The emergence of Web 2.0 applications made it possible for technologies such as B2B and B2C to flourish. Web 2.0 applications have created a business opportunity in an online environment. Kuwait’s laundry industry has a gap in garment cleaning since it has not adopted the best strategy of getting clients. This gap has created an opportunity for exploring internet-based options where real-time online laundry services can be provided to Kuwait people. Actors who engage in collecting clients’ clothes using vehicles dominate the Kuwait laundry market and transport them to their laundry centre where after cleaning, they take them back to the clients. This paper discusses the proposed company’s vision, mission, goals, values, and legal perspectives that influence the establishment and running of the company. It also offers a physical description of the organization. It then provides information on owners and key personnel who are involved in running the business before discussing the company qualifications, vendor and professional services, description of services, and/or how the services of the company work. It also offers an evaluation of the company from the context of SWOT analysis and Porter’s five competitive forces. In the final section, it conducts a market analysis of the e-Laundry company.
A legal framework influences a business establishment through regulations. Although laws that regulate direct foreign investments are not applicable to the case of the e-Laundry, major laws that are relevant to Kuwait’s business environment such as the commercial company law are worth considering. The laws constitute an important backbone for the regulation of the operations of the e-Laundry business. For example, the business will engage in a contract with laundry cleaners and clients. Thus, the laws are crucial to the extent that they regulate the general conventions and contracting deals that are made between the e-Laundry and other players.
While establishing a Limited Liability Company, the owners contribute capital of not less than KD7500. Although the required capital is higher than this in practice, the amount is the minimum figure that the law permits. Through the company’s article of association, Kuwait requires new businesses to identify their objectives, managerial details, capital, and members (Dabdoub 22). Regulations on a Limited Liability Company in Kuwait require businesses to transfer a minimum of 10 percent of profits into legal reserves until the reserved amount is 50 percent of the total company’s capital.
While establishing such a company, the husband and wife are taken to constitute one party. Kuwait law requires members of a company to be all-natural people. However, amendment 28/1995 permitted “companies to be the founding members of limited liability companies” (Dabdoub 22). When a Limited Liability Company bears an excess of seven members, its supervisory council should comprise at least three members. This council must be identified in the articles of association. Kuwaiti corporation law permits companies to have one or more managers. They may be remunerated or not. These managers should not necessarily be Kuwait nationals or members of a company. Where they are not identified in the articles of association during the incorporation process, their appointment during general meeting is required.
State of the Company
Kuwait permits the establishment of specific types of business ventures. These ventures include “Limited Liability Companies, closed shareholding company, public shareholding company, joint liability company, limited partnership, and joint ventures” (Dabdoub 20). Apart from joint ventures, Kuwait establishes different legal entities to regulate their establishment and operations. In their daily operations, businesses experience different challenges, which may incapacitate them financially. In such a situation, they are declared bankrupt. Creditors can recover their debts by selling the businesses’ property. The proposed e-Laundry intends to protect its owners from losing their personal property, including their capital contribution in the event of a collapse of the business. A Limited Liability Company is the only type of company that is permitted by the Kuwait administration. Therefore, the e-Laundry business will be registered as a Limited Liability Company.
Limited Liability Companies need to have a minimum of two founding members. In the current e-Laundry business, the company already has three founding members. Since this figure is less than seven members, a situation in which a supervisory council must be identified in the articles of association, the company does not have the council. The law also permits the founders to be members of the company. All the three founders are in the managerial positions on a long-term basis. In the articles of association, such individuals are considered fit for service in their respective positions until such a time when they are incapacitated, dismissed, or when they die.
Vision, Mission, Values, and Goals
Missions, values, goals, and the vision of an organisation guide its operations. The strategic plan of the e-Laundry business needs to reflect the aspects of the organisation’s mission statement. The company’s mission is to respond to laundry cleaning needs of customers who are located both within Kuwait’s capital city and across the nation to increase their accessibility and choice of preferred cleaners. The company also increases the reach of laundry cleaners to a bigger customer base through a one-stop online order collection centre.
The analysis of the quality of a mission statement of an organisation is important since it helps to determine its lucidity, sense, application, breadth, and worth. A mission needs to have a clear rationale, strategy reach, a clear value, principles, and organisational behaviours (Goodstein, Nolan and Pfeiffer 43). The e-Laundry Company’s mission statement captures all these aspects.
