Entrepreneurship Final Project
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Entrepreneurship Final Project (Business Plan)
The development of e-business is quite perspective nowadays. This is why the creation of the online grocery store may be very perspective and can bring positive results within a relatively short period of time. Basically, this business plan will focus on the analysis of the company, its products and services, market and competitors as well as perspectives of the company in the market. In such a way, it will be possible to clearly define the current situation and perspectives of the development of online grocery store and develop effective strategy to maximize its potential profits and make the company function stably. The company is supposed to be created in Salt Lake City and target at the mass customers with an average income who can afford the provision of online grocery store services and buy products online regularly. At the same time, it is obvious that the development of such e-business is very perspective, taking into consideration the rapid progress of IT and the growing share of e-commerce to the extent that it gradually starts to replace the traditional commerce. Consequently, the creation of the online grocery store will basically target at the future perspectives which are quite good, though it is also necessary to take into consideration some current difficulties, such as the lack of popularity of the company among customers, the necessity to enter the market where entering barriers in conventional commerce are very high due to the presence of a large number of competitors. Nevertheless, the permanent need of customers in grocery products and the development of e-commerce may be the basis for the future growth and progress of the company in the market.
Vision and mission statement
Basically, the online grocery store targets at the mass customers but it does not necessarily mean that its major goal is to expand its presence in the market enormously within a relatively short period of time. In other words, aggressive and expansive strategy is not the major goal of the company and it is not its major tool to achieve success in the market. Instead, the online grocery store is supposed to be a small business, the company that primarily functions within the city where the demand on its products and services can be relatively high and stable. It is very important to maintain the permanent interest of customers to the company and provide its services properly and in a possibly shorter time to meet the expectations of customers. The latter will naturally lead to the growing customers’ satisfaction and the growing popularity of the company among customers. It is important to underline that the company will focus on the grocery products that can be permanently supplied to customers. The online services imply that the company can maintain the contact with its customers 24/7 and therefore it needs professional personnel, which though is not supposed to be numerous. Basically, the company should employ the possibly minimal number of employees in order to minimize its expenditures, especially at the first months or even years of its functioning. Consequently, quality outweighs quantity, in this regard. The company should gain its share in the online commerce within a city and its major advantage is to focus on the offering of new, free online services to deliver grocery product to customers and the company should attain a stable number of loyal customers it could provide with its products and services on the local level. On the other hand, the company should not waste its financial resources on the competition with larger companies operating in the conventional commerce. In such a way, online business is one of the strategic advantages the online grocery store should use to forms its loyal clientele within a city that will provide the company with an opportunity to function effectively and get permanent profits, due to the loyal customers as well as to the permanent demand on grocery products.
The online grocery store is a new company that actually just starts the online business. This is why it is necessary to underline that the company does not have sufficient experience of the functioning in the online grocery market. On the other hand, it is also worthy of mention the fact that this segment of the market is relatively new that means that the entering barriers here are low and therefore the company, in spite of the short history of its existence, can gain its share of the market. It should be pointed out that the online grocery store is a small company that targets at the development of its online business relying on the small team of professionals that can fulfill the task of the development and promotion of the company within the target segment of the market. At the same time, the development of the company should focus on the formation of the positive experience of the company so that its personnel could feel conscious of the potential of the company to meet the most challengeable goals in the future. The growth of the self-esteem of the personnel will naturally contribute to the better performance of each member of the team working at the company. In addition, this will contribute to the formation of the positive image of the company in the market and customers will grow confident in its services and products. However, it is necessary to understand the fact that, being a new player in a dynamically progressing market, the online grocery store will need to focus on the promotion of its products and services because the lack of the experience and the fact that the company is absolutely new naturally poses the problem of the gaining public approval and formation of a recognizable image of the online grocery store, at least, among the customers that regularly use online services to buy certain products, including grocery.
Business and industry profile
The online grocery business, as it has been already mentioned above, is relatively new direction in the development of commerce. In fact, e-business is relatively new and therefore it creates certain advantages for the online grocery store to enter the market because customers are actually just discovering the online grocery market. Basically, this means that the industry does not really impose unsurpassable barriers on the way of the company to the rapid progress and gaining its share of the market. It is possible to estimate that the perspectives of online grocery business are very good.
