Business Proposal for Australian Organics Limited

This business proposal suggests that Australian Organics Limited should enter the Australian market of organic products by manufacturing and marketing shower gel, soaps, and shampoo. The proposal includes an executive summary, background information, mission, product offering, marketing analysis, target market, and financial plan.

Running head: BUSINESS PROPOSAL
BUSINESS PROPOSAL
Name of the Student:
Name of the University:
Author Note:

1
BUSINESS PROPOSAL
2. Executive summary:
The business proposal shows that Australian Organics Limited should enter the Australian
market of organic products. The company should manufacture and market shower gel, soaps and
shampoo. The company should target both men and women as its target customers. The mission
of the company should be marketing organic products which would benefit the skin of the
consumers by removing germs and dirt as well as restoring moisture. The company should from
its very inception make strategies to deal with threats from new companies.

2
BUSINESS PROPOSAL
Table of Contents
2. Executive summary:....................................................................................................................1
3. Background:.................................................................................................................................2
4. Mission:.......................................................................................................................................3
5. Product (service offering):...........................................................................................................3
6. Marketing analysis:......................................................................................................................4
a. Industry analysis:.........................................................................................................................4
Threat of new entrants:................................................................................................................4
Threat of substitutes:....................................................................................................................5
Bargaining powers of customers:................................................................................................5
Bargaining powers of suppliers:..................................................................................................6
Competitive rivalry:.....................................................................................................................6
b, Competition:................................................................................................................................7
7. Primary target market:.................................................................................................................7
8. Marketing:....................................................................................................................................7
a. Product:....................................................................................................................................7
b. Pricing:.....................................................................................................................................8
c. Distribution:.............................................................................................................................9
d. Promotion:.............................................................................................................................10
9. Financial plan:...........................................................................................................................10

3
BUSINESS PROPOSAL
10. Critical risks:............................................................................................................................10
11. References:..............................................................................................................................11

4
BUSINESS PROPOSAL
3. Background:
Skincare has emerged into an important part of the personal care among both men and
women in Australia. Australia is a developed economy and is the home to one of the most
competitive markets in the world. The country owing to its career opportunities attract immense
numbers of workers from foreign countries as well. The country harbours some of world’s most
important commercial hubs like Sydney and Canberra. The residents of Australia are subjected to
high level of stresses due to their busy life style and high level of environmental pollution. These
two issues have detrimental impacts on the skin of the people which has made skincare in
evitable part of their lives. However, chemicals used in skincare products also have side effects
on the skin leaving in dry and devoid of its natural oil balance (Krutmann et al. 2017). Moreover,
chemicals in the skincare products, when washed by water reach the water bodies and harms the
environment. The consumers in Australia today prefer organic skincare products which are
tender on their skin and causes less damage to the environment. It is a fact that the number of
organic skincare products available in the Australian market is far less compared to the large
number of consumers. The consumers owing to dearth of organic skincare products of Australian
origin are compelled to purchase organic skincare products made my foreign companies (Bale et
al. 2018). This detailed description bring into light the gap in the Australian organic skincare
market. The gap over here refers to the high demand for organic skincare products which exists
in the Australian market and the less numbers of companies manufacturing organic products. The
aim of the research would be a business proposal to launch an entrepreneurial venture which
would cater to this gap in the Australian organic skincare product market. The name of the
proposed company would be Australian Organics Limited which would be based in Sydney
and listed on ASX. The goods which the company would manufacture would consist of soaps,

5
BUSINESS PROPOSAL
shower gels and shampoos for men and women (Zillich, et al. 2015). The services of the
company would consist of continuous customer support services on the official website of the
company, email, telephone and social media. Customers would also be able to gain advices on
skincare on the website.
4. Mission:
The mission of Australian Organic Limited (abbreviated as AOL) would be offering
organic skincare products to consumers which would benefit the consumers. The products being
of organic origin would be tender on skin while their ingredients would remove dirt and germs
which accumulate on the skin. The products would restore the moisture and oil balance of the
skin leaving in nourished as well as soft. The products being of organic origin would cause
minimum damage to the environment, thus benefiting the social. Thus, AOL would seek to
benefit the consumers and the society at large by offering organic skincare products.
5. Product (service offering):
The products which Australian Organics Limited would market in Australia would be of
two main categories namely, skincare products and customer service. The skincare products
range would consist of soaps, shower gel and shampoos. The basic ingredients of all the products
would be organic in nature. The fragrances would be different. While the products targeting
female customers would ha ve floral fragrances, the products targeting men would have
fragrances like musk, sandalwood and chocolate (Gopaldas 2015). All the skincare products
would be free from chemicals and paraben.
The service offerings of Australian Organics Limited would consist of skincare advices to
customers on the official website of the company. The customers can also gain information about

