Carhone Partnership PLC: Business Plan for Grocery Retail Sector

This assignment presents a detailed business plan for Carhone Partnership PLC, a company focused on the grocery retail sector. The plan begins with an introduction and a business model canvas, outlining key partners, activities, value propositions, customer relationships, and customer segments. The market analysis section explores market size, growth rate, competitiveness, and segmentation strategies, identifying the target customers and their current purchasing habits. The operation and technology section details technology options, technological impacts, production methods, sales and distribution channels, and resource requirements. The human resources section covers the required expertise, ownership structure, and manpower needs. Finally, the finance section projects revenue, start-up costs, profit and loss statements, and potential financing sources. The plan concludes with a summary of the key findings and recommendations for Carhone Partnership PLC's success.

Business Idea

Table of Contents
INTRODUCTION...........................................................................................................................1
MARKET ........................................................................................................................................6
3.1 Size of the market and full capacity of market.....................................................................6
3.2 Growth rate and competitiveness in industry. What keep new competition from entering
this market...................................................................................................................................6
3.3 Any trend that impacts firm in positive or negative manner.................................................7
3.4 Different ways to segment market........................................................................................7
3.5 Who and where are targeted customers................................................................................7
3.6 Where are customers getting product now. Major competitions in market and their
position in market........................................................................................................................7
3.7 Location of the business. How many customer will purchase product.................................8
OPERATION AND TECHNOLOGY.............................................................................................8
4.1 Different options for developing the technology..................................................................8
4.2 Technological changes that may impact business.................................................................8
4.3 Various options for producing product or service ................................................................8
4.4 Options for sales and distribution.........................................................................................8
4.5 Resources required for development and their availability to company...............................9
4.6 Laws and regulations related to the business........................................................................9
4.7 Moral and ethical issues related with business.....................................................................9
HUMAN RESOURCES..................................................................................................................9
5.1 What technical and management experience is required......................................................9
5.2 Owners of the business and their role.................................................................................10
5.3 Ownership structure of company........................................................................................10
5.4 Manpower requirements for concerned business................................................................10
5.5 Growth strategy of company...............................................................................................10
FINANCE......................................................................................................................................10

6.1 Projected revenue from the sales of product or services of company.................................10
6.2 How much is start-up cost and equipment/ capital cost .....................................................10
6.3 Project profit and loss statement for first three years .........................................................10
6.4 Possible source of financing................................................................................................10
CONCLUSION..............................................................................................................................11

INTRODUCTION
Business idea refers to a concept that can be used for financial gain that is basically
centred on a product or service that can be provided for money. This assignment is related to
Carhone partnership Plc. which deals in retail sector and producing grocery products. It
manufacture various grocery products like Chocolates & gum, coffee, tea , beverages, dried
fruits, nuts and seeds etc. The business idea of the company is that it manufacture quality
products according to needs and demands of the customers and sell them at affordable price. So
that each income group of customer can able to purchase them. Basically this organisation target
children fir chocolate & Gum, Adults and professional for tea and coffee products. The main
concept of this business is to gain profit though the sell of products which are produce according
to the customers demands.
BUSINESS MODEL CANVAS
It refers to a graphic representation of a number of variables that show the values of a
company. This model was developed by Alexander Osterwalder and Yves Pigneur. This model
can be used as strategy tool for the development and growth of a new firm. It also help in
analysing the situation of an existing business. This model defined nine categories which refer to
the building blocks of a company. The business model canvas of Carhone partnership Plc. is
mentioned below which is helpful for the new business of this firm:
1

The Business Model Canvas
Key Partners
The key partners
of the company is
suppliers who
provide raw
material to this
firm for producing
grocery products.
 Business at
a regional
and local
level
 Local joint
ventures

