RelaxO Company’s Business Development and Production Plan

Business Name

Our business will operate under business name RelaxO. The name was chosen in relation to the services it offers which include giving passengers comfortable cubes for relaxing. Most importantly, it is easier to remember this business name since it is associated with the services provided by the company.

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Description and location

RelaxO boxes will be strategically located in the third terminal in Indira Gandhi International (IGI) Airport since it is a major aviation center in India. Likewise, the fact that the airport is located about 10km from the city of Delhi, makes it effective since it will serve the high number of passengers who prefer to be at the airport waiting for their freight (Laulajainen and Stafford, 1995, p6).

Faridabad

Faridabad is a major industrial and population center based in India. In this regard, the high population of this town gives RelaxO Company a wider market for its services. In the same way, the city has a wide range of information technology which makes it easier for the company to provide internet services for the customers by fixing essential materials such as computers. Similarly, the city offers human resources in terms of skilled and qualified manpower which is able to work effectively with the advancing technology to ensure quality services for its customers (Cerotti, 2010,).

Sohna

This is a small town located approximately 56km from Delhi. Sohna is an effective location for RelaxO since it serves as a tourist center due to its historical background. For example, the name Sohna was derived from gold dust that was collected from the sands of streams flowing around the town. In the same way, there is a pretty holiday resort that offers a breathtaking view of the ground below as well as sulfur springs which are said to have medicinal qualities. Similarly, the resort provides outstanding steam bath facilities for the tourists in addition to a swimming pool, filled with water emitted from a wall mural. According to Abrams (2003, p 46), such features are quite essential in terms of attracting tourists who are the main target for RelaxO.

Sonipat

This is one of the districts bordering Delhi city. We chose the district since it has plenty of agriculture products that supply our catering department with high-quality products which will be used to serve our customers (Cerotti, 2010). Since agriculture products are perishable, we have also chosen this location since it is near our RelaxO facility thus we will be able to provide our clients with a variety of fresh food and fruits.

Noida

Noida is a significant section of the city of Delhi which is characterized by large industries, businesses, hotels, restaurants, nightclubs, and cinema halls. The location has great infrastructure systems which provide a conducive environment for the tourists who wish to travel around the town. In addition, the region is famous for the large sports stadium which has been continuously upgraded to host 2010 commonwealth games. This is a clear indication of massive tourists who will visit the region in 2010 thus increasing the number of RelaxO targeted customers. In the same way, the location has an IT hub with various software companies as well as a large number of BPOs. Consequently, the area has attracted many industries which have made it easier for RelaxO Company to obtain design materials and other facilities needed in its operations (Abrams, 2003, p 6).

Product/services

RelaxO is focused on providing a comfortable resting place for passengers at Indira Gandhi Airport in India through the use of high-quality boxes which are built using high-quality materials. Initially, the company will put about 45 boxes in the airport. The boxes will be of two kinds including single and double occupancy. These boxes will also provide extra services which include comfortable beds, TV sets with major global channels, internet services, standard storage space, alarm clocks, adjustable light system, advanced ventilation system and temperature controller, and smoke alarm. These services are aimed at ensuring that the passengers are comfortable and that their fatigue will be taken care of. In the same way, the company offers efficient prices for its services for example, for the single occupancy, the passengers will be charged AUD 6 per hour while double occupants will be charged AUD 8 per hour (Birt, 2003, p19).

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Company

As a new business undertaking, RelaxO will be operated under partnership whereby individuals will own shares of the business. The partners include Hanan, Lamyaa, Nouf, Patrick, and Saloni. Based on the fact that financing a new business venture is a challenge, the partnership will effectively address the initial capital requirement for the company. In this case, the 5 partners have contributed equal portions of the initial capital that is AUD 10 each.

SWOT analysis

Strengths

The major strength of RelaxO Company is based on its brand. Since the brand of the company is associated with the services it offers, it gives the firm a strong competitive advantage in the market. In the same way, customer awareness has been enhanced leading to strong customer loyalty. Similarly, the company offers wonderful services for travelers to the airport. Since these services have never been provided by any other tourism firm in the airport, customers will strongly embrace RelaxO. In addition, the local market does not face stiff competition hence the company will be able to offer quality services without worrying about its position in the market (Birt, 2003, p8). In this regard, the company will have time to design strategies to enter the global market by first conducting the research about global competitors since it will have enough resources based on the high number of customers in the airports.

Weaknesses

In any business undertaking, start up capital is a major challenge. This is due to the fact that the start up facilities needs a great capital requirement for the business to be fully set and operational. Although most of the materials that are needed to set up RelaxO are manufactured from industries which are near the airport, financial resources required to purchase the facilities is still minimal. Hence, lack of adequate capital is a major weakness which has limited the business to open many branches.

Similarly, the high demand for the services has called for well-trained and skilled employees who will be able to deliver quality services especially careering services. This means that the company will be required to hire and train its employees so as to give the customers quality services that would create customer loyalty towards the product. However, this will be limited by the scarce financial resources.

Opportunities

One of the opportunities available for RelaxO is the large number of travelers who are always waiting at the reception for their fright. This is brought about by delays in the flight or the fact that some customers wait for connecting frights hence the company will be providing facilities for such customer to relax. Based on the fact that some passengers are always left out in the airports, RelaxO will utilize such an opportunity to provide those passengers with exemplary resting places which are affordable. In the same way, since most airports do not provide hotel services which include hourly accommodation and catering services RelaxO Company will offer these services hence creating customer loyalty and high profitability for the company (Abrams, 2003, p 35).

