Business Consultancy Project Report: Sunset Tan Expansion Strategy

This report provides a comprehensive business consultancy analysis for Sunset Tan, a UK-based beauty salon. It begins with an executive summary and introduction outlining the project's objectives, which include market analysis and strategic expansion. The report conducts a situational analysis using PESTEL, SWOT, and Porter's Five Forces to identify internal and external factors impacting the business. Key problems identified include the impact of Brexit and COVID-19 on trade policies, economic conditions, and competition. The report then explores expansion possibilities using the Ansoff Matrix, considering market penetration, product development, and market development strategies. A detailed plan of action is presented, including aims, objectives, risk assessments, stakeholder analysis, and resource planning. The report concludes by summarizing the findings and recommendations for Sunset Tan's strategic growth and expansion in the competitive market. References are included to support the analysis and recommendations.

The Business
Consultancy
Project

EXECUTIVE SUMMARY
In order to strategically expand in the market so that it can increase its customer base which
can help in increasing its profits it is important that market analysis is done which can help it in
selecting the best option for expansion. In this report a detailed action plan for Sunset tan which
is a beauty salon is made through situational analysis, problem identification and analysis of
available options so that best strategy can be selected by it in order to expand in market.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................2
Situational Analysis and Problem Identification.............................................................................2
PESTEL analysis....................................................................................................................2
SWOT analysis.......................................................................................................................4
Porter’s five force analysis.....................................................................................................5
Identification of problem........................................................................................................5
POSSIBILITIES (OPTIONS)..........................................................................................................6
Ansoff Matrix.........................................................................................................................6
SAF model..............................................................................................................................7
DETAILED PLAN OF ACTION....................................................................................................9
Aim and Objective..................................................................................................................9
Risk assessment......................................................................................................................9
Stakeholders Analysis..........................................................................................................10
Action plan...........................................................................................................................12
CONCLUSION..............................................................................................................................14
REFRENCES.................................................................................................................................16
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INTRODUCTION
The main aim and ultimate objective of all organisations is to earn higher level of profits
and expand in larger target market. This can be achieved only through meeting the needs and
expectation of customers and through developing and making better and more effective strategies
(Lycko and Galanakis, 2019). For current project based on business constancy, the selected
organisation is Sunset Tan which is a UK based company situated at Neasden Lane Brent Park,
London, United Kingdom. This organisation basically deals in providing wide range of
professional salon services that includes facilities like Feet care, body treatment, eye care, face
treatment and many other associated salon services.
This project mainly consists of three main parts that is Situational analysis and problem
Identification, possibilities and available options together with specific project and detailed
action plan. For situational analysis use of PESTEL analysis, Porter’s Five force and SWOT
analysis is made. To determine and evaluate possibilities and available options, discussion about
Ansoff model is made. Further, in the last part of project a discussion about aim and objective,
risk assessment, stakeholder’s analysis and resources planning charts is included.
Situational Analysis and Problem Identification
Situational analysis is basically associated with evaluation of internal and external factors
of an organisation together with clear identification and determination about capabilities,
potential customers and other aspects of environment that directly and indirectly creates impact
on business operation and functions of an organisation (Ilie, Nickerson and Planken, 2019). For
proper analysis of prevailing situation in external and internal business environment of Sunset
Tan use of PESTEL and SWOT analysis is made together with Porter’s five force analysis to
identify and determine all possible issues and problem exist in current target market of Sunset
Tan.
PESTEL analysis
Use of this model is made by Sunset Tan to evaluate and analysis the issues and
opportunities that are prevailing in current external or macro environment, a description of which
are provided below:
Political- This factor is mainly associated with the current political and trade policies of a
nation that directly impacts the strategy formulation and business operations (An Example PEST
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Analysis of The UK, 2020). Basically the political strategies of government of UK are stable that
create many opportunity for an organisation like Sunset Tan but recently the Brexit issues and
Covid- 19 has created a negative effect on stability and flexibility of political environment. Both
Brexit and Covid- 19 issues have made international trade policies more stricter and hamper the
international trade for organisation. Thus, the recent issues and problem that exist in the political
environment of Sunset Tan is associated with strict trade policy that has made expansion of an
organisation more difficult and also affected the supply network that is creating a threat for
Sunset Tan and hampering its expansion and performance (Markham, 2019).
