Report

Business Development
and
Value Creation

EXECUTIVE SUMMARY
For every company it is essential to conduct market as well industry analysis because
through it they can understand situation and developing decision which lead to conducting
business operations and function in effective manner. Forever Clothing is going to open their
new clothing store at United Kingdom and there are offering wide range of cloth made up of self
healing material as well as natural dye. Through this they need to conduct several activities or
practices such as market analysis, industry analysis, competitors analysis, Balanced Scorecard
and financial as well as operational plan. It is so because this will help in effective decision that
lead to effective conducting of business operations and functions.

Table of Contents
INTRODUCTION...........................................................................................................................3
1. The opportunity............................................................................................................................3
1.1 The opportunity................................................................................................................3
1.2. Industry analysis..............................................................................................................4
1.3. Innovations brought to the industry by the new venture.................................................5
1.4 Strategy.............................................................................................................................6
1.5 Ethics, responsibility, and sustainability..........................................................................6
2. The company and team................................................................................................................7
2.1 Legal structure..................................................................................................................7
2.2 Ownership.........................................................................................................................7
2.3 The advisory board...........................................................................................................7
2.4 The management team......................................................................................................7
3. Marketing ....................................................................................................................................8
3.1 Identification of customers...............................................................................................8
3.2 Number of potential customers and potential sales revenues...........................................8
3.3 Requirements of various customer segments...................................................................8
3.4 Appropriate sales and promotion approaches...................................................................9
3.5 Analysis of how purchase decisions are made, and how/if this behaviour can be changed. 9
3.6 Customer price sensitivity................................................................................................9
3.7 Cost of acquiring and retaining customers.....................................................................10
3.8 Strengths and weaknesses of competitors and ways that competitors are likely to react
when the company enters the market...................................................................................10
3.9 Results from Market Research.......................................................................................11
4 Operating and Financial plans....................................................................................................11
4.1. Conversion of inputs into outputs that customer value.................................................11
4.2 Financial plan.................................................................................................................12
4.3. Contingency plans.........................................................................................................12
5 Conclusions and Balanced Scorecard.........................................................................................13
5.1 Balanced Scorecard........................................................................................................13
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5.2 Main conclusions from the project.................................................................................13
5.3 Limitations and future directions....................................................................................13
REFRTENCES..............................................................................................................................15
2

INTRODUCTION
For a company it is essential to develop business and for that they may create value as it
help in conducting work in effective as well as effectual manner. Business development is
considered as entails task as well as processes which leads to development and implementation
of growth opportunities within and among an organisations (Aarikka and Jaakkola, 2012). Along
with this value creating is primary purpose of any business unit in order to develop value for
shareholders for enhancing stock price for ensuring the future of company. This report is based
on the Forever Clothing which is going to offer wide range of clothing for men, women and kids
as well as these cloths are made up of self healing material and these are also made of natural
dye with didn't fade at UK marketplace. For this they are conducting several practices such as
market and industry analysis, different intellectual properties/ patents, strategies for competitive
advantage. Along with this this report will also include legal structure which can be adopt by
respective company as well as it will also include informations related to operating and financial
plans.
1. The opportunity
1.1 The opportunity
 Market research
It is consider as practices which are conducted by a company in order to gather proper
information able the target market and customers (Achtenhagen, Melin and Naldi, 2013). This
plays an essential role in process of developing effective business strategies. In respect of
Forever Clothing they will adopt survey and observation in order to conduct market research.
This is so because through it they able to identify the need as well as requirement of customers
related to clothing and fashion.
 The gap
Gap analysis is define as a method in which a business try to identify the gap among the
what customer's want and what they are offering to them. By conducting this analysis respective
company able to identify requirement of customers through which they can design products
accordingly.
1.2. Industry analysis
 Current competitive situation + PEST
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Political- Political condition of respective company is stable so it will be opportunity for Forever
Clothing to start their business at respective market by offering such a unique clothing products.
Economical- This factors is strong at United Kingdom so at respective place leaving standard
will be high. That will be opportunity for respective company to operate their because peoples of
UK can easily afford it.
Social- It is essential for a this company to understand social factors of United Kingdom peoples
because that will help them in developing more effective as well as impressive products.
Moreover in this they need to consider lifestyle, preference, new trends and so of UK (Austin
and Seitanidi, 2012).
Technological- Peoples of UK are more attracted toward the innovation as well as new
technology so that will be effective for Forever Clothing. This is so because their clothing
products are based on new technology which help in attracting more and more customers.
