MBA685 - Strategic Business Plan: Kiwi Travels New Venture Plan

This document presents a strategic business plan for "Kiwi Travels," a new venture focused on promoting New Zealand tourism with an emphasis on Maori culture. It includes an executive summary, internal analysis using the McKinsey 7-S Framework, external environment analysis via PEST and Porter’s Five Forces, strategic analysis, long-term and short-term objectives, generic and grand strategies, functional tactics, policies, and strategic control measures. The plan outlines the company's philosophy, mission statement, and the rationale behind choosing New Zealand as the base of operations, highlighting the country's developed economy and thriving tourism industry. The venture aims to leverage technology through an e-commerce platform to offer customized travel packages and cultural experiences, targeting a niche market interested in exploring New Zealand's rich heritage. With an initial budget of £150,000 (BP), the company plans to establish its office in Auckland, focusing on both domestic and international tourism markets.

Running head: BUSINESS PLAN
Strategic Management: Business Plan
Name of the Student
Name of the University
Author’s note

Executive summary
The purpose of this assignment is to make a business plan for a new venture. The assignment
encompasses all the strategies, policies and objectives that entrepreneurs should evaluate and
analyze in order to understand the feasibility of the business. The name of the venture is “Kiwi
Travels” and the platform of the business model is internet and the strategy of the company is to
target a niche market. New Zealand is a land of rich cultural heritage and the focus of the
company is to uphold the integrity and heritage of the Maori culture. PEST analysis and Porter’s
five forces has been used to understand the dynamics of the external business environment. On
the other hand McKinney 7s framework is used to analyze the internal business environment.

Table of content
1. Introduction..................................................................................................................................3
1.1 The venture............................................................................................................................4
1.2 Rational of the business.........................................................................................................5
1.3 Company’s philosophy..........................................................................................................6
1.4 Mission statement..................................................................................................................6
2. Internal Analysis..........................................................................................................................7
2.1 The McKinsey 7-S Framework..............................................................................................7
2.2 Strength..................................................................................................................................9
2.2 Weakness.............................................................................................................................10
3. External Environment................................................................................................................12
3.1 PEST Analysis.....................................................................................................................12
3.2 Porter’s Five Forces.............................................................................................................14
4. Strategic analysis.......................................................................................................................16
5. Long-Term Objectives...............................................................................................................16
6. Generic and Grand Strategies....................................................................................................18
7. Short-term objectives.................................................................................................................20
8. Functional tactics.......................................................................................................................20
9. Policies that empower action.....................................................................................................22
10. Strategic Control and Continuous Improvement.....................................................................23
11. Conclusion...............................................................................................................................24
12. Reference list:..........................................................................................................................25

1. Introduction
The establishment of a business organisation follows a procedure depending upon the
scale of business, the nature of business and also the industry in which the business will operate.
Before starting a venture it is important for the people associated with the venture to come up
with a plan for the business (Aziri and Nedelea 2013). This is a business plan and there are a
number of functions of this document: it helps in understanding the prospect of the business; it
develops an understanding regarding the resources will be required to carry out the initial stages,
it will also guide in determining the mandatory procedure that is required to start the business
etc. For a business unit to successfully operate and generate profit the initial steps of
incorporation, employing the right people at the right time ensuring the resource and capabilities
are essential. This report is a business plan for a venture which is in the travel and tourism
industry (Botha and Robertson 2014). The idea is to develop a travel agency that is based on the
e-commerce platform; the idea is initiated based on the rising importance of technology in the
lives of the people. One of the major drives to open the business in the e-commerce domain is to
stay connected with the customers need and requirements. The company is an offshore
organisation which will be set up in New Zealand due to the trade facilities in the country as well
as the infrastructure that will be required to set up the business. The budget that is set for the
venture is £150,000 (BP). The company will focus on promoting and encouraging the tourism of
New Zealand along with the culture of the country.