Economical- It basically includes all the factors that related with economic conditions of
a nation like its growth rate, GDP, disposable income of customers, rate of un-employment,
inflation and deflation rate and other bank and financial rate. The UK is mainly having a well
developed and fast growing economy, but at present the issue of Covid-19 together with Brexit
has negatively impacted the economic conditions of UK (Hendrischke and Li, 2019). Due to
Brexit, the value of Pound has decreased in international market and also created the problem of
high employee turnover that is for Sunset Tan. Beside this, a reduction in disposable income of
customers and unstable economic condition is also lead by Covid-19 thus, has hampered the
current performance and productivity level of Sunset Tan and also made its expansion more
difficult in international market due to high level of instability in economy.
Social factors- It is mainly based on needs and expectation of customers and society in
which a business organisation operates. It consists of various factors like age distribution,
attitude and behaviour of consumers, health consciousness of society, lifestyle and trend of target
market, culture and belief of society that directly impact the productivity and sales of an
organisation. The society of UK in which is Sunset Tan is operating is highly health conscious
that is creating a pressure on Sunset Tan to provide safe and risk free salon services to customers
(Ssegawa, 2019).
Technological factors- This mainly based on aspects like innovation and advancement
level of technology together with awareness about advancement in technology and effectiveness
of Research and development. As being a salon operator it become essential and vital for Sunset
Tan to remain up to date and aware about latest innovation and technology improvements in its
field to provide more better and exclusive services to its customers to enhance its productivity
and viability (Huerta and Minderman, 2019).
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Legal- This element of external environment is associated with various legal laws and act
made by government of a nation. In context of Sunset Tan there are various legal factors to
which this organisation need to comply with which includes heath and care law to provide safe
services to customers together with copyright and safety law to ensure a smooth and
uninterrupted services for a longer period without any kind of legal consequences.
Environment factors- The society and government of UK are becoming more aware and
attentive towards protection of environment from all kind of hazardous impact thus, it become
essential for Sunset Tan to maintain a control and check on its operations so that no effect or
negative impact is lead on environment through controlling carbon emission and other hazardous
substances (Tuominen and Martinsuo, 2019).
SWOT analysis
Use of this model is made by Sunset Tan to have better evaluation and check on internal
factors a description of which is provided below:
Strengths:
 Huge number of loyal customers who
have committed toward this
organisation because of adequate level
of prices charged for services is also
an strength ofSunset Tan.
 The enhanced brand value and history
of providing quality skin treatment
and body care facility are strength
Sunset Tan (Lycko and Galanakis,
2019).
Weaknesses:
 Lack of global presence is the biggest
weakness of Sunset Tan that is
hampering its productivity and profit
level.
 The high level of employees turnover
and absenteeism lead by Brexit and
Covid -19 is also creating a weakness
for Sunset Tan.
Opportunities:
 Having an opportunity to expand at
global level.
 Can make use of better and more
innovative technology to offer
exclusive and new facilities to
customers through gaining higher
Threats:
 High level of competition in salon and
fashion beauty care sector is creating a
threat for Sunset Tan.
 The current Brexit and Covid -19
issues has made it more difficult to
plan expansion at national and
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competitive strength. international level (Ilie, Nickerson and
Planken, 2019).
Porter’s five force analysis
Use of this model is made bySunset Tan to effectively determine the current level
competition and other relevant factors that have significant influence on companies profitability
and other business operations a discussion of which is provided below:
Barring power of supplier- A large number of suppliers are available for cosmetic
products thus, this risk is at lower level in context of Sunset Tan due to availability of many
options from where it can avail and procure quality product at lower price level.
Bargaining power of customers- Due to availability of many salons at locality level of
Sunset Tan, the barging power of customers is relatively high as they are having an option of
shifting towards other salon who are offering services at lower cost (Markham, 2019).
Threat of new entrants- This risk is also at higher level for Sunset Tan as there are less
barriers and risk for new entrants thus, new companies can easily enter the target of Sunset Tan.
Threat of substitutes- This risk is also at higher level for Sunset Tan due to large number
of organisation which are offering same services and products.
Threat of rivalry- As availability of large number of organisation are there in business
environment who are dealing in same field the level of competition and rivalry is also high for
Sunset Tan (Hendrischke and Li, 2019).
