Business Plan of EasyShop - Assignment Example

Company Summary EasyShop is a supermarket chain store that was started in January 2011. The supermarket is located in Las Vegas, Nevada. EasyShop will offer various household and food merchandize at affordable prices. Other than being affordable, the products and services will be of high quality. The start-up plan of the company is based on its vision and mission. Vision: To become the best in retail services in regard to the customer. Mission: To become innovative leaders in the industry in terms of the services offered to the customers. EasyShop is located in Las Vegas city in the state of Nevada. The supermarket has various departments dealing with different kinds of products. These departments include food, electronics, housewares, floral, chemist and laundry department. Strengths and Core Competencies EasyShop offers products and services that are affordable (at low prices) in comparison to competitors. It offers a wide variety of products and is committed to offer the best retail services in the city of Las Vegas. Challenges There are several supermarkets in Las Vegas and this will prove to be a difficult situation for EasyShop to establish its brand image and attract customers. These supermarkets include; Albertsons, Walmart Supercenter, Mariana’s Markets Deli, 99 Ranch Market, Trader Joe’s, Vons, Whole Foods Market, Food 4 Less, and Sunflower Markets. Products and Services EasyShop will offer products and services related to food and household merchandize. These products and services will be provided in the supermarket’s departments (food, electronics, housewares, floral, chemist and laundry department). Products to be offered in the food department include meat, grocery, dry food products, packaged food, and soft drinks. In the electronics department, both products and services will be offered. Products will entail mobile phones, televisions, refrigerators, laptops, personal computers, home theatres, and other household electronic items. Services to be offered in this section include repair and maintenance services. Other products to be offered include cooking utensils and dishwares by the housewares department, floral products by the floral department, medicines by the chemist department, fabric softeners and detergents by the laundry department. Competitive Comparison The Las Vegas market is highly competitive and it will face stiff competition from the following supermarkets Albertsons, Walmart Supercenter, Mariana’s Markets Deli, 99 Ranch Market, Trader Joe’s, Vons, Whole Foods Market, Food 4 Less, and Sunflower Markets. Albertsons, Walmart Supercenter, and Mariana’s Markets Deli will be used to show how competitive the market is in Las Vegas. Albertsons is located in Las Vegas and it has different operating hours; the store operates from 5am to 1am everyday and the pharmacy operates from 9am to 9pm on weekdays, on Saturday from 9am to 6pm and on Sunday from 10am to 6pm. The supermarket offers numerous products and services and they include; floral department, pharmacy, seafood, instant digital prints, flu shot clinics, hard liquor, general merchandise, coin-operated copy machine, recycling – plastic bags, grocery department, film developing, carpet steam cleaners for rent, ATM, money transfer service, and store tours available (Albertsons 1). Mariana’s Super Market boosts itself of an excellent reputation in offering fresh food products to satisfy the needs of the customer. The supermarket provides great food service at reasonable prices. Mariana’s Super Market has the following sections; supermarket, deli, bakery, and fresh produce (Mariana’s Super Market 1). Wal-mart Supercenter offers store services such as cell phones, garden center, McDonald’s, L.e.i. apparel, canopy home collection, tire-lube, and 1-hour photo center. The store is opened 24 hours and the pharmacy center operates from 9am to 9pm during weekdays, 9am to 7pm on Saturdays, and from 10am to 6pm on Sundays (MyStore411.com 1). Marketing Plan The form of market segmentation that will be used is the demographic segmentation. Demographic is the most common technique used in market segmentation. The method characterizes the market on the basis of socioeconomic or demographic features. The most common forms of demographic measures include income, occupation, education, family life cycle stage, ethnic group, household size, age, and gender (Boone and Kurtz 393). The total population of Las Vegas, Nevada is 564,484 residents. The median age (years) in Las Vegas is 35.5 (City of Las Vegas 1). Table 1 shows the Las Vegas market segmentation (demographic). Table 1: Population by age and market segmentation for Las Vegas, Nevada (Source: City of Las Vegas 1). Market Segment Age Total Population in Percentage 1 Under 5 years 8.1% 2 18 years and over 72.7% 3 65 years and over 11.5% The Las Vegas market can be divided into three segments. The first segment comprises of the “under 5 years” age group. This amounts to approximately 8.1 percent