Business Markets of the UK - Essay Example

Business Planning 1) Executive Summary The prime intent of this essay is to elaborate on a specific business idea and likewise, frame an effective plan for ensuring its financial viability and maintaining long-term sustainability. Thus, producing as well as serving the UK customers with fresh fruit juices made from tropical fruits that are not native to the UK has been considered as the business idea to be emphasised in this context. In order to write a formal business plan on behalf of the selected idea, various significant aspects have been duly considered. In this context, such aspects are reckoned to be outlining a brief explanation of the business, conducting industry analysis with due consideration to the prevailing competition, identifying appropriate target market as well as framing marketing plan and preparing budget showcasing a quality financial plan. In terms of findings, it is worth mentioning that there is a significant probability of the above selected business idea to attain success in future in the respective industry, as the consumption rate of juices is identified to increase over the next few years in the UK. From the perspective of financial analysis, a budget of £10,000 has been duly considered for the newly adapted business idea, which would eventually assist in estimating the actual costs to be incurred and the profits to be gained after offering the respective products and/or services to the customers in the initial years of its operations. Finally, a realistic financial plan has been drawn for the new venture, which would aid the business to measure its financial viability efficiently in future. Table of Contents 2) Business Description 3 3) Industry Analysis 4 4) Competition Analysis 8 5) SWOT Analysis 9 6) Target Market and Marketing Plan 10 7) Operations and Human Resources Plan 12 8) The Budget 15 9) Financial Plan 17 References 20 2) Business Description In this present day context, huge variations in the food choices of people living in different regions throughout the globe are becoming increasingly identifiable. This might be owing to the reason that the people living in this contemporary world have become much health conscious to remain fit and live a longer life. Thus, with this concern, in this health conscious era, the business idea has been taken into consideration, for the production and the distribution of fresh juices obtained from the fresh fruits those are not native to the UK. It can be apparently observed in this similar regard that there lays the presence of several juice bars in varied regions of the nations in the world that serve apple, orange, strawberry and other fruit flavoured juices to their respective customers worldwide (Belvoir Fruit Farms, n.d.; Boost, n.d.; The Snug, n.d.). However, a least number of ventures in this modern business setting are noted to serve fresh juices obtained from various tropical fruits that deliver health benefits to the people. Thus, based on the above stated scenario, an attempt has been made to adopt a business idea, which would prove to be beneficial and advantageous in satisfying the customers by offering them with quality products and/or services. This business idea is reckoned to be producing as well as serving fresh juices obtained from distinct tropical fruits including mangosteen and acai berry among others, which will tend to offer health related benefits to the customers in the global domain. The objectives of this business idea would be to understand the requirements of the customers of this modern world from health as well as wellbeing perspectives and acquire a brief knowledge about the prevailing market conditions with respect to the similar business. Apart from these, the proposed business will also aim to deliver quality and appropriate customer service for raising the satisfaction level of the customers who possess keen interest in consuming fresh juices made from various tropical fruits. It is projected that by the fulfilment of the above stated objectives, the business idea of producing and serving fresh juices made from tropical fruits would be able to reap several significant benefits. These benefits could be duly measured in terms of increasing the profitability level gradually year after year, efficiently coping up with the already prevailing competition relating to the similar business and ensuring long-term sustainability in the respective places, wherein the business is supposed to be operated. Specially mentioning, the business would mainly consider the idea of providing quality and fresh juices made from tropical fruits to the customers for the purpose of obtaining the above stated benefits. In this context, it is to be affirmed that for maintaining the quality of fruit juices, the business would be required to ensure that its main product line do embrace 100% tropical fruits with the absence of preservatives to be included in the same. Besides, the business must also ensure that its fresh juices do not contain any sort of added colouring or flavouring and are manufactured from delicious and nutritional natural elements. 3) Industry Analysis While conducting industry analysis for the above stated business idea of producing and serving fresh fruit juices made from tropical fruits to the customers, it will be vital to mention that the business would mainly operate in the respective markets of the UK. Generally, fresh juices appear in the category of soft drinks. Based on the report published by Muray (2014), it can be apparently observed that the global sales of fruit juice is projected to be developed by approximately 2.7% Compound Annual Growth Rate (CAGR) in the succeeding five years from 2013. From a financial perspective, the worldwide fruit juice industry witnessed value growth of 1% and 3% escalation in terms of volume in the year 2013. From the report of Murray (2014), it was also noted that in relation to the industry of soft drinks, fruit juices along with nectars lay under the third-biggest category followed by