Identification of problem
In accordance with analysis of above external and internal factors of environment of
Sunset Tan evaluated with the help of PESTEL analysis, SWOT analysis and Porter’s five force
following problems and issues are identified in context of Sunset Tan:
 Inflexible and stricter trade policy created by Brexit issues has enhanced the problem for
Sunset Tan as it has made expansion of this organisation more difficult that hamper its
objective and aim of gaining higher expansion and growth opportunity at national and
global level.
 The covide-19 has negatively impacted the economy and growth rate of UK that is
ultimately hampering the disposable income of customers that is leading to an
implications and problem of reduction in demand and productivity for Sunset Tan.
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 Further, the high level of competition and several organisations that are providing salon
facilitates at home are creating biggest threat and problem for this organisation as it
directly reducing and hampering its productivity and sales margin (Ssegawa, 2019).
Thus, it can be evaluated that strict trade policy and instable economic conditions together with
high level of competition are main issues and problems that are currently existing in business
environment of Sunset Tan.
POSSIBILITIES (OPTIONS)
Ansoff Matrix
The Ansoff Matrix is also known as product/market expansion grid which helps the
companies in analysing various options that are available for growth so that strategies can be
formulated by the company which can help in their strategic expansion. This matrix was given
by Igor Ansoff in 1957 so that businesses can choose suitable option for their expansion in
market. Following are the options which can be used by Sunset Tan in order to expand its
market:
 Market penetration: This strategy focuses on growing in the existing market of company
by selling its existing products. This is a very simple strategy to grow as the company
sells the products which it already offers in the market by the way of reducing prices to
attract existing and new customers, by increasing promotion and distribution efforts or by
acquiring a competitor in the marketplace (Dawes, 2018)
 Product development: In this strategy the products of company are developed by and
new or modified products are offered in existing market so that the new demand of
customers can be met that can help the company in gaining a competitive advantage in
market. In this strategy the company needs to develop its product by the way of R&D so
that market requirement can be appropriately met. Also strategic partnerships with other
firms can help in creating new products so that market demand can be efficiently met.
 Market development: In this strategy the company offers its existing products in new
markets so that a new customer base can be developed and its business can be expanded.
The company can use this strategy when it aim at catering to the needs of different
customer segment or when it tries to expand its business either nationally or
internationally so that a new market can be acquired. In this strategy the products that are
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offered are same only the markets are different (REZAEI, KHAVARIAN and
GHAFURZADEH, 2016).
 Diversification: In this strategy the company sell new products in new market and is the
most risky strategy of expansion as it involves huge cost of R&D to develop new
products as per the new market which is targeted by company. Also the company has to
bear the expansion cost so that the market can be efficiently acquired and the needs and
wants of customers can be met efficiently.
From the above discussion it can be said that market penetration is the best strategy tht is
suitable for Sunset tan as the company can with low costs expand in the existing market and
make new customers in the same market. Also due to Brexit it will become hard for the company
to expand in EU nations as many trade restrictions will put on companies of UK. Further due to
the pandemic situation caused by Covid-19 it will become difficult for companies to expand in
other markets as the people are under the fear of coming into contact with other people due to the
deadly disease (Johnson, 2016). This has made it difficult for businesses to expand their markets
either nationally or internationally. Also as people are facing problems with funds due to
lockdowns faced by nations it will be difficult to sell them new products as they will not be able
to afford the new products. Thus it can be said that market penetration is the best strategy that
can be chosen by Sunset Tan. The company can promote its sales through giving discounts and
offers, selling through online markets etc. so that more profits can be earned.
SAF model
It is also known as strategy analysis framework which help the businesses in analysing the
strategies which are to be implemented in company that can help it in growing in the market.
Following steps are to be followed while following the SAF strategy:
 Step1: Current company position: It is important that the current position of company is
analyzed by using BLS analysis, BCG matrix and BEP analysis so that the revenue and
profit generated by company can be calculated and the strategy of expansion can be
formulated by the company (Piran and Dresch, 2016).
 Step2: External environment: In order to strategically expand in market it is important
that the external factors affecting business are analyzed using PESTLE analysis, Porter’s
five forces etc. so that the factors that can negatively affect growth strategy can be
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analyzed. This will help the company in taking appropriate actions to minimize the
negative impact.
 Step3: Internal capabilities: It is important that the internal capability of business is
determined by analyzing its resources so that its ability to expand can be determined.
