Strategic Plan for Adventure Caravan: Market and SWOT Analysis Report

This report provides a strategic analysis of Adventure Caravan, a family-owned business in the caravanning industry. The report begins with an executive summary highlighting the need for adaptation in the face of changing market demands. It then delves into an introduction to the caravanning industry, emphasizing its significance to the Australian economy and the challenges faced by companies like Adventure Caravan, including the increasing weight of caravans and shifting customer preferences. The report outlines Adventure Caravan's mission, vision, and strategic direction. It includes a SWOT analysis, market analysis, and PEST analysis to identify strengths, weaknesses, opportunities, and threats. The report also discusses industry forecasts, cost-benefit analysis, and the impact of market opportunities on the current business. The report provides recommendations for Adventure Caravan to sustain and grow within the competitive caravanning industry. Finally, the report concludes by summarizing key findings and suggesting potential strategies for the company's future.

Running head: A STRATEGIC PLAN FOR ADVENTURE CARAVAN
A STRATEGIC PLAN FOR ADVENTURE CARAVAN
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Executive summary
Adapting changes are necessary for survival as it gives a brief idea of what is going on in the
market and the prevailing demands of the customers and make the changes accordingly. The
caravanning industry plays a very significant role in developing the country’s economy. This
report insights about the various changes need to adapt, identification of various strategic
direction and formulating them, opportunities and threats in the market, problems associated
in the industry and the steps taken to improve the level and performance of the company
‘Adventure Caravan’.
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Table of Contents
Introduction................................................................................................................................3
Section 1:....................................................................................................................................4
Section: 2....................................................................................................................................6
SWOT analysis:.....................................................................................................................6
Market analysis:.....................................................................................................................8
PEST analysis:.......................................................................................................................8
Section 3:....................................................................................................................................9
Industry forecast and information........................................................................................10
Cost benefit analysis and ROI..............................................................................................10
Analysis of the Opportunities...............................................................................................14
Impact of opportunity on current business...........................................................................14
Section 4:..................................................................................................................................15
Conclusion................................................................................................................................16
REFERENCES.........................................................................................................................17
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Introduction
Caravanning has always been a fun, and most people enjoy anyhow. There is a
developed sense of independence when one is caravanning, and it becomes convenient in
moving huge luggage, which may not be possible in case of vans or combis. Caravan
sometimes becomes an excellent companion and provide the required comfort zone, which is
sometimes missing using vans. There is a continuous and rapid change in our environment,
and we human beings need to adapt these changes for our survival. Same goes for the caravan
industry; the ever-changing demands and technology shift is making it difficult for the
industries to face the challenges. Caravanning industry plays a very significant role in
enhancing the Australian economy. About 85% of the total Australian population has enjoyed
the caravan holiday once in their lifetime (Caravanindustry.com.au, 2020).
However, people need to be continuously persuaded about the products else in will
not create a position in their mind, and they will have a changed perception. Hence, it
becomes important that proper motivation action must be taken in order to remain in the mind
of the customers (Lynch 2015).
Adventure caravan is facing the same problems, and hence necessary steps are to be
taken for sustaining in the market. The major problem that customers are facing is due to the
weight of the caravan. Due to its heavyweight, many customers are making a shift from
caravans to different light-weighted vehicles which would be more comfortable on the part of
the customers (Caldicott, Scherrer and Jenkins2014).
This report discusses about Adventure Caravan’s strategic direction, its marketing
performances, the scope of marketing opportunities, and formulating the marketing
objectives. Therefore, a proper strategic plan must be made by the company to sustain the
market.
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Section 1:
It becomes very important to identify the direction of the strategy only then a plan can
be made. Mission and vision statement of the company has a direct link with the performance
of the employees, thus resulting in an improved level of profitability. Through these
statements, one can keep himself or herself motivated and agile and can perform better after
giving the required effort. The mission of ‘Adventure Caravan’ can be divided into two parts
because their main aim is to meet the demands of the customers as well as to provide a
working environment that is safe and secured for their employees so that there remains a job
satisfaction among the employees.
The mission and vision of the company are well aligned as the vision of the company
is to be significant and be the number one supplier of quality recreation as well as
commercial caravans. Since it’s important to spend quality time with family and the company
understands this very well, this is the value that ‘Adventure Caravan’ aims for and also to
have a love for luxury and be adventurous and passionate in life.
The most important key to any strategic planning is to have an organisational
direction; direction can here be referred as the integration of all the efforts made by the
employees of the organisation, this gives way and reason for the existence of the company to
remain in future. Similarly, targets keep the employee concentrated, committed and
consistent with his work and help in driving the scalability and the growth of the business. It
is also said that goals help in giving long-term goals and helps in acquiring knowledge.