The primary goal of the company is to bring together both laundry cleaners and people who look for laundry cleaning services together via an online platform with the view of increasing the range of customer choices. In this process, the company earns income in the form of fees that are levied from successful orders from the cleaners. Values encompass all beliefs of an organisation, including its personnel. The company values quality in service delivery and increased speed in getting a reliable cleaner. We believe that customers are the primary reason why many organisations, including the e-Laundry business, are established. Therefore, some key values for the success of this business include providing quality and high-standard online logistical information on customer locations and/or ensuring follow-ups on the cleaning service progress on behalf of the people who seek links with cleaners throughout the website.
Visions spell the expected future position of an organisation. An effective vision needs to set the organisation’s direction while motivating people (Bumgarner 11). The vision of the e-Laundry company is to become the most preferred link between cleaners and people who look for laundry cleaning services in Kuwait. In 5 years to come, the company envisions to expand to the global platform. Considering that people around the globe value speed and quality in service delivery the company anticipates achieving its vision through an online platform for linking cleaners and service seekers.
Company’s Physical Description
The e-Laundry company is located in Kuwait city. The city has more than 2.1million people. Reaching only 50% of this population implies that the company can have an excess of one million individuals. Targeting them can help to create a successful business.
Information on Owners and Key Personnel
Three people, namely the members, who serve in the managerial positions, own the company. Two of them are males, namely party 1 and party 2, while one is a female, namely party 3. Party 1 serves in the position of the CEO and the finance director. Party 2 is the chief IT expert and the executive director of finance. Party 3 is the executive company’s communications manager. Party 1 has a wide experience in organisational leadership. He has worked with several organisations in Kuwait in the position of strategy and accounting auditor. He brings his vast experience in the e-Business to ensure transparency and accountability in financial transactions. As the CEO, he is the vision carrier of the company.
Party 2 has a broad experience in IT infrastructure troubleshooting in the manufacturing industry. In the past, he played the role of ensuring real-time availability and dependability of information technology systems that were deployed in the automated manufacturing processes. With his experience, the company believes he will ensure a real-time availability of the website while at the same time recommending the appropriate additional investments to increase the capacity of the company to handle the increasing traffic.
The successful performance of an information-based company that handles a large number of service users requires ardent customer communication (Youndt 837; Spiess et al. 5). For this purpose, party 3 will take the responsibility of communicating and negotiating with customers in case of complaints of service quality that can lead to fines. She has a good experience in interpersonal communication in a teamwork environment since she has worked with organisations that employ a large number of employees. She has served in the position of human resource manager and the head of organisation strategy for medium-sized telecommunication companies.
The company owners who are also in charge of running the business have declared the e-Laundry corporation qualified to operate in the online marketing industry. The owners have the knowledge, capacity, and skills that are necessary for managing the business of an organisation that depends on information technology knowledge bases. Their wealth of knowledge is critical in developing strategies for coping with challenges that influence online companies such as cyber threats and various forms of fraud. The company believes that effective customer communication is important. To this extent, our customer communications director has ample knowledge for ensuring sustainable good customer relationships. Factors such as reliability and availability of the company’s IT infrastructure will ensure that customers can use the website whenever they have an order to place or while looking for orders at any time of the day.
Vendor and Professional Services
The website and supporting infrastructure will need to be designed and constructed. Construction entails physical development of hardware and software applications. Hardware and software can be developed in-house. They can also be sourced from a vendor who can customise it to suit the e-Laundry needs and requirements. This option is preferred to reduce challenges that are associated with new information system platforms such as system learning and the high probability of occurrence of bugs that may lead to a breakdown of the system soon or after its implementation.
The system will also require maintenance. Thus, vendors and professionals’ services will be required during the business operations. Selection of bidders depends on the capacity of their systems to allow or enhance information flow among various business establishments within and outside the e-Laundry company. The selection will also facilitate connectivity between the company and its external stakeholders. The company will also recruit professional service providers through the bidding process. Selection of the successful bidder will follow the ‘low-price-bidder’ basis. However, a proof of the reliability of the provided services will be incredibly important.
Products and Services
We focus on building trust among customers and cleaners. Our website facilitates the online collection of cleaning revenues on behalf of the cleaners. We also provide information on customers and cleaners’ locations. The company also processes and sends the money that is collected from customers for cleaning service payments.
Explanation and Specification of the Business Model
The company does not offer tangible products for sale. Rather, the focus is on linking people who seek laundry services to cleaners. When customers issue orders, they remit payments immediately to the company via e-Banking. Cleaners update their progress in cleaning process while customers inform the company when they have received their cleaned clothes for the company to process payments to the cleaners.
In case of quality complaints, after engaging the two parties, the e-Laundry company can deduct fines and remit them back to the customers. The balance is sent to the cleaners. This way, the company seeks to maintain cleaners’ ratings, which determine the basis of their recommendation to people who seek cleaning services. The company pushes cleaners to offer better quality services so that people who look for cleaning services can have confidence that cleaners who are linked to them are reliable and dependable.
