Business Plan
BUSINESS PLAN FOR TECH SNEAKER SOLUTIONS INC.
Executive Summary
Tech Sneaker Solutions Inc. is an e-commerce company with a vision of becoming a market leader in web based sales of sneakers in China. The company is located in Hong Kong which is city in China. There has been a common trend whereby many internet companies have failed, but Tech Sneaker Solutions Inc. is exceptional since intensive research and proper planning of the business has been done by experts. The success of the company will largely depend on an easy to use website designed by IT experts and excellent customer service. This is because the existing online businesses lack the same as evidenced by a research done that revealed how dissatisfied customers were which has led to loss of loyalty in the industry.
In the next three years, Tech Sneaker Solutions Inc. intends to create an icon ecommerce brand recognized in the region and built customer loyalty to the business which will translate to increased sales volume and business growth. According to the projections, the company is deemed to operate profitably at an increasing rate over the three years hence the need for funding and support by investors and stakeholders. The company will ensure wealth maximization of the shareholders is observed to create value for shareholder investment. The company will also initialize an effective marketing strategy whereby clients will be able to return goods within a stipulated time for exchanges or refunds. This maximizes customer loyalty and promotes repeat purchases and referrals by clients
Organization Description
Tech Sneaker Solutions Inc. is an online based company in China that deals in sneakers to its consumers. It also offers IT consultancy services and freelance jobs in sales and marketing. It is set to become a market leader in the country in sales of its products online in correspondence to advance technology. The company has remained profitable and relevant over the past years despite many internet-based and online businesses failing. This is mainly because of proper planning, good revenue streams and proven business models (Lasher, 2005). The company’s major objectives are to make Tech Sneaker Solutions Inc. an iconic brand, to create infrastructure for the fulfillment of online based sales and to grow sales and operations through laser focus in two different phases in a controllable and measurable market to drive customers to the company website.
The company strives to improve the overall image of online merchants hence stimulating growth of online shopping. China is a country experiencing high economic growth and its citizens could appreciate growing market for online shopping mainly because the market system is majorly physical and online shopping is just setting in. It is therefore important to build a strong brand with desirable features that instill trust and reliability to potential customers especially since competition is low. Tech Sneaker Solutions Inc. has taken this initiative and is currently reaping greatly from the large customer base. The company’s business philosophy is the belief in customer satisfaction as our success. The company will market its products and services online, therefore the target market will be mostly those with digital phones, tablets and computers. Advertisements will also be done to increase awareness and promote online searches and purchases for the products.
Problem and Solution
Business in the current environment are transferring their services to the online market that is overwhelmingly creating avenue for firms to increase their market share. Tech Sneakers Solutions Inc. will provide services to consumers through the online network using mobile phone applications. Many footwear consumers experience challenges in locating an effective market or store they can source their high quality products. With emergence of many counterfeit products, consumers are in search of an online medium they can buy directly. In addressing the challenges in locating buyers and sellers where confidence and trust are key, Tech Sneakers Solutions Inc. aims to serve this gap in the business environment. The application intends to connect buyers and sellers through a platform that can help in creating transparency and protecting both consumers and sellers. In this regard, the application sought to integrate an easy to use, reliable and secure gateway for buyers and sellers that will enable their business interaction through buying and selling of sneakers. To be effective, the management of the platform will be able to effectively ensure that both buyers and sellers undergo evaluation and verification to reduce cases of fraud (Byrd & Megginson, 2013).
The sneaker application will help this startup business that will connect buyers to sellers through a platform that both buyers and sellers can trust and conduct their business engagement responsibly. The market will open market for both buyers and sellers creating a platform for trade. To ensure both buyers and sellers are protected, the application management will require sellers to send the products to their office for verification and approval and inspection (Byrd & Megginson, 2013). This measure will help in ensuring that only high quality products are able to reach the consumers by eliminating faulty sneakers. The inspection process will enhance quality control of products reaching the buyers reducing cases of customer complaints and poor satisfaction. Additionally, inspection will ensure that sellers are able to maintain a positive profile in the views of buyers influencing sustainability of their businesses.
In the office staff member will inspect the sneakers through the facilitation of catalogue for fake to ensure that the end consumers receive high quality and original sneaker. After inspection, sneakers photos will be uploaded in the application and shipped to the buyers when sale process is completed. Basing on the above approach, high price of average orders will help in ensuring that these expenses are taken into consideration while making revenue from the sales. Tech Sneaker Solutions Inc. will be launched in November 2017 where the company targets that initial stages will attract fewer buyers and sellers, but will increase as confidence and trust for both sellers and buyers will increase the number of transactions on daily basis increasing. The following subchapters going forward will discuss the dynamics of the business in terms of marketing, operations, employee organizations, and financial aspects of the company among others.
