MGT807 - Entrepreneurship: Lio & Marry Business Plan and Analysis

This business plan outlines the strategic approach for Lio & Marry, a new clothing retailer in the UK, introducing a high-tech virtual trial and fitting machine to enhance the shopping experience and reduce operational costs. The plan includes an executive summary, new business opportunity analysis, environmental and competitive dynamics (Porter's Five Forces), market potential assessment, an innovative business model, and a detailed marketing strategy. It also covers operating strategies, value chain analysis, resource requirements, financial projections, potential funding sources, and an action plan. The analysis highlights the competitive landscape, particularly from established retailers like Marks & Spencer and Tesco, and emphasizes the company's strategy to leverage technology for a competitive advantage. The plan also addresses political, economic, social, technological, legal, and environmental factors, including a commitment to sustainable manufacturing practices. The company aims to offer a complete family clothing range at reasonable prices to attract customers and gain market share. Overall, the business plan provides a comprehensive overview of the venture's objectives, strategies, and expected outcomes.

Running head: ENTREPRENUERSHIP AND INNOVATION
Entrepreneurship and Innovation
10/8/2019

ENTREPRENUERSHIP AND INNOVATION
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Executive Summary
The aim of this report is to present business plan for the new business idea of Lio &
Marry to install high-tech virtual trial and fitting machine that can reduce the efforts of the
business and save time of the shopper. The analysis has highlighted that the company will
operate in the United Kingdom with headquarter in London. But, the competitive dynamic
analysis has highlighted that existing retailers can raise competition for the business that can
only be overcome by the promotion of new installed technology in the business. In addition
to this, the company has planned to charge reasonable prices from customers to attract
increased number of customers. This will also help company in giving strong competition to
the rivals. Further, the high tech machine will help company in attaining competitive
advantage against its close competitors like Marks & Spencer, Tesco, and Amazon.

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Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
New Business Opportunity....................................................................................................3
Environmental Dynamics.......................................................................................................4
Competitive dynamic.............................................................................................................7
Market Potential for new business.........................................................................................9
Innovative business model.....................................................................................................9
Marketing strategy for business...........................................................................................10
Marketing Mix.................................................................................................................10
Operating strategy................................................................................................................11
Value Chain Analysis.......................................................................................................11
Requirement of resource for business..................................................................................12
Financial Projection.............................................................................................................13
Potential sources of finance.................................................................................................15
Action plan...........................................................................................................................16
Conclusion................................................................................................................................16
References................................................................................................................................17

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Introduction
A business plan is an important strategic tool for the entrepreneurs. A good plan not
just support entrepreneurs in focusing on the particular steps required to make a business idea
successful, but it also support in attaining the short-term as well as long-term objectives
(Mullins & Komisar, 2010). According to the statement of Silicon Valley Eugene Kleiner and
Venture Capitalists, presenting a business plan enforce the management to move towards a
disciplined thinking. A business idea may be an effective one and sound great, but when it is
put down in the paper with all numbers and details, it can fail (Mebmer, 2016). While the
business plan is considered to be important in the entrepreneurship, not all the entrepreneur
requires it. There are number of funding experts who agree that a good business idea is not
enough, even great idea can fail if not properly formed and executed to make the business
idea work (Brinckmann & Kim, 2015). In order to explain in detail about the use and
different aspects of a business plan this paper is being presented while elaborating a new
business idea for the new clothing retailer in United Kingdom. The Business plan in this
report is explaining the different aspects that will be considered by the company while
introducing the new idea such as marketing strategies, financial projections, competitive
dynamics, operation strategy etc.
New Business Opportunity
The business idea is the introduction of innovative technology of Virtual trial and
Fitting room that can allow customer a new experience and business a new way of saving
money as well as time. The business that is planning to introduce this technology is Lio &
Marry which will established in the United Kingdom clothing industry. This business is
specialises in selling clothes for men, women, and kids.

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The major motivation for introducing Virtual trial and fitting technology is because
dressing industry is moving towards digital phase with the invention of different highly
technological machines that can provide a new experience to the retailers as well as
customers. This business idea is focused towards developing a high-tech sizing machines that
can work to scan the bodies of the shoppers and offer immediate printouts that suggest the
fitting of a dress and styles and sizes that can fit them best. This technology has been recently
introduced in the market and limited numbers of shopping malls have installed it in their
system in the Los Angeles. The technology is receiving good response in the market from the
shoppers who love it due to their reduced efforts in trying the dress and for the fittings of the
dresses. Besides this, this technology is providing huge benefit to the entire industry
comprising manufacturers, retailers, and customers. Manufacturers are gaining benefit in
terms of increased sales, retailers are gaining benefits in reduced operations cost due to
requirement of limited staff at stores, and customers because it is saving their time (MDG
Advertising, 2012). This technology can define the way a product can fit before giving a trial
to a dress by the customer or shopper by examining the specifications provided by the
company of clothing.
Furthermore, this high-tech machine can also be installed at home as it can leave a
huge impact on the sales through Internet and resolve the issues of Internet returns. Around
Almost 1/3 of the clothes that are ordered online returned back because of the inappropriate
fit (MDG Advertising, 2012). With the help of this software, shoppers can scan themselves
for the accurate measurements and clothing matchers before purchasing anything.
Environmental Dynamics
Political Force – The government of United Kingdom set different rules and
regulations to be followed by the businesses like Health and Safety British standards for