There are several reasons which determine good perspectives of the online grocery store. First of all, the consumption of grocery products is traditionally high because these products are really essential and cannot be adequately substituted at the moment. Secondly, the customers need the supply of grocery products permanently and without wasting their time and money on shopping. This means that customers are really interested in free delivery services the company can offer and, if they receive products of high quality and save their time, they will be naturally satisfied with the services offered by the new company. Finally, online business is rapidly progressing because the customers’ opportunities to use online services constantly grow. Consequently, the services and products offered by the online grocery store to customers will become traditional to customers and, taking into consideration the fact that these services are more convenient to customers, the company can grows proportionally to the growth of the industry at large. In this respect, it should be said that the fact that the industry will grow is beyond a doubt for the development of new technologies and their accessibility make customers prefer online services to conventional commerce. In such a way, it is possible to speak about online grocery business as a perspective alternative to conventional grocery stores, supermarkets and other operators of the grocery market.
The business strategy will be focused on the implementation of innovation and provision of the company with opportunities to the improvement of its performance due to the use of new technologies. What is meant here is the fact that it is necessary to implement an effective IT and IS in order to provide the company with an opportunity to secure its online transactions and protect private information of its customers. It is also very important to protect the company from breaches which may threaten to the normal and stable functioning of the company. Obviously, this will need the employment of IT professionals or professional that could maintain or even develop an effective IS. In addition, it is necessary to create an effective supply chain in order to maximize the effectiveness of the logistics. To put it more precisely, the online grocery store should have a sufficient storage space to provide ample opportunities to satisfy the demand of customers. At the same time, it is extremely important to avoid the overstocking of grocery products and deliver it from the supplier to customer in a possibly shorter amount of time. In such a way, the company will not need a large storage space, while the effective logistics will provide ample opportunities for the supply of products practically directly from supplier to consumer. In the current business situation it is very important because this contributes to the preservation of the high quality of products and the satisfaction of needs and demands of customers. Moreover, it will decrease costs of the company on the storage of products.
Finally, it is necessary to create a team of professionals that could interact effectively and, taking into consideration the fact that the company focuses on the small business, it is very important that a small of professionals could perform their best to increase the effectiveness of the performance of the company at large. In this respect, it should be said that in the course of the development of the company the organization of some special training courses for the personnel of the company may be needed. In fact, it is possible to develop the strategy of sharing of knowledge between members of the team in order to save costs on training and increase the effectiveness of the work of each member of the team, while the ultimate goal of the training is the formation of universal professionals that can perform various tasks effectively.
Company products and services
The online grocery store will focus on the sales of grocery products. Basically, the choice of grocery products is determined by the stable demand on these products from the part of customers. This fact is very important because the company is just entering the market and needs to have a permanent demand to satisfy. Otherwise, it will be quite difficult to avoid possible crisis in the result of the under-consumption of its products or the growing storage of products that does not meet the business strategy of the company. Obviously, grocery products may be easily delivered to customers and customers always need these products because grocery products constitute an essential part of the contemporary consumption and without them customers cannot satisfy all their gastronomic needs. At the same time, it is necessary to provide customers with products they know perfectly well. This means that the company should avoid the sales of some exclusive or exotic products because, on the one hand, often they may need some special conditions of storage, while, on the other hand, the demand on such products may be low. Moreover, customers buying exotic products would more likely prefer to buy them in a conventional store where they can select the products themselves.
Furthermore, the development of the company should be focused on the offering customers convenient services which could increase their satisfaction. In this respect, it is possible to offer customers free delivery of products they order in the company. At the same time, customers should have an opportunity to trace all the stages of the shipping of the product and receive it in a possibly shorter period of time after they make the order. It is also very important to make the services and products of the company available to customers that means that the online grocery store should offer customers 24/7 services. Customers should have an opportunity to not only order some product and trace its shipping but they should also be able to contact the company freely to get some consultation, ask questions, receive some recommendations concerning products and services of the company, etc.
The marketing strategy of the online grocery store should primarily target at the gaining the recognition of the company by its customers and the formation of the positive image of the company’s brand among customers. The latter will naturally lead to the formation of the positive customer experience and increase the customer loyalty to the company’s products and services. In this respect, it should be said that primarily it is necessary to focus the efforts of the company on the quality of products and services delivered to customers. In actuality, this means that the products the company delivers to its customers should be of the high quality and it is absolutely unacceptable that customers could have been dissatisfied with the quality of the products they ordered because it can undermine the image of the company and lead to the dissatisfaction of customers. Obviously, this threatens to the deterioration of the image of the company and therefore the risk that the company will fail increases consistently in case customers are dissatisfied with the quality of products they receive. This is why it is necessary to develop an effective system of the control over the quality of the products delivered to customers. It is possible to control the quality of product before it is send to the customer.