6
BUSINESS PROPOSAL
skincare on the social media handles of the company (Santos 2018). The suppliers and
distributors can gain information from the website of the company, by sending emails and on
calling up on the dedicated number.
6. Marketing analysis:
a. Industry analysis:
Australian Organics Limited should conduct an industry analysis of the organic skincare
industry prior to launching its skincare product range into the market of the Australia. This is
because the analysis of the market would find importance in making strategies of the company.
The model which would be used to conduct the industry analysis is Five Forces Model proposed
by Porter:
Threat of new entrants:
The threats of new entrants refer to the competition which existing firms operating in
profitable markets face. The Australian organic products market is expanding owing to huge
demand for the products. The numbers of companies in Australia manufacturing organic
products are less compared to this demand. This means that the existing firms are able to attract
immense customer base, thus earning supernormal profits (Zhang et al. 2018). However, it can
be pointed out that profitable markets attract new companies which would reduce the
profitability the existing companies would be enjoy. This means that the companies established
in the market adopt ways to prevent or at least reduce the entry of new companies. As far as
AOL is concerned, the company should make strategies to counteract the threats it would receive
from newly emerging companies. The company should use its competitive advantages like

7
BUSINESS PROPOSAL
financial power and customer base to ensure that newly emerging companies are not able to
poach its customer base (Ştefăniţă and LEUCIUC (2018).
Figure 1 Cycle showing AOL's action to deal with threats of new entrants
(Source: Author)
Threat of substitutes:
The threat of substitutes comes from products using different technology but capable of
serving similar functions as the products as under question. As far as the organic skin care
products are concerned, they face competition from inorganic skincare products. The inorganic
products tend to be cheaper and more easily available. These inorganic products attract
customers more easily towards themselves compared to organic products, especially die to their
New companies
enter Australian
organic product
market
Paoch
customers from
AOL
AOL's revenue
falls
AOL makes
startegies
Reduce threats
form new
entrants

8
BUSINESS PROPOSAL
low costs and easy availability (Mihailovic, Vescovi and Pontiggia 2017). This means that AOL
should consider the prices of the inorganic products available in Australia. The company should
make its pricing strategies so as to prevent firms manufacturing inorganic skincare products
poach customers its using pricing as a strategy.
Bargaining powers of customers:
The bargaining powers of consumers refer to the capability of consumers exert pressure
on firms by exercising the option of choosing to buy products from several firms. As far as the
number of organic skincare producing companies in Australia is concerned, it can be pointed out
that the number is limited. The situation apparently points out that the consumers are liable to be
put under pressure from these companies to purchase organic skincare products. However, in
reality the consumers enjoy immense bargaining power in the organic skincare market in
Australia. The country is already under domination by British multinational companies like
Unilever and Indian organic cosmetic manufacturing giant Himalaya Pharmaceuticals. The
consumers in Australia in order to make up the scarcity of Australian organic products available
in the market, order organic products of foreign origin. Thus, it can be pointed out that the
bargaining power of the customers are pretty high in Australia.

9
BUSINESS PROPOSAL
Figure 2. Steps showing bargaining power of consumers
(Source: Author)
Bargaining powers of suppliers:
The suppliers of resources like raw materials, labour, knowledge and plants are able to
exercise high bargaining power over the companies if the numbers of former is low. As far as
suppliers of organic skincare is concerned, the number of suppliers are low in Australia which
are likely to enjoy high bargaining power over the companies like Australian Organics Limited.
However, it can be pointed out that the companies manufacturing organic skincare products are
able to counteract this scarcity of suppliers of organic skincare raw materials, today possess
supply chains in different countries around the world. This enables these companies reduce their
dependence on their resident suppliers and acquire raw materials from a large number of
suppliers at economies of scale.
Large
numbers of
companies
marketing
organic
products
Customers
can choose
from the
companies
Customers
enjoy more
bargaining
power
compared to
companies

10
BUSINESS PROPOSAL
Competitive rivalry:
The competitive rivalry refers to the competition which companies receive from firms
manufacturing similar products. As far as Australia is concerned, the market is already the home
to A’Kin which is a multinational company making botanical products. The country is already a
strategically important market to companies like L’Oreal. which are carrying out continuous
innovation to introduce more innovative products into the market, This means AOL should make
strategies to counteract this competition it receives from competitor companies.
b, Competition:
The rate of competition in the organic skincare product market is very high. The
Australian organic skincare market is experiencing high rate of expansion owing to entry of a
large number of companies. The market is home to resident companies manufacturing skincare
products for men and women. These companies make both premium range products which are
expensive and medium range products which are comparatively less expensive. This means the
rate of competition is very high.