The main target of ‘Adventure Caravan’ is to be in the market and rule it by providing
the customers with the best service and a job satisfaction to the employees of the company, so
that there is better retention of employees, as the caravan market is expected to grow for the
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next ten years in Australia. Therefore, alignment of organisational direction with that of the
organisational target becomes necessary.
Many factors impact the performance and growth of the company, which includes:
1. Rate exchange: high exchange rate causes a negative effect on the country’s economy
as the price of the product increases and the demand for the same product deceases.
2. Price of the fuel: high fuel prices causes less investment in vehicles which has a great
impact on the purchasing of caravans.
3. Weather change: bad weathers also have an adverse effect on the minds of the
customers regarding the purchase of caravans, they may not feel interested in
purchasing a caravan during a stormy season or when it is raining heavily.
4. Seasonal downturns: if there is a slowdown in the economy, it becomes difficult for
the company to sustain in the market and satisfy the needs and net demands of the
customers.
5. Digital disturbance: every time the company has to follow the recent market and
digital trends in the market and allocate their resources accordingly. Due to this, the
company losses a consistency in which it is operating—as a result, making it difficult
for the customers to buy their products.
All these factors are to be kept in mind before making any strategic plans for the company.
Certain legal and ethical requirements must be considered in order to sustain in the
market. Some of which includes, recognition of fair and genuine competition among
customers, ideals of the industry has to be maintained in the conduction of a dignified and
honourable business, the company must assist development of the industry, employees must
be kept safe and honoured, and all the contractual obligations must be enacted promptly, and
claims must be justified, both Federal and State regulations need to be followed. All the
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contracts must be properly made in order to prevent further inconvenience to the customers
Regulation of all these requirements leads to better performance of the company.
The average growth of this industry is about 3.4% since the last five years and is
expected to grow exponentially at a rate of 2.1% per year. It has been observed that the
tourism and accommodation sectors have examined a growth which also results in the
development of any country’s economy.
Source: www.caravanindustry.com
It was important to consider all the above points in order to have a clear idea of the
industry ‘Adventure Caravan’ is operating in, and accordingly, further approaches can be
made. Therefore, after taking all the factors into account, one can easily identify the strategic
direction of the company.
Section: 2
SWOT analysis:
This technique helps in identifying the strengths, weaknesses, opportunities and threats of any
business or a person and helps in making precise decisions (Sarsby2017). It is also helpful in
making a profit for the organisation. This technique becomes very helpful as the threats
known can be resolved, preventing inconvenience (Gürel and Tat 2017).
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STRENGTHS
 Quality
 Promotional activity
 Favourable climate
 Location
WEAKNESSES
 The increased cost of operation
 Turnover of the staffs
 Government regulations
OPPORTUNITIES
 Increased cabin installation
 Co-operative marketing
 Increased target market
 Grants for infrastructure
THREATS
 Increased Australian dollar
 Increment in oil prices
 Increased competition
 Different styles of accommodation
STRENGTHS:
A variety of activities are made available for the people who are visiting the place so
that they don’t feel bore. Many facilities are made available, and the quality has been
enhanced in order to sustain in the market. There are many promotional activities introduced
by the local and state government in order to have a good advertisement for the company.
The favourable climate of Australia has increased the proximity of attractions for the tourists.
WEAKNESSES:
The operating cost of a caravan is pretty high, and it becomes difficult for installing;
also, the cost induced is very high. Due to this reason, the company is not interested in paying
more to the employees; as a result, many employees decide to walk out of the company.
OPPORTUNITIES:
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A trend of installing more cabins is helping the caravan industry to get a steady pace
in the market and helping the company to earn more profit. It is mostly seen that many
promotions can be made on the state and local level in order to make people aware of the
existing company. Many grants have been made for the infrastructure by the Federal
Government, which can be the biggest opportunity for the company (Caldicott, Scherrer and
Jenkins 2018).
THREATS:
There is a constant increase in the price of the oil, which disinterests the customers to
opt for caravans (Creti, Ftiti and Guesmi 2014). Also, there is a growing market trend of
apartment style of accommodation, making it difficult for the company. Competition is very
high, and the Australian dollar is also increasing. Thus, a reduced interest can be seen among
the customers.
Market analysis:
Market analysis is done when a huge data has to be collected with precise results. A
wide range of products that includes compact, lightweight and so on must be manufactured to
achieve the target market as the industry must be given an overview of the clarification and
the chain of the industry structure (Leivestad 2018).
PEST analysis:
Political factors:
A stable government must be present, which would allow the business to grow and
which would make the competition fair. If the stable government is not established, risks can
prevail. There must be a positive attitude towards the business, and all the changes in the
environment must be adapted (Fenna 2019).