Furthermore, it is important to provide the normal conditions of the storage and delivery of products. In this respect, the minimization of the time spent on the delivery of the product from the supplier to the customer suggested above may be very effective to provide the high quality of products.
At the same time, the quality of services is also of a paramount importance. This means that customers should be satisfied with the quality of the services of the company from the moment they make an order to the moment they receive the product they order. To put it more precisely, the company should clearly and precisely inform the customer about the variety of products it can offer, explain the rules of shipping and transactions, guarantee its security as well as security of the private information of customers. Moreover, it is necessary to inform the customer about the time of the delivery and deliver the product exactly in time. In such a way, it will be possible to meet the major goal of the marketing strategy – to increase the customer satisfaction and form the positive image of the company’s brand in the market. At the same time, it will also contribute to the formation of a positive experience of customers and increase their loyalty to the company’s products and services. The latter will provide the stable amount of customers who could buy products regularly and attract new customers to the products and services of the company.
Location and Layout
Basically, the company should be located in a city that can provide a stable amount of customers and where customers have ample experience of using online services. In this respect, it is possible to start the online grocery business in such a city as Salt Lake City, which is a large city and its potential for the development of the online grocery business is quite good. The number of customers may potentially even exceed the needs of the company, taking into consideration the fact that it is supposed to be a small business, but, on the other hand, it is possible to concentrate on the quality of products and services and formation of the stable target group of loyal customers.
Speaking about the facilities needed for the company, it should be said that it needs to have an office where all the transactions and operations could be processed, including those involving suppliers, customers, etc. Naturally, the company will need to have a hardware and software equipment to provide its online services and it should be highly reliable and meet all the needs of the company. In addition, it is necessary to have a storage space which could be situated nearby the office of the company. Ideally, it should be placed in the same building that will save costs of the company. Finally, it is necessary to have transportation facilities, i.e. vehicles to deliver products to customers. However, taking into consideration the costs of these facilities, it would be better to outsource transportation services using the services of a reliable company.
At the present moment, the entering barriers in the online grocery market are relatively low because this segment of the market is new and the competition is low. However, it is necessary to remember about the existence of conventional grocery stores which are more popular among customer, but, in actuality, it is possible to speak about the possibility of the online grocery store to become a substitute but not a direct competitor of the conventional stores. Even though products offered by the store are the same, but it actually has some strategic advantages, such as free delivery of products to customers and the opportunity to contact the company anytime, which can provide ample opportunities to gain its own share in the grocery market in Salt Lake City, but, at the moment, it will be quite difficult to overcome the competition from the part of conventional stores. In this respect, the technological progress may gradually annihilate the current popularity of conventional stores compared to the online grocery store.
Description of management team
The management team should contain professionals that could provide the most effective functioning of the company. Basically, it is necessary to employ an IT professional that could maintain and develop online services of the company and its IS as well as promote it online; the professional in the field of logistics to maximize the effectiveness of the delivery of products from suppliers to customers that is the strategic goal of the company; accountant is also important to optimize the financial performance of the company; a lawyer may be needed, though the employment of this specialist is optional and a lawyer may be employed within a few years after the launch of the business; and finally, the owner of the company should coordinate the actions of all members of the team.
Plan of operations
Primarily, it is necessary to define the major suppliers of grocery products. Ideally, it should be the producers of the products. After that it is necessary to acquire facilities that could provide the storage of the products and work of the company. The next step is the definition of transportation company that could provide stable supply and delivery of products. After that it is necessary to employ professionals to organize the work of the company and acquire essential equipment. The start of the functioning should be proceeded by the active promotional campaign that should mainly concentrate on advertising of the company’s products and services online using Internet.
Financial forecasts and loan or investment capital
Basically, the online grocery store may use the loan capital to start its business but it is very important to maintain the stable financial development which forecast is presented in the Table 1 (App.). The company should target at the gradual increase of its profitability along with the increase of sales and growing popularity of the company among customer, though it is impossible to forecast a rapid breakthrough in the grocery market, taking into consideration the competition from the part of conventional grocery stores.
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