Executive Summary
Brunel New Hope will be a living goods recycling firm that operates in Bruce University and will target the entire population of the university and environments as its market. The market will range from beginners, continuing, leaving, left students and lecturers before taking up other institutions as our market. Our firm will be a cost effective firm, which we intent to make profitable. Betty, JoJo and Wei dong, will own the company. The main distinct activities will include;
- Buying and sell second hand living goods like books, utensils, clothes and many others
- Offering library services
- Maintenance and repairs of the same for a fee.
The market and supply for living recycled goods is already existent and people are much more interested and conscious, which in return, a recycling company buying and selling is one of the best investment opportunities available on the campus. Three in eight students use recycled living goods regularly while five of the population sell their living products. The demand for living goods is increasing within the campus and it neighborhood whole foods industry is growing. The market is existent and existent in high demands. Our main competition is retail businesses selling similar but new goods in the nearby neighborhood and will remain to be our competition, so this will be a test to our determination and what we can actually provide and offer to our customers.
Brunel New Hope will advertise and market significantly through journal adverts, newspaper adds, college bi-weekly newsletters, flyers, sponsoring the college football team. Our focus when advertising and marketing is to be personable with customers through advertisements at all times. People need to relate to what is being sold and to the opportunities that are being convey with the ownership of campus recycling companies.
Mission and Strategy
Our mission will be to deliver competitively priced, quality second hand living goods and services for the heath nation. This will be in line with our aims and objectives. We shall do this through superior capability, innovation and production. The target customers will be of paramount and the focus of our activities.
Our strategy will be concentrated in all target customers, mainly through our sales and marketing knowledgeable representatives, as well as teams who specialize in respective organic food industries
Objectives and Aims of the firm
Our objectives are to provide and ensure-
- provide a market for second hand living goods.
- bring living goods nearer to students
- To achieve annual sales of 1000,000 and make a profit of 200,000 the first year of operation.
- Have a business growth rate of 10% Per annum starting from year one of our operation.
JoJo as General Manager, Betty as Sales manager and Wei dong as Customer service manager will manage the company. Since they are students, working hours will be for collecting living goods: 9am-5pm, Mondays-Fridays, every semester and for Selling living goods: 9am-5pm, Mondays-Fridays, the beginning of each semester.
Stage of business
Our company firstly recycle (collect) the living goods from students who graduate from Brunel University each semester and do not want to use these living goods any more, then resell these living goods in rational price to new students who enter Brunel University from next semester and want to save their money buying new living goods from the street shops. We use the personal computer to develop our company’s website for those students who wish to put their living goods onto the website in categories of what kind, original price, quality, quantity, picture, etc. And also leave their contact details for in case to contact them.
We then design an advertisement of our company and use the printer to print it out into numbers of copies. When next year new students come to Brunel University, we deliver these ads to them so that they can contact our company in the future. For small size goods (books, chargers, converters, reading lamp, etc.), we store them in our own home; for large size goods (micro-wave oven, TV, acoustics, sound box, etc.), we store them in the van. For the goods that may not be sold to students, we sell them to the local recycling centre.
Products and Services
Our products
The living goods (books, electronic appliances, kitchen goods, etc.) from Brunel University students who graduate from Brunel University and do not wish to use these living goods any more.
Our company aims to save and economize resources from Brunel University graduate students and help new students saving their money buying new living goods from street shops. We have large scope of sources, low and rationale price, easy and fast trading means and very low risks. Ultimately, to give publicity of saving usable resources effectively and efficiency to Brunel University students.
How does it work
Firstly, Betty and Wei dong recycle (collect) the living goods from students who graduate from Brunel University each semester and do not want to use these living goods any more, then resell these living goods in rational price to new students who enter Brunel University from next semester and want to save their money buying new living goods from the street shops. JoJo use the personal computer to develop our company’s website for those students who wish to put their living goods onto the website in categories of what kind, original price, quality, quantity, picture, etc. and also leave their contact details for in case to contact them.
Then, Betty and Wei dong design an advertisement of our company and use the printer to print it out into numbers of copies. When next year new students come to Brunel University, Betty and Wei dong deliver these ads to them so that they can contact our company in the future. For small size goods (books, chargers, converters, reading lamp, etc.), we store them in our own home; for large size goods (micro-wave oven, TV, acoustics, sound box, etc.), we store them in the van. For the goods that may not be sold to students, we sell them to the local recycling centre.
As our company aims to run a start-up small business focusing on Brunel University students, this is a good chance. As each semester, there are always thousands students graduate from Brunel University and thousands new students enter Brunel University to start their new course. Most of the students are international students who do not have too much money to buy new living goods from street shops or who want to save their money buying those goods. Our company is right here to serve these students, not only make profits, but also give them publicity on how to save usable goods effectively and efficiency.
Our company aims to serve only Brunel University students; we collect students’ living goods from them during Mondays to Fridays in each semester, and allow new students who want to buy these goods from us at the beginning of each semester. Technological advances may include upgrading our website design, contact information of our company, etc.
Technology & Systems Requirement
The final division accounts for equipment and production activities. In this division, land costs are about 1/3 of the costs because of office and warehousing costs that will be accumulated. Other activities that are initially costly are the website design, specialized kitchen and testing equipment, and manufacturing consultation and design. For the website, the cost is meant to completely design a new site with our target market in mind and then decrease annually to accommodate incremental changes. The manufacturing design and specialized kitchen and testing equipment will both be a major initial design with minor incremental changes in the following years with reducing costs. Lastly, the only major increasing cost item in this division is the Product Development that works alongside the chefs and market researchers to discover new products to increase our line of products.