The company needs to generate revenues to continue its operations and expansion. We charge 0.500Fils per order. However, we only make this deduction when customers have received their laundry from the cleaners. This plan helps in creating trust and good customer relationships. The company collects orders via an online portal and passes them to cleaners whom the customers have chosen. In this process, cleaners’ ratings act as a method of assisting customers in the selection of the most preferred cleaner. Through the specification of customer and cleaners’ locations, clients can choose cleaners who are within their localities.
Service features are crucial in the marketing of products and services. Fields defines service features as the traits of service that an organisation wants customers to understand in a bid to build a brand image (14). The services that the e-Laundry company provides have features such as free self-search for cleaners and customers to peak orders. The service guarantees speed in the search process. In fact, people who seek the cleaning services have a choice of being connected to a recommended cleaner in the closest area. The service is readily available. It operates full time. Therefore, people do not have to rush in a bid to place orders before the company closes its daily business.
Porter’s Competitive Forces
The Porter’s five-force method provides a way of analysing the elements that shape industry competition. These elements include, “the degree of rivalry in the industry, threats of new entrants, threats of substitutes, the bargaining power of customers, and the bargaining power of suppliers” (Porter 57). The e-Laundry company is the only such establishment in Kuwait. The degree of rivalry is one of the most important competition factors. Numerous small business organisations are operating in the laundry industry in Kuwait. While they may not establish online business operations using a model that is similar to the e-Laundry company, they can continue picking orders directly from customers without passing through the company. Hence, they encounter a high threat of substitutes.
Although the degree of rivalry is currently low, the success of the e-Laundry company may attract new investors in the online sector. Since establishing an e-Laundry business is not capital intensive, the threat of new entrants is high. Rivalry in the industry makes the laundry business incredibly dynamic. Organisations keep on looking for mechanisms for enhancing their competitive advantage, including the innovation of new service additions to meet the emerging consumer needs (Hoskisson, Ireland, and Hitt 53). Cleaners in the Kuwait’s laundry industry look for mechanisms for getting many orders. The online platform for the e-Business company helps in resolving this challenge. Hence, it is anticipated that the online laundry company will receive a positive reception. It will give cleaners an opportunity to compete freely. Consequently, the company does not anticipate rivalry from such laundry business establishments.
The bargaining power of the buyers is low. The success of the organisation is dependent on the strength of its customer base (Hill and Westbrook 47). Therefore, apart from retaining the existing customers, organisations seek mechanisms for attracting new customers who are loyal to the competing brands. The e-Business does not have any other e-Laundry competitors. Therefore, customers have a low bargaining power for better services they cannot compare the online laundry services with any other brand. People who seek cleaning services constitute the most important service suppliers. Since they have an alternative of issuing orders directly to cleaners, their bargaining power is high. Thus, the success of the company depends on its capacity to provide additional service features to encourage them (clients) to use the online platforms to access cleaners.
Meeting the Six (6) Objectives
Information systems are incorporated into a business model of an organisation with different objectives. The six most important objectives include the establishment of innovative merchandise and services, incorporation of stakeholders, upgrading of production processes, enhancing cost-effectiveness, attaining competitive advantage, and globalisation (Basu par.1-6). E-Laundry can meet the objective of developing new services by conducting surveys on customers’ views on the features of the provided services once the company launches its operations in Kuwait city. Upon the analysis of the views, improvements or addition of new services to increase user-friendliness can then be incorporated.
The information system that forms the backbone of the operations of the e-Laundry company integrates service seekers with cleaners who are the closest and most important stakeholders of the company. The IS system provides a chat room for customers and cleaners where they can share their service experiences with the company and/or amongst themselves. Customers can also give recommendations on how they expect cleaners to serve them better through the chat room. Customers place orders by themselves while within their locality. Cleaners also pick orders from any location without having to come to the organisation. This plan changes the laundry business in Kuwait by increasing cost-effectiveness and the efficiency of business processes. The company does not also need to employ many employees since all people who use the online platform serve themselves.
Online services can be availed in any geographical location around the globe. Therefore, the company can extend its business to include all nations in the world. Indeed, the vision of the e-Laundry company is to expand into global platforms after gaining local success in Kuwaiti market. By enhancing the service user experience, the company believes that an IS system acts as source of competitive advantage. The system pays incredible attention to the issue of speed and availability in a bid to retain and attract new users.
