Business Creation Project: Retail Analytics in the UK

This business creation project outlines a comprehensive plan for a retail analytics business designed to assist small and medium-sized retailers in the UK. The project begins with an overview of the proposed business, emphasizing the challenges retailers face in understanding customer desires within a competitive market. It details the mission and vision, rationale, and business value proposition, which includes maximizing efficiency and facilitating data-driven decisions. The methodology for assessing market opportunities, including market size and profitability, is thoroughly discussed, along with an analysis of industry vulnerabilities and market dependencies. The research design to understand consumer needs incorporates both primary and secondary research methods. The project also explores marketing aspects, innovativeness, Porter's five forces, competitor analysis, financing, globalization, and the organizational structure required for execution. The business aims to provide retailers with tools to analyze inventory, sales, and market demand, ultimately enhancing sales opportunities and improving operational performance. The project emphasizes the importance of data security and regulatory compliance to build trust and ensure the success of the business. The plan highlights the need for predictive analytics and its benefits for the retail sector, showcasing how the business will help retailers make informed decisions, improve consumer engagement, and gain a competitive edge.

Business Creation Project

TABLE OF CONTENTS
Overview of proposed business plan............................................................................................3
Mission and Vision......................................................................................................................3
Rationale of the proposed business..............................................................................................4
Business value preposition...........................................................................................................4
Methodology to assess market opportunities: market size and profitability................................5
Main industry vulnerabilities and market dependencies..............................................................7
Research design to understand consumer need............................................................................8
Research results............................................................................................................................8
Main marketing aspects & innovativeness of the idea...............................................................10
Porter's five forces......................................................................................................................12
Competitors analysis..................................................................................................................12
Financing business & its revenue model....................................................................................13
Globalization..............................................................................................................................15
Organizing team to execute their idea........................................................................................15
REFERENCES..............................................................................................................................16
APPENDIX....................................................................................................................................17

Overview of proposed business plan
In an ultracompetitive and turbulent retail sector, it becomes quite complicated for the
retail organizations to understand their customer desires. Lack of data here isn’t a problem
whereas information which is obtained from multiple system, region and channels is difficult to
use for meaningful results or making informed decisions. Thus, by having data analytics
software, retailers will be able to keep their large data on a computerized platform and connect
all of their operations and gain successful sales. It will also help them to keep control and
monitoring over their business activities with making informed decisions to maximize revenue
and profit during critical time. The idea of designed business plan is about using extensive data
set and performing various analytics techniques i.e. statistical, quantitative and predictive model
in order to make rationalized plans and actions.
The business will provide retail analytics tools for examining their inventory level, sales,
supply chain movement, market demand and other critical data set so as to make sound
procurement and marketing decision. Under this, data will be gathered from target customer
(small and medium sized retailers) and same will be analysed in a proper manner by using
analytical methods like cluster analysis, decision tree, descriptive statistics and predictive
modelling. On the basis of output generated, products that are needed to be kept in shelf in large
or small quantity will be determined and by doing so, sales opportunity will be increased for the
business firm. Apart from this, factors on which firm needs to focus more, which will be
identified by using predicative analytics. All these things will help retail firms in identifying
right direction in which they need to work for earning good amount of profit in business.
Mission and Vision
The mission of this business is to facilitate the adequate care and security of the data
which belongs to the consumer. Moreover, it will help the retail industries in making the
adequate records of the transactions. Therefore, the professionals has planned to implement the
costs as initial investment in the business as 465000000.
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Rationale of the proposed business
Figure 1 Analytical solution working in retail sector
(Source: Data analytics in the UK, 2017)
In today’s era, retailers are moving at international level to establish their presence
worldwide. They are overdriving multi-channel shopper experience in order to generate larger
revenue, gain consumer loyalty and improve their performance by generating superior insight via
advanced analytics. Over the past few decades, digitalization forced retail organization to rethink
their business strategies. Consumer preferences and behavior have been changed drastically with
the rising trend of e-commerce. Therefore, now retail analytics scope has been totally shifted
from POS (point of sale) data to the analysis of large amounts of information so as to have clear
understanding of customer needs and wants. In order to stay competitive and gain success in the
competitive market, it has become really important for the existing retailers to use different
analytics solution to identify better product margin, personalized outreach, design a superior
product mix targeting their key customers and making data driven business decisions which
ensures a better return on investment. The data analytics solution provides firms great assistance
to have a clear insight towards user behavior, with which they can adopt personalized consumer-
centric strategy in all the areas of operations like marketing, pricing and others.