1.1 The venture
The idea is to set up an off shore organisation in New Zealand in the Travel and tourism
industry. The business will be based on the e-commerce model and will be available in various
platforms. The people who will be initiating the venture are James Kelly and Marcus Russo. The
duo is friends from college and has a vision to promote the culture of New Zealand on a global
platform. It will be an online travel agency which will help and guide the customers to manage
their vacation in New Zealand. There will be packages which the customers can choose form or
they can also customize their own plan with the help of the options that will be available. The
micro focus of the agency will be on cultural tourism, where the people, lifestyle, history,
cuisine, language etc will be given importance (Köhler and Garcia Durand 2007). The website
and the mobile application will have a layout which will attract the customers who are interested
in exploring the culture of the country. There will be hotels and resorts listed in the platform
from where the customers can easily book their stay. There will also be several packages that
will be listed in the website, the customers can choose the package and enjoy their vacation in
New Zealand and the entire vacation will be planned by the company (Cross 2015). Depending
on the choice of place and the budget the customers can choose the packages. New Zealand is
blessed with gorgeous exotic locations and a rich culture thus the venture is a feasible idea. The
name that has been suggested for the organisation is “Kiwi Travels”. Technology is the key to
the venture and the tourism industry over the years have gained immensely form the
advancement of technology and acceptance of technology by common people. The website will
offer the customers with user friendly customization and features. Usually tourists who are
travelling form a different country do not have idea regarding the hotels and transportation; in
that case they approach a travel agent who acts as a mediator in planning the vacation. The

company will serve the visitors in the similar way in a much lower price. The packages that will
be offered will be divided in sections and subsections: budget, luxury, adventure. But all these
aspects will be associated with the association of the Maori culture.
Apart from these services there will be a list of articles that will help the visitors to know
more about the country and the places to visit along with the things to do while visiting the
country. One of the purposes of the company is to promote the culture of the country therefore
there will be articles regarding the various shades of the beautiful culture that is prevalent in the
country (Cross 2015).
The office will be situated in Auckland, which is one of the trade centers of the country
and is also a tourist destination. Though Wellington is the capital of the country, Auckland is
chosen as the base of operation in terms of infrastructure availability and feasibility of the
people.
1.2 Rational of the business
New Zealand is a country that has a developed economy and the government of
the country also encourages trade and business. Tourism is one of the major modes of income for
the country. This makes both the industry as well as the country of operation a lucrative
opportunity for the company to invest upon. The company will encourage and focus upon the
culture of the New Zealand. The management of the company also has experience in the tourism
industry thus the venture will be guided by experienced people. The tourism industry has a
significant contribution towards the economy of the country; in 2017 both domestic and
international tourism amounted to $35.9 Billion (Tourismnewzealand.com 2018). The tourism
industry in New Zealand is flourishing the government of the country has been spending

significant amount in the industry as there is opportunity in the process total tourism expenditure
was $34.7 billion in 2016 (Tourismnewzealand.com 2018).
1.3 Company’s philosophy
The values and principles that drive the organisation are to spread knowledge regarding
the culture of New Zealand with the help of tourism. Every package will have a culture oriented
aspect which will help the visitors to connect with the local people and understand, appreciate
the culture of the country.
1.4 Mission statement
To promote and encourage New Zealand tourism in the international platform

2. Internal Analysis
As a new venture the company will have to invest the finance as well as human resource
starting from what is available in the start. The internal capabilities of the company are based on
the expertise of the owners and their passion for travel and information technology (Bah and
Fang 2015). The owners of the company are also committed to promote the rich culture of New
Zealand. The financial investment that the company is going to make is £150,000 (BP). And this
money has been partially brought in by the owners and is taken as a loan. The internal
environmental factors that will impact that business operation are the human resources, financial
resource, infrastructure, contacts etc. With the help of The McKinsey 7-S Framework, the
internal resources and capability of the company can be analyzed. Here 7 aspects of the internal
business environment are stated in terms of its presence and impact of its existence.
2.1 The McKinsey 7-S Framework
Hard elements
Strategy: the strategy that the company has taken to maintain an edge over the other players in
the market is to position the company in a way that it highlights and promotes the culture of the
country. Cultural tourism is a rising and popular aspect in the industry.
Structure: As a new venture the structure of the company is fairly simple there are just two
people in the company as they recruit more people while developing the website or collect data
the company will follow a hierarchal system, owners of the company being the highest level of
report. There will initially be two teams business development and information technology and
each will be led by one of the two entrepreneurs.

