Effective Planning: Strategies for Success in Business and Beyond

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Business Plan
(Opening an Indian retail apparel shop in
Auckland, New Zealand)
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Table of Contents
BUSINESS IDEA.................................................................................................................................3
Realistic description of the business idea and mission statement....................................................3
Justification of innovative and unique selling points.......................................................................3
Key transactional relationship, partners and stakeholders...............................................................4
Analytical discussion of key issues using analytical frameworks...................................................4
POTENTIAL CUSTOMERS AND STAKEHOLDERS......................................................................5
Identify and describe customers, partners and stakeholders............................................................5
Analysis of customers needs, wants, preferences and characteristics.............................................6
Estimate the number of customers and expenditures expected with necessary justification...........7
ANALYSIS OF COMPETITION AND MARKET STRATEGIES.....................................................7
Strengths and weakness of competitors...........................................................................................7
Marketing strategies.........................................................................................................................8
Product pricing, placement and position strategies.........................................................................8
Critical success factors.....................................................................................................................9
REFERENCES...................................................................................................................................11
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BUSINESS IDEA
Realistic description of the business idea and mission statement
The success of every new start-up is highly based upon the visionary and realistic idea. The
business idea of establishing new Indian ethnic apparel in the Auckland comes because in New
Zealand, statistical data founded that every year, approximately 5.3 billion NZ dollars is spent on
clothing products (Churchill and Iacobucci, 2006). This amount is equal to the 4% of total
consumer spending which indicates that consumers are demanding designer and fashionable Indian
apparel to have a great joy of experience. Moreover, rapid growth of organizations like Glassons
Limited, Saree Bazar and Roop Darshan shown that consumers are now very aware about new
apparel goods and demanding different types of fashionable and trendy looking ethnic cloths in
wide range of colours to meet their expectations. Due to all of the findings, entrepreneurs decided to
begin a new venture in Auckland, named Baba ethnic wear. Furthermore, this idea has been
originated from two aspects, one is NZ Fashion week encourages ethnic apparel designers to save
environment from harmful chemicals and other is India is the most popular nation for organic
fabrics. Thus, material can be bought from India to design ethnic garments and thereby meet the
demand of Asians. The idea of the entrepreneur is to import Indian ethnic garments and retailing
them in New Zealand. The reason for selecting Auckland is it is very big city and majority of the
population resides here.
Mission Statement:
“To create a strong brand image in the apparel industry by providing unique Indian ethnic
wear”
Vision statement:
“To emerge as a leading organization in the apparel industry by the year 2025”
Objectives:
 To provide quality fabric ethnic wearing in different colours at an acceptable price.
 To recruit skilled, talented and experienced sales personnel to meet market demand.
 To provide eco-friendly goods to meet environmental responsibility.
 To enhance customer base, turnover and maintain profitability.
 To create an effective marketing and promotion plan to increase market demand.
 To invest in research and development activities to addressdemand fluctuations and meet it
by serving goods accordingly.
 To meet stakeholders objectives such as employees, investors, community and public.
 To enhance competitive strength and create a strong market position.
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Justification of innovative and unique selling points
This business presents a unique selling point for the customers through which, they will
desire to buy Baba ethnic wear garments. By opening such new outlet, entrepreneur can mitigate the
gap in the apparel industry as currently, there is no any retail organization which is delivering
organic ethnic cloths clothsin NZ. Henceforth, it will be a unique business in the industry which
will be able to gain consumer attention and develop a strong position in the competitive market.
Moreover, sustainability aspect will also proves an unique preposition of the products, it is because,
its product portfolio will be made from the organic fabrics like cotton, khadhi, natural dyes, silk and
bamboo (Churchill, & Iacobucci, 2006). Further, use of skin friendly goods which is made by
natural dyes will present uniqueness in the front of consumers. The reason for setting a unique
preposition is none of the retailers are using organic material to design their apparels. In addition to
this, reasonable price, eco-friendly products, fashionable and designer cloth will help to gain
customer loyalty and reach targets.
Key transactional relationship, partners and stakeholders
Every business unit has number of stakeholders such as employees, workers, investors,
suppliers, shareholders and regulatory agencies.. Baba ethnic wear requires recruiting committed
workforce who will be able to provide best quality customer services. Entity can maintain effective
relationship with their workers by providing them better salary, recognizing their performance and
rewarding them for their best efforts. While, serving quality products and services to the clients
helps to enlarge target consumer base which results in high turnover and profitability (Hausman,
Leonard & Zona, 2009). By this, it will be able to provide better return to the investors and maintain
good relationship with them. However, timely payments to the suppliers enhance their satisfaction
level, which in turn, Baba ethnic wear will be able to take longer period credit.