VRIO, SWOT analysis etc. can be done in order to analyze its internal capabilities.
 Step4: Identify key problems and opportunities: The problems and opportunities present
in market should be analyzed so that effective actions can be taken that can help in
gaining a competitive edge in the market.
 Step5: Recommendations: The actions that can be taken by company so that it can
strategically expand can be formulated in this step so that the implementation of strategy
can be done which can help the business in achieving its goals (Matraeva and Babenko,
2019).
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DETAILED PLAN OF ACTION
Aim and Objective
According to the above research analysis of market of the organisation Sunset Tan, it is
evaluated that currently organisation is present in UK. The world economy from recent past
months is suffering from the effects of COVID19 therefore its impacts are clearly visible on the
UK economy as well. Along with it recently before COVID19, BREXIT took place that is
another factor which is affecting the economy of the United kingdom’s, it outcomes are during
the businesses of different industries and organisations available in those industries. The fashion
and cosmetic industry is also affected by it, the company Sunset Tan is a salon which comes
under cosmetic industry(Cunha, 2018). The objective of this section of the report is to develop a
appropriate action plan for Sunset Tan by looking at the current situation of the market. The
section focuses on the objective of Sunset Tan to become stabilize again in their domestic market
place and give their competitive advantage along with making it more stronger by being one step
ahead of its competitors. Therefore specific objective of the action plan is to enhance market
stability of Sunset Tan along with maintaining a competitive edge by facing the current problems
existing in the economy around the globe and specifically in the UK economy.
Risk assessment
Risk assessment and management is basic factor of which affect the organisation at every
stage and in all phases. Risk assessment is considered to be one of the most essential an
important task of an organisation to undertake and perform effectively for gaining knowledge
and having an appropriate idea about the marketplace and the different kind of risk present in it
which can affect and hinder the objective of the company. All different types of organisations
small or big and private or public undertakes risk management for analysing and knowing their
value and also for creating value for their functions and operations (Pažitka, Wojcik and Knight,
2019). There are many different types of risk present in the marketplace such as avoidable risk,
mitigatable risk, transferable risk, exploitable risk and acceptable risk. All these different types
of risk are awaited and known by the organisation with the help of risk assessment and
Management, according to which entity place the risk into respective types and work accordingly
for becoming more effective and bringing better results. In order to develop an effective and
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detail plan for Sunset Tan risk assessment is a very important stage which is done into three
steps. All the steps are mentioned below:
 Risk assessment- This is the first stage where evaluation of risk will be conducted by the
executive or members of the organisation. In this step risk is properly evaluated where
the likelihood and impact of certain risk are two most common and certain attributes
which are used to assess the risk. At this stage of risk assessment ain-depth analysis of
the impacts of COVID19 and BREXIT a seen on the Sunset Tan. Here the participants
will conduct a research for knowing the present and future impacts of these two factors
on the organisation its operation and over its revenue and profit units.
 Risk rating- This is the second stage of risk assessment and Management concept there
the identified and assess risk will be rated according to the impacts on the organisations
present and future actions. The risk rating stage is where the identified risk are located to
a particular type out of all different types of risks. The COVID19 is a kind of risk
situationwhich is impacting the whole world and all different economies that implies that
this is not avoidable or mitigatable (Martins, Ribeiro and Duarte, 2018).This form of risk
come under acceptable and exploitable risk. That means Sunset Tan can only accept risk
calling because of COVID19 and exploit new opportunities from it for maintaining it
operations and being stable in the marketplace.
 Prioritizing risk- This is the third stage of risk assessment process where according to
the impact and serious of the risk it is being prioritised in order to make appropriate
actions for mitigating the impacts of those risks and reducing there influence over the
operations of the organisation. Currently the risk of COVID19 is not mitigatable as the
whole world is suffering from it but BREXIT is one risk which is the priority of Sunset
Tan. The company will be making plans and strategies to overcome the effects of
BREXIT and COVID19 in the future while staying in their existing market that is
domestic market and gaining a competitive edge (Lehmann, Saulich and Wohlgemuth,
2018).
Stakeholders Analysis
Stakeholder analysis is a process and procedure of identifying those people who holds
influence over the decision making of organisation and can impact the operations. Stakeholder
analysis is performed in order to align the objectives of stakeholders and organisational plans and
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