By this it can be estimate that for Forever Clothing current competitive situation is
moderate because at United Kingdom no other company offer self healing material cloths with
natural dye. But at respective place there are number of companies that are dealing in clothing
and fashion industry.
 Projected strategic moves by current players
For this Forever Clothing may adopt Porter's five force model, which is given below:-
Factors Range Reason
Threat of entry High It is high for Forever Clothing because
at respective industry there is low rules
and regulation (Bocken, Rana and
Short, 2015). Due to which any new
company can enter into industry easily
with new innovation.
Bargaining power of suppliers High This factor will be high for respective
company because there are very limited
suppliers of self healing clothing
material as well as natural dye.
Bargaining power of customers Low It will be low for this firm because
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there is no other companies who
offering self healing clothing. So if a
customers want to purchase it they have
to visit Forever Clothing store.
Threat of substitute Moderate It will be moderate for respective
company because no substitutes are
available for self healing cloth
(Cinquini, Minin and Varaldo, 2013).
But there are also several companies
who offer attractive design which may
attract customers.
Industry rivalry High This factor will be high for Forever
Clothing because there are number of
companies at UK who offer attractive
design of cloths which attract
customers.
 Changes brought to the competitiveness of the industry by the new venture
Forever Clothing is going to introduce new range of clothing products which are made up
of self healing material as well as its colour is not get fade because it company is using natural
dye. Along with this, cloths made up of these material are highly skin friendly, based on new
trends and so on which help company in attracting more and more audiences.
1.3. Innovations brought to the industry by the new venture
 Intellectual property/patents
There are several Intellectual property/patents which are necessary for Forever Clothing
to adopt, from which some are given below:
Copyright: Through this respective company may protect their unique technology and designed
cloth, moreover by adopting this they not able to copyright article of clothing range but help in
securing design like print, pattern and technology (Fedreheim, 2013).
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Trademark: It define as logos, quotes, symbols and signs in a fashion industry at which Forever
Clothing is operating. By adopting this technique firm able to protect their brand name and logo.
Patents: This help respective company in protecting their innovation from getting copied. This
will aid in protecting unique technology of company i.e. self healing material clothing with
natural dye which didn't fade.
1.4 Strategy
 Sources of differentiation and competitive advantage
This can be analyse by value chain analysis, that is explained below in respect of Forever
Clothing:-
Primary Activities
These activities are directly related to the physical creation, maintenance, sales as well as
support of products and services which are offer by a company. In respect of Forever Clothing in
order to manager primary activities, they divided whole practice into sub section which include
practices like management of inbound logistics, operations, outbound logistics, services,
marketing and sales (Jaakkola and Hakanen, 2013). These all activities help respective company
in gaining competitive advantage because they adopt proper software which help in conducting
work in systematic as well as effective manner.
Support Activities
These activities are mainly supported by primary function which are mentioned above.
This activities are also divided into several sub activities such as procurement, human resource
management, technological development, infrastructure and so on. This will also help respective
company in gaining competitive advantage at the marketplace because their management
conduct operations as well as develop store by considering it which lead to accomplishment of
task in most effective way.
1.5 Ethics, responsibility, and sustainability
For Forever Clothing it is essential to conduct those practices which are ethics based as
well as through which they can sustain at marketplace in effective manner (Lenssen and et. al.,
2013). Moreover, it will be also their responsibility to offer quality products that lead to
attainment of desire goal. In order to all this, respective company management may conduct
practices like offer best quality products, they must also follow legal rules and regulations, they
must use natural colour and so on.
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2. The company and team
2.1 Legal structure
Legal structure refers to form in which a company start doing its business at potential
marketplace (Maine, Lubik and Garnsey, 2012). In respect of Forever Clothing they may adopt
partnership legal structure, in which business unit is run by 2 or 20 peoples.
2.2 Ownership
At Forever Clothing ownership will be belongs to the partners of the firm as well as it
will be their responsibility that they must take take trademark of their business ideas, logo and
name so that no other company able to copy it.
2.3 The advisory board
At advisory board there are numbers of members who have strong authority at the
company. In respect of Forever Clothing, their members of advisory board are CEO, Vice
president, employees, director and so on.
2.4 The management team
 Expected contributions by each team
At Forever Clothing every team are expected to conduct particular thing so that company
can attain their goal as well as objective in effective manner. Some of the major expected
contribution of teams are given below:-
Marketing- This department plays a main role in making business successful because they
promote as well as advertise products in effective manner so that more and more customers get
attracted toward them. At respective company marketing team also conduct research so that they
can help in planning things in more effectively and accordingly.