While, on the other hand, regular payments to the lenders will make them confident about
their fund security. By this, Baba ethnic wear will be able to take more debt to fulfil their additional
finance requirement. Customers are external parties but still, they are the most important
stakeholder because Baba ethnic wear's main objective is to serve quality ethnic apparel products to
the customers (Simón-Moya and Revuelto-Taboada, 2016). By serving sustainable, fashionable and
ethnic clothing products to the clients, it will be able to attract large number of people and compete
effectively in the market. Moreover, promotion, advertisement and marketing tools and techniques
will assist entrepreneur to regularly interact with the consumers and address demand fluctuations.
Furthermore, after-sales services also create a better image in the mind of consumers and meet their
desires and expectations effectively.
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Analytical discussion of key issues using analytical frameworks
In NZ fashion industry, the level of competition is very tough because many organizations are
offering top-quality services to their customers. Baba ethnic wear going to start its operations
in Auckland at where, currently many ethnic shops and online retailer are providing apparel
services to the clients (Mason and Botelho, 2016). Most of them are retailing ethnic wear
garments designed from regular fabrics whilst 10 Indian clothing brands are delivering
organic cloths via the online channel. Henceforth, its competitive analysis through Porter's 5
forces model is conducted here as under:
Buyer's bargaining power:
In New Zealand's fashion industry, customers have little bargaining power to push down
apparel product prices. It is because online retailers and other cloths shoppers are providing services
at different rates henceforth, consumers have many alternatives available to buy products at
favourable prices (Hu & Yang, 2016).
Supplier’s bargaining power:
Most of the apparel companies have little control over the prices because of the presence of
large number of raw material suppliers. Input prices of the goods are relatively low and suppliers
are delivering services to the retailers at an affordable price (Simón-Moya & Revuelto-Taboada,
2016).
Competitive rivalry:
In NZ, large numbers of online as well as retail shops are rendering services to the
customers. Hence, the level of competition is very high while, in order to grab larger market share
and enhance competitive strength, shoppers are trying to charge a ridiculous rates to sell their
apparel brands and build a strong position. Roop Darshan, Saree Bazar, Aditi Sarees, Glassons and
Storm etc. are some of the leading organization who are providing Indian Apparel products to in NZ
(Mason, Botelho, 2016).
Threats of new entrants:
Rising demand of apparel products is attracting entrepreneurs to commence their business in
NZ.
New ventures are identifying new and unique ways to popularize their products and build a strong
position (Churchill, & Iacobucci, 2006). Thus, new entry threats are very high.
Threat of substitutes:
With regards to the NZ fashion industry, there is a threat of substitute products launches by
the competitors to defeat rivalries. It directly influenced the consumers buying decisions and affect
potential sales and profitability of the organization.
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POTENTIAL CUSTOMERS AND STAKEHOLDERS
Identify and describe customers, partners and stakeholders
As discussed earlier, that there are different types of stakeholders who has some kind of
stake in the smooth functioning of Baba ethnic wear. The main objective of new start-up organic
apparel is to serve customers with the high quality clothing products (Hausman, Leonard & Zona,
2009). Company will target mainly Asian and Kiwis customers and identify their desires and wants
and will deliver services accordingly. Moreover, it will also serve other people who like to wear
Indian traditional dress. Its potential consumer base mainly comprises of kids and women whose
expectations will be fulfilled through offering trendy suits, kurthi's, sarees, eco-fashionable and
trending looked apparels. Products will be made by using different type of fabrics such as
traditional and hand-painting made of natural dyes like kalam-kari, finger imprints, brush strokes
etc. Furthermore, altering, tailoring, after-sales services like guarantee, warranty etc. also helps to
serve consumers beyond expectations. This in turn, Baba ethnic wear can attract customers and
retain them for a longer duration to accomplish pre-decided targets (Hu & Yang, 2016).
Contrary to this, individual who invest their money in the organization will be the investors
and their objectives will be satisfying through giving them better return. Moreover, involving them
in the decisions making process helps to satisfy them and, as a result, entity will be able to get extra
money from the investors (Grant, 2016). Furthermore, Indian exporters will supply different types
of organic food material to Baba ethnic wear. In this, material will be acquired from different states
of India such as silk form Shahlon Silk Industries Pvt Ltd. (Surat) and organic cotton from Sinar
Import Export Trading (Bengalauru) (Rothaermel, 2016). The reason behind this is Shahlon Group
is the second highest fabric manufacturer in the textile industry whereas Sinar Import Export
Trading is selected because Karnataka is a leading producer of silk. Besides this, sustainable
products help to meet environmental responsibilities and satisfy public. While, government also
works as an external stakeholder that regulate and monitor business activities and functions. Baba
ethnic wear will satisfy them by making regular payments of their tax obligations and carrying out
operations in public interest (Ismail, 2016).
