Level 7 Business Incubation Project: Stay Cozzy Business Plan

This business incubation project presents a comprehensive business plan for "StayCozzy," a travel company focused on providing budget-friendly accommodation options in New Zealand. Addressing the limited availability of affordable hotels in the region, StayCozzy aims to connect travelers with local homeowners and smaller hotels, leveraging the growing tourism industry. The plan details the company's nature, scope, and focus, including its product and service offerings, target market, and industry lifecycle position. It includes an organizational vision, goals, and structure, along with an analysis of the business environment using PESTLE and Porter's Five Forces models. The value model, resource requirements, business and growth strategies, functional strategies (marketing, operations, HR, and finance), and risk management approaches are thoroughly examined. Finally, the project outlines performance evaluation metrics and potential exit strategies, concluding with recommendations for ensuring the success and sustainability of StayCozzy.

Running head: BUSINESS INCUBATION PROJECT
Business Plan
Name of the Student:
Name of the University:
Author’s Note:

1STAY COZZY
Executive Summary
The assignment aims at creating a Business plan particularly in the field of the hotel and
travel industry where the business will be focusing on developing a travel company that
arranges people stay at other homes. The assignment would be dealing with the various
problems associated with New Zealand for the availability of the budgeted hotels. The
tourism industry is growing at a constant rate and the business of the company is
significantly dependent on the same. The operations of the business would be
conducted in the New Zealand by the name of “StayCozzy”. The growth in the tourism
industry and the demand for more budget hotels or staying place in the New Zealand
Area will be the key area where the company will be focusing. The marketing activities,
operations of the company and the financials of the company was assessed for the
business. The financial plan for the StayCozzy Company was built incorporating the
various business and macroeconomic factor that can significantly influence the
operations of the company. The business growth strategies for the company was
assessed for the company and the relevant analysis on the same was done for the
company. The risk management strategies deployed by the company for assessing the
various business condition in which the company would be operating is the key factor
that needs to be undertaken. The performance evaluation for the company was also
done by identifying the key performance areas for the company and the key
performance indicator. On an overall basis, the viability of the business model and the
financial projections of the company was evaluated to be stable for the company.

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Table of Contents
1.0 Introduction..................................................................................................................7
1.1 Nature, focus and scope of the Business................................................................8
a) The type of Business..............................................................................................8
b) Product and Services Offered................................................................................8
c) Potential Target Market...................................................................................12
d) Current Position in Lifecycle...........................................................................12
e) Industry Lifecycle............................................................................................13
f) Window for Opportunities...................................................................................14
1.2 Collect and Present Data.......................................................................................15
a) Describing the data type and collection method used.........................................15
b) Key Findings.........................................................................................................16
2.0 Organisational vision, goals and structure................................................................17
2.1 Internal and External Stakeholders of the Business..........................................17
2.2 Mission Statement and Core Values of the Business............................................18
2.3 Short-term, Medium-term, long-term Goals of the Proposed Business................20
2.4 Feasibility and Congruence with Vision of the Proposed Business.......................20
2.5 Organizational Structure for the Business.............................................................22
2.6 Potential of the Organizational Structure...............................................................22
2.7 Gaps in Organizational Structure...........................................................................22

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3.0 Business environment, key success factors and competitive advantage.................23
3.1 PESTLE Analysis...................................................................................................23
3.2 Porter’s Five Force Model......................................................................................24
3.3 Market Viability and Key Success Factors of the Business...................................25
3.4 Value for the Customers........................................................................................26
3.5 Strength and Weaknesses of the Proposed Business..........................................27
3.6 Competitive Advantage..........................................................................................27
3.7 Competitive Viability...............................................................................................27
4. Developing the value model and examining outcome in terms of delivering, creating
and capturing value.........................................................................................................28
4.1 Analysis of the key components and functions of the proposed business towards
developing a value model............................................................................................28
4.2 Value model justified for viability and potential of value creation..........................29
4.3 Business Key Outputs............................................................................................31
4.4 Value Model...........................................................................................................33
4.5 Viability and Value Creation from Business Model................................................40
5.0 Resource Requirement..............................................................................................41
5.1 & 5.2 Resource Requirement of Proposed Business and there Potential sources.
.....................................................................................................................................41
5.3 Appropriate Financing Strategies..........................................................................45