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Economic factors:
Most of the businesses are highly affected due to the change or slowdown in the
economy mainly due to the recession times where the country has to go through a tough time,
and sometimes many companies fail to survive. Subsidies and taxes imposed by the
government are the main reasons affecting the strength of the company (Carson and Carson
2014).
Social factors:
The overall size of the population is very important as it helps in measuring the
structure that is changing can be measured. In other words, if there is an increase in
population, the size of the market also increases (Mason 2015). Migration is also a key factor
including the change and preference of the lifestyle of the people as it frequently changes, as
a result, a track has to be kept (Boyle and Keith 2014).
Technological factors:
These factors sometimes help in ensuring a competitive advantage for various
companies and helps in understanding the potential of the managers to manage the business
and stay competitive in the market(Fjelstul and Fyall 2015).. Automation, communication
technologies and CAM (computer- -aided manufacture) are some of the factors associated
with the technological factors that need to be adopted by the company in order to prevail the
perks associated within the market (Edmonds and Bradley 2015).
Section 3:
The different market opportunities which have been identified for the enterprise can be stated
to be as follows:
1. The New Zealand as a market can be considered to be very attractive for the
enterprise. As the tourism industry has been performing well, it can take advantage of
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the different opportunities and expand the operations to New Zealand. In this manner,
firm will be able to match the supply with the demand and ensure successful
operations and sales.
2. Product development: The product development can be understood to be another
strategy which can be undertaken by the firm in order to ensure that it can get into an
association with the production of a new product line with the help of which it will be
able to perform well (Moutinho and Vargas-Sanchez 2018).
Industry forecast and information
The expansion to New Zealand can be considered to be a rather viable opportunity because
New Zealand as a country has been doing well. The information related to the industry in
New Zealand can be mentioned to be as follows:
Figures 1 and 2: The business in New Zealand
(Source: Figure.nz 2020)
The above image reflects that the tourism and recreational businesses in New Zealand. In
association with this, it can be rightfully reflected that the industry has been performing
considerably well and that any business if it gets an opportunity can invest in the industry.
Cost benefit analysis and ROI
Expansion
FISCAL YEAR
Cost Items 2020 2021 2022 2023 2024
Expansion costs $ $ $
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200,000 100,000 200,000
HR costs
$
150,000
$
100,000
$
120,000
Project Team Salary to carry
out the change
$
70,000
$
15,000
$
20,000
Technology
involved
$
100,000
$
100,000
$
25,000
$
20,000
Legal constraints
$
50,000
$
150,000
$
150,000
Operations and Contingencies
involved
$
150,000
$
150,000
$
200,000
Project Total
Cost by Year
$
450,000
$
250,000
$
770,000
$
290,000
$
310,000
PROJECT
TOTAL COST
$
2,070,00
0
Fiscal year
Benefit Sources 2020 2021 2022 2023 2024
Cost Reduction due to efficient
operations
$
200,000
$
250,000
$
550,000
Enhanced Revenues involved
$
20,000
$
200,000
$
550,000
Decreased Employee Overtime due
to Robotics involved
$
45,000
$
10,000
$
950,000
$
850,000
Decreased Overhead and other
expenses
$
40,000
$
50,000
$
60,000
Total Benefits Per Year
$
-
$
65,000
$
250,000
$
1,450,00
0
$
2,010,00
0
Confidence factor 100% 100% 100% 100% 100%
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Benefits Claimed for Analysis
$
-
$
65,000
$
250,000
$
1,450,00
0
$
2,010,00
0
Project Grand Total Benefits
$
3,775,00
0
Product expansion
FISCAL YEAR
Cost Items 2020 2021 2022 2023 2024
Product development
costs
$
545,000
$
76,000
$
67,000
$
540,000
$
54,990
Software Development
$
67,900
$
78,000
$
54,300
$
65,000
HR costs
$
56,000
$
67,890
$
78,900
$
76,000
Telecommunications
$
67,900
$
87,000
$
67,000
$
98,000
Training
$
78,900
$
67,000
$
678,000
$
6,540
Maintenance and
Consulting Fee
$
89,000
$
98,000
$
56,000
$
50,000
$
78,900
Project Total Cost by
Year
$
634,000
$
444,700
$
422,890
$
1,468,200
$
379,430
PROJECT TOTAL
COST
$
3,349,22
0
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Fiscal Year
Benefit Sources 2020 2021 2022 2023 2024
Cost Reduction
$
50,000
$
60,000
$
70,000
$
89,000
$
56,000
Enhanced Revenues
$
200,000
$
76,000
$
100,000
$
100,000
$
70,000
Cost reduction in
employee salary
$
100,000
$
90,000
$
800,008
$
78,000
$
790,000
Expertise Outsource
$
10,000
$
10,000
$
10,000
$
10,000
$
100,000
Total Benefits Per Year
$
360,000
$
236,000
$
980,008
$
277,000
$
1,016,000
Confidence factor 100% 100% 100% 100% 100%
Benefits Claimed for
Analysis
$
360,000.00
$
236,000.00
$
980,008.00
$
277,000.00