Human resource- Respective department also necessary for Forever Clothing because they help
organisation in hiring most effective employees so that they can attain their desire goal
successful (Michelini and Fiorentino, 2012). Moreover it will also help in conducting effective
planning so that company can attain their desire goal as well as target effectively and
successfully.
Designing- The expectation from respective team is that they design effective cloths so that more
and more customer's get attracted toward them. Moreover it is also expected from them, they
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must conducted market analysis so that they can develop most attractive design according to
customer's need, expectation and requirement.
 Expected salary
The average salary of marketing executive who are working at marketing team is near by
$ 54,412 per year and marketing manager who will lead team will get near by $ 145,620
annually (Pätäri and et. al., 2012). In respect of human resource executive will be approx £
26,236 per year and HR manager will get $ 60,070 on annual basis. Along with this, designing
manager of respective firm will get near about £ 52,332 per year.
3. Marketing
3.1 Identification of customers
The customers of Forever Clothing are men, women and kids of upper class, upper
middle class and middle class peoples. The respective company also develop trendy design
according to which teenagers are also get attracted toward products because they have limited
amount of money to spend on cloths. So dresses made up of self healing material stay long which
save their money.
3.2 Number of potential customers and potential sales revenues
Forever Clothing is estimating 50,000 peoples as a potential customers and they are
estimating to earn approx $ 500,000 to $ 1000,000 in a year through the United Kingdom
marketplace.
3.3 Requirements of various customer segments
 Importance of purchase convenience, rapid delivery, product customization, etc. for
these segments
The target segments of Forever Clothing is women, men and kids of upper, upper middle
and middle class peoples. For all of these segments purchase convenience is essential so that they
visit to store and easily purchase cloths which they required as that will help them in saving their
time and energy (Pekuri and et. al., 2014). Along with this for them rapid delivery of facilities is
also necessary so that customer get free in proper time without staying in queue for long time as
well as customize products is also effective for them. This is so because that will help customers
in getting ready to wear cloth with proper fitting.
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 Ways to effectively access each segment, distributors, a captive sales force, e-
commerce, etc.
The Forever Clothing may access each and every segment by conducting proper
advertisement as well as promotional activities through social media, print media, video and
digital media (Pfitzer, Bockstette and Stamp, 2013). For assessing distributors they may interact
and communicate them so that they can get proper quotations for buying self healing clothing
materials. Moreover in order to get captive sales force respective company may attract more and
more customers towards their store as well as for accessing e - commerce they may develop
effective application from which customers can purchase products.
3.4 Appropriate sales and promotion approaches
Sales and promotion approaches is define as a techniques which are adopted by a
company in order to advertise as well as promote their business at the potential marketplace. In
respect of Forever Clothing they may adopt several approaches for sales and promotion activities
such as social media, digital media, conduct advertisement on newspaper and television and so
on.
3.5 Analysis of how purchase decisions are made, and how/if this behaviour can be changed
Purchase decision of a person is based on proper procedure according to firstly they will
determine need and issues for which they have to purchase things, then at next stage they
conduct information search in order to know from where they can conduct purchasing. Third
stage will be evaluation of alternative that related to identification of different store from where
they can purchase products. After all these stage purchase of product will be done according to
requirement (Ritala and et. al., 2013). Along with this, behaviour of a customer get change when
they have option of getting more innovative as well as attractive products in decided budget.
3.6 Customer price sensitivity
The pricing strategy which is adopted by Forever Clothing is seeming pricing in which
management fix price of products at low and when they get growth and be stable at marketplace
they will increase cost of offering.
3.7 Cost of acquiring and retaining customers
Forever Clothing also need to conduct various activities so that they can acquire as well
as retain customers in effective manner which will help in attracting more and more customers at
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potential marketplace. So in order to acquiring customer company need to conduct promotional
activities and in that they get costing of near by £ 10,000 £ 30,000 per year. On the other hand,
respective firm also need to conduct activities which lead to retaining of customers for long time
duration and for this approx £ 15,000 £ 20,000 amount will be incurred.
3.8 Strengths and weaknesses of competitors and ways that competitors are likely to react when
the company enters the market
Forever Clothing is operating their business at fashion and clothing industry, where there
is high competition. There are also several strengths as well as weakness of these competitors,
some are given below:-
Strengths Weaknesses
 Competitors have huge number of
experience due to which they know in
what situation which strategy will work
(Schaltegger, Hansen and Lüdeke,
2016).