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5.4 Analysis and Justification of Required Resources.................................................46
6 Critically examining and developing the business and growth strategies....................48
6.1 Analysis of growth and business strategies thereby providing strategy directions
on growth prospects.....................................................................................................48
6.2 Assessment of business and growth strategies based on strategy direction and
growth prospect of the proposed business..................................................................49
6.3 Assessment of business and growth strategies for potential to meet the proposed
organizational vision and goals....................................................................................50
7. Developing and implementation of functional strategies and proceeding with plans for
successful business functioning......................................................................................50
7.1 Identification the development of marketing strategies and objectives and
translating the same into marketing mix and positioning plan.....................................50
7.2 Identification and developing of operational strategies and objectives and
translating the same into operational plan...................................................................51
7.3 Identification and developing human resources and staffing strategies and
translating the same into HR plan................................................................................53
7.4 Identification and development of financial strategies and objectives and
translating the same into financial plans......................................................................54
7.5 Presentation of analysis which identifies the human resource and staffing
objectives and strategies for the proposed business...................................................55
7.6 Developing HR plan for the proposed business....................................................59

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8.0 Risk and Control Management..................................................................................60
8.1 Advanced Technical Analysis................................................................................60
9.0 Performance evaluation and strategic exit................................................................64
9.1 Key Performance Areas and Indicators.................................................................64
9.2 Performance Evaluation and Exit Strategy............................................................65
10.0 Conclusion...............................................................................................................66
11.0 Recommendations...................................................................................................66
Reference List..................................................................................................................67
List of Tables and Figures...............................................................................................75

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Table of Figures
Figure 1: Hospitality Industry...........................................................................................12
Figure 2: Tourism Industry Outlook.................................................................................14
Figure 3: Amenities of Hotel............................................................................................15
Figure 4: Industry Sales of Hotel Industry.......................................................................17
Figure 5: (Graph Showing Tourism Valued Added)........................................................21
Figure 6: (Image showing Visitor arrivals).......................................................................26
Figure 7: Profitability Graph.............................................................................................36
Figure 8: Human resource planning process at StayCozzy............................................59
Table of Tables
Table 1: Products and Services of StayCozzy................................................................11
Table 2: Services of StayCozzy.......................................................................................12
Table 3: Customer Analysis.............................................................................................14
Table 4: Potential Target Market and Analysis................................................................14
Table 5: Various Opportunities for StayCozzy................................................................18
Table 6: Internal and External Stakeholders...................................................................21
Table 7: Stakeholders of Companies..............................................................................24
Table 8: Organisation Goals............................................................................................26
Table 9: Management Structure......................................................................................28
Table 10: Gaps in Organisation Structure.......................................................................30
Table 11: PESTEL Analysis............................................................................................32
Table 12: Market Analysis and Viability...........................................................................35

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Table 13: Key Success Factors.......................................................................................37
Table 14: Value for Customers........................................................................................38
Table 15: Value Creation.................................................................................................39
Table 16: Competitive Viability........................................................................................41
Table 17: Analysis of Key Components..........................................................................42
Table 18: Sales Revenue Forecast.................................................................................45
Table 19: Profit Profile.....................................................................................................46
Table 20: Return on Investment......................................................................................46
Table 21: Start-Up Requirements....................................................................................48
Table 22: Profit and Loss Statement...............................................................................50
Table 23: Cash Flow Analysis.........................................................................................51
Table 24: Balance Sheet.................................................................................................52
Table 25: Viability of Business Model..............................................................................54
Table 26: Start- Up Capital..............................................................................................54
Table 27: Employee Base...............................................................................................55
Table 28: Resource Requirements..................................................................................59
Table 29: Financing Strategy for Company.....................................................................61
Table 30: Analysis and Justification of Resources..........................................................64
Table 31: Growth Strategies............................................................................................66
Table 32: Growth and Business Strategies.....................................................................67
Table 33: Assessment of Business and Growth Factors................................................68
Table 34: Implementation of Strategies...........................................................................70
Table 35: Marketing Mix..................................................................................................73

