if they add value to its operations (Cameron & Sine 1999, p. 15). Every customer will be handed a receipt showing the item he has purchased and its price, and every transaction will be recorded in a computerized system for review. Moreover, I will set up other measures to ensure other important functions of the organization are followed in accordance with the set policies to improve its long term performance in the industry.
The company will conduct promotions to increase sales. Customers that will purchase high quantities of products will be offered free samples to encourage them to continue purchasing products from the store (Cameron & Sine 1999, p. 23). This will enable the company to develop important relationships with its customers in the market based on positive values and beneficial exchanges. In addition, the company will use outdoor advertising to make customers aware about its operations and various services it offers to consumers. This approach will be used to prepare the market for the company’s entry to make customers aware about the location of the company’s store and specific products which are sold there.
Financials
The main goal of the company is to become a large company that sells a variety of food products within the next five years. The company intends to use value added services to make its brand more attractive in the market so as to boost its long term performance. This approach will enable the company to understand the needs of its customers and come up with effective ways of satisfying these needs by selling them high quality products (DuBrin 2003, p. 59). The company’s financials will be mainly divided into two categories
Operational Expenses
The main operational expenses the company is going to incur will include licenses, rental expenses, fittings, registration of business and health and safety requirements. Other initial expenses will include water, electricity, equipment and other general expenses. The company will also have to deposit a significant amount of money in the bank before it begins its operations to ensure that its operations remain stable in the beginning (DuBrin 2003, p. 62). The whole amount I am going to invest in the company in the beginning will be about 120,000 dirhams.
The cost of paying employees’ salaries has also been included in the initial expenses that will be incurred by the company in its operations. Since the company will have three employees, it will have a flat pay structure to save on unnecessary wage expenses which may drive up costs of operations.
As shown in the table, the company’s is projected to have positive revenue growth after three years. The store will not be in a position to make a profit in the first year of its operations. It will experience a marginal loss due to high costs of operation in the industry. However, after the second year of operations, projections show that the company will be able to register a profit from its operations due to an increase in the number of products it will be selling in the market.
In addition, the company seeks to expand its operations by opening up new branches in other areas (Vom Brocke & Rosemann 2010 p. 103). This strategy will help it to increase its market share by targeting new consumer segments. In a period of three years, this will increase the company’s stability because it will make its internal as well as external processes more efficient to increase its earnings in the market.
Organization
The organizational structure will consist of two employees who will assist me in executing various duties in the company. These two employees will have specific responsibilities which they will be required to perform in the organization to ensure the company achieves its objectives in the industry. One of the employees will serve as a sales assistant while the other employee will deal with supplies and procurement functions in the company.
I will perform finance, coordination and supervisory roles to ensure all functions run smoothly without unnecessary problems or delays (Vom Brocke & Rosemann 2010 p. 106). Whenever there is too much work, the company will hire temporary workers to perform additional duties to ensure it satisfies the needs and expectations of its clients. I chose a simple organizational structure because I felt that the company needs to keep its fixed costs low for it to break even within the twelve months.
The organization also intends to maintain active relationships with other external companies in the industry. Therefore, it is important for decision making processes to be simplified to ensure all employees understand the roles they are supposed to play to enable the company to achieve its objectives in the industry. As a leader, I will use a flexible decision making approach which encourages all employees to contribute their ideas to make both internal and external processes more innovative.
Policy changes will be agreed upon by all employees to encourage consultations and openness between all employees in the company (Vom Brocke & Rosemann 2010 p. 109). This approach seeks to enhance good relations within the organization to ensure the two employees feel that they have a positive role to play in enabling the organization to achieve its goals. This will motivate them to improve their performance to improve internal systems in the company by making them more innovative.
Employee wellbeing will also be taken into consideration by the company to ensure workers are not distracted from attaining positive performance by other external issues. The company will develop a comprehensive human resource policy that outlines all benefits that will be given employees as part of their service package. I will formulate a comprehensive payment package consisting of health, transport and housing allowances which will be offered to employees (Rue & Byars 2003, p. 81).
This will show that the organization is grateful for the important role they play in making it achieve its objectives to motivate them to work harder. The human resource policy will also outline the strategic goals the company intends to achieve within the next five years. Therefore, this will have a big influence on the overall organizational culture adopted by all stakeholders in the company.