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recognition of the hazards, assessment of risk, and risk control (Mensah & Julien, 2011). If
businesses that operate in the country do not follow these regulations they are panelised and
even asked to close down their operations. Lio & Marry the new business has to abide the
laws and regulations of the government and must provide safe environment to its employees
by ensuring their good health. Besides this, in order to operate successfully, the company also
has to ensure the safe installation of the technology such that it does not impact anyone at the
outlet.
Economic Force – Presently, the economic position of the country is not certain and
this more likely impacting the retail industry sales, because people do not have higher
disposable income to spend on the luxury products like food and clothing. Number of
retailers in the market has been hit by this and has closed their number of retail stores in order
to cut the jobs. For instance, Marks & Spencer has recently closes its number of stores in
order to cut 2% of jobs which covers around 70,000 staff members (Wood, 2019).
Considering the case of Lio & Marry, which is planning to introduce their clothing brand in
UK with the high-tech machine of virtual trial and fitting technology, will in the initial period
only help company in maintaining its budget and reduce the operations cost as discussed
above this technology require limited number of staff members in the store and quick trial
and fitting technology will safe lot of time and money of company and its customers.
Social Force – In the last few years the society and their preference have changed.
The changing trend and advanced technologies are enforcing people to change their demand
and buying habits (Fernie, Sparks & McKinnon, 2010). Today, many of the shoppers like to
purchase their product from different online retailers like Amazon which has impacted the
financial stability of number of offline retailers in the market. However, shopping through
these platforms has resulted in increasing number of return orders again to the retailer

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Amazon due to inappropriate fitting. This problem will be solved by the virtual trial and
fitting machine of the customer and will be the major reason to attract increased number of
customers.
The present cheap clothing industry is impacting the supermarkets and other luxurious
brand offering high quality clothes at high prices. In order to deal with these cheap clothing
retailers, Lio & Marry has planned to offer high quality complete family clothing range at
reasonable and affordable prices for the customers of United Kingdom.
Technological Force – Technology is considered as the main element of the retail
market and needed to lead the market. Today, every retailing business is using different types
of technologies for easing their operations and reducing the waiting time of the customers
(Edmunds, Thorpe & Conole, 2012). As, the clothing industry of United Kingdom is highly
competitive and incorporate online retailers like Amazon, Lio & Marry has planned to install
the virtual trial and fitting machine in the market to give strong competition to the existing
players.
Furthermore, businesses should carefully manage their brands. First the position of
the brand should be regularly communicated to the target audience. Key brand in the market
mostly invest huge amount on the promotions to increase the brand awareness, build
customer loyalty and change the preference of the customer in the market (Miškinis & Byrka,
2014). Hence, in order to have brand awareness and loyalty of the customers, Lio & Marry
has to focus on the promotion of its products in the target market through different mediums
such as advertisement, public relation, direct marketing, digital marketing, sales promotion,
etc.
Legal Force – Legislations keeps on changing with time by the country’s
government. In order to smoothly operate in UK, Lio & Marry has to follow all the laws

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framed and implemented for the safety of the constitution. One of the examples is Fair
Packaging and Labelling Act, implemented for the labelling and packaging regulations of the
products. This law encourage manufacturers and retailers to follow this law by eliminating
the use of plastic and other non-decomposable ingredients for the packaging.
Environmental Force – With the present climate of the environment, different issues
are being raised on the radio, television, and magazines. Every organization, industry, and
business is being pressurized to alter their way of using the material and the way they
manufacture. Lio & Marry will establish a Green Policy under which it will focus on organic
and sustainable manufacturing of the clothes by avoiding the use of leather and other material
that are used for producing clothes. This will not just help in reducing the pollution from the
environment but also help company in meeting its corporate social responsibility as well as
attracting customers to purchase products from the company.
Competitive dynamic
The clothing industry of United Kingdom is highly competitive due to presence of
number of leading brand in the market that are offering high quality products as well as low
quality products as reasonable prices to the customers (IBIS World, 2019). In order to explain
in detail the competitive dynamics, this paper has used Porter Five Force Framework that can
help in identifying the forces that can impact the operations of Lio & Marry.
Threat of new Entrant – The retail industry has low new entrant threat because of
requirement of high capital investment that is required to enter in the industry and compete
with the existing strong brands who are leading the industry with high customer loyalty and
customer base. For instance, Marks & Spencer has strong customer loyalty in the market
which can impact or discourage the new entrant.