 Another
key
partners of
this firm is
association
s like
governmen
t.
Key Activities.
 Effectiv
e and
efficient
distribut
ion
system.
The
compan
y prefer
online
through
e-
commer
ce and
others.
 Determi
ning
custome
rs taste
and
preferen
ces so
that
offer
product
accordin
g their
needs
and
Value
Proposition
Offer variety of
products which
create value for
the customers.
For example,
the company
offer sugar free
chocolate and
herbal and
organic coffee.
 Safe
online
purchasi
ng so
that no
one can
leak or
hack the
personal
informat
ion of
the
clients
 Home
delivery
and
gatherin
g from
Customer
Relationships
 Long
term
relations
hips and
retain
loyal
customer
s by
providing
them
quality
product
which
generate
value to
them.
 To retain
customer
s by
using
good
infrastruc
re
Customer
Segments
 Low-
middle
income
groupEa
sy
going,
tradition
al
lifestyle
 This
compan
y target
mostly
children
and
adults
for its
grocery
products
like
chocolat
es and
tea or
coffee
etc.
2

wants.
 Gatherin
g
feedbac
ks,
suggesti
ons and
informat
ion so
that
make
improve
ment in
the
business
and
goods
that are
offered
by the
compan
y.
 Logistic
s and
warehou
sing
preferab
le store
Key Resources
 For
distribut
ion of
the
Channels
 Stores
 Carhone'
s website
 Social
3

goods an
d
products
, they
firm will
prefer
online
portals,
websites
and
accounts
on
numerou
s digital
platform
s
 For
revenue
stream,
it can
use
Logistic
s and
warehou
sing
 For
making
strong
relations
hip with
the
media
like;
Twitter,
Faceboo
k,
Instagra
m and
others
 Mobile
applicati
on is the
best
channel
to
provide
informat
ion
about the
products
of this
company
and it is
cost
saving
and
easily
can be
utilized
by the
customer
s at any
4

custome
rs they
use
string IT
infrastru
cture
time.
Cost Structure

 IT
infrastructure
is the most
expensive
because with
the help of it,
the firm can
attract various
customers
and provide
information
to them in
about its
products.
Revenue Streams
 The firm
manufactur
e products
like sugar
free
chocolate
and herbal
and
organic
coffee. For
these
products,
customers
are ready
to pay
because
they
generate
value to
them.
5

MARKET
3.1 Size of the market and full capacity of market
Market size is referred to the number of people in a market segment that can be the
potential buyers. It is essential for business firms to acknowledge the market size before
launching a new business or product in market (Bocken, Rana and Short, 2015). With the help of
market size, Carhone partnership Plc. will be able to identify their addressable market, total
revenue opportunity and available market. There are two approaches that can be used by
Carhone partnership to acknowledge their market size i.e. bottom-up and top-down. As company
is going to provide chocolate, tea, gum, coffee, dried fruits etc. and these product are used by
people on daily basis. Market size for Carhone partnership is wide. Market capacity is the
volume of sale of service or good and it is based on size of market. In case of concerned
company, yes market is at full capacity.
3.2 Growth rate and competitiveness in industry. What keep new competition from entering this
market
In 2018, growth rate in grocery sector is around 4.1 % and it is estimated that this sector
will grow 22% in value for period between 2017-2022. This means that growth rate of entire
industry is very high. As there are big organisations like TESCO, ALDI, LIDL which are
operating in same grocery sector and provide discounts to customers (Brannback and Carsrud,
2015). This denotes that competitiveness in this industry is very high. These existing
organisations are performing very well and satisfy the needs of customers without charging them
more due to which customers are highly satisfied. This restricts new competition like Carhone
partnership entering into this industry.
3.3 Any trend that impacts firm in positive or negative manner
Main trend associated with grocery business is E-commerce. The ongoing shift of online
shopping also impacts other trends in this sector. Businesses related with groceries have started
to provide fast home deliveries along with click and collect option (Child, 2019). This has
impacted the companies in this industry in a positive manner. As people in UK are more
indulged in managing business and jobs, they have less time to go for shopping. E-commerce has
helped people in shopping without going to stores. Due to this, sales of Carhone partnership will
also increase and company will achieve high revenue and profitability.
6