Value Proposition
Customer value proposition refers to description of experiences that a potential buyer will realize in use and purchase of products. In the product marketing for the platform bring together both buyers and sellers, it will be effective to apply marketing mix strategies in meeting the needs of users of sneakers application (Chong, Shafaghi, Woollaston & Lui, 2010). Customer value propositions also known as value proposition. The value propositions will comprise of benefit statements for generic audience. The most important tool for the firm’s customer value proposition is marketing approach or strategies that it adopts. For this particular firm, marketing mix will be critical in creating customer satisfaction. Customer satisfaction will involve introduction of product inspection for process that will ensure control of product quality to guarantee high customer satisfaction. Quality control also ensures that customers get what they want, which propositionally implies that customers are able to achieve high satisfaction from the products.
The customer value proportion is critical and arguably the most crucial determinant in the marketer’s toolset. The significance of value proposition is that it will help in create a strong foundation of customer satisfaction, which by itself influences the business growth. Through quality and value proposition by the firm, there is high chances of growth that will ensure effective market share growth and expansion for the business. Chinese users, there are a lot of buyers who are looking for buying high quality and original sneakers brand. So it will be helpful for users around the world who want to buy sneakers from China and other Asian countries. So our website will be valuable for users around the world. It will facilitate users in acquisition of high quality brands in relation to sneakers.
The firm will take into consideration the customer needs, which is quality of sneakers and value for their money. This implies that these needs must be met. However, in case of unsatisfied demands by the buyers and sellers, management must be ready to address these issues amicably to ensure that the demands are achieved effectively. There are indication that complains would arise hence the need to set-up a dispute management team to be able to address challenges brought out by both buyers and sellers to assure high satisfaction among the users. It is important to essential that gaps in the satisfaction level are addressed effective through strategic options to protect both buyers and sellers. Unsatisfied needs should also require guidelines for both consumers and buyers to facilitate in effective dispute management process for high quality services.
Our perspective is to develop an e – company business (online store) that can positively contest with worldwide manufacturers like Amazon. Com and Alibaba.com
Our mission is developing an online retail outlet business that will make available a number of sneakers from top production manufacturers at reasonable prices to a number of customers that will cut across different countries of the world.
Tech Sneakers Solutions Inc. is a worldwide web store that intends to become a worldwide product and contend positively with the major manufacturers on the market hence we will make sure that we put the right framework and procedures in place that will allow us to develop the company of our desire. At Tech Sneakers Solutions Inc., we will make sure that we seek the services of people that are certified, sincere, client centered and are ready to work to help us develop a flourishing company that will benefit all the share entrepreneurs (the entrepreneurs, employees, and customers). As a point, in fact, the profit-sharing agreement will be made available to all our control employees and it will be based on their efficiency for a period of three years or more. In opinion of that, we have made the decision to employ certified and qualified arms to take up the following positions; Primary Professional Official / Chief executive, Human Sources and Administration Administrator, Factory Administrator, Merchandize Administrator, Business Designer, Transportation and Logistic Administrator, Information Technologist, Financial advisor, and Call Middle Agent.
Strategic Partners
To achieve the organizational objectives, partnership is crucial to facilitate the business practices. The partnership will include large manufacturers of the sneakers, quality assurance bodies, and Information Technology solution providers like Microsoft and online payment gateways to allow fast and secure payments for services. The partnerships will enhance the ability of firm to provide secure and efficient business services to buyers and consumers. In addition, the firm intends to also partner with local established franchise that will allow smooth transition of services from suppliers to buyers. In meeting this intent, the firm will strategically partner with various shipping companies that are reputable for effective delivery of products to consumers (Belew, 2011). The partners will also be required to sign formal agreements with the company to ensure that they have legally binding agreement with the partners. The local partners will be crucial in ensuring that administrative and legal issues are addressed effectively. For international buyers, the firm will partner with clearance agents to ensure that consumers are able to receive their goods on time. The growth of the firm will increase number of partners to ensure quality of goods and services rendered is not comprised due to increase customer volume.
High level timeline
The company with have a team comprising of the marketing and sales department, customer care unit, maintained unit and a management team that will help in the running of the organization. The leadership style that I will utilize is the transformational leadership that will help in including the employees in the decision making process. In addition, I will empower the employees to demonstrate their different talents for the benefit of the organization and for their personal and professional growth. The marketing department is a crucial department that will have a direct contact with the consumers to ensure that they feedback is addressed effectively. In addition, the customer unit will receive the consumers providing them with effective services in the reception.
With the need for motivation, the company will draft an equitable reward system that will reward the employees to ensure that they demonstrate high productivity in the organization. The company will require an official legislative licensing from the Registrar of Companies. In addition, the organization will require other legal registrations form the local authorities facilitating in the company legal regulations adherence. The other concern is the privacy policy for the organization where the customers’ data should be protected from the third party to ensure that they do not face privacy issues in relation to their organization interaction with the consumers. The company will outsource some of the services to ensure that they are able to concentrate on the key services to offer the best quality services. The supply department will also facilitate in engaging in legal agreement with the suppliers to ensure that the organization objectives are met as indicated. Customer loyalty is important for the survival of Tech Interiors Inc. In addition, the company will form its policy based on no credit basis.