System: The operations in the initial stage will be building the contacts and collecting data from
the business development department. On the other hand the IT department will lead the
development and creation of the website.
Soft elements
Shared values: the core value of the company is to provide the customers with a good time,
ensure there is a healthy and enjoyable work environment. The owners believe one should do
what they like doing for a profession since they love Travelling and in the course learn about the
culture of various places they have come up with the idea of this venture (Singh 2013).
Style: The leadership style that will be adopted by the owners in the process of the business is
transformational, the owners believe that as the organisation is driven by technology they have to
keep improving updating and adopting to the changes in the technology as well as focus on the
needs and requirements of the customers in order to achieve success in the objectives.
Staff: The human resources that will be employee have to be either skilled in terms of
management or have information technology knowledge. This is the initial requirement for the
employees; the owners have brought with them four other members who are experts in these
fields.
Skill: based on e-commerce platform the requirement of the business is IT skills as well as
administrative skills, in order to ensure that the platform is operating (Cross 2015).

Figure: 7s model of McKinsey
Source: (Ravanfar 2015)
2.2 Strength
Experience and knowledge: The people who are associated with the company are mostly the
owners; there are two people who are in the venture. One of them is from New Zealand and is
passionate about the place and its culture and has knowledge about the country, James is a
person who understands the land and its culture and he is passionate about travel and is a master

in business management. He contributes his management skills and understanding of the culture
towards planning and organisation of the business. On the other hand Mark is a person who has
Information technology background, he has been associated with a big IT firm for more than 10
years, with his previous experience and skill the website which is one of the major infrastructures
of the business model will be developed. They are also the people responsible for hiring more
human resource (Chaffey et al. 2013).
Financial support: The owners of the company have the financial capability of £150,000 (BP),
which enables the company to build the website and organize a few people to develop the data
base for the website.
Service: as an online travel agency the company will come up with unique and lucrative holiday
packages for the people who are interested in exploring the cultural exclusiveness of New
Zealand. The packages will be divided in a way that it will cater to a wide array of people
depending on the income demographic as well as psychographic segmentation. The company
will allow the people to pay with the help of several options and in order to do that they have to
seek support and develop the website accordingly (Chang et al. 2015).
The concept: The concept of cultural tourism is relatively new and unique in the industry; the
people of the organisation are passionate about the vision and the concept. This is a major
strength as this will allow the people to create objectives which are realistic and achievable.
2.2 Weakness
Lack of experience in terms of running a business, this is one of the major drawbacks of
company, both the owners are not from a business background, study management and dealing

with business practically is two different things and therefore the company has a disadvantage
over other competitors in the market.
There is also lack of infrastructure in the company as an off shore organisation the owners have
to start the business and build the infrastructure from scratch. Each and every step associated
with incorporation will be a challenge for this reason.
Lack of suppliers and contacts in the industry is another weakness; the skill and knowledge of
the people are not enough for the development of the plan that the entrepreneurs have in mind in
terms of the service and the reach of the business. it will take time to build the data for the
institution.
A major part of such a business in this industry is dependent on the customer service department
and the company must invest in their resources and infrastructure to develop this segment. But
that is being neglected in order to create more and more packages and offers.

3. External Environment
The elements in the external environment of any business organisation impact the success
and failure of the company to a significant extent. The management of the new venture must
consider factors like the competition in the industry, political and social scenario of New
Zealand, the condition of the economy as well as the status of the technology and infrastructure
will impact the business and decisions in the process (Bah and Fang 2015). The management of
the company will take decisions based on these factors. For example, if a package is being
formulated the composition of it should be based on these factors making so that it is more
attractive to the target market (Bah and Fang 2015).
The PEST analysis will help in determining the impact of the factors discussed above. On
the other hand porter's five force analysis will help in understanding the competition in the
industry.
3.1 PEST Analysis
Political: The government of New Zealand encourages trade and commerce in the country. The
government also has good foreign relations with other country to encourage foreign investment.
The government of the country also has policies and infrastructure to support the venture as there
is increase in the internet usage by the common public in the past decade. The tourism strategy
both aligns and coordinates government efforts supporting the sector to boost the economic
contribution of tourism across the country and plan for the future (Ho 2014).