 Competitors also have huge numbers of
potential as well as loyal customers that
will help them in enhancing their
business.
 Respective company competitors are
also have high experienced as well as
knowledgable employees which aid
them in conducting work effectively for
attaining their desire goal.
 Competitors are operating at respective
industry from huge time and it is not
possible for them to always come up
with innovative products.
 Competitors are also not provide high
quality training and development to
their employees which affect their
working style as well as productivity
(Sørensen and Jensen, 2015).
These are some major strength and weaknesses of Forever Clothing competitors.
Moreover, when they get to know about Forever Clothing and its products, competitors at United
Kingdom will try to offer unique products which help them in attracting as well as retaining
customers.
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3.9 Results from Market Research
By conducting market research, management of Forever Clothing able to know about
their target customers, their requirement, competitors, their strengths and weaknesses and so on.
Moreover, market research also help in developing effective decision about the products through
which Forever Clothing can attract more and more customers towards them.
4 Operating and Financial plans
4.1. Conversion of inputs into outputs that customer value
 Supplier relationships
Suppliers of respective company are those who sale self healing clothing material as well
as natural dye seller. It is necessary for respective company to develop as well as maintain
effective relationship with their suppliers so that they get quality raw material in low price as
compare to others.
 Inventory required
Clothing store have number of inventory at their store which help them in conducting
their business operations and functions in effective manners (Sullivan, Peterson and Krishnan,
2012). In respect of Forever Clothing, inventory which they required are shelves, racks, hangars,
display case, ,mannequins to display cloths, computer system, adequate cleaning supplies.
Moreover they also required other inventory like attractive infrastructure, table, waiting chair and
so on.
 Manufacturing/service provision
There are numbers of provision which are followed by a company in order to ensure that
they are conducting in effective as well as efficient manner. In respect of Forever Clothing they
also need to adopt several manufacturing or service provisions like minimum working hour act,
equal payment act, equality act and so on. It is so because it help in motivating employees which
enhance their work quality.
 In-house/outsourced operations
In house activities or operations of respective company are manufacturing cloths by using
self healing material and natural dye as well as according to need, demand and expectation of
targeted customers (Wilson and Post, 2013). Another in house activity of this firm is to sale
manufactured products to the customers so that they can use it according to requirement.
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4.2 Financial plan
 Cost calculations
For every company it is necessary to estimate as well as calculate cost of conducting
business operations and functions (Pätäri and et. al., 2012). This is so because it help in
conducting business activities or development of strategies accordingly to company budget. In
respect of respective company it is essential for them to hire accountant who conduct cost
calculating as well as development of budget.
Cost Calculation:
Cost Amount (£)
Initial investment 600000
Classification of investment:
Plant and machinery 200000
Factory premises 50000
Furniture and fittings 50000
Legal expenses for establishment 10000
Marketing expenses 20000
Employee expanses 20000
Inventory requirements 200000
Cash requirement 50000
 Projected Break Even Point
It is considered as a situation at which company is not gaining profit as well as not facing
loss. They are at no profit no loss situation. By developing or projecting break even point
respective company can estimate their sales and profitability according to which they can take
decision in order to enhance profit as well as market shares.
Particulars Amount (£)
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Sales £6,00,0000.00
(-) variable cost -£4,20,0000.00
Contribution £1,80,0000.00
(-) Fixed cost -£1,80,0000.00
BEP £0.00
 Projected Cash flows
Cash flow is considered as net amount of cash as well as cash equivalents that transferred
into and out of a business unit. By projecting cash flows Forever Clothing can estimate real or
virtual flow of money at a business. That help them in develop effective decision according to
their sales as well as profit.