Competitive Advantage
Porter’s Five Forces Analysis for the company
Buyer Power
The company will face the threat of buyers shifting their loyalty to other rival companies operating within the university environment after the first years of operation. This phenomenon according to porter is referred to as backward integration. To curb this threat, the company will come up with three generic strategies to counter this threat.
- Cost leadership: – after a while, it will reduce the price of some its products including the cost of offering services such as packing.
- Differentiation strategy: – The Company will come up with alternative products that are differentiable from the rival firms.
Supplier Power
The company will be faced with the threat of the suppliers being able to control the price of some of the books and other living goods they supply after realizing it is fellow students operating the business. To counter this force, the company will extends its supplier chain by making the prices supplies come through alliances with suppliers (students).
The generic strategies that will be adopted by the company against supplier power are by increasing the price of their products. In essence, the extra prices charged for the raw materials are borne by the customers. This is the differentiation strategy. Another strategy to insulate itself from this force is that of focus. Because of the higher material prices, the company will take on the differentiation-focused strategy. In this strategy, the methodology will be improving the quality of their products. By so doing, the prices would be increased without harm being made to the customers.
Barriers to Entry
The other force challenging the company is entry of new companies with dealing with the goods. This would pose the threat of neutralizing the company’s profits as well as its market share. The generic position that the company will take is cost leadership. Through lowering its production costs and increasing operational efficiencies, the company will be able to lower its product prices while maintaining its profitability. This will deter potential investors/ entrants into the industry. This kind of focus strategy that also encompasses the differentiation strategy makes entry difficult.
Rivalry
This force emanates from other companies that will or operating within the university. The threat here is that these companies capturing the market. However, the company’s framework/ strategy will be reducing prices whenever faced with such a threat. Prices are then reverted to normal after the exit of that company the specific market segment.
Consequently, the company strategy adopted will mean to reduce rivalry. Focus will also be used as the generic strategy to solve these problems- rival companies cannot effectively meet differentiated as well as focus on the needs of the customers. Still, so long as living goods are not 100% substitutes of one another, the problem of switching costs arises.
Threat of Substitutes
From the economist point of view, threat of substitutes arises when the demand of that good is likely to be affected when the price of the substitute changes. This elasticity of price has formed a real force that the company has to fight if it has to be sustained in the near future. If the company increases the price of its products. This bars the company from effectively increasing the price of its products whenever need arises. To reduce the strength and danger of this force, the company will strengthened its differentiation generic strategy as its framework. Customers would then be loyal to the uniqueness of their products even if the price increases in price.
Direct sales by our self
We sell items once a week in the campus. Like a open market as the vegetable and fruit market.
Online sales
Put items’ photos online, and give the website to the customers.
Consignment sales
Direct sales by other people, they help us to sale the items and we can give them some commission.
Target Market
The main target market consists of university students, men and women, with a conscience regarding environmental responsibility, a high regard for high standard of living, and a love of the outdoors. They live in the university and surroundings. A secondary target market exists among neighbors of the university.
Financial overview
Betty, Wei dong and Jojo own the company. It is registered as private owned company. The initial capital injection from the owners will be 10,000, a car worth 4000 and a computer worth. This will be contributed in proportionate to their contributions. The company Performa financial and cash flow statements are as follows (excel attachment). The cash flow statement shows how the cash will apply the first year in business.
Analysis
The current makeup of the budget averages to 17% of the funds going towards Business Management Leadership, 56% of the funds dedicated to Functional Operations Leadership, and the remaining 27% directed towards the Technology and Systems Requirement category. After establishing the brand through the business management leadership roles, the hope is to redistribute the funds from that category into advertising in order to establish a connection with the consumers.
Marketing Strategy
In order for us to achieve our objectives, this company will hire well respected advertising consultants to assist us in marketing products to the customers and kick start us in the market. We allocate some funds for marketing. The website will be designed and put the products for all customers in the website.
Placing
The town and its environs host a number of middle class young people conscious of their health and many of whom require organic food. Our target market will include residents, visitors and any person conscious of their healthy.
Promotion Sales and Advertising
Our main objective to increase our sales to a level that will sustain us for a period of fifteen years and this is through a study growth rate of 10% for the next 5 years. To be able to achieve this we need to be able to make sales of 200,000 per annum. This will be possible through proper advertising and promotional activities.
We will hire a renowned consultant in advertising to give us insights on how to advertise and have good promotional techniques. The consultants will advise us to make advertisement in television, offer executive retreat for corporate clients, put billboards and one page flyer in the town centre.
The budget is prepared using the overall objective of the firm in order for the firm to raise funds for its survival, the budget allocated to marketing is very important. We have allocated 3,000 for marketing.
Positioning
Brunel new hope will have wide variety of living goods in Brunel University. We will have very attentive customer care and all our customers complaints will be taken care of and all questions answered. Once the customer complain has been received, it is handed to customers service officer who forwards to the concerned department.
Price
Our products will be priced at a reasonable rate, which is acceptable, by our customers. The prices will not be too high or too low but meeting the customers needs and satisfaction. Possibly, we will make prices of our goods to match the prices of our competitors because we are at initial stages.
Desired Market Share
Brunel new hope market share is expected start growing from the second year by 10% this as compared to industrial growth rate. This is possible through the promotional and advertising strategy that will be used.
Strategic Alliance
We will liaise with other second hand companies offering in various parts of the town and beyond for strategic alliances.