Business Plan: Feasibility Study of Virtual Changing Rooms Venture

This business plan outlines the feasibility of a virtual changing room venture in the retail clothing industry. It explores the concepts of causation and effectuation in entrepreneurship, conducting technical, economic, operational, scheduling, and legal feasibility studies. The plan includes a competitive and STP analysis, justifying the venture's feasibility based on return on investment and customer experience. The chosen technology and e-commerce business model leverages augmented reality to allow customers to virtually try on clothes online or in physical stores. The document also touches on the business and marketing strategies entrepreneurs can use for success, along with planning tools to mitigate risks. Desklib provides access to this and other solved assignments for students.

Business plan

Table of Contents

Concept of causation and effectuation and feasibility study of the New Venture...........................1
Competitive and STP analysis and the justification of feasibility...................................................3
Chosen business model and the working of new venture................................................................4
Business and marketing strategies followed by entrepreneurs for success......................................5
Quantitative and qualitative planning tools used by entrepreneurs to mitigate their risks and
common mistakes done by entrepreneurs........................................................................................6
References........................................................................................................................................8

Concept of causation and effectuation and feasibility study of the New
Venture
A causation approach is defined as the approach which states that the entrepreneur has the target
of the predefined goal which aims to find the scope of the goal and how it can be reached in a
successful manner. An effectuation approach is defined as an approach which states that the
entrepreneurs meet the targets the scope which are at the hand and our aims to materialize the
multiple goals which are not essentially predefined. Causation process is the process which
focuses on the selection among the means in order to create the effect. Effectuation process is the
more than one set of the means which is given and targets the selecting means among the
possible effects which is formulated with the help of the multiple set of means. This is a process
which is important for the entrepreneur because it provides the entire picture of the assorted
approaches in basically the three fundamental stages of the entire process. Using the resources is
a first step and goal setting is the second step and decision making is a third step. They are also
considered as the three key characteristics while building the venture and developing the strategy
along with the planning of the marketing approach as well. Causation approach basically
describes the traditional perspective of entrepreneurship. This is a model in which the
entrepreneur makes the decisions to set a predetermined goal and then choose among the mains
in order to accomplish that particular goal (Inkon, 2019).
The startup venture decided and planned is the virtual changing rooms in the retail industry
under the clothing sector. These are the changing rooms which help the online customer to buy
clothes with the help of the internet. customers need not to visit any physical shop to buy the
cloth and try in the changing room. Customers can just share the pictures and videos in order to
try the clothes they have selected on the website which can tell them the fitness and other
criterias of selecting the dress. This helps customers in easy buying of the clothes in an online
manner without visiting any shop and also helps organisations they can avoid the unnecessary
touch from the customers and without touching the can easily select the dress and try them with
the final purchase of it.
Feasibility studies of this clothing company who have the unique selling proposition of virtual
changing rooms are divided into technical feasibility and economic feasibility along with the
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legal feasibility and operational feasibility and also the scheduling feasibility. technical
feasibility targets the technical resources which are required for the development and the
maintenance of the product. In the context of the virtual changing rooms, technical resources
required on the fundamental basis are the computer systems and other hardware and software
which are basic for the company. Talking about the heavy technology which are highly required
in such services to the customers are the augmented reality and artificial intelligence Technology
(Jukova, Ilina, Gundarin and Zotova, 2019). Economic feasibility involves the cost and benefit
analysis of the product which helps the organisation to identify the cost and benefits which is
related with the product before the allocation of the financial resources is being done. In the
context of the virtual changing room, although there is a high cost of developing and
implementing this unique selling proposition in the clothing company, it has a high return on
investment. This is because nowadays fashion clothing is in a trend and the customer wants
everything at the doorstep without visiting any shop and the physical touch to any one. Therefore
this is the economic innovation which an entrepreneur can think of in the clothing industry. That
is why it is said that it takes a large cost but also it gives a large return as well. Operational
feasibility basically involves the analysis and determination of the resources required in
completing the entire development of the product in an effective and efficient manner. In the
context of virtual changing rooms, It involves the entire supply chain from developing to the
using of that technology which is operated by the organization which requires the technical
experts to operate the systems of augmented reality which helps customers if they find any
queries regarding this facility to them. Scheduling feasibility is one of the most important studies
in the successful development of the product because it is treated with the deadline and just in
time management in which the estimations are highly important whether it is internal or external.