carbonated soft drinks and water. The report of Murray (2014) also highlighted the fact that over the recent few years, juices under the segment of soft drinks possessed a definite identity crisis and its value growth was deemed to be minimal. This might be owing to the reasons of changing business market conditions associated with fruit juices and incessant transformation of the likings of the people (Murray, 2014). With regards to conduct a critical industry analysis for the above stated business idea, it can be ascertained that the developed juice markets, such as the Asian as well as the Middle Eastern markets tend to change their respective operational systems with the transformations observed in the launch of any super-premium juice. This change on behalf of such markets can be mainly observed in terms of using the system of High Pressure Pasteurisation (HPP), which emphasises keeping the final packaging contents of the products, such as fresh fruits, in this case, intact. With the introduction, development and the maintenance of such an effective operational system, it is anticipated that the performance of the global fruit juice industry would be improved by an extensive level. This can be justified with reference to the projections made that the worldwide business market would entail 90 bln litres as well as sales of USD 167 bln within the year 2018, which signifies nearly about 18% of overall growth (Murray, 2014). After acquiring a brief idea about the worldwide performance of fruit juice industry and its likely improvements in the upcoming years, an attempt has also been made to acquire knowledge about the market of the same in the UK. It is much essential to consider the business markets of the UK while performing industry analysis, as the adapted business idea, which mainly deals with producing as well as serving fruit juices from tropical fruit, will operate in the same. With this concern, the report published by British Soft Drinks Association (2014) revealed that the consumption of soft drinks, particularly in the UK, has been growing rapidly with every fiscal year during the period 2007 to 2013. A tabular representation has been accordingly provided below for better comprehension of the above stated context. Source: (British Soft Drinks Association, 2014) However, the most discouraging fact is that the consumption rate of fruit juices in the UK has been decreasing from the year 2007 to 2013, which can be better understood from the following tabular illustration. Source: (British Soft Drinks Association, 2014) Thus, based on the above identified consumption trend of fruit juices in the UK, it can be affirmed that the adapted business idea may face certain difficulties in the initial years of its operations. Though the business idea would possess a Unique Selling Point or Proposition (USP) of offering quality fruit juices made from tropical fruits those which are not native to the UK, the chances of facing major difficulties remain quite minimal. It is worth mentioning that during the initial years of operations, the business requires to comprehend the tastes of the people belonging to different regions of the UK and then acquire a brief knowledge about the existing market conditions relating to the same (British Soft Drinks Association, 2014). Similar to this sort of business, it is obvious that the different juice bars engaged in offering distinct varieties of fruit juices tend to maintain hygiene in order to evade any sort of negative perceptions held by the customers relating to product quality. Thus, the newly adapted business idea would also have to focus on hygiene as well as health benefit aspects for attracting the customers and raising product sales (Finnerty & Tombs, 2010). 4) Competition Analysis The fruit juice market in the UK is increasingly becoming a demanding section of beverage industry because of the rising awareness and most importantly, the preferences of the customers towards consuming various healthy products. This particular market is predominantly viewed to be much competitive with the presence of numerous juice bars or companies those offer premium quality of fruit juices to the potential customers belonging to the UK. In this regard, the newly adapted business idea might face extreme market competition from two of the already existing companies, namely Belvoir Fruit Farms and Boost Juice Bars operating in the similar industry. Belvoir Fruit Farms is regarded as one of the leading companies, which offers quality range of fruit juices to the customers in a global domain by taking numerous initiatives. These initiatives include making deliberate efforts towards refurbishing any sort of new fruit juice, regularly checking the ingredients to be used in the juices and ensuring that the juices are served as per the requirements of the customers. Moreover, it ensures that the products being delivered to the potential customers do not contain any sort of preservative that may affect their health and wellbeing (Belvoir Fruit Farms, n.d.). On the other hand, Boost Juice Bars was founded in the year 2000, which is being involved in providing quality and premium juices to the people of the UK for numerous years. It is mainly known for its deliverance of enriched products with improved level of customer service and huge concern over the use of ingredients in such products (Boost, n.d.). From the above analysis, it is quite clear that the newly adapted business idea would face extreme level of business market competition from Belvoir and Boost amid the prime ones for which, it needs to embrace and execute certain effective strategies to differentiate its product. In this regard, one of such strategies could be reckoned as ensuring that fresh juices made from tropical fruits, which are not native to the UK, are offered to the people of the UK maintaining proper level of hygiene. 