3.4 Different ways to segment market
There are different types in which market can be segmented such as demographic,
behavioural, geographic and psycho-graphic segmentation. In demographic, people are targeted
on the basis of their age, income, gender etc. In behaviour, consumers are targeted in accordance
with their different behaviour. In geographic segmentation, people are segmented according to
their location. In Psycho-graphic, people are segmented in accordance with their lifestyle and
preference.
3.5 Who and where are targeted customers
As Carhone partnership is chocolate and gums for specially children and other products
like tea, coffee, nuts, dried fruits etc. for mainly adults in economic pricing. Company is going to
segment on the basis of age which is a type of demographic segmentation. As store is located at
prime location, targeted customers of company are presented near grocery store only due to
presence of offices, college and schools in that area.
3.6 Where are customers getting product now. Major competitions in market and their position in
market
Customers will get products like chocolates, gums, tea, coffee, dried fruits, nuts from
Carhone partnership. At present, they are getting these product from large grocery stores like
ALDI, TESCO etc. Major competitors for Carhone partnership will be Sainsburry, TESCO,
LIDL, ALDI, Asda etc. All of these stores posses a very strong position within market as they
offer high quality of services and products to their customers in genuine rates.
3.7 Location of the business. How many customer will purchase product
Carhone partnership is located at Oxford street in London which is a prime location. As
there are many colleges, offices and school near location, concerned company will have access to
large customer base.
OPERATION AND TECHNOLOGY
4.1 Different options for developing the technology
There are different options that can be acknowledged by company to develop technology
like self-designing, subcontract, off the line etc (Burns, 2016). Company is going to adopt Off
the shelf technology in which software, hardware, machines and other technologies that are
7

required by Carhone partnership will be ready-made. Company is required to purchase and
implement them according to the need of grocery store and customers.
4.2 Technological changes that may impact business
As technology is getting advanced day by day, it will help new busineses like Carhone
partnership in reducing their operational costs for ex, basic enterprise software will helps in
keeping record, managing accounts and mobile technology will helps in providing proper
interaction among employees and between employees-cusotmers. Also, changing technology
will provide high security to Carhone partnership. This will impact business in positive manner.
4.3 Various options for producing product or service
In order to produce the product or service, company is going to work in a partnership.
Concerned company i.e. Carhone partnership is going to partnership with organisations like
SureSafe so that products can be delivered and distributed to customers in a timely and proper
manner. To produce products company is going to do in-house production so that fresh and high
quality products can be offered to customers.
4.4 Options for sales and distribution
In order to attain high sales and distribution in a timely & proper manner, Carhone
partnership has partnership with SureSafe company which offer delivery and distribution
services. Due to timely services offered by Carhone partnership, both the firms are going to
attain high sales and revenue.
4.5 Resources required for development and their availability to company
Main resources which are required by Carhone partnership for in-house production of
products like chocolate, coffee, dried fruits etc. are skilled and capable workforce, raw material,
machines, equipments, suppliers etc. skilled and capable workforce will be able to product high
quality products in a cost efficient and timely manner (Foss and Saebi, 2017). Raw material such
as fruits, cocoa, unprocessed tea, coffee etc. are required by production department of company.
Contact with different suppliers will helps in ensuring that company will not face shortage of
materials and other required resources.
4.6 Laws and regulations related to the business
For new buisnesses like Carhone partnership regulations and legal compliances began
with taxes. Other that paying taxes, owner of firm is required to know about taxes that they have
8

to pay. In this context, Carhone partnership have to pay income tax, estimated tax, employment
tax, excise tax (Halberstadt and Spiegler, 2018). Beside this, company will have to follow
employment law, labour law, antitrust laws, environmental regulations, state licensing etc. Not
following them can charge company high penalties and taxes.
4.7 Moral and ethical issues related with business
Ethical issues can result heavy penalties and fines to Carhone partnership whereas moral
issues will be related with belief system of customers, employees and other stakeholders related
with business. In case of Carhone partnership, moral issues that can take place are harassment
and discriminating of employees, negligence with health & safety of workers. Ethical issues that
can take place in concerned firm are unethical accounting practice, threat to privacy and security
of people (Joyce and Paquin, 2016).
HUMAN RESOURCES
5.1 What technical and management experience is required
To manage this grocery business, less technical skills are needed. In case of management
skills, good experience is required so that different activities like sale, promotion, distribution,
production can take place in a proper and advantageous manner.
5.2 Owners of the business and their role
Owners of this concerned business are two entrepreneurs named Daniel Smith and Jones
Smith. Daniel Smith is the CEO of company whereas role of Jones Smith is of owner-manager
where all the responsibilities of manager are fulfilled by him.
5.3 Ownership structure of company
Ownership structure of Carhone partnership is of partnership type. In this type of
structure, two or more than two person signs a document and agreement to operate business
together. In case of Carhone partnership, partners of company are Daniel and Jones Smith.
Company has also partnership with SureSafe for delivery & distribution purpose.
5.4 Manpower requirements for concerned business
As business is new in market and have less customer base, for first year company
requires 7 employees. For second and third year, it is estimated that Carhone partnership will
need 10 and 12 workers respectively. To find right employee, interview process will be carried
9