The operations the firm will help in ensuring that the needs of the consumers is addressed. The grievances from the consumers should also be managed effectively. The firm will utilize the customer care to unit and the online markets in receiving grievances and feedback from the consumers (Belew, 2011). During the meetings, the customer unit will be required to present the challenges and grievances from the consumers. The grievances that have less gravity can effectively be managed by the customer care unit. However, the grievances that are beyond the solution by the customer care will be referred to the department concerned with the grievance. During the meeting, these concerns will be addressed and an appropriate measure will be decided together. This will help in ensuring that the customers are satisfied with the services.
It is necessary to pick a reliable location for business even if much of the work is online based. Customers need a physical location to build on their trust and loyalty in this type of business hence the choice of country’s capital where majority of literate population is found. Many online businesses could start in a relatively small office and as the business grows, the company could present a similar picture of the online business physically by setting up offices that depict such true images (Belew, 2011). A company should have an excellent online reputation as well as good customer service at their offices. The company has made a provision for leasing of office space that caters for clients and other investors who would visit the company offices with ample parking to meet their expectations and allow for business growth.
Administrative Structure
The company will have a well-defined roles of each of the department to ensure there is effective flow of information and promote effective delivery of services. This will facilitate in effective performance in the firm demonstrating various forms of effectiveness in the organization. The management team and the other employees will have representation in the company’s decision making process. The Chief Executive Officer will be the overall leader of the organization who will be responsible for the long-term decision making process for the company. The C.E.O. will also chair the meetings to ensure that the organization achieves the objectives as required. The summary of other responsibilities assigned to the CEO that will guide in delivery of organizational commitment. The CEO will be responsible for offering route for the following responsibilities.
The finance management will help in the management of financial capability of the firm. In addition, the finance manager will also advice the organization on financial matters and financial investments of the firm. The supply chain manager will be responsible for the suppliers’ engagement, procurement, and ensuring that the products reaches the customers effectively. This will help in the growth and development of the firm. The human resource manager will facilitate in ensuring that recruitment and training, motivation of employees and addressing the challenges in the employees that may prevent the achievement of the desired goals for the organization.
Accounting reporting is a crucial process in a company that informs on the performance of the inventory in a company. In addition, it presents the crucial details that relate to financial decisions of the organization. The employee from the inventory and reporting will be addressing the question on the performance of the organization financially then report to the financial manager. This will help in promoting effectiveness in the financial analysis of the firm. The online communication staff will be responsible for the online services to the consumers. It will also address the online advertisement through the Social media networks such as Facebook and Twitter. These two social networks are crucial mass advertisement channels that are cheap and promote the performance of organization.
Warehouse managers will be responsible for the interfaces with third – celebration suppliers (vendors), keeps appropriate information of available products and make suggestions for re – stocking and works together with the merchandising administrator to ensure that products are always available in the warehouse. These roles will ensure that sneakers delivered to the company by sellers will be effectively managed and inspected. Merchandise Manager is responsible for the management of source interaction, market trips, and the education and development of the organizations’ buying teams. In addition, merchandise manager is tasked with the responsibilities of helping in ensuring reliable quality of items and items on our rack, accountable for the purchase of items and items for the organizations, responsible for planning sales, tracking stock, selecting this product, and writing and costs purchases to vendors and ensures the organization functions within a specified budget.
Transport and Logistic Manager is responsible for management and delivery of the merchandise from the firm to the buyers. Additionally, transport and logistics manager will be able negotiates deals with delivery companies and collaborate with the Merchandize Administrator in moving items from the maker to the warehouses. Details Technologist will be responsible for management of the organizational website, responsible for ongoing update of our online store, ensure that our payment system is properly secured 24/7 and responsible for setting up, servicing of application applications and components for the organization and manage strategies and supply sequence application, Web servers, e-commerce application and POS (point of sale) systems. Lastly, the Details Technologist will be responsible for ongoing update and servicing of IT systems and handles any other technical and IT-related responsibilities.
Business developer will manage exterior research and organize all the inner resources to include the organizations’ best clients and entice new ones. Business developer will also be responsible for models market information and evaluate the amounts of transactional data produced by customer purchases. The manager will be responsible for Identification, prioritization, and reach out to new associates, and work at home possibilities. Further, Business developer will be responsible for monitoring execution, suggest for the customer’s needs and get in touch with clients, develops, carries out and analyze new plans for growing to improve sales, documents all customer contact and information, represents the organization in ideal meetings and helps improve revenue and growth for the company.
Accountant will be responsible for planning fiscal reviews, costs, and fiscal reviews for the organization, economical predicting and threats analysis, creating and handling economical techniques and policies, providing payrolls, ensures conformity with taxes legislation, handles all economical dealings for the company and serve as inner auditor for the company. Call Middle Agents will ensure that all connections with clients (e-mail, walk-In center, SMS or phone) provide the consumer with an individualized customer support experience of the biggest level. Through connections with clients on the device, Call Middle Agents will use every opportunity to build client’s interest in the company’s items and services. Consistently remains up to date with any new details about the company’s items, marketing strategies etc. to make sure precise and details are provided to clients when they make inquiries (Chong, Shafaghi, Woollaston & Lui, 2010). Lastly, Call Middle Agents will controls inquiries via e-mail, talk, and telephone demands the organization, distribute posts in the organization and handle any other responsibilities as allocated line manager.