Analysis of customers needs, wants, preferences and characteristics
Looking at the present volatile market, the demand and needs of the consumers are
fluctuating rapidly (Kotler, 2008). From the present study, it has been founded that the demand for
Indian clothing is rising consistently (Pesonen, 2013). Specially, Indian who are living in the
country likes to wear traditional and their cultural dress like sarees, kurtis, churidars, salwar suits.
Moreover, in the present times, many of the Asians are also influencing by the Indian traditions,
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cultures, lifestyle etc. Therefore, they desiring to wear Indian ethnic cloths, specially, women wants
to wear traditional wearing such as trendy suits, elegant sarees etc. Henceforth, the demand for the
Indian dress is rising continuously (Onkvisit and Shaw, 2009), as a result, many market
opportunities are available for the retailers to establish and expand their market by delivering
services in New Zealand. Further it has been explained by Rothaermel, (2016) that Indian tradition
attracts tourists and travellers to a large extent henceforth, it bring growth in overseas market
demand for ethnic cloths.
. Females prefer traditional Indian dress from the retailers and online cloth service provider
to wear it especially on the festivals, occasions etc. The product portfolio of the chosen venture will
be made of Indian organic material like cotton, silk, khadi (Fabric made from raw cotton) etc.
Moreover, hand-printing and trending fabrics like finger imprints, kalam-kari (hand-made printing)
and brush strokes are demanding by Asians, Kiwis and many other people. Along with this, female
prefers sustainable wearing products for their kids so that any harmful impacts due to chemical to
their skins can be prevented. Therefore, BABA ETHNIC WEAR will offer eco-fashion conscious
products to the women for their children. Besides this, an another area of company's operations is
tailoring and fit on, it is because, clothing products may be of different sizes which may be unfit to
the customers. Therefore, these operations will meet customer expectations by altering the clothing
products and meet market demand.
Estimate the number of customers and expenditures expected with necessary justification
Projection is also an important facet of planning a new business so that it can be establish
effectively. With regards to the Baba ethnic wear, potential customers and expenditures with
necessary justifications are conducted here as under:
Estimation of number of consumers
Particulars Year 1 (NZD) Year 2 (NZD) Year 3 (NZD)
Number of customers - Kurtis 300 308 317
Average price for Kurtis 120 121 122
Revenue - Kurtis 36000 37267 38579
Average customers - Sarees 220 226 232
Average price for sarees 180 181 183
Revenue - Sarees 39600 40994 42437
Average customers - Kids 200 206 275
Average price 70 70 71
Revenue 14000 14493 19520
Total revenues 89600 92754 100536
Cash flow statement
Pre-Operating
Year
Year 1
(NZD)
Year 2
(NZD) Year 3 (NZD)
Cash Inflow
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Opening Balance 0
Sales 0 89600 92754 100536
Owner's fund 20000
Bank Loan 30000
Total Cash Inflow 50000 89600 92754 100536
Cash Outflow
Working Capital 20000 0 0 0
Legal and Registration Charges 200 0 0 0
Market Research 300 0 0 0
Marketing and promotional 200 200 200
Purchases 26880 27826 30161
Transportation charges 13440 13913 15080
Utilities (Electricity & Phone) 300 301.5 303.0075
Interest on loan 2799 2799 2799
Rent on premises 3500 3675 3858.75
Salary 8412.8 8412.8 8412.8
Miscellaneous Expenses 500 500 500
Loan Repayment 10000 10000 10000
Total Cash Outflow 20500 66031.8 67627.4 71314.64
Net cash flow 29500 23568.2 25126.16 29221.09
Opening balance 0 29500 53068.2 78194.36
Net cash flow 29500 23568.2 25126.16 29221.09
Closing Balance 29500 53068.2 78194.36 107415.45
ANALYSIS OF COMPETITION AND MARKET STRATEGIES
Strengths and weakness of competitors
There are number of apparel providers who are operating in Auckland, NZ. For instance,
Hallenstein Glassons Holding Limited is one of the well-established business group, in which,
Hallensteins captured largest market share in men apparel, Glassons in women ethnic wearing
whereas HBK is known for kids clothing (Mason, Botelho, 2016). Moreover, Jean Jones is also
another top-seller of women cloths who has global presence. Apart from this, Kathmandu Ltd,
Kmart, Aditi Saree, Saree Bazar, Roop Darshan etc. are several indirect competitors who will give
tough competition to the Baba ethnic wear. In order to reach target goals and objectives, it is
essential for the venture to enhance competitive strength so that it can compete effectively with the
rival firms. For this, it is important for the entrepreneur to address their competitors strength as well
as weaknesses so that, strategic policies and decisions can be taken for the competitive success
(Simón-Moya & Revuelto-Taboada, 2016). Hallensteins's internal evaluation to measure its
strengths and weakness are examined here as under:
Strengths Weaknesses
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 Well-established business in domestic
market
 Economies of scale
 Rapid growth rate
 Excellent turnover and profit margin
 Less labour cost.