11
BUSINESS PROPOSAL
7. Primary target market:
The primary target market of Australian Organics Limited would be consumers of all
ages except babies. The skincare products of AOL would be available in variants targeting male
and female consumers. The skincare products by AOL would be made from organic ingredients
and would be devoid of any synthetic preservatives. This means that products would be helpful
to consumers following different types of lifestyle. The professionals would be able to use the
skin care products by AOL to clean their skin. The consumers involved in sports can use the
products of AOL to wash away the dirt and germs which their skin catch while playing games.
8. Marketing:
a. Product:
The product of Australian Organics Limited would consist of organic skincare prodcuts
targeting both men and women. The products of the company would consist of shower gel, soaps
and shampoo. These products would be available in separate variants meant for men and women.
The variants meant for men would have fragrances like like musk and sandal. The variants meant
for women would consist of floral fragrances. The products of the company would be aligned to
meet the requirements of consumers. The first product strategy of AOL would be maintaining
high quality parameters for its products. The products of the company should be free from all
kinds of synthetic preservatives. The second strategy of AOL should be that the company would
make its products available in multiple variants to cater to the needs of the consumers more
specifically. For example, shampoo for women would be available in variants like anti-hair fall,
anti-dandruff, oil balance and damage hair rescue. This clearly means that the company right
from its inception would use niche marketing to cater to the needs of the consumers more
specifically. The third product strategy which the company would adopt would be that the

12
BUSINESS PROPOSAL
products would be available in both single pieces and as parts of product bundles. The fourth
strategy of the company would be ensuring ethical supply of raw materials. The company should
ensure that the suppliers are not engaged in any sort of illegal and unethical operations like use
of forced labour. The fifth strategy would be that the products would be available in premium
variants and the classic variants. The premium variants would be expensive and target rich
customers. The classic variants would be more affordable and target the middle class consumers.
b. Pricing:
The aim of the pricing strategy of Australian Organics Limited would be ensuring that its
products are able to cause value creation to the consumers. The company accordingly would
divide its pricing strategy to price both its product categories namely premium and classic
variants. The premium variants would be the high end range of organic skincare products of the
company. The classic variant products would be the less extravagant organic skincare products
of the company targeting middle class consumers. It can be pointed out that acquiring materials
for organic products involve more expenditure compared to acquisition of inorganic products.
This means that the company would not be able price its products below a certain price.
Moreover, companies view high costs of products as quality parameters. Thus, it is prudent that
the target consumer segments of the company consists of upper and middle class customers. The
pricing of the company would also be aligned with its product bundling strategies. The company
would charge higher prices for single products. It would on the other hand charge lower prices
for unit products forming product bundles.
c. Distribution:
Australian Organics Limited should form a strong distribution strategy to distribute its
organics products. The distribution channel should enable the company to distribute its products

13
BUSINESS PROPOSAL
all over Australia. The company should set up brick and mortar outlets in the main cities to sell
its products directly to customers. The company should also sell its products through retail
chains which would enable the company to penetrate markets where it has no direct presence.
Similarly, the company would use two ecommerce channels to receive orders online. The
company should receive orders for its products on the ecommerce portal attached to its official
website. The company should market its products in foreign markets by using third party
ecommerce portals like Amazon. Thus, it is evident that the distribution channel would enable
the company cater to customer bases both in Australia and abroad. The distribution channel
would enable the company generate high profits in the short run. In the medium run this would
enable the company to acquire customers in the foreign markets as well. This strategy would
enable the company to expand in the foreign markets in the long run.
d. Promotion:
The company should use aggressive promotional techniques to promote its products in
Australian market in the initial phase and in foreign markets in the long run. The company
should offer discounts on purchase of its products. The features of the offers of discount like
product eligible for the discount and rates of discount would vary on regular basis. This would
enable the AOL to create curiosity among consumers which would enable the company to attract
more customers. The company should promote its products by participating in fashion show like
London Fashion Week. The company should hire celebrities to endorse the product. This would
enable the company to establish its products as a status symbol to attract upper class customers.
This would enable the company generate high revenue.

14
BUSINESS PROPOSAL
9. Financial plan:
Attached
10. Critical risks:
Attached

15
BUSINESS PROPOSAL
11. References:
Bale, S., Cameron, J., Meaume, S. and Ingegneri, A., 2018. Skin care. In Science and practice of
pressure ulcer management (pp. 111-124). Springer, London.
Gopaldas, A., 2015. Creating firm, customer, and societal value: Toward a theory of positive
marketing. Journal of Business Research, 68(12), pp.2446-2451.
Krutmann, J., Bouloc, A., Sore, G., Bernard, B.A. and Passeron, T., 2017. The skin aging
exposome. Journal of dermatological science, 85(3), pp.152-161.
Mihailovic, T., Vescovi, T. and Pontiggia, A., 2017. The Beauty Ideal in Chinese Luxury
Cosmetics: Adaptation Strategies of Western Companies.
Santos, B., 2018. Changing the world, on soap at a time-Amual Soap (Doctoral dissertation).
Ştefăniţă, Ş.U.Ş.U. and LEUCIUC, E.G., 2018. Romanian Pharmaceutical Sector-Between
Challenges, Opportunities and Market Threats.. Legal Aspects of the Trading of Listed
Companies. LUMEN Proceedings, 6(1), pp.83-89.
Zhang, C., Kolte, P., Kettinger, W.J. and Yoo, S., 2018. Established Companies' Strategic
Responses to Sharing Economy Threats. MIS Quarterly Executive, 17(1).
Zillich, O.V., Schweiggert‐Weisz, U., Eisner, P. and Kerscher, M., 2015. Polyphenols as active
ingredients for cosmetic products. International Journal of Cosmetic Science, 37(5), pp.455-464.