Intellectual Property Protection
Intellectual property has been part of the economic reforms and the open-door policy that Chinese government has tried to implement in the past years. The Chinese government shown their effort to protect the intellectual since 1970s and up to date the government is still enacting new policies to protect it. In 1983 the government built an integrated legal system with the sole responsibility of intellectual protection. Despite the government effort to protect IP, some foreign investors are still complaining about the current strategies and are requesting the government to put more effort in protecting their IP (Cao 248-259).
Moreover, the government has made the various effort in protecting IP such as, the imposition of administrative penalties, enacting of China’s IPR laws which state the provisions for compensation of economic damages an individual or companies get in the event of infringement of their intellectual right. Though these local laws have been designed to comply with major international IP laws and agreement, the local laws do differ from laws found in most of the Western countries. For instance, in some cases, the total damages which could be recovered is capped (Yang 197-209). However, where they are not capped, in most situations, fines and damage awards are usually small in compared to those in other nations. The compensation or damages are generally computed on the according to the infringer’s unjust enrichment. Because the infringers often sell their counterfeit or illegal copies at a lower price in comparison with prices charged by IPR owner, such unfair self-gain is often modest compared to possible profit loss as a result of lost sales.
Legal Framework in China
Innovators who want to do business in China will certainly have problems in understanding the Chinese legal system. Without going into the peculiarities of different sets of laws in China, the firm will take into account all legal frameworks to understand forms of regulation in different segments of its operation. Legal reformers were advised to learn from China’s past and from the experience of foreign countries. Thus post-Mao reforms placed heavy reliance on imported legal norms. Even when they looked to prior PRC experience it was coloured by foreign and mostly Soviet ideals. During the 1980s, legislation on such matters as environmental protection, regulation of foreign and domestic businesses, intellectual property, and civil procedure and arbitration, and host of other areas drew increasingly on European and North American models. The reformers realised that as China becomes more and more integrated with the world economy Chinese legal system had to conform fully with the international system.
The CISG (contracts for the International Sales of Goods) convention, which established uniform default rules for international sales contracts, and the WTO agreements on TRIPS, TRIMS, and dispute resolution are examples of the globalization of private law and private property regimes that the firm will take into account when it expands its operations outside China. In China however those norms had to confront norms from a strong local culture. Legal culture is simply defined In terms of customs and opinions, and the ways of thinking and doing about law. Whereas indigenous legal norms may emerge gradually through a process of formalization of customary norms, where law norms are imported, compliance requires that these imported norms accommodate local norms and practices. An increased complexity in social and economic relations permits creation of increasingly diverse and broad relationships beyond those kinship and community, informal and subjective relational norms may give way to norms of formality and objectivity.
First of all in China, the liberal notion of restraining state power conflicts strongly with the views of many in the post-Mao period that a strong state is essential to China’s development. While Confucianism and collective norms that it has generated have been severely criticised as overly authoritarian and repressive, these remain powerful restraints on the penetration of foreign legal norms associated with liberalism. The traditional supremacy of familial and personal ties over institutional obligations remains strong, and the general absence of social ideals of individualism affects the selection and application of foreign legal norms. Based on modern Chinese legal system, there is effective Intellectual Property and legal protection for the business to encourage invention and growth of business through innovative approaches. Therefore, Tech Sneaker Solutions Inc. will comply with both international and local legal and intellectual property laws to ensure legal compliance of the business.
Legal issues in operating an online marketplace are important to observe to minimize the risks associated with non-compliance. The has considered agreements with online service providers such that there are agreements and provisions relating to web design, hosting, search engines, intellectual property ownership, third party rights clearance and information security and confidentiality. The website content will be protected from unauthorized commercial exploitation by use of trademarks. There is the creation of enforceable online contracts and that they appear on proprietary websites. The company has devised means of copyright infringement immunity that will assist in protection of company works and displays on the internet from third party misuse. The rights of privacy and publicity have been considered by the company to protect financial information and those related to child rights. Agency liability is well taken care of to avoid implication of the business due to employee actions. The company has put in place relevant insurance and devised the taxation obligations to avoid collision with authorities which could damage company reputation.
Management
The firm is privately owned in China that will operate in the footwear industry to deliver an application that will connect both buyers and sellers. The company will employ qualified and competent management team that will facilitate in the management decisions. Having a highly motivated workforce team will help in achieving high outcomes in terms of productivity and growth translating to high satisfaction among the users (Byrd & Megginson, 2013). The management team will comprise of talented entrepreneurs and developers to help the firm in the implementation of the strategies for growth. Software developers will also be used in regular updating of the application and its development to ensure that it meet the needs of users. It is the responsibility of this team to ensure that reviews of the users are taken into account and where applicable changes are implemented (Byrd & Megginson, 2013).