It basically involves technology and finance along with the environment and logistics which is
followed by the laws and trade. Legal feasibility concerns the legal requirements and various
laws which are associated with the big data protection and social media laws as well. In the
context of virtual changing rooms, the entire system is managed by the computer system and
technical expertise in which data analysis and Private data is saved therefore cybersecurity is
highly important against any cyber crime (Fichter and Tiemann, 2020).
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Competitive and STP analysis and the justification of feasibility
Virtual changing rooms can be analyzed in the form of competitors in the industry. This can be
done with the help of porter's five forces model which is the competitive model that helps in
examining the competition in the industry. It is the framework which determines the competitive
environment of the company of a particular product and the current as is done in context of the
virtual changing rooms. Threat of new entrants is one of the areas of Porter's five forces model.
Virtual changing rooms have low threat of entrance and this is because this is a unique selling
proposition which is the rarest innovation that any company did till now and therefore this is a
new technology which the retail company is introducing. Hence there is a low threat of entrants.
Bargaining power of buyers is low for virtual changing rooms and this is because customers who
are willing to buy something in the retail industry, such as fashion and clothing will definitely
choose virtual changing rooms if they want their product at their doorstep. Bargaining power of
suppliers can be high and this is because there are other retail brands and fashion clothing
company who are giving much better services at low cost and more profit. That is why suppliers
will choose first those brands and then this new technology and that is why bargaining power of
suppliers is low. Threat of substitutes is low for the virtual changing rooms because any e-
commerce company who deals with the fashion clothing do not have the virtual sealing rooms or
are just working on it. Therefore, substitutes are rarest in this case of this unique selling product
by the organisation. Competitive rivalry is high because people generally don't trust technology
on its very early stages and it is successful. There are other competitors who are providing much
more attractive services and offers and discounts through which the customers get attracted
towards them. Fashion clothing has a high competition in the retail sector that is why there is a
high number of rivalries of the virtual changing rooms in fashion clothing (Ferrandina and
Carriero, 2022).
STP analysis stands for the segmentation and targeting along with the positioning. It is basically
the three step model which determines a product and services along with the communication and
its benefits to some of the specific customer segments. It is basically based on the market
research which aims at the target customers and how they are segmented along with the
positioned location as well. Segmentation of the virtual changing rooms of the customers is
mainly divided into demographics and lifestyle of the people. Market targeting of the virtual
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changing rooms are the age group of the people which are mainly the youngsters and lifestyle
who are Technology based and once the product and services at the doorstep. Product
positioning is in the online manner with the help of company website and online purchasing of
the products with the delivery of the product chosen at the door step of the customer. This is
online because virtual changing rooms is more effective in the online manner and the customer
do not want to visit the shop but this is also available in the physical stores when the organisation
don't want any customer to touch the cloth and try by themselves so therefore they provide the
video making facility in the phone and try their chosen dress in that video without trying in the
changing rooms (Grit, 2019).
This new business is considered feasible because it has good return on investment according to
the cost invested by the company in the technology they are introducing for the customers.
Moreover it is observed that it has a greater turnover and positive image of the brand which also
serves the convenient and faster shopping experience to the customers that ultimately helps in the
customer loyalty and long-term customer relationship as well. This helps a customer to not to go
for a struggle in order to wear or physically touch the cloth as they just have to stand in front of
the screen and try the dress out which they have chosen either in a physical store or in an online
manner (Souza, de Oliveira, Fossile and da Veiga, 2020).