Threats

Although the company does not face stiff competition locally, it is faced with many other challenges globally since there are many companies which provide such services in other airports. It is imperative to note that even though the company will enjoy more profits locally, the profits may decrease due to the competition from other global companies. In this way, the business will be exposed to low sales and reduced number of customers in the long run. In the same way, global competitors may be able to scrutinize the company’s weaknesses through its website so as to grab the available opportunity. In this way, the company may possibly experience low revenue and reduced number of customers in the international market.

Financial statements

Budgets for the start up costs

Facility Description Estimated cost($)
RelaxO design
RelaxO manufacturing cost
Wages and salaries
Lease cost
Initial advertising
Miscellaneous expenses
Operating expenses
40units
single- 30 units
Double- 10 units
Annual
Internet connection
DHT
Registration
Air conditioning
Cabling
RelaxO website
Initial stock Supplies3 months
36,000
51,300
22,600
216,000
4,000
15,0005,000
10,000
3,000
15,000
5,000
2,000
2,000

15,000

Total establishment cost 401,900

In addition to the budget of the start up resources, the company needs to lease land for setting up RelaxO boxes, commercial insurance for the RelaxO facilities as well as life insurance policies for the employees. In addition, RelaxO will regularly update its website in conjunction with its management system which will be a prudent avenue for tracking local and foreign visitors.

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Sales projections for the first 3 years

RelaxO units Services hours Rent price(AVG) Total sales
Year 1 25 4500 $6.40 $720000
Year 2 33 5850 $6.45 $1,245,172
Year 3 40 6900 $6.50 $1,794,000

Income statement for first 3 years

Income statement for first 3 years

Marketing

In its endeavor to penetrate global market, RelaxO will effectively adopt strong marketing mix which comprise of the 4ps (product, place, promotion and price). This section will therefore discuss how RelaxO Company will employ the 4ps (Rich and Gumpert, 1985, p8).

Products

As mentioned earlier, RelaxO will specialize with the establishment of comfortable cubicles which are aimed at providing passengers with relaxing facilities thus giving the passengers privacy and comfort at Indira Gandhi airport. These facilities will be manufactured using high quality materials to give proper comfort to the users. In order to meet the expected high demand from the customers the cubicles will be operating 24 hours. The initial facilities will comprise of single and double occupancy units.

Place

RelaxO facilities will initially be situated at Indira Gandhi airport. This is due to the fact that the airport is the second largest in India. Hence, it has access to many passengers who travel as well those who wait for their freight at the reception due to delay or bad weather condition that hinder their departure (Rich and Gumpert, 1985, p 23). In the same way, the company is strategically located in the industrial area thus resulting to the reduced costs of transporting raw materials needed for the maintenance of its systems. One level distribution channel will also be adopted so as to eliminate the expenses incurred in terms of the commissions and wages paid to the middlemen. In this way the company will continue to enjoy high profits.

Promotion

RelaxO will use various strategies to ensure that its services are well known in the market. In this regard, a website which clearly gives direction to the customers and the facilities provided by the company will be developed. This will enhance online booking for other facilities in the process of booking air tickets. In the same way, the company will use travel magazines to advertise its facilities. This will enhance global advertising since most people who use the airport will have access to the information regarding the company. Hence, the website and the travel magazine will be the main advertising and promotional media (Rich and Gumpert, 1985, p 57).

Prices

As mentioned earlier, RelaxO has set affordable prices for the customers who will use its facilities. In this regard, the company has placed price for a relax box with single occupancy to be AUD 8 while for double occupancy is set at AUD6.It is fundamental to note that such low prices will result to higher revenue which is one of the main objectives of the company.

Contingency plan

Due to the future expansion of IDI Airport, it is evident that the airport will be receiving a large number of international freight with the largest number of visitors preferring a long stay in other hotels leaving RelaxO with few customers. The management team has therefore designed an alternative plan which is aimed at safeguarding the performance of the company. In this regard, RelaxO cubicles will be turned into hotel rooms which can accommodate many travelers in the airport. This would ensure that many customers do not travel long distances to look for alternative hotels and restaurants.

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The fact that only few hotels are located at around two to three kilometers, give RelaxO company a vital chance to capture travelers who prefers a long stay instead of hourly rest. In their plan the partners together with local and foreign investors will take the responsibility to ensure that incase RelaxO boxes fails to accomplish the goals of the company, a team of experts will be hired in order to implement and ensure success of the entire contingency plan (Laulajainen and Stafford, 1995, p 54).The Gantt chart below gives a clear picture of the major initiatives which will be included in the plan and the time they will be implemented.

Timeline sheet

Timeline sheet

Reference list

Abrams, R., 2003. The Successful Business plan secrets and strategies. NY, The planning shop, pp 42-56.

Birt, I., 2003. Writing your plan for small business success. NY, Eclipse Commerce Pty Ltd, pp 15-28.

Cerotti, P. 2007 A winning business plan. (Attached reference material).

Laulajainen, R. Stafford, 1995.Corporate geography: Business location principles and cases. Sage, Kluwer Academic Publishers, pp 6-18.

Rich, R. Gumpert, E., 1985 How to write a winning Business Plan. Harvard, Harvard Business Review, pp 23-45.

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