The organization intends to employ a total of 11 employees comprising of the founder and managing director to facilitate in smooth running of its operations. To ensure professional and user-friendly services, the firm sought will establish an effective teamwork to guarantee high outcome in the business engagements. As the firm grows, more additional staff would be needed to ensure that consumer needs are met appropriately and satisfactorily. The main areas that the team will fill comprises of Founder, Managing Director, System Developer, Chief Marketing Officer, System Analyst, Head of Programmer, IT Manager, Web Developer, Server Controller, and Business Analyst. The application development process will require outsourcing of legal compliance officer to ensure the firm complies with both local and international regulatory frameworks.
Marketing Research
Market Research Analysis
Despite e-commerce sales estimated to reach nearly $3 trillion by 2018, online shopping will still only account for less than 10o% f total retail sales. Since 2015, Amazon has experimented with opening brick-and-mortar stores to increase its ability to better tap into the retail market and reduce shipping costs, all while providing customers with a great shopping experience. The inability to physically pick up and interact with a product prior to purchasing has always deterred people from buying online. Tech Sneaker Solutions Inc. will utilize its current stores to host the sneakers from the sellers to effective ensure that they are inspected through the quality assurance as a measure to ensure high satisfaction of consumers. Additionally, the e-commerce site by the firm will ensure effective performance of the market and enhance customer satisfaction. Based on this framework, it will facilitate to the growth of the market and its
Additionally, these stores do not have cashiers; new technology allows customers to be charged for the items in their shopping basket upon their exit from the store (Jesdanun, 2017). The company will face significant competition from existing markets, but its market niche (Sneakers) will give it a competitive advantage that will improve the performance. Therefore, ensuring positive performance in the business environment will guarantee positive development and growth. The system will enable buyers to acquire their sneakers easily and their money protected to ensure they get value of their money. The sustainable growth of the market will increase its ability to expand to other markets abroad and in Asia to increase its performance and growth path. With emerging market for sneakers in China, the company will ensure high quality products in meeting the needs of consumers.
Another opportunity for Tech Sneaker Solutions Inc. to continue its growth lies in international markets. Firms in the market are experiencing growth in market share by expanding and internationalizing their operations into the emerging markets. Tech Sneaker Solutions Inc. plans to launch an interactive system with customer support to ensure that the needs of consumers are effectively addressed, which now allow effective performance of the firm. Tech Sneaker Solutions Inc. might emerge as the most popular sneakers application in China if effective marketing mix is integrated. With the market in China taking off so successfully, the potential for expansion in areas like China and Latin America remains a strong possibility (Castillo, 2017). Just as Tech Sneaker Solutions Inc. looks to expand in global markets, the company also aims to expand its performance in the local market. There is an opportunity for Tech Sneaker Solutions Inc. to expand its operations to emerging markets in Asia and neighboring continents. Doing so would allow the company to generate a higher profit margin, by efficiently controlling the cost of producing and selling products to compete with other companies’ higher-selling items.
Estimated Size of the Market
As the internet continues to develop and more people gain access to it, e-commerce is becoming more predominant in peoples everyday life’s. Studies show that 51% percent of Chinese urban population prefer to shop online. Ninety-six percent of Chinese have made at least one online purchase in their life, and 80% in the last month. While 55% of sales are done through online branded stores like Alibaba, 45% are done through online marketplaces. Eighty percent of all online marketplace purchases are done through Amazon.com (Wallace, 2017). Increasing TV advertisement is the single biggest motivator for consumers to embrace online business and encourage purchase of products throughout trusted and reliable online markets. As consumers shift from physical buying in stores, competition in online markets is increasing with emergence of smaller markets that are effective and reliable (Spangler, 2015). Digital transformation also addresses the customer experience and innovation. Customers more than ever require a positive experience when shopping online. Companies now look to personalizing their website when guiding customers through the shopping experience. In an ever evolving marketplace innovation is key. New technology allows consumers to feel engaged, waiting for the next product of service to better assist them (Newman, 2016).
Sneaker Market in China
With the rising disposable income for Chinese consumers, demand for sneaker products continues to rise. The growing middle class in China results to more consideration on products quality in the market. Consumers are now becoming sensitive to quality and originality of products that they intend to buy in the market. Furthermore, growth in online population is resulting to increase in number of consumers buying their products online. Growth in demand for quality footwear in China results to with impact positively the intended business operations. From the survey conducted by Euromonitor, there is growth in Chinese footwear demand that has increased significantly by 2% for the period between 2015 and 2016. Of the growth, survey found that men’s shoes market contributed to RMB136.3 billion in terms of revenue which accounts to approximately 38% of the total revenue collection in footwear.
Figure 1: Footwear Market in China
| 2012 | 2013 | 2014 | 2015 | 2016 | |
| Children’s shoes | 32,595.8 | 36,181.3 | 39,980.3 | 43,978.4 | 47,980.4 |
| Men’s shoes | 104,587.9 | 114,837.5 | 124,483.8 | 131,081.5 | 136,324.7 |
| Women’s shoes | 153,735.8 | 169,878.0 | 177,182.8 | 178,954.6 | 176,628.2 |
| Total | 290,919.4 | 320,896.8 | 341,647.0 | 354,014.5 | 360,933.3 |
Source: Euromonitor International
Marketing Plan
The firm will implement a high level timeline that will ensure effective performance of the firm. The first activity will involve development of a marketing plan. The first one month will require implementation, test and evaluation of the performance of the application to ensure that the trial period corrects most of the bugs or suggestions for improvement in the application software. The second stage will involve launching of the application during the second month. This measure will create awareness among the domestic buyers and supply. This will be followed by the marketing strategy through advertisement in local TV stations to ensure that potential users are informed of its usage and significance in easing the buying and selling of footwear products. To develop an effective marketing plan for the application, the marketing department will establish a marketing plan.