Economy: As a developed country the country is a land of opportunities for investors. There is
also a growing trend in the economic development of the country; therefore the investment
decision in the country is profitable for the business. One of the objectives of the business is to
earn profit and therefore the status of the economy in the country of investment is important
(Gupta 2013). The entrepreneurs of the venture will bring in 150000 (BP) in expectation to get
their investment back in two years and at the end of the third year the venture is expected to
make profit. The largest export industry of New Zealand is the Tourism as it is the greatest way
of earning foreign exchange. 7.5 percent of the workforce of the country is directly employed in
this industry (Gupta 2013).
Social: The Company is targeting the international as well as domestic tourists for the service.
The country lifestyle of any country is dependent on the economic condition of the country and
as New Zealand is a developed country the people lead a high standard of living. There is
acceptance of cultural diversity and upgrade of technology in the daily lives of the people. The
culture of the country is important for the company as one of the objectives of the business is to
promote the rich heritage of the country in the international platform (Gupta 2013).
Technology: The technology adaptability of the country is also high as the people accept the
changes in technology, as the company is based on technology this aspect of the analysis is
important (Ho 2014). The payment choice and decision that the customer is going to make will
be based on technology therefore the acceptance is essential and is also prevalent among the
people. The availability of the skill and technology in terms of developing the website and the
mobile application in the future is available in the country (Ho 2014).

3.2 Porter’s Five Forces
With the help of porter’s five forces analysis the company can determine the competition
in the market. Understanding the competitors is an important step in deciding the policies and the
packages. This helps the company in initiating competitive advantage over the other in the
market (Teeratansirikool et al. 2013). With globalization and increased communication with the
international market, it is imperative to have a policy in the operation that will give the company
advantage over the other organisations in the industry. Michael Porter in introduced this
framework in 1979 (Cheng 2013). It will not only help the company identify the competition in
the current situation it helps the company to forecast the competition and trends in the future
(Fiore et al. 2013).
Threat of new entries: The tourism and hospitality industry in the New Zealand has significant
contribution towards the development of the economy of the country. A company looks out for
opportunities in such industries where there is scope of return on investment, thus making the
industry attractive for new entrants. There are a number of services that a new company can
come up with in the tourism department; the model that this new venture is following is effective
and efficient in terms of reaching out to the target market. Hence it can be concluded that the
threat from new entrants are high. The feasibility of this new venture is the best example of the
threat in the future.
Competition in the industry: There are a number of players in the tourism industry of New
Zealand; some of the direct competitors of the venture are Zicasso.com, acrossnz.com,
experiencenz.com etc. the government also provides packages and guidance to the tourist in
planning their vacation in the country making it one of the most significant competitors. The

intensity of competition makes the market attractive for the investors. It also reassures the
investors that there is scope of growth and development in the future. Therefore the threat from
competition is high.
Bargaining power of the buyers: as discussed above there is intense competition in the market
which increases the option of the buyers or the customers, this deceases the switching cost of the
buyers. This aspect increases the bargaining power of the buyers. The management has to be
constantly in sync with the needs and requirements of the customers in order to be attractive and
interesting.
Bargaining power of the suppliers: The suppliers of the company have a number of contacts
who operate in the same business model, the suppliers are the hotels, resorts and transportation
companies etc. it can be said that their bargaining power is high as there are other organisation
where they can list their companies with higher profit margins.
Threat of substitute: Physical travel agents are the major threat in case of substitute. The people
who do not want to relay on internet based company to manage their travel plans and want to
make plans for themselves are also a substitute to the service the venture will provide the target
market.

4. Strategic analysis
With the help of the internal and external business environment the management of the
new venture will decide upon the strategic decisions that will lead the organisation towards
achieving the objectives. There are a number of opportunities that the company has to achieve an
edge over the competitors (Fiore et al. 2013). The first opportunity that the service has is the
focus on culture tourism. Starting from the layout and color selection of the website and the
mobile application the venture will promote the Maori culture and the heritage. The packages
that will be developed will be focused around this as well, the society and the culture of the
country is an opportunity for the company to create an exclusive brand image. The name and the
logo of the organization will also be created on these lines (Fiore et al. 2013).
The external business environment is also favorable for the venture hence it can be said
that the company has an opportunity to incorporate the business with the help of the policies and
encouragement from the government. The increased use of technology among the target market
is a big opportunity for the business. The decision of the owners to incorporate a business model
based on internet is because of this scope. Buying and selling of goods and services has gained
immense popularity in the international as well as New Zealand domestic market therefore the
owners of this new venture wanted to explore this opportunity. As one of them is form
Information Technology background he has skill and knowledge regarding the technical aspect
of the project.