of the market. The second market segment is the “18 years and over” age group; the group comprises of 72.7 percent of the market. The third and the final segment is the “65 years and over” age group. This segment comprises of 11.5 percent of the market segment. The market segment in Las Vegas is divided into three categories; segment 1 comprising of the under 5 years age group, segment 2 comprising of the 18 years and over age group, and segment 3 comprising of the 65 years and over age group. The target market segment is the 18 years and over age group. The segment forms the largest portion of the market and most of the products and services in EasyShop target this segment. Within the supermarket, there are hot spots that will offer this segment of the market the opportunity to access internet for free. Supermarkets are getting more demand from the younger generation. This is because of the kind of products and services they require. This segment consumes on a larger scale products such as snacks and confectionaries. Products like cell phones, tablet PCs, and laptops are a common among this generation (market segment 2). These products define their lives and the supermarket will offer them at catchy prices. Services such as the internet will be offered since most of these products used by market segment have internet connectivity. Internet and light snacks will be provided for free by EasyShop. These are some of the needs required in this market segment. Technology has tremendously advanced in the last 10 years and this has affected the type of products and services required in the market place. Most of the products and fashionable among market segment 2 revolve around technology. More people are connected through cell phones and the internet; almost everyone is on the social network and has a mobile phone number. This market segment is attracted by trendy technological products -the type of products that can enhance their social interaction. The business industry has a lot of potential for both the new and the existing investors. Businesses such as supermarket are gaining popularity because of the variety of services they offer to their customers. The market is expected to grow by a large margin by the year 2015. Technological advancement is a factor that is causing the growth in the market. Industry Analysis Supermarket is defined in many ways and a single definition of supermarket does not exist. There are three methods that are used to describe a supermarket and they include the stock requirements, the features, and the level of self-service, and the minimum size necessities. For instance, “in the United States, a supermarket was first defined by the Supermarket Institute as a self-service departmentalized food store having a minimum sales volume of $250,000 per year. In 1954 the minimum sales volume was revised to $500,000…” (Jain 109). Recently, the figure was modified to 1 million US dollars per year. In the UK (United Kingdom), supermarket is described as a “self-service store food store with centralized check-outs and a sales area of over 2,000 square feet” (Jain 109). Main Competitors The Las Vegas market is very competitive; there are several supermarkets and grocery stores offering the similar products and services but at very competitive prices. EasyShop has to face this competition if it has to succeed in the Las Vegas market. The main market segment target is the younger generation and there are wide varieties of products offered by these supermarkets. As stated earlier, these supermarkets and grocery stores include; Albertsons, Walmart Supercenter, Mariana’s Markets Deli, 99 Ranch Market, Trader Joe’s, Vons, Whole Foods Market, Food 4 Less, and Sunflower Markets. Barriers to Entry There are no barriers to entry in the Las Vegas business market. Regulations Green Roots Program - the program assists business and homeowners to adopt cost-saving management practices and environmentally conscious practices. The Las Vegas Chamber of Commerce deems that green business activities can assist members to make business choices that have positive effects on the community, employees, and the customers (Las Vegas Chamber of Commerce 1). LEED Certified Buildings – businesses are required to meet the LEED certification. Commercial Real Estate – the commercial real estate broker performs this; these individuals are knowledgeable of the local commercial market (Las Vegas Chamber of Commerce 1). Strategy and Implementation Summary EasyShop will offer products and services at affordable prices, prices that are consumer friendly. A variety of products and services will be offered for each market segment (segment 1, 2 and 3). After-sales services will be provided for most of the merchandize bought by the customer. Catchy loyalty programs will also be available for the loyal customers. EasyShop will develop an official website in which they will create a brand and the company image in the Las Vegas market. Through the website, the consumer will be able to