The first question will involve use of the 4P marketing plan with incorporates promotion, place, prices and product. The four aspects will be set in a manner that helps customers to seek the service. Starting with promotion, the company will use advertisement as one of the mediums of marketing the service. Adverts will be placed on Google AdSense, Social media and even the mainstream media such as Television. Social media and use of Google AdSense will be the major advertisement strategy because it is cost effective and broad. The product will be also designed in a manner that promotes its use and attracts customers. In this case, the brand name is chosen because it reflects the nature of the service. It relates with the service such that clients get an idea of the type of service offered by the company by merely seeing the name. The pricing strategy will be very flexible to ensure that the company’s terms are affordable (Reuvid, 2011). As such, the company will offer discounts. Lastly, the company will use corporate social responsibility as a tool of creating a good public image.
The total size of the market for the business is 48% since the country has a mobile network penetration rate of approximately 70%. This means that this percentage if properly marketed to, can increase sales volume of the company. This is especially so since the country has fully adopted the reliable and efficient network where many citizens are therefore able to access the internet conveniently, hence a rich avenue for online business. The world interconnects through the web and many consumers have limited time to go shop in malls due to work commitments and household obligations, online business is thriving well in the country. Such businesses will obviously grow with proper strategies in place especially with products, pricing marketing and service delivery.
The company will incur startup costs which include computer systems with MS Office, QuickBooks Pro, CD-RW, broadband internet connection and a printer. They will also need web development to ensure that the company webpage provides a one stop shopping experience for customers with ease of use. Office supplies, desks, chairs, filling cabinets and telephone line installation for customer care are also required. There is also the legal fee for formation of the business that needs to be submitted to relevant authorities. This means that the business needs a good capital outlay for successful startup. The same capital will be required for shipping the quality products and offering training to employees for exceptional marketing skills. The company should note that there could be future exchange rate fluctuations for imported goods and inflation in the country which could affect the business financially.
Proper planning and strategies towards cost effectiveness will assist in overcoming the above barriers such that the company does spent too much during its initial stages. This is because the company will require considerable amounts of capital to launch a strong business brand through marketing and promotions. The company will be affected by changes in technology such that it will need to adjust to remain relevant in the competitive market. New mobile apps are being invented such that a client can just order a product and pay for it using the app at the comfort of their homes or offices. This means that the company has to be in line with current technological developments to attract new and retain existing customers. Government regulations are subject to change depending on the political conditions of the country. The company needs to be adequately prepared for such to avoid being caught off-guard and losing profits or its public reputation. Economic crisis in developing countries is dominant and the company should have strategies to counter it since it affects buying behavior as well as profitability.
The customers view the products as satisfactory since they are of high quality and fairly priced. The company’s customer service offers excellent customer care services to clients especially when products need to be delivered. Delivery and after sales services instill a sense of confidence in our clients such that they refer our products to other and even come back for more. This increases the company profits and productivity. Customers are slowly and confidently adopting online purchases of several goods especially when the business is well set up and managed to meet customer needs in a timely manner. Online purchasing of products is reliable because the products can be delivered at whatever destination countrywide without the hustle of traveling to view a product and transport it again to their home which is costly and time-consuming.
The one-stop online shopping provides a convenient avenue for family inclusivity in products and services. Customers will not be subjected to the time-consuming movement form one physical shop to another trying to get each family member products and especially clothing. The firm has it all for the clients’ whole family at a competitive price with an option of sales return if not satisfied within a stipulated time for possible exchanges. This makes clients satisfied and buys the products exclusively with no worry of disappointment. Other after sales service the firm will offer is support services such that clients can enquire later after buying on usage and maintenance of goods especially electronics.
Competition
Tech Sneakers Solutions Inc. will face competition from two major online platforms that allow selling and buying of products. These are Alibaba an AliExpres being major online markets encouraging buyers and sellers to buy footwear products online. Selling has become easy since one does not need to post products and services on classified sites in USA, Europe or any other country thanks to advanced technology. Online markets are a booming business and if strategically planned and implemented, could be a great success. Many business and organizations actually want to have an online feeling for its stakeholders. Since the competitors have a good social media presence, Tech Sneakers Solutions Inc. should come up with strategies to outdo the rivals and ensure that they are exposed to larger audience for wide customer base. Tech Sneakers Solutions Inc. will ensure that almost all the products are available to consumers for reliability and consistency to avoid losing clients to rivals.