5) SWOT Analysis One of the major USPs of the newly adapted business idea, which concentrate on offering fruit juices made from tropical fruits that are not native to the UK, could be duly considered as one of its major strengths. This is mainly owing to the reason that such concept is new as well as unique, which might attract the customers of the UK to consume the offered products. In terms of weaknesses, it can be affirmed that the above stated newly adapted business idea may face problems while conducting its operations in the fruit juice industry of the UK having limited knowledge about the concept. Besides, the inability to understand the prevailing market conditions of the UK in a rapid manner due to lack in experience would be the other weakness of the business. It is worth mentioning that the newly adapted business idea would possess the opportunity of attracting huge figure of customers of the UK towards its fruit juices, as these people showed utmost interests in consuming such products and making extensive level of expenses for availing the same during the preceding few years (The Statista, 2014). Apart from this, the increasing level of consuming juice drinks in different regions of the UK from the year 2007 to 2013 would also assist the newly adapted business idea to have greater opportunities in placing itself as one of the dominant marketers in the UK fruit juice industry (British Soft Drinks Association, 2014). It has been earlier mentioned that there exists huge market competition in the fruit juice industry in the UK. This can be justified with reference to the fact that several renowned market players, including Boost Juice Bars and Belvoir Fruit Farms are operating in the respective industry of the UK in an efficient way, already capturing a substantial proportion of the entire market (Boost, n.d.; Belvoir Fruit Farms, n.d). This can be regarded as one of the crucial threats for the above stated newly adapted business idea. 6) Target Market and Marketing Plan From the provided information, it can be ascertained that a huge figure of young adults belonging to the UK became much health conscious by consuming healthy diets that would keep them free from any sort of disease or illness. These people as well as the aged individuals of the UK are identified to restrain from experiencing varied chronic illnesses including arthritis, obesity, gout and asthma among others that has become quite challenging to be cured permanently with the currently accessible medicines. Thus, based on this scenario, the target market of the newly adapted business idea would be the health-conscious adults within the age range of 30-70 years who do not only desire to remain physically fit but also tend to follow a stern dietary regime. Moreover, apart from this, the newly developed business idea would also target those customers who possess above average income levels with disciplined living style. With regards to the provided information, it was found that there exist several customers who do not desire to consume packed juices that are served in cans. This is mainly because the producers often use a blend of artificial flavours, sugar as well as preservatives to improvise the acceptability of such packed juices during their preparation. In this regard, the newly adapted business idea will also target those customers who do not prefer packed juices served in cans. On a further note, the new business idea would also target such customers who are ready to pay for the fresh juices made from tropical fruits in a hygienic environment. In precise, it can be inferred that the health conscious people residing within different regions of the UK would be the potential target market for the newly adapted business idea. From the perspective of designing a quality and an effective business plan, it must be mentioned that marketing is reckoned to be a prime external factor, which supports a new business to access numerous opportunities and identify along with mitigate threats that emerge during the conduct of operations (Jain, 2010). Thus, based on the above notion, the newly adapted business idea must use available marketing methods to attract the customers that comprise both tourists and locals. In terms of marketing, the prime purpose of the new business idea would be to gain local recognition within the business markets of the UK. Specially mentioning, the marketing plan of the newly adapted business idea will be designed according to the 4Ps of marketing. In this regard, concerning product characteristics, the new business idea would produce and serve fresh fruit juices made from tropical fruits those are not native to the UK for the people who mainly reside within different markets of the nation. The main product line of the business, i.e. fresh fruit juices, would thus be produced in such a way that it can offer better health as well as nutritional benefits to the potential customers of the UK. It is projected that the new business idea may prove to be favourable in terms of profitability and other financial indicators, as its chief product line is deemed to be unique and special for the people who reside within the UK. In terms of place or location, the new business could make product availability in all the grocery shops and shopping malls located in major regions of the UK. It will be vital to mention in this regard that the business will mainly select the urbanised as well as well developed regions for marketing its major product line, i.e. fresh fruit juices made from tropical fruits. Apart from the aforementioned two Ps, when relating to the conception of marketing mix, pricing also plays an imperative role in support of a business towards determining its profitability level and competing with major competitors. This is also similar to the case of the newly adapted business idea. In terms of price, the new business idea could adopt and utilise penetration strategy, as it lies in the introductory phase. From a conceptual perspective, penetration strategy denotes offering quality products with low process to the customers. This particular strategy may prove to be beneficial for the new business to introduce its main product line, i.e. fresh fruit juices made from tropical fruits in diverse business markets of the UK. Finally, in relation to promotion, the new business could make greater use of print media, TV commercials, radio advertisements and organisation of major events among others (LinkedIn Corporation, 2015). 