Business value preposition
 Maximizing efficiency
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 Well-informed and rationalized business decisions
 Analytical solutions
 Proper database integration and its successful management
 Better access to the business information
Methodology to assess market opportunities: market size and profitability
Explosion of large amounts of data is a revolutionized business. In today’s competitive
world, every establishment is expecting making their business decisions based on robust data
analysis. Thus, analytical solutions will add value to every area of the value chain and
organizational decisions. Solid infrastructure, extremely talented workforce and technological
investment helped UK to thrive in data revolution in the analytics sector (Zott and Amit, 2013).
As a result, the data analytics sector is considered vital for the economy as it is one of the
developed and strongest places. Over the upcoming 5 years, industry is expected to grow at
177% with the expected increase in big data users to 644,000. From 2010 to 2015, use of cloud
technologies by the UK business has been doubled from 48% to 84% (Data analytics in the UK,
2017). By 2017, industry is supposed to create 58,000 jobs and IT and Big data is forecasted with
total revenue of £322 billion GBP by the end of 2020 contributing to 2.7% to the GDP. All the
factors clearly indicate that the sector shows good progress and possibly is expected to grow in
near future.
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Figure 2 Retail analytics
(Source: The Future of Retail Analytics, 2013)
Although currently, big data providers are serving large retail firms with advanced
analytical tools, small and medium sized retailers remain overwhelmed due to scarce
understanding of the business data and unavailability of extensive knowledge and skilled
champions and analysts. The main reason why they are not taking full benefit of such capabilities
is that mainly, all the analytics are allocated to their IT department for the data warehousing &
management. However, companies do not use the same as a strategic weapon. Current evolving
and ever-expanding retail market bringing both the challenges as well as opportunities for the
retailer to diligently examine their large volume and variety of data for the competitive success.
Although several retailers are using data analytics, however, changing era makes it necessary for
the business to replace existing tools and approaches with the latest one, so that, they can access
more information and create amazing shopping experience.
In the retail sector, data follows through product manufacturing, shipping, stocking,
advertising, purchasing, consumption and lastly, knowing final user’s satisfaction level which
forward retailers in maximizing their sales and operational performance (Albrecht and
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et.al.,2016). Thus, by providing end-to-end analytics solution to the small & medium sized
retailers, the planned venture will be able to grab the existing opportunity very well. With this,
retailers will be capable of examining huge dataset generated by ERP (Enterprise Resource
Planning), inventory control, retail sensors, social media and others. Business intelligence tools
and analytical solutions will render below mentioned tangible benefits to the retailers, presented
hereunder:
 Maximizing sales on each customer visit by having deep understanding of their buying
preferences and pattern
 Finding out new sales opportunity by determining unexpected trends
 Enhance stock management with having greater visibility to product pipeline
Main industry vulnerabilities and market dependencies
The main challenges for the business that the proposed business needs retailer’s critical
data that contains highly confidential data set about their sales, marketing and other activities.
Thus, building trust & integrity among them is the main challenge. Besides this, it is the main
requirement to keep data safe & confidential. With the increased use of cloud based application,
now-a-days, sensitive data is easily accessible from various plat form which are vulnerable to
hacking. Thus, security concerns are the main challenge and lack of it might resultant heavy loss
as well as reputational damage (Seifu and et.al.,2016). With reference to huge dataset, its loss
can result in unmet user expectations. Thus, application & server security need to be properly
managed to combat such issues upon which business success is heavily dependent. In addition to
this, licensing can result legacy difficulties which need full-legal compliance.
General data protection regulation:
This is the most helpful regulative authority which keeps the records of all the
transactions and details of the company’s clients. This law is generated by the EU law of data
protection which insures that all the retail business must keep confidentiality in recording the
detail or transacting. Therefore every export and import of any data will be monitored by the
regulatory and which will be helpful to the firm in analyzing their financial operations.
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Research design to understand consumer need
In order to find out current retail analytics need of the existing businesses, data either can
be collected through primary and secondary survey. Here, it is decided to use a mix strategy
wherein an original survey of 20 existing small & medium sized retailers will be conducted
through distributing questionnaires whereas the primary research findings will be evidenced with
the available secondary data (Grant, 2016). Questionnaires contain required set of questions that
will help to generate valid information to assess their current data analytics needs. In this, top
managers like executives, managers and directors of the chosen businesses will be surveyed
online. All the 20 units will be selected randomly with equally defined probabilities.
Research results
After surveying retail executives, it is found that all the small & medium sized retailers
are aware of the analytical solutions and know the benefit of the same. The majority of them did
not currently use any analytics, still, with the changing market, they are considering the need to
implement data analytics for the unique solution and help them in decision-making.
(Source: PWC Global Data and Analytics Survey, 2016)
Evidencing the result, from the secondary dataset, currently, business executives need to
make their decision making capability more speedy and sophisticated as well, so that, they can
achieve a strong position in the market.