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Threat of Substitute Products – The substitute product threat in the clothing
retailing industry is high due to possibility of imitation and copying of the designs easily. In
spite of higher innovative designs and high quality products offered by the existing brands in
the market, retailers offering cheap substitute are easily able to copy the designs. This
increases the threat for Lio & Marry to operate in the market as there are chances for the
imitation of its designs and also the virtual fitting machine.
Competition among existing players – In the retail industry of United Kingdom,
there are number of retailers operating which is increasing the intensity of the competition
(Deloitte, 2019). Lio & Marry has to deal with intense competition from retailers like Marks
& Spencer, Tesco, etc. who have strong foot in the industry. Besides this, with the
introduction of the operations in UK, there is possibility that existing retailers may imitate the
same virtual trial and fitting machine in their system. However, in the initial phase Lio &
Marry will definitely gain competitive advantage through this technology because there are
no retailers in the UK industry who are using this technology.
Power of Suppliers – The bargaining power of the suppliers in the retailing industry
is high due to presence of limited number of suppliers offering high quality products to the
retailers. Hence, in order to operate successfully in the market, Lio & Marry has to focus on
maintaining strong relationship with the suppliers such that they can get products at
reasonable prices.
Power of Buyers – The bargaining power of the customers in the retailing industry is
high due to low switching cost and availability of number of retailers in the market (Wu,
2010). If customer can bargain the prices in the market and if did not get the reasonable
prices they move to another retailer. But, with the use of this high-tech machine the company

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will be able to maintain reasonable prices of its products and attract increased number of
customers to purchase the products.
Market Potential for new business
Lio & Marry can operate successfully in the United Kingdom market as there is
increased market potential to successfully run the business in the clothing retailing industry.
In spite of the well-publicised difficulties experienced by the bricks and mortor stores, the
industry of footwear and apparel recorded high growth in the year 2018 (Euromonitor
International, 2019). In addition to this, the introduction of new designs and trends and
technology is attracting customers to purchase the products. The virtual trial and fitting
technology is gaining the attraction of different retailers and customers are it is reducing cost
as well as efforts for purchasing the products.
Innovative business model
Key Partners
 Associatio
n with
local
consultanci
es and
marketing
agencies
 Suppliers
Key Activities
 Analysing
the demand
of the
customer in
the market
 Strong
distribution
network
 Maintenance
of
warehouses
and retail
stores
 Best
customer
service and
ensuring
good in store
experience
of customer
 Selling or
Value
Proposition
 Safe shopping
experience
 Convenient
shopping
 Variety of
clothing for
men, women,
and kids
Customer
Relationship
 Building
customer
loyalty by
offering high
quality
products
 Offering new
experience of
cloth trials and
fitting
 Promotion of
products to
attract
customers
 Focusing on the
suggestion and
feedback of the
customer
 Retaining loyal
consumers
Customer
Segments
Mass Market
Segmentation:
 Men
 Women
 Children

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clothes
 Attracting
maximum
customers
through
promotion
Key Resources
 Stores
 Warehouses
 Store
Infrastructur
e
 Human
Resource
 Virtual trial
and fitting
machine
Channels
 Stores
 Website
 Social Media
Channels
Cost Structure
 Employees
 Warehouse
 Capital
Expenditur
e
Revenue Streams
 Sales of
products
Marketing strategy for business
Marketing Mix
Product – Product is the physical item or service offered by the business to its
customers to meet their demand (Mintz & Currim, 2013). The products that are offered by
Lio & Marry are range of clothing options for the men, women, and kids with high quality at
reasonable prices. In addition to this, the company is using a high-tech machine that is virtual
trial and fitting that will be used to take the measurements of the client to identify how the
chosen dress looks on the shopper. This will allow company to reduce its cost and save lot of
time.
Price – Price is the amount that is charged by the business in exchange of products
and services. The pricing strategy that is planned to be adopted by the company is economy

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pricing which allow business to charge reasonable prices from the customers for the
exchange of the products. By adopting this strategy, Lio & Marry can attract increased
number of shoppers to get high quality products.
Place – Place is the point of sale where business plan to sell its products and services
(Lamey, Deleersnyder, Steenkamp & Dekimpe, 2012). Lio & Marry has planned to introduce
the business in London, United Kingdom with the motive to give strong competition to the
existing brand in the market.
Promotion – Promotion is the strategy used to attract customers to purchase the
products (Gordon, 2012). The promotional elements that will be used by the business is
advertisement, public relation, direct marketing, and digital marketing.
Operating strategy
Value Chain Analysis
Value chain analysis is the framework that is adopted by the business in order to
identify the activities that help business in attaining competitive advantage against its
competitors (Donovan, Franzel, Cunha, Gyau & Mithöfer, 2015). The primary and supporting
activities of Lio & Marry are presented below:
Primary Activities
Inbound Logistics – This activity of the company is related to receiving, storing, and
internal distribution of the products. The company receive products from its suppliers, store
at its warehouse and distribute to the retail store.
Operations – It is related to the production of the products. The company will contact
different suppliers who can provide high quality products at reasonable prices.