Table 1: Competitive Analysis
| Factor | Me | Competitors | ImportanceTo Customer |
| Products | A wide variety of products online | A market gap exists since some products are not available online | 4 |
| Price | Prices will be fair for all products | Since there are currently few online shops, prices are not competitive | 5 |
| Quality | Excellent quality and durable products | Some clients have complained of low overpriced products hence no value for their money | 4 |
| Service | Customer focus enhanced with outstanding service delivery | Customer care service seems to be overwhelmed and do not respond to customers timely | 5 |
| Reliability | The company will deliver orders timely and have refund or exchange options to clients | Some orders not delivered as requested with limitation to some regions | 4 |
| Expertise | Considerable investment in research and development will create expertise in the business | The company has not well catered for the future uncertainties and could be in for surprises | 4 |
| Company Reputation | Tech Sneaker Solutions Inc. is just setting up but with time will have a reputation to clients | competitors is a well-known company currently enjoying monopoly | 3 |
| Location | The startup will see the company operating in the capital city and its environs before its growth | The company operates countrywide online and delivers to most locations | 3 |
| Advertising | The company will include social media, print and billboards to tap more potential customers | The company relies mostly on social media to advertise hence a gap exists | 5 |
| Credit Policy | The company will operate on a sustainable credit policy for its goods to avoid business failure and losses | competitors have a credit policy with its suppliers that has to be assessed since it could turn out sour in future | 4 |
Tech Sneakers Solutions Inc. will have a competitive advantage over its existing online business because of reliability in products and service delivery since the company will invest in competent team to cater for customer needs. All untapped avenues will be taken into consideration to increase customer base which translates to increased sales volume. Excellent customer service will be critical to business success such that all customer needs are attended to in a timely manner. The products will be fairly priced and cater for many categories of clients. The company will focus on getting products from reputable suppliers so that they are of good quality since many customers value quality goods due to value for their money since it is a developing country and pricing is sensitive. All in all, the company is expected to be a market leader in online sales and outdo the competitors in the same industry.
Tech Sneakers Solutions Inc. has acknowledged that today’s ecommerce world is competitive hence need to research on the best niche or idea to attack. The company has focused on building a sustainable brand with support from several successful entrepreneurs in the business. It is important to ensure that all the clients acquired during the setting up of the businesses are retained since they are a great asset to the company. They are the face of the business and will usually refer the products to other potential clients hence building the company brand. This way, the company has to maintain quality products and be a price leader at the same time to sustain the clients. To build the brand, the business has to be unique form competitors and focus not only on prices and profitability but mostly on customer loyalty, differentiation and growth strategy.
The most critical thing about online business promotion is ensuring that the company website has all the information potential clients need to successfully buy or sell a product. The company has invested in web development experts who have tailored the company website to customer needs and provided relevant product information to win customer loyalty at first sight. The company will also adopt print media, social media and television advertising to reach its wide range of clients (Lasher, 2005). It is important to explore all avenues of advertisements during a business startup hence the need to consider catalogs, billboards and trade shows. Customers will need to have some form of training in the trade shows on how to purchase goods online even if the website has simplified it for them. This creates a sense of trust and loyalty which influences consumer buying behavior.
The customers need to have a positive picture about the firm such that market gaps are catered for in the new business. The company needs to offer services that competitors have sidelined to gain competitive advantage over them. With advancement in technology, the company has adopted a system that will be able to detect repeat customers. This is because client profile will be created on the company database such that when customer revisits, it is easy to identify them possibly by their first name or cell number (Lasher, 2005). This also creates a sense of belonging to customers who are in turn influenced to buy more and be loyal to the company products. The company will need some capital to design logos and cards as well as an attractive company website that acts as a one stop shopping for its consumers.
To successfully promote the ecommerce business, the company will enlist bloggers as much as the internet markets goods for businesses. The company has to do something extraordinary by asking reputable bloggers to write about the merchandise and services offered by the company. On acceptance, the company will write reviews about them which will create awareness to potential clients who follow the bloggers on social media. Many clients prefer ease when shopping in stores or supermarkets and it also applies to online shopping. The company will avail shopping widgets such as search boxes, shopping carts and calculators on their site. It is also important to include social media buttons such as twitter, Facebook and Pinterest such that customers share their shopping experiences with friends and family.
As earlier said, startup companies should focus on quality and service delivery since setting low prices as compared to competitors will rob the business of meaningful profit margins required to operate the business. In any case, established business can outdo the new business by setting lowest prices hence the need to adopt an average pricing strategy and maximizing on service delivery and customer satisfaction. The prices as compared to those of similar products with competitors are relatively the same. This is mainly because many households in the third world country are price sensitive hence the need to focus on excellent customer service and quality products that offer value for money while maintain average market prices (Scarborough, Cornwall & Zimmerer, 2016).
According to a market survey earlier conducted, buying behavior by customers is not influenced much by prices but quality. Unique customer service is mostly valued for satisfaction, and the company has invested in competent staffs that are highly motivated and have skills to cater for every customer needs since they have the company goals and interests at heart. Customer needs are therefore taken care of since there exists a market gap in customer satisfaction hence an opportunity for a firm (Scarborough, Cornwall & Zimmerer, 2016). Credit card mode of payment by customers could be risky if not well managed. The company has invested in proficient strategies to ensure that clients that use such modes of payments are not fraudsters who would drain the company capital or profits. Refunds and payment card disputes/chargebacks should be monitored closely by an IT expert and the necessary adjustments made immediately for effectiveness and transparency in the payment systems.