7) Operations and Human Resources Plan The operational plan of the newly adapted business idea, which is concerned with producing and serving fresh fruit juices made from tropical fruits that are not native to the UK, could be better explained by analysing varied significant aspects. These aspects might include market analysis, following a specific business model, paying utmost attention on a specific performance indicator i.e. health and safety and design along with layout. With regards to the factor concerning market analysis, the new business idea will be operated by identifying its target audience. It is obvious that different nations possess distinct cultures and flavours. Moreover, in this contemporary world, it is often observed that the customers’ tastes as well as preferences are incessantly changing in a repeated manner. By considering these vital components while initiating a new business, the stated venture needs to conduct a comprehensive market analysis. It is thus worth mentioning that following a specific business model would be most practical for a small business like the stated venture, which deals with producing and serving fresh fruit juices made from tropical fruits that are not native to the UK. In this regard, the newly adapted business idea may follow the business model of a sole trader, which would require extensive level of investments for initiating the venture in the initial phase. Thus, it is recommended that the new business could follow the business model of partnership (Redder, 2011). While focusing on a specific performance indicator, i.e. health and safety, it will be vital to mention that the existence or the sustainability of the newly adapted business idea depends mainly upon this vital component. This can be accepted with reference to the fact that there lays the presence of hygiene certificates or policies as well as licences those are required to be followed by the new venture while introducing its major product line in different business markets of the UK. In this context, the hygiene certificates or policies principally are related to food storage along with preparation and distribution of the main product line to the ultimate end users. Finally, from the standpoint of design and layout factor, it must be mentioned that the newly adapted business idea will be operated by making deliberate efforts in improving its brand and determining customer loyalty among others. It is worth mentioning that the product sales of a company is directly related to the factor of design as well as layout, as this constituent tends to justify the company’s brand image (Redder, 2011). Thus, this factor could also be related to the newly adapted business idea in terms of its operations while introducing major product line in the UK markets. The human resources (HR) plan of the newly adapted business idea can be better understood by identifying the potential members required to conduct efficient business operations. Thus, with this concern, in order to introduce the business of fresh fruit juices made from tropical fruits that are not native to the UK, the venture may appoint one manager for handling various managerial activities in the respective operational domain. Besides, the company may also appoint managers relating to other chief operational domains of production along with operations, marketing, planning and development of new products, procurement and finance as well. Specially mentioning, the roles of production along with operations manager of the new venture would be controlling the existing production system, managing the operational labour force and recording food expenses. Apart from these, the other roles of production as well as operations manager are reckoned to be motivating the existing labour force, optimising the reward opportunities and more importantly, ensuring that the respective food products are timely delivered to the potential customers of the UK (LinkedIn Corporation, 2015). The major responsibilities of the marketing manager of the new venture would be creating unique as well as new marketing ideas, monitoring the prevailing business market competition, managing marketing budget and setting effective marketing plans along with strategies among others. Besides these functions, the marketing manager of the new venture would also perform the role of adopting vital decisions associated with distinct variables of marketing mix. The manager of planning along with development of new products of the new venture will be entitled with the roles of conducting staff induction, succession planning, coordinating as well as executing HR related policies and supporting the development of new products among others. Finally, the roles of the procurement and the finance managers for the new venture would be to enhance the availability of the necessary elements to be taken into concern for producing fresh fruit juices made from tropical fruits and budgeting along with assessing financial performance respectively (LinkedIn Corporation, 2015). Thus, from the above analysis and discussion, it can be affirmed that the newly adapted business idea would commence its functioning in the different business markets of the UK with 5 managers who would be looking after distinct operational domains. 