out. To compensate workforce, company will offer them paid and casual leaves. To motivate
workforce, incentives and bonus will be given to them. Employees will be given on the job
raining where assistant managers of their department guide them in performing work (Kim and
Park, 2016).
5.5 Growth strategy of company
Company is going to choose market penetration in which those products which are
already existing in market will be sold in existing market. To get advantage against rivals,
company is going to reduce rates of products so that high sales and revenues can be attained.
FINANCE
6.1 Projected revenue from the sales of product or services of company
Carhone partnership has forecasted to generate approx. 40,000 revenue through selling
its wide range of products and services. It is identified through conducting research in which the
needs and preferences of customers are taken into consideration.
6.2 How much is start-up cost and equipment/ capital cost
START-UP COSTS Cost ($) EQUIPMENT/
CAPITAL COSTS Cost ($)
Registrations 25000 Business purchase price 120000
Business name 1100 Franchise fees 25000
Licences 25000 Start-up capital 87722
Permits 1200 Plant & equipment
Domain names 3500 Vehicles 25000
Trade marks/designs/patents 3700 Computer equipment 35000
Vehicle registration 4500 Computer software 25000
Membership fees 5000 Phones 21000
Accountant fees 4500 Fax machine 12000
Solicitor fees 3500 Security system 15000
Rental lease cost (Rent advance/deposit) 3000 Office equipment
Utility connections & bonds (Electricity, gas,
water) 1422 Furniture 25000
10

Phone connection 1700 Shop fitout 8000
Internet connection 2500
Computer software 2100
Training 4400
Wages 3600
Stock/raw materials 3700
Insurance 1200
Building & contents 8900
Vehicle 1100
Public liability 123000
Professional indemnity 1400
Product liability 35000
Workers compensation 33000
Business assets 100000
Business revenue 350000
Printing 3500
Stationery & office supplies 15000
Marketing & advertising 18000
Total start-up costs $7,89,5
22
Total equipment/capital
costs $3,98,722
6.3 Project profit and loss statement for first three years
PROFIT & LOSS Year 1 Year 2 Year 3
Sales 55000 45000 77000
less cost of goods
sold 44000 36000 61600
Gross profit/net
sales $11,000 $9,000 $15,400
Expenses
Accountant fees 125 458 336
11

Advertising &
marketing 125 458 678
Bank fees &
charges 220 325 587
Bank interest 222 325 557
Credit card fees 250 325 786
Utilities
(electricity, gas,
water)
251 220 450
Telephone [phone]
Lease/loan
payments 325 786 684
Rent & rates 360 251 251
Motor vehicle
expenses 450 333 450
Repairs &
maintenance 450 125 125
Stationery &
printing 470 450 452
Insurance 550 650 750
Superannuation 554 687 780
Income tax 786 336 335
Wages (including
PAYG) 1120 222 666
Total expenses $6,583 $6,171 $8,537
NET PROFIT
(Net Income) $4,417 $2,829 $6,863
6.4 Possible source of financing
For Carhone partnership, possible source of financing are loan from back, financial
institutions, friends, family etc. company has higher chance of getting money from friends and
12

family rather than banks and other financial institutions. This is because bank will require
collateral and security to assure timely return of money. In case of taking loan from bank and
financial institutions, company have to give up some other property as a collateral.
CONCLUSION
From above mentioned report, it is concluded that business idea include basic
information about a business such as the service or product, the target demographic and others.
Acknowledging aspects like market, human resource, technology, finance, business can be
introduced and operated in market in a proper manner.
13