5. Long-Term Objectives
It is important to have long term objectives for any business organisation because it gives
the management a direction to operate. It ensures that the company remains true to its values and
principles. For a new company it is important to have long-term goals as it will help in the
growth and development by guiding the management in formulating strategies to achieve the
objectives. The focus of a new venture is upon objectives which can be achieved in a short term
as the company has to be ready to incorporate, but these short term objectives are also guided by
the long term ones.
Some of the long term objectives of the company are:
 To gain 3 percent profit at end of the third year
 To establish a brand image
 To ensure a healthy end enjoyable work environment for the people
 To encourage innovation with investments in research and development
 To build valuable customer relations
 To promote the rich cultural heritage of New Zealand
 To make sure at least ten mentions of the company and its services in the best travel
and tourism media by 2020

6. Generic and Grand Strategies
As discussed above the tourism industry in the domestic and global platform is crowded,
there are many established travel agents who offer packages and help the people to plan their
vacation in New Zealand and the government is also one of the competitors in this segment. The
company has come up with a strategy that can be analyzed with the help of Porter’s generic
strategy framework. Following figure demonstrates the framework.
Figure: Porter’s generic strategy framework
Source: (Kim 2004)

Porter has explained three ways in which any company can gain competitive advantage over the
other organisations in the industry. Cost leadership or low cost, differentiation and focus.
Cost leadership: For a company that is new and has restricted financial resource it is not possible
to incorporate this strategy in the business. Companies who have incurred profit for a
considerable period of time and have gathered loyal customers use this to increase the reach of
the business (Tanwar 2013).
Differentiation: This is the process by which a company can make the products and services
engaging and more lucrative than other competitors. The company has the ability to innovate and
develop the products in this strategy, research, back up with reputation and high quality and
effective sales and marketing are some of the prerequisites of this strategy (Kim 2004).
Focus: The entrepreneurs of the new venture can adopt the focus strategy as the focus of the
venture is upon the cultural aspect of the country. This will help the company to target the niche
market that they are trying to create in terms of cultural tourism. The management will firstly try
to understand the dynamics of this niche market and determine the unique requirements of the
customers based on this the company will develop packages to suit the needs of the customers.
Therefore it can be said that the strategy that the company will undertake is differentiation focus.
The company will serve the customers with an experience of Maori culture by providing
opportunity to stay and experience from within the areas (Tanwar 2013).
On the other hand the grand strategy that the company will incorporate in the business is
sustainable growth, as a new venture the company has to grow and develop in order to meet
other objectives of the business. This strategy is focused on how the industry and the elements in

the industry operate. The management of the company should keep up with the dynamics of the
needs and requirements of the niche target market to engage more customers (Fiore et al. 2013).
7. Short-term objectives
The management has to prepare the resources and capabilities in order to incorporate the
business in the least possible time. Short-terms objectives cumulatively help the company in
achieving the long-term objectives. The owners have to make decisions to ensure there is a
stable (Jones and Penaluna 2013)
● To employee the resource and capabilities to establish the website by 2019.
● To employee 10 people by the end of 2018
● To create content for the website in order to educate the customers regarding the rich
culture of the Maori
● To endorse the platform first as a website and then develop a mobile phone application
that is user friendly
● To increase the traffic in the pages of the website and the downloads of the application
8. Functional tactics
The company wills employee a number of functional tactics in order to achieve the objectives of
the business. As it is a new company the operations of the business has to be planned from Day

one. The ventures start with the two owners, who are responsible for bringing in four other
people in the organisation. (Kew and Stredwick 2017)
Renting the office in Auckland, it has been mentioned above that the base of operation will be in
Auckland and therefore the owners need to rent the place.
The next tactics is to divide the operations in two segments operations and process. As discussed
above the operations will do the research and will also act as business development department
to gather clients. Only after getting the clients to list themselves and work with the company the
packages can be formulated. Therefore research is the most important part of the business and it
will take at least four months to create a preliminary data base. On the other hand the process
department can also be the IT department will be responsible for developing the website (Lueg et
al. 2014).
Creating content to educate the people, one of the major parts of building a website apart from
the technicality of it is to create the content that will be displayed in the website. The aim of the
company is to promote the culture of the country as well therefore this step is important; the
content has to be informative and must also engage and interest the people in visiting and
experiencing the Maori culture. This tactic will also help the company to communicate with the
customers (Kew and Stredwick 2017).
Another functional tactics that the company should incorporate is the focus on marketing with
the help of marketing mix; this should only be commenced after the data that is required. The
management has to decide upon the product or service in this case and build the packages so that