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(So
urce: The Future of Retail Analytics, 2013)
The above diagram illustrates that retail after apparel sector, retail comes at second
position that needs analytical solution for their dataset.
(Source: PWC Global Data and Analytics Survey, 2016)
From the above diagram, it can be seen that highly data driven businesses are more
interested in applying predictive models whereas some-what data driven businesses prefers
diagnostic and prescriptive models. Considering retail sector, which is largely a data driven
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industry and also ever-changing, therefore, majority of the surveyed people stated that they need
predictive analytics for the business unit.
(Source: The Future of Retail Analytics, 2013)
Survey participants also agreed that retail analytical solution will enable them to keep
regular track or monitoring over their business information like inventory, purchase, frequency
of customer visit, sales each visit, marketing and others. Looking to the above results, it
showcase that retailers gave high preference to the better consumer insight and operational
efficiency by robust data analytical framework which will be extremely useful for them in sound
and well informed planning & decision-making. Thus, by using analytical software’s and
business intelligence systems, they will be able to ensure better consumer engagement and gain
success to win a competitive battlefield.
Main marketing aspects & innovativeness of the idea
Marketing is of great significance which aims at attracting more and more users from all
around the world so that they can serve grab large market share (Armstrong and Kotler, 2005).
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The proposed plan will be a B2B business because it will target medium and small sized retailers
existing in the UK. Its marketing strategy will be as follows:
Product: It consists of goods and services that will be offered to the target group. For the
designed business plan, analytical software and tools for performing various analysis like
decision tree, cluster analysis and predictive analysis will be the main product. Services include
consultation, storage of large volume of data, management and its analysis a well.
Price: Charges which will be received in return for the analytical solution rendered to the
retailers is called price. As the venture will target small & medium sized entrepreneurs,
therefore, maintaining an affordable price seems necessary (Yaghubian, Mahmoudi and Tiji,
2016). Availability of innovative analytical software and business intelligence will help business
to establish a good position in the market. Moreover, personalized software will benefit the
business to compete successfully with the top-analytics’ businesses.
Place: Business will serve their target users by making personalized contact and
delivering online analytical solutions. Besides this, authorized distributors and local offices will
render the needed analytical software to the retailers.
Promotion: Personal contact with the retailers to understand their business need and
providing software solution for analysis their critical business data accordingly assist the entity
to meet user expectations (Luo, Roach and Jiratchot, 2016).Under the integrated promotional
plan, website, social networking channel and newspaper ads will be used for the market
awareness. In addition to this, our analyst personalized attention will encourage word of mouth
publicity.
People: Efficient and talented analysts who are experienced in the analytics sector will be
hiring. Moreover, managerial personnel and software and hardware engineers who graduated
from the well-known universities will be hired, so that, excellent analytical solutions along with
smart consultation services can be rendered to the use.
Process: Understanding business operational scale, identifying their requirement and
delivering the best analytical solution where they can integrate their all the business dataset and
analyze it through various models for the sound decision-making will be the core
focus(Khodaparast and et.al., 2016). In addition, special attention will be made for securing
businesses confidential dataset.
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Physical evidences: Collaborative relationship and team working practices among staff
members will enable the business to serve the client with advanced data analytical software to
examine data from all the area of their operations (Seifu, 2016). Physical evidence about client
details will be secured on website with password protection for security management and will be
GDPR compliant.
Porter's five forces
Bargaining power of suppliers: If the business is dealing in the unique product line
which consist of law numbers of suppliers than there will be increment in the bargaining power
of them. Moreover, a single supplier will have their own prices which will bring them the
adequate gains in the coming time.
Bargaining power of buyers: if there will be large numbers of buyers than the company
will have opportunity to decide the prices over the products. On the other side, if the buyers are
less in numbers than there will be their bargain power.
Threat of new entrants: In relation with the business of data protection industry there
will be threat of new entrants as they will offer the pirated software on a lower costs which will
be attractive to the consumers.
Competitors: there will be large numbers of consumers in the market who are being
facilitating the data protection services to the consumers and retail industries. Moreover, there is
need to have adequate analysis through their pricing strategies and the product or services dealt
by them.
Threat of substitutes: there will be changes of having the substitute products which will
affect the brand image as well as sales of the data protection services. The piracy and duplicates
will be a big threat to the business.
Competitors analysis
A contending outlook of almost all sort of businesses is required to accelerate the growth
of the organization at a higher pace. It is with a special consent of any newly establishing
business as in the present case of a newly proposed business plan. It is going to establish in UK
and is hence required to carry out a competitor’s analysis to compare among their proposed
services with that to its competitors. Considering the same, a well-known company named Check
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