8) The Budget Budgeting is important to be considered while initiating a new business. This is mainly because the financial viability and the long-term sustainability of a new venture in the respective business markets largely depend on this specific indicator, i.e. budgeting. From a theoretical perspective, the perception of budgeting is regarded as a process of making effective planning with respect to spending money for attaining long-term benefits (Rabin, 1992). In relation to any business, budgeting simply denotes balancing expenses with that of the income earned after conducting any sort of business. Specially mentioning, budgeting is deemed, as a quantitative plan, which acts as a decisive tool for making effectual decisions about what activities are required to be made for future outlook (Rubin, 2013). While determining the budget for the newly adapted business idea, which mainly focuses on producing along with serving fresh fruit juices from tropical fruits those are not native to the UK, it is to be affirmed that the venture could commence its initial operations by incurring £10,000. This start-up cost of the new venture will mainly depend on its potentiality to expend for the instruments including coolers and juicers among others, advertising, rent and obtaining the necessary permits as well as licenses for performing smooth operations in the business markets of the UK. It is worth mentioning in this similar context that the above stated expenses are reckoned to be quite crucial for the new venture, as these are identified to be the prerequisites for the smooth functioning of a business in this contemporary business world. It is thus projected that an effective budgeting would certainly assist the new business to estimate its incurred costs, obtained revenues and utilised resources while performing varied operational functions in the initial years of its introduction in the respective business markets. This proper estimation of the incurred expenses would certainly provide a direction to the business in determining its financial position and measuring long-term sustainability in the respective business markets (Leonard, 2009). With regards to the initial investment of the newly adapted business idea, which has been settled at £10,000, it must be mentioned that utmost attention will be required to be paid on determining the expenses involved while conducting operations in the initial years in the diverse business markets of the UK. It can be further affirmed that during the initial year of the establishment of the new business, it might not gain profits and thus, might have to experience loss. With this concern, it is projected that the new business idea would incur the expenses amounting to £9500 while conducting operations in the initial year. These expenses would be incurred by the company in various operational domains including advertising, maintenance of the business or operational instruments such as juicers, repairs of the same and miscellaneous costs amid the prime ones. A detailed analysis of the budget of the new business idea could be better comprehended in an elaborated manner from the following financial plan. 9) Financial Plan After acquiring a brief idea about budgeting, it is to be affirmed that framing an efficient financial planning would certainly assist the newly adapted business idea to work upon its financial performance and meet the requirements of finance (Greenwood, 2002). From a conceptual standpoint, the notion of financial planning is regarded as a basic form of financial management, which tends to determine about how a particular business has raised the required finance and applied the necessary funds (Maheshwari, 1997). Notably, financial planning comprises certain vital elements that lay emphasis on determining the overall financial performance of a business enterprise. In this regard, such elements are ascertained to be making relevant decisions relating to finance in an efficient way, corresponding to the motives of the individuals and formulating effective enterprise objectives (Sestina, 2002). The financial plan for the newly adapted business idea, for the first years of its operations, could be better understood from the tabular representation depicted below. Based on the above financial plan, it has been assumed that the new venture would incur a loss of about £ (35) for the first year of its operations. This might be owing to the reason that the venture to have lack in experience about conducting this business in the UK and expecting lesser amount of acceptability of the same by the people belonging to respective regions of the nation. In terms of conducting financial plan for the business of the new venture, sales of around £3,000 would be feasible in the initial year of its operations. While making the sales, varied operational expenses are likely to be incurred by the new business with the intention of determining the profitability level. Such operational expenses would mainly include advertisement, maintenance as well as repairs, salaries, depreciation, miscellaneous expenses and professional fees. Finally, while analysing the financial plan developed for the new venture, it can be inferred that the newly adopted business idea may experience negative operating profit in the initial year of its operations. The prime reason for the newly adopted business idea to face loss in the first year of its operation would be lesser acceptability of the fresh fruit juices made from tropical fruits amid the customers of the UK, since this particular product line is newer as well as unique to them. With regards to the conduct the financial plan for the newly adapted business idea, it will be vital to mention that the venture is required to identify certain potential sources based on which, adequate funds could be raised in case it experiences turbulent financial conditions. In this similar context, one of such sources could be ascertained as availing loans from any financial institution such as bank. Besides, the new venture could also make better use of its already existing capital for coping up with the situation of unstable financial conditions. This will enable it to deal with any volatility emerging from unforeseen scenarios. References British Soft Drinks Association, 2014. Overall Soft Drinks Consumption. Creating New Choices. [Online] Available at: http://www.britishsoftdrinks.com/write/MediaUploads/BSDA_annual_report_2014.pdf [Accessed April 10, 2015]. Boost, No Date. Once Upon A Time... About Boost. 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