The normal operations of any company are marked by situations, which act as strengths, weaknesses, opportunities, or even threats to its success. These aspects define the concept of SWOT analysis, which is a theoretical methodology for analysing external and internal factors that influence the business operations (Hill and Westbrook 47). The e-Laundry company has the strength of linking all cleaners and people who seek laundry services using an online platform. The company’s human resource is also highly capable of initiating and maintaining positive customer relationships as the source of the organisation’s competitive advantage. Its main weakness is the lack of ability to guarantee that its online platform is the only choice for linking cleaning service seekers and cleaners.
The company’s opportunities include using its highly capable human resources to build a long-term brand image and its associated assets. Lack of any other online service provider for cleaners and cleaning service seekers is an incredible opportunity for acquiring economies of scale before new entrants can emerge. Achieving such economies can help to reduce rivalry in the industry. The capacity of people who seek cleaning services to connect with cleaners without using the company’s online platform constitutes the major threat to the company’s business operations.
Research and Design (R&D)
In every organisation, research and design are important in the development of new processes, products, and services. For the e-Laundry company, increasing the number of service users will mean increasing traffic and queues in the processing system. Therefore, the company needs new developments in the processing systems to minimise response times of the service user commands. There will be the need to invest in research and design of the system to increase service utilisation rates and user interfaces to meet web-browsing technological changes.
Marketing and Market Analysis
From the discussion of the previous sections, Kuwait e-Laundry market has no other player. Therefore, people will be trying the new services for the first time. The company targets all people who seek laundry services and cleaners. Such people need to own personal computers or Smartphones to permit them to access the company’s website to place, pick orders, or remit payments. In the short-term, the target market is the Kuwait market, specifically starting with Kuwait city. The company seeks to target its market segment through internet and social media communication. Additionally, traditional media such as TV, radio, newspapers, and magazines are used to direct people to the company’s website or engage in social media interactions with the company.
As a targeting strategy, social media is incredibly helpful. It opposes the traditional approaches to brand communication in which organisations mainly focused on “controlling what was said about their products and brands by dominating communication channels with carefully planned messaging” (Anbu and Mavuso 319). However, in the modern business environment, control of messages is immensely difficult. This difficulty is attributed to the fact that the ability of customers to access information through online interactions has become incredibly sophisticated.
The significance of targeting people through social media is incredible. Indeed, nowadays, client communication assumes the two-sided conversation method (Rust, Zeithaml, and Lemon 117). This method often entails online communication through B2B (business-to-client) procedure. The e-Laundry will position its brand as a service for people who have the interest of being linked to laundry cleaning players with speed and precision in terms of the selection of the cleaning service provider. It also positions its brand as the current trend in laundry cleaning industry in Kuwait.
Cost-Benefits and Risk Analysis
In Kuwait, there lacks an organisation that links cleaning service seekers to laundry cleaners. This project proposes a business opportunity to seal this gap. The basic idea of operating the company lies in the placing of orders on the secured website to pick up laundry clothes and deliver them to the customers. The business involves receiving orders online and passing them to a favourable laundry cleaner from where the customer can pick his or her items. Opposed to the current operation model of the laundry cleaning business actors in Kuwait, laundry cleaners will subscribe to the company and pay an annual fee plus a 0.500Fils per order. This way, the company is a worthwhile venture that will generate its revenues up to the tune of $190000 when it will be operating globally.
|Start-up working cost to develop the portal||$44,000|
|Total monetary support||$87,000|
|Year 1||Year 2||Year 3||Year 4||Year 5|
|Direct Costs of Sales||$60,000||$67,000||$71,431||$73,111||$76,702|
|Sales and promotion||$11,000||$12,000||$13,000||$13,000||$13,000|
The gathering of the required capital is expected to take two months. The implementation of the portal will take two weeks. Thereafter, the process of advertising to get the required workers and creating customer awareness will take three weeks. Hence, the implementation of the business is expected to be done in July 2015.
The company will hire the services of an IT guru to develop the online portal that will feature how orders will be done, how payments will be made, and/or the security policy among others.
Since the company is expected to be long lasting, it will embark on a security policy that guarantees all stakeholders and the company the security they need when carrying out their business operations. It will address issues such as information security where clients and the company will be sure that unauthorised parties invade the online portal.
The emergence of Web 2.0 applications created the possibility of developing an online business where people could meet by virtue of the environment to trade in both goods and services. In Kuwait, such an opportunity has not been utilised in the laundry industry. The paper proposed an e-Laundry business opportunity in which people can place orders while cleaners pick them. The e-Laundry company will provide information on the location of cleaners and the cleaning service seekers, especially for people who wish to give out their cleaning jobs to cleaners within their locality. For every order, the company anticipates charging 0.500Fils.
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