Financial Plan
The company has planned strategic alliances with VISA, MasterCard and American Express to enable cashless payment which is modern and used by most clients currently in the developing country. There will be funds raised during a proposed Initial Public Offer (IPO) but they will not be included in the statements. Investors will also have the option of buyback as an exit strategy in addition to the IPO option.
Pro Forma Income Statement
| Year 1 | Year 2 | Year 3 | |
| Sales | 12870 | 15628 | 17945 |
| Direct cost of sales | 3802 | 4867 | 5186 |
| Other expenses | 2469 | 3152 | 3693 |
| Total cost of sales | 6271 | 8019 | 8879 |
| Gross Margin | 6599 | 7609 | 9066 |
| Gross Margin % | 51.30% | 48.70% | 50.50% |
| Expenses | |||
| salaries | 1287 | 1453 | 1596 |
| marketing expenses and contingencies | 563 | 765 | 984 |
| Depreciation | 0 | 31 | 31 |
| Insurance | 95 | 95 | 95 |
| Rent | 450 | 450 | 450 |
| payroll taxes | 165 | 184 | 208 |
| Legal expenses | 200 | 155 | 183 |
| Total operating expenses | 2760 | 3133 | 3547 |
| EBIT | 10110 | 12495 | 14398 |
| Interest expense | 874 | 743 | 675 |
| Taxes | 506 | 625 | 720 |
| Net Profit | 8730 | 11127 | 13003 |
Pro Forma Balance Sheet
| Year 1 | year 2 | year 3 | |
| Current Assets | |||
| Cash | 57,735 | 63,730 | 74,857 |
| Accounts Receivable | 0 | 0 | 0 |
| Other Current Assets | 0 | 0 | 0 |
| Total Current Assets | 57,735 | 63,730 | 74,857 |
| Long term Assets | 124,856 | 148,345 | 164,962 |
| Accumulated depreciation | 0 | 31 | 62 |
| Total long-term assets | 124,856 | 148,376 | 165,024 |
| Total Assets | 182,591 | 212,106 | 239,881 |
| Liabilities and Capital | |||
| Accounts payable | 75,781 | 106,090 | 131,109 |
| Current Borrowing | 0 | 0 | 0 |
| Other liabilities | 0 | 0 | 0 |
| Total Liabilities | 75,781 | 106,090 | 131,109 |
| Paid in capital | 95,645 | 95,645 | 95,645 |
| Retained Earnings | -300 | -756 | 124 |
| Earnings | 8,730 | 11,127 | 13,003 |
| Total capital | 104,075 | 106,016 | 108,772 |
| Total capital and Liabilities | 182,591 | 212,106 | 239,881 |
Conclusion
Tech Sneaker Solutions Inc. has acknowledged that today’s ecommerce world is competitive hence need to research on the best niche or idea to attack. The company has focused on building a sustainable brand with support from several successful entrepreneurs in the business. It is important to ensure that all the clients acquired during the setting up of the businesses are retained since they are a great asset to the company. They are the face of the business and will usually refer the products to other potential clients hence building the company brand. This way, the company has to maintain quality products and be a price leader at the same time to sustain the clients. To build the brand, the business has to be unique form competitors and focus not only on prices and profitability but mostly on customer loyalty, differentiation and growth strategy.
Reference
Chong, W. K., Shafaghi, M., Woollaston, C., & Lui, V. (2010). B2B e‐marketplace: an e‐marketing framework for B2B commerce. Marketing Intelligence & Planning, 28(3), 310-329. doi: 10.1108/02634501011041444
Belew, S. (2011). Starting an online business all-in-one for dummies. Hoboken: John wiley.
Byrd, M. J., & Megginson, L. C. (2013). Small business management: an entrepreneur’s guidebook. New York, NY: McGraw-Hill.
Lasher, W. (2005). The perfect business plan made simple. New York: Broadway Books.
Reuvid, J. (2011). Start up and run your own business:. London: Kogan Page.
Scarborough, N. M., Cornwall, J. R., & Zimmerer, T. (2016). Essentials of entrepreneurship and small business management. Upper Saddle River: Pearson.
Appendix
For Bankers
Bankers want assurance of orderly repayment. If you intend using this plan to present to lenders, include:
Amount of loan
How the funds will be used
What this will accomplish—how will it make the business stronger?
Requested repayment terms (number of years to repay). You will probably not have much negotiating room on interest rate but may be able to negotiate a longer repayment term, which will help cash flow.
Collateral offered, and a list of all existing liens against collateral
For Investors
Investors have a different perspective. They are looking for dramatic growth, and they expect to share in the rewards:
Funds needed short-term
Funds needed in two to five years
How the company will use the funds, and what this will accomplish for growth.
Estimated return on investment
Exit strategy for investors (buyback, sale, or IPO)
Percent of ownership that you will give up to investors
Milestones or conditions that you will accept
Financial reporting to be provided
Involvement of investors on the board or in management
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