Performance management procedures will be a key part of human resource management strategies that will be implemented by the company. They will be used to reward employees that achieve positive results in their duties. All employees will be made aware of the main criteria that will be used to measure performance in the organization.
These will include: attentiveness, attendance, loyalty and customer feedback (Rue & Byars 2003, p. 85). Employees who get positive reviews from customers will get a bonus once in a year to motivate them. Performance management processes which will be set up will help the company to attain its goals because employees will be motivated by different incentives to achieve positive performance.
Exit Plan
The company’s growth strategy focuses on breaking even within the first twelve months. My main aim will focus on getting back the capital invested in the company after one year so that I go on to the next phase of the growth strategy. This next phase will involve increasing the company’s product portfolio to attract new customers in the market. This will involve adding other food products on the company’s portfolio to increase its popularity in the market. In effect, the company will look at developing relationships with new categories of customers in the market to increase the value of its brand (McHale 2011, p. 72). The company also intends to open three additional retail outlets in other parts of the city within the next two years. This will be in line with its long term growth strategy.
On the other hand, if the company fails to register a profit within twelve months of operations, it may be forced to change its business model or close its operations completely. Some of the factors that may cause the company to close its operations include: low customer numbers, low sales revenues, high competition from substitutes and large debts (McHale 2011, p. 76).
An increase in debts will compel the company to change its business strategy because it will not be in a position to carry out its functions effectively. The company will be forced to review its operations to ensure it has more revenue streams. Therefore, this approach will be used by the company to manage risks to ensure that its operations are not affected by low profitability. In the long run, it will be in a position to review its long term focus in the market.
Appendices
A1: Renovations
Electric Wiring will be done for an estimated period of two weeks.
The company will set aside a small space where customers will be able to sit as they await to be served some cornflakes products.
The retail section will cater to customers who are only interested in purchasing cornflakes products for home consumption.
It will have wide walkways to allow shoppers to shop in comfort and to increase their convenience.
Picture showing the layout that will be used for the store.
A2: Licensing Requirements and Regulations
- Trading license.
- Certificate of health and safety after inspection.
- Perfect credit rating after assessments of past financial history.
- Environmental audit will be carried out by regulators to ensure the firm satisfies good environmental practices in its operations.
A3: Specific Cornflakes Brands to be Stocked
- Kellogg
- General Mills
- Cereal Partners
- The Jordan’s Cornflakes
- Weetabix
The retail prices of these products will range from 21 to 36 dirhams. They will also have both English and Arabic instructions on their covers showing ingredients and other useful details to customers to enhance their consumption experience. The company will only purchase products that have been certified as safe by local regulatory authorities to protect customers’ health and wellbeing. These products will be sold in different flavors such as: fruit, honey, nuts, cinnamon, chocolate and vanilla.
Picture showing cornflakes, on a plate ready to be served. This will be included in the overall marketing strategies for the organization.
A 4: Crunchy Bites’ logo together with the slogan to be used for marketing.
This is the logo that will be used to represent the product in the market. It communicates feelings of enjoyment, relaxation and convenience. These are some of the main attributes that define the company’s product strategy and they will show the unique service proposition it offers to its customers in the market.
The slogan for the product in the market will be: ‘we’ve got your needs covered.’ This slogan will be used to make all customers aware about the value they will get from consuming it. This will be used to encourage customers to have positive attitudes towards the brand in the market.
References
Cameron, K & Sine, W 1999, ‘A framework for organizational quality culture’, Quality Management Journal, vol. 6, no. 4, pp. 7–25.
DuBrin, AJ 2003, Essentials of management, Thomson, Peterborough.
Haberberg, A & Rieple, A 2008, Strategic management: theory and application, OUP, Oxford.
Hisrich, R 2010, International entrepreneurship: starting, developing and managing a global venture, Sage Publications, London.
McAfee, RP 2009, Competitive solutions: the strategist’s toolkit. Princeton University Press, Princeton.
McHale, N 2011, Transforming teams: develop yourself and your team – transform your results, Ecademy Press, Hertfordshire.
Panda, TK 2008, Marketing management, Excel Books, New Delhi.
Pride, WM 2008, Foundations of marketing, Cengage Learning, Mason.
Rue, L & Byars, L 2003, Management: skills and applications, McGraw Hill, New York.
Vom Brocke, J & Rosemann, M 2010, Handbook on business process management, Springer, Berlin.