Chosen business model and the working of new venture
Business model is based on the technology model and e-commerce model. Technology model is
used in order to adopt the advanced technology for the customers so that they can serve the rich
experience to them for better turnover and high return on investment. This is done with the help
of an e-commerce model so that the online shopping can be assisted to the customers with better
shopping experience of fashion clothing with the augmented reality and artificial intelligence in
the form of virtual changing rooms introduced by the organisation. The new venture works with
the help of augmented reality Technology (Pardede, Tanjung, Goli and Suhairi, 2022). It
basically allows the customers to try the clothes without any wearing or touching them
physically in the physical stores. Customers who have smartphones can take the advantage of
this technology. This works as the customer can see their live image on the website and the dress
which is elected by them. This helps them to figure out the fittings of a dress and other criterias
of purchasing the dress. This technology is beneficial in the physical stores as well as on the e-
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commerce website for the customers who don't want to visit any physical shop and want the
product at the doorstep. This is how the entire system of augmented reality works in the virtual
changing rooms (Teasdale, Steiner and Roy, 2020). The organisation has chosen the technology
and e-commerce model for the new venture so that they can bring advancement in the world with
something better and provide the experience of shopping to the customers who are fashion freaks
and want that clothing to be rich without touching them and personal visit in the stores. This
helps in saving the time of the customers as well as of the organisation as well. That is why the
technology and e-commerce business is chosen with the entire framework of the new venture in
the context of customers as well as in the perspective of organisation as well (Body, 2021).
Business and marketing strategies followed by entrepreneurs for success
There are various business and marketing strategies which are followed by the entrepreneurs for
success. Using social media is one of the strategies. This is because nowadays there are various
online platforms with the help of which the entrepreneurs promote and advertise their products
around the selling as well to the wider range of the customer's and in a cost efficient method.
Creating the video tutorials is another strategy (na Gaelscolaíochta, 2019). This is because
sometimes customers don't know how to use the online website for purchasing so they hope we
did it to really help them in guidance of how they can purchase and use the advanced technology
in the e-commerce website. Starting blogging is also one of the strategies. This is because written
blogs related to the products and services offered by the company in different websites and also
evens their own website rules are effective to get the customers attracted towards the brand.
Understanding search engine optimization is also another strategy (Tiffany and Peterson, 2022).
This is because it helps in ranking the website on the top of the search results in search engines
and also increases the website traffic. Using social media application advertisements with the
help of retargeting techniques is one of the strategies. This is because there are various social
media applications such as Facebook and Instagram along with twitter and LinkedIn and many
more which help organisations to display the advertisement of different companies so that they
can target the audiences for the purchase of the product and services from a particular website.
Moreover, creating an affiliate program and using the email marketing sequences are also the
business and marketing strategies which are usually used by the entrepreneur for success (Götz,
2020).
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Quantitative and qualitative planning tools used by entrepreneurs to mitigate
their risks and common mistakes done by entrepreneurs
There are several planning tools in order to perform the qualitative risk analysis by the business.
These tools are the risk probability and impact assessment along with the probability and impact
matrix which is followed by the risk data quality assessment and risk categorisation and also the
risk urgency assessment and expert judgement. tools which are used for the quantitative risk
analysis are probability distribution and data gathering along with the representation techniques
and sensitivity analysis which is followed by the expected monetary value analysis and decision
tree analysis and also the tornado diagrams and expert judgements. All these are the qualitative
and quantitative planning tools for the risk analysis so that its mitigation can be done in a timely
manner without any major losses to the organisation. Such tools start with the risk assessment
and then the risk identification so that the priority can be set of each risk in the current product
development and then finally the mitigation of it according to the priorities of the risk. all these
stages are carried out by the entrepreneur so that they can identify the risk and mitigate the same
potential manner. In the context of virtual changing rooms, risk is to put the higher cost on the
development or high investment but there can be low rate of return because the technology needs
security and this proves the biggest risk in the form of cybercrime and big data management.
Therefore the organisation needs the high cost in development of the new product and its
security along with the maintenance of the software as well (Kairouz, Azar, Lteif and Kraiker,
2019).