Cash Flow Statement
Particulars Jan Feb Mar Apr May June
Cash inflows
Investment 500000
Credit sales 200000 450000 300000 450000 1500000 550000
Total inflows 700000 450000 300000 450000 150000 550000
Cash outflows
Fixed: Rent and
elexrticity 300000 250000 150000 200000 120000 350000
Variable : Direct material 250000 35000 20000 350000 15000 120000
Total outflows 550000 285000 170000 550000 135000 470000
Net Cash flow 150000 165000 130000 -100000 15000 80000
Opening balance 0 150000 315000 445000 345000 705000
closing balance 150000 315000 445000 345000 360000 785000
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Particulars Jan Feb Mar Apr May June
Cash inflows
Investment 800000
Credit sales 120000 200000 750000 300000 500000 650000
Total inflows 920000 200000 750000 300000 500000 650000
Cash outflows
Fixed : Equipment’s 250000 120000 150000 250000 110000 150000
Variable : Direct material 35000 30000 25000 15000 10000 50000
Total outflows 285000 150000 175000 265000 120000 200000
Net Cash flow 635000 50000 575000 35000 38000 450000
Opening balance 0 635000 585000 1160000 1195000 1575000
closing balance 635000 585000 1160000 1195000 1575000 2025000
 Analysis of risk, present value, IRR, etc.
It is essential for Forever Clothing to conduct analysis of risk, present value, IRR
(Internal rate of return) and so on because through that they can create decision according to the
situation (Pekuri and et. al., 2014). Along with this it will also help in avoiding risk or limitations
which may affect profitability ratio of a company. IRR provides profitability of the investment
by discounting expected cash flows on the present value method and deducting amount of initial
investment.
NPV 8%
Initial Investment -Year 0 -6,00,000 -600000
Year 1 25000.00
0.925925925
9
23148.148148
1481
Year 2 100000.00
0.857338820
3
85733.882030
1783
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Year 3 250000.00 0.793832241
198458.06025
5042
Year 4 300000.00
0.735029852
8
220508.95583
8936
Year 5 50000.00 0.680583197
34029.159851
6876
Year 6 50000.00
0.630169626
9
31508.481344
1552
NPV
-
6613.3125318
523
 Analysis of possible scenarios and probability of occurrence
For every company it is essential to conduct analysis of possible scenario as well as
probability of any occurrence because through this they able to develop strategies for the future.
In respect of respective company by analysing possible situation as well as probability of
occurrence they able to know risk which may arise in future. This will also help them in develop
effective decision accordingly that help in overcoming from these situation. All the budgets and
cash flow charts are made on budgeted basis and it is possible that cost incurred in the project is
more then what is expected. Together with this amount of cash flow which is expected to be
received may very and this change can be a positive sign when more funds are received. A
negative impact may leads to hinder organisational performance which was planned.
4.3. Contingency plans
 Triggers/thresholds to change courses
For this Forever Clothing may adopt Triple bottom line model because that will help
them in contingency plans in effective manner which lead to attainment of desire goal as well as
target successfully. In this model there are three parts i.e. social, environmental (ecological) or
financial (Pfitzer, Bockstette and Stamp, 2013). For respective firm it is essential to adopt all
three factors because that will help them in develop clothing products that are according to
demand as well as requirement of society, didn't harm environment and effective for customers
budget.
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5 Conclusions and Balanced Scorecard
5.1 Balanced Scorecard
Balanced scorecard is consider as strategic management performance used by a company
in order to identify as well as improve several internal business operations and functions that
result in external outcome. It will also used for measuring as well as providing feedback to a
company (Ritala and et. al., 2013). In respect of fhjkl Company by maintaining balance
scorecard they able to understand customers feedbacks as well as suggestion that will help in
developing effective decision according to their need, requirement and expectation. That will
also lead to enhancement of sales and customers base.
5.2 Main conclusions from the project
By conducting evaluation of above discussed point it can be conclude that for every
company it is essential to conduct proper evaluation of market as well as industry as that will
help them in developing strategies as well as plans. Moreover, for a business unit who want to
enter into new market it is essential to provide new as well as innovative products and services
so that they able to attract more and more customers. For this there are several other practices are
need to be conducted by respective company such as identification of target segment,
understanding to their behaviour, environment analysis. Along with this, they also need too
conduct analysis of operations as well as financial plan so that they can develop proper strategies
related to finical requirement for conducting work effectively. In this management need to
analyse financial elements like Cost calculations, Projected Break Even Point, Projected Cash
flows, Analysis of risk, present value, IRR, and many others.
5.3 Limitations and future directions
Limitation which are faced by Forever Clothing are their competitors, finance stability,
number of skilled employees, availability of self healing material and natural dye and so on. So it
is necessary for respective company to adopt proper strategies by evaluating market and industry
so that they can plan accordingly. Along with this, they must also store their raw material so that
they can avoid situation of shortage.
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REFRTENCES
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Wilson, F. and Post, J.E., 2013. Business models for people, planet (& profits): exploring the
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Business Economics. 40(3). pp.715-737.
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