search for products, their availability, and the prices. EasyShop will begin by targeting the young generation of the Las Vegas market (market segment 2 – 18 years and over age group). Through the internet (such as social media websites) and other promotional methods, EasyShop will convince the people why they should shop at EasyShop supermarket. The target market will be offered extra services such as free internet through the company’s hot spots. Loyalty programs will be provided to the loyal consumers; the shoppers will be able to get discounts or gifts through the program. The loyalty program will enable EasyShop to know more of the Las Vegas market segment (that is, they will be able to understand the shopper’s buying trends). Marketing Budget Close to $10,000 will be used for marketing in the fiscal year ending 2011. The methods to be used for marketing include television, newspaper, the internet, and road shows. SWOT Analysis Strengths Many customers find it easy to shop in a supermarket due to the wide range of products and services available. The prices for the products and services in EasyShop are affordable. The quality of the products and services is high. The company possesses highly qualified staff able to deliver quality services in the shortest time possible. Weaknesses The cost of employing highly qualifies staff is very high. The number of staff in EasyShop may not be able to meet the demands of the market. Opportunities Technological advancement has lead to the development of products and services that meet the needs of the consumers. There are regions in Las Vegas that need to tapped; these regions do not have businesses such as supermarkets. Business is growing at a rapid rate in Las Vegas. Threats The financial crisis has made investment a difficult venture. The main competitors are offering products and services at very low prices. However, most of these products and services are of low quality. Some of the regions in Las Vegas are insecure and thus, the business cannot run for 24 hours in a day. Marketing Mix EasyShop will offer a number of products and services through its departments and they include fabric softeners, detergents, mobile phones, televisions, refrigerators, laptops, personal computers, home theatres, cooking utensils and dishwares, floral products, medicines, meat, grocery, dry food products, packaged food, and soft drinks. The Las Vegas market is highly competitive and this a great challenge to EasyShop. The prices for the products and services will be competitive. EasyShop will offer these products and services at prices lower than those of the main competitors will. EasyShop will be located in the outskirts of Las Vegas but near the neighborhoods. The location has been chosen because of its convenience to the shoppers. The mode of promotion that will be used is media advertising such as television, the internet, magazines, and the newspapers. Other than media advertising, EasyShop will use road shows to convince the consumers why they should their purchase products and services. Operational Plan Task Effecting Period (December 2011 to May 2012) December January February March April May Selecting the location Developing the official website Recruiting and training of the staff Promotion (media advertising) Opening of EasyShop EasyShop will be located near the Las Vegas neighborhoods but in the outskirts of the city. Currently, there are no legal obligations for EasyShop. EasyShop will start with 30 staff members. The owners of EasyShop are not included in the 30 staff members. The organizational structure of EasyShop is as follows. In the order of hierarchy – the Managing Director, Operations Manager, Human Resource Manager, Head of Finance, Departmental Heads, Supervisors, Cashiers, and customer assistants. Financial Plan The total investment required is worth $2,000,000. The development of EasyShop will cost $600,000, personnel will cost $500,000, capital expenditures will cost $500,000, and promotion will cost $10,000. The revenue forecast from 2012 to 2015 will be as follows: 2012 - $2,500,000 2013 - $3,200,000 2014 - $5,000,000 2015 - $7,200,000 Profit And Loss Projection The net profit for the years between 2012 and 2015: 2012 - $400,000 2013 - $1,000,000 2014 - $3,000,000 2015 - $5,200,000 Works Cited Albertsons. Albertsons. Albertsons, 2011. Web. 28 Nov. 2011. Boone, Louis, E. & Kurtz, David, L. Contemporary Business 2009 Update. Mason, OH: Cengage Learning, 2008. Print. City of Las Vegas. Census Data. City of Las Vegas, 2008. Web. 28 Nov. 2011. Jain, Neleesh. Retail Management: A Realistic Approach. New Delhi, India: Global India Publications, 2008. Print. Las Vegas Chamber of Commerce. Business Resources. Las Vegas Chamber of Commerce, 2010. Web. 28 Nov. 2011. Mariana’s Super Market. Mariana’s Super Market. Mariana’s Super Market, 2011. Web. 28 Nov. 2011. Mystore411.com. Wal-mart Supercenter in Las Vegas, Nevada (department store) – Location & Hours. Mystore411.com, 2011. Web. 28 Nov. 2011. Read More