 Unavailability of skilled and experienced
employees
 Fluctuations in productivity and
profitability due to demand volatility
 High supplier prices.
 Tough competition
 Pricing pressure
Marketing strategies
Marketing strategy refers to the business plan of action that combines all the marketing
objectives into one comprehensive plan. The major marketing strategies that can be used by
company are as follows:
 Segmentation: It is concept that will help in the division of market into smaller parts. A
detailed analysis of Auckland market can be done to facilitate segmentation process. Further,
market can be divided on the basis of demographic, geographic, behavioural and
psychographic factors. (Kirca, Jayachran and Bearden, 2005). The demographic factors will
help Baba ethnic to divide customers on the basis of factors like, age, gender, income,
nationality etc. The major customers will be from children of age group 2-15 and women of
16-26.
 Targeting: The new company has decided to target individual who are Asian and Kiwis.
Among this strong focus will be on women and children who demand clothing very much.
However, current fashion trends must be focused mainly to meet the expectations of this
group.
 Positioning: The positioning strategy will help Baba ethnic wear in developing a different
image as compare to its competitors (Pesonen, 2013). With the help of strong marketing it is
possible. Further, company is using Indian material and design like, silk, cotton, georgette
and thread work and providing high quality cloths at reasonable price.
Product pricing, placement and position strategies
4p's
4P’s Business offerings
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Product The brand new planned venture focuses on delivering customized
clothing products as per taste and preference of consumers
(Anaejionu, 2013). The quality of apparels is kept high to avoid
dissatisfaction among customers.
Place The brand outlet is going to be established at prime locations of
Auckland market such as near airports, tourist destinations and.
The brand stores can be opened at the major shopping complex
of the city (Onkvisit & Shaw, 2009).
Price The organization is going to adopt pricing strategy to offer
products at reasonable price. The company is providing products
made of organic cotton it will use economic pricing. By
providing good quality at appropriate prices, company can boost
the sales of business.
Promotion The promotion strategy will help in ensuring brand awareness
among customers. Both direct and indirect marketing channels
will be used by firm (Jafari, 2013). The offline promotion will be
done through use of advertisement on billboards, newspaper, Tv,
pamphlets etc On the other hand, firm will also use social media
sites, own website and techniques like search engine
optimization to enhance promotion.
Critical success factors
For the business of Baba ethnic wear consideration must be given on critical success factors that
will ensure the prosperity of business in Auckland market. They are: New concept of clothing – The modern concept of clothing that ensures use or organic cotton
and fibre can bring something fresh and innovative for the masses of Auckland. The
customers can find the use of organic material without any adulteration and thus resulting
into best quality of products (Kotler, 2008) Use of technology –Baba ethnic wear will use automated billing system due to use of
scanners without barcodes for the acknowledgement of the clothing products available in the
brand store. Baba ethnic wear can use RFID technique which means radio frequency
identification device for identification and tracking function ( Kirca, Jayachran & Bearden,
2005). The company will design its own mobile application so that customers can place the
order with the help of their cell phone within their comfort zone. Economy range - The products of brand will be provided at fair and reasonable prices. This
will help in drawing the attention of majority of price concerned customers. On the other
hand, use of organic cotton is new concept introduced by company (Korotkov, Occhiocupo.
& Simkin, 2013).
 Feedback cell - A special feedback counter will be developed in the new brand store and in
the upcoming future stores also for effective resolution of the issues and queries of the
customers. With the help of these feedback problems of customer will be resolved on time
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and thus prevent their dissatisfaction.
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REFERENCES
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Ismail, M. B. M., (2016). Factors Affecting Competitive Rivalry of Rice Shop Owners: multiple
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Jafari, A., (2013). The Principles of Islamic Marketing. European Journal of Marketing. 47(10).
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Pesonen, A. J., (2013). Information and communications technology and market segmentation in
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Rothaermel, F. T., (2016). Competitive Advantage in Technology Intensive Industries.
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Study of Entrepreneurship, Innovation &amp. 26(3). pp.233-256.
Simón-Moya, V. and Revuelto-Taboada, L., (2016). Revising the predictive capability of business
plan quality for new firm survival using qualitative comparative analysis. Journal of
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Business Research. 69(4). pp.1351-1356.
Online
Anaejionu, R., (2013). Business plan for a start-up clothing store. [Online]. Available through:
<http://smallbusiness.chron.com/business-plan-startup-clothing-store-10406.html>.
[Accessed on 26th August 2016].
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