There are several common mistakes done by the entrepreneur while handling the business for the
first time. Inappropriate competitor analysis is one of the common mistakes. Identifying the
competitors and fighting against them is one of the most important things that an entrepreneur
can focus upon so that they can create the unique selling proposition accordingly. Competitive
analysis is important for the entrepreneur to make sure it must be done on a basis so that they can
plan their business as per the competition in the market. And this is the common mistake which
most of the Independence do for the first time to start the business. Low initial capital is another
common mistake done by the entrepreneur. If the business needs investment more than the
owner spends it then it can result in the failure of a business and no stability in the marketplace.
It is important for the entrepreneur to at least spend money for the initial resources of the
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company so that it can give the great hike of prophets in the near future (Oliveira, 2021). And
that is why it is considered as the common mistake which is done by the entrepreneur for the first
time. Making the recruitment decision on the basis of budgeting is also one of the common
mistakes done by the entrepreneur. This is because every business names the expertise in every
department of the organisation that is in marketing and finance along with human resource and
research and development and many more as per the needs and requirements of the business.
Therefore, it is important for the owner to focus on the expectations which give them the
productivity rather than focusing on the cost of the business. Moreover it is further observed that
entrepreneurs sometimes think that everything is upon them but not on the entire organisation.
This thought is wrong because the organisation works as a team and the success and failure
basically depends upon the entire organisation and each and every employee who is working for
the company. This is how team management is done. Making the margins too small is another
common mistake made by the entrepreneur for the first time. There are pricing Business models
in which the strategies are given about the large profit margins. It is important for the owner to
be independent while starting off the business so that they can have a large profit margin and can
gain the profits from the initial year of operations. This helps in reducing the losses as well. all
these are the common mistakes which are done by and opinions for the very first time in the
business operations (Uproot and Hough, 2019).
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References
Books and Journals
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Ferrandina, A. and Carriero, F., 2022. Business plan in Excel. IPSOA.
Fichter, K. and Tiemann, I., 2020. Impacts of promoting sustainable entrepreneurship in generic
business plan competitions. Journal of Cleaner Production, 267, p.122076.
Götz, J., 2020. Business Plan. In Seasonal Affective Disorder and Light Therapy (pp. 165-203).
Springer, Wiesbaden.
Grit, R., 2019. Making a business plan. Routledge.
Inkon, K., 2019. A cross-sectional study on the relationship between business plan, entrepreneur
type, development stage and profitability of US SMEs. Academy of Entrepreneurship
Journal, 25(1), pp.1-21.
Jukova, E.E., Ilina, I.Y., Gundarin, M.V. and Zotova, A.I., 2019. Planning a new business:
typical mistakes of a business plan in the service sector. Journal of Environmental
Management & Tourism, 10(3 (34)), pp.441-447.
Kairouz, P., Azar, C., Lteif, R. and Kraiker, T., 2019. Developing a business plan competition-
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na Gaelscolaíochta, C., 2019. Business Plan.
Oliveira, M.G.G.D., 2021. Business plan for social impact: mobile application to address size
discrimination (Doctoral dissertation).
Pardede, D.H., Tanjung, S.R., Goli, I. and Suhairi, S., 2022. Business Plan Analysis of the
Business Feasibility Case Study. Jurnal Ekonomi, Manajemen, Akuntansi dan
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Souza, A., de Oliveira, A.M.M., Fossile, D.K. and da Veiga, C.P., 2020. Business plan analysis
using multi-index methodology: Expectations of return and perceived risks. SAGE
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Teasdale, S., Steiner, A. and Roy, M.J., 2020. Wrestling with wicked problems? The value of
business plan competitions to social entrepreneurship education. Journal of Nonprofit
Education and Leadership, 10(3).
Tiffany, P. and Peterson, S.D., 2022. Business plans for dummies. John Wiley & Sons.
Uproot, T. and Hough, S., 2019. Uproot Business Plan.
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