it can please the market and also engage them. The management of the company has to decide
the price, place and promotional strategies for the same (Armstrong et al. 2014).
As the company will operate in the digital space the management should employee time to create
social media presence and use some of the content of the website to promote the website. This
step should be taken after the website is launched, in fact the pages should be created and
promoted at the same time (Jones and Penaluna 2013).
9. Policies that empower action
Some of the policies that will empower the objectives of the business are as follows:
The first policy that the company should undertake is encouragement and innovation in the
process of business, as the company will cater to a niche market, they should work hard in
offering the customers with service options that will improve quality of the travel, help them
experience the culture as closely and as realistically as possible (Werani et al. 2016).
The culture of the company is based on the values which drive the organisation that is passion
for travel and love for the culture. Based on this the company will follow an inclusive policy in
employing the human resource where the skill and talent of an individual will be the prime
aspect of selection.
There will be a policy of providing the customer a complete guidance of the tour that they are
choosing to opt. The customers will be given an opportunity to speak with a representative
before availing a package; this representative will explain the procedure and the package to the
customers (Werani et al. 2016).

The people who are working for the company will have working hours depending upon the legal
boundaries of the country. There will be an informal environment where there people will be
encouraged to innovate and work in their own space.
Another policy of the company will be to contribute towards the development of the Maori
community, as the company will work closely with the community the owners understand their
responsibility they have towards the same ((Lueg et al. 2014).
10. Strategic Control and Continuous Improvement
It is not only important for the company to ensure that the process of implementation of
the strategies are effective, there should also be a constant monitoring of the process as well. In
order to do that the management has to determine several milestones that can act as a marker of
achievement. The objectives of the business and the time period that has been mentioned should
be maintained in order to achieve success.
As mentioned above the policy of the company is to encourage the people to innovate
and make changes in the process as well as operation. The objective of the company is to cater to
the needs and requirements of the customers and in order to do that there must be provisions for
continuous requirement. As an e-commerce website the international market is also the target
market for the company (Lueg et al. 2014).

11. Conclusion
It can be concluded form the above discussion that Kiwi Travels will be an organisation
that will cater to a niche market. The company has the goal to promote the Maori culture among
the international market as well as cater to the needs and requirements of the target market
accordingly. In order to stay true to this goal, differentiation focus strategy will be used to ensure
competitive advantage over the other players in the market. In New Zealand the government and
the society encourages tourism industry and it has proven to be one of the significant
contributors towards the economy. Hence it can be said that the new venture is feasible.

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13. Appendix
Summary Statement
Sources of Capital
Owners' and Other
Investments $150,000
Bank Loans -
Other Loans -
Total Source of Funds $150,000
Startup Expenses
Bldgs / Real Estate $10,000
Leasehold
Improvements 30,000
Capital Equipment 40,000
Location / Admin
Expenses 21,500
Opening Inventory -
Advertising / Promo
Expenses 18,000
Other Expenses -
Total Startup
Expenses $119,500

Category Pre Start Up
Estimate
Cash on Hand 150,000
Cash Receipts
Cash Sales NIL
Collections from credit accounts NIL
Cash from Loans or other outside
sources
NIL
TOTAL CASH RECEIPTS $
-
Total cash available $
150,000.00
Cash Paid Out
Purchases $10,000
Gross Wages 30,000
Outside Services NIL
Supplies NIL
Repairs & Maintenance NIL
Advertising NIL
Car, Delivery, Travel NIL
Accounting Services 18,000
Legal Services 21,500
Capital expense 40,000
Telephone NIL
Utilities NIL
Insurance NIL
Taxes (real estate, etc.) NIL
Income Taxes Paid NIL
Interest NIL
Other Expenses
SUBTOTAL $
119,500.00
Loan Principal Payment
Capital Purchase
Other Start Up Costs
Reserve and/or escrow
Other Withdrawals
Total Cash Paid Out $
119,500.00

Cash Position $
30,500.00