########
###
Project Grand Total
Benefits
$
2,869,008
Hence, it can be mentioned that the Expansion plan is more beneficial than the Product
development plan. The rate of return is as follows:
Fiscal Year
2020 2021 2022 2023 2024
Undiscounted Flows
Costs
$
450,000
$
250,000
$
770,000
$
290,000
$
310,000
Benefits
$
-
$
65,000
$
250,000
$
1,450,000
$
2,010,000
Net Cash Flow
$
(450,000.00)
$
(185,000)
$
(520,000)
$
1,160,000
$
1,700,000
Discount Factors
Discount Rate 7%
Base Year 2020
Year Index 0 1 2 3 4
Discount Factor 1 0.9346 0.8734 0.8163 0.7629
Discounted Flows
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Cost
$
(450,000)
$
(233,645)
$
(672,548)
$
(236,726)
$
(236,498)
Benefit
$
-
$
60,748
$
218,360
$
1,183,632
$
1,533,419
Net
$
(450,000)
$
(172,897)
$
(454,188)
$
946,906
$
1,296,922
Cumulative
$
(450,000)
$
(622,897)
$
(1,077,085
)
$
(130,180)
$
1,166,742
Net Present Value
$
254,748.39
Internal Rate of
Return 0.32
Analysis of the Opportunities
From the given analysis using the Cost benefit analysis and the return on Investment,
it can be rightfully mentioned that, the expansion opportunity to New Zealand can be
understood to be a better strategy which can be applied by the Caravan firm to expand its
operations and to ensure sound business opportunities.
Impact of opportunity on current business
Hence, the current business opportunity can be mentioned to be rather viable for the
business operations. In association with this, it can be rightfully mentioned that, the
expansion to New Zealand will be beneficial for Adventure Caravans (Ansoff et al. 2018).
Once the business finds success in the country of New Zealand, it can then choose to adhere
to other countries and expand its horizons. The budding tourism and recreational industry can
be mentioned to be rather beneficial for the firm and provides a greater opportunity to the
Adventure Caravan to ensure long term success. The benefits will be as follows:
 Better economic conditions
 New market
 Higher sales (Rothaermel 2016)
 Management of supply and demand.
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Section 4:
It becomes an important aspect, and one should know that the risks must not be
associated with the procedures that are kept for an emergency (McKay, Brander and Goff
2014). While starting any business, it is very important that all the boundaries should be
given a look which may include risks at competitors end, financial risks, and risk of
compliance that has inappropriate licenses resulting in failed legislative procedures.
The main aim of a risk management plan is to achieve the target set within a given
deadline. It is important to know the resources present, and proper allocation is done only,
then the risk can be reduced, and the objectives of marketing can be achieved (Hopkinson
2017). For this, the person responsible for implementing the plan must be known, and records
must be maintained. It also results in a change in industrial relation and the introduction of a
new one. All the factors, legal, economic, as well as environmental factors, are responsible
and must be improved in order to reduce risks and perform more (Wu, Chen and Olson
2014).
The objectives of the company must be consistent and compatible enough to meet the
target and capabilities of the organisation and also to get a knowledge of the current financial
position (Wong, Tsen and Tan 2014).
Similarly, objectives must be aligned with the company’s direction in order to meet
legal and ethical requirements set.
In order to increase the demands of the caravan, it is important to create awareness
among the customers and change their perception, and this can only be done through the
marketing mix (Mahadevan 2014). The place chosen must be convenient enough for the
customers to visit, price should be standardised and better than the competitors, attributes of
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the product must be persuaded well, and the most important thing is to measure the
performance of through various marketing campaigns (Altman 2018). The success of the
company also depends on how successfully the industry factors are taken in account this
includes a comparison with other companies, registration and total sales of the company, and
also the consumers who are attending the company for the purpose of buying (Mir and
Pinnington 2014).
Conclusion
Therefore, from the above discussion, it can be concluded that for making a strategic plan for
any company it is very important that, all the factors that include identification of strategic
direction which comprises of the mission and vision statement of the company must be kept
in mind and aligned to identify the impact of marketing activities and confirm the strategic
direction. It is equally important to analyse the major strengths and weaknesses also evaluate
the performance of the company. Goals and formulation of long-term objectives are needed
to be managed, and risk must be reduced. Only then, the development of attainable and
measurable objectives could be achieved.
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