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Table 36: Human Resource Management......................................................................79
Table 28: Worst Case Scenario Financials.....................................................................82
Table 29: Normal Case Scenario Financials...................................................................82
Table 30: Optimum Case Scenario Financials................................................................82
Table 31: Expenses Analysis..........................................................................................83
Table 32: Risk Management Strategy.............................................................................85
Table 33: Performance Evaluation and Exit Strategy.....................................................87

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1.0 Introduction
The business model of StayCozzy is a hotel aggregator model where the
company would be acting as a platform for the customer wanting to stay at budget
house. The customers travelling in the New Zealand can search the various houses and
hotels offered by the company along with the services and amenities provided by the
lodging place. The aim of the company would be to make the unorganized market of the
hotel industry into a more simple and similar way so that the same can help the
suppliers and consumers meet at a common platform for providing the services. The
operations of the company would be purely online based where the company would be
aggregating and doing partnership with various hotels and community for getting hotels
and private houses. The flagship services offered by StayCozzy will ensure that
partners are able to book their hotels at the best price. Therefore, in order to ensure
utmost satisfaction to the services provided to the customers StayCozzy will start with
using the hotel which will be able to provide full control over the day-to-day operations
(Finkler, Smith & Calabrese, 2019). The prices or the room tariffs charged by the hotels
in New Zeeland has been the key issues why the tourism experience has been difficult
for the tourist making them financially unable to avail the best services and experience
which they should get. However, StayCozzy would be entering the market thereby
providing products and services at a reasonable rate so that the company is able to
serve the varied customer and include the same on the services offered by the
company. The differentiation strategy led by the company will be evident by following a
blue Ocean strategy. Therefore, the core services will be focused on increasing
customer value and capturing the interest of the customers who are looking for both

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quality and discount pricing. Growth and development of the operations of the business
operations are off great importance and the same has been taken into consideration for
the purpose of the analysis of the company.
1.1 Nature, focus and scope of the Business
a) The type of Business
With the modernizing world and growing technologies it is important that
companies adopt to various technological changes and advancement so that the
operations of the company runs effectively. The company would be offering hotel
services for the entire tourist visiting New Zealand and looking for budget stay
with basic facilities. The company will be connecting the travellers with the local
traveller who are having private house and willing to rent the same for earning
rental income. The services provided by the company will be in accordance with
the variety of rental property and hotels that the company would be giving for the
tourist and the local people. The services provided will be also based on the
variety of hotel amenities and facilities desired by the consumers and the
distinction of the same would be done. This low-cost leadership will match with
the quality of services provided in three-star hotels at a much higher price
(Mensah & Blankson, 2014).
b) Product and Services Offered
The hotel would be offering various types and categories of rooms so that
the customers of the company have a wide and varied choice of selection
according to the preference of the consumers. The rooms to be offered by the
following hotels and private houses would be based on types of common rooms

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offered, different suites and various other premium rooms according to the
demand placed by the consumer. The types of the products that would be offered
by the company would be accordingly to the room type definitions like:
Room Type Accommodation Pac
 Single Bed Room Having a single bed providing accommodation to a
single person (Ahmad & Saber, 2015).
 Double Bed Room Having a double bed providing accommodation to two
people.
 Queen Room Having a queen sized bed and providing
accommodation to one or more person.
 King Sized Room Having a king sized bed and providing
accommodation to one or more person.
 Studio Room Will have a studio bed, a convertible bed providing
accommodation to one or more person.
 Master Suite A living or parlour room that will be connecting one or
more bedroom.
Table 1: Products and Services of StayCozzy
The above rooms or the products that are offered by the company would be purely
based on the tie up done by the company with the various property lenders and hotels
willing to get rental income from the property.