Smartshop Business Plan Report: Management, Marketing and Finance

The Smartshop business plan outlines an Australian-based retail venture offering a wide range of products through both online and offline channels, targeting both male and female consumers. The plan emphasizes a management approach utilizing the unity of command principle and a democratic leadership style, complemented by a divisional organizational structure. Marketing strategies include social media marketing (Facebook) and traditional newspaper advertisements to reach the target audience. The report analyzes key competitors like Amazon and eBay and proposes strategies based on sustainability, innovation, and quality to minimize competition. Financial analysis covers startup costs, revenue projections, and funding through angel investors. Key risks and challenges, including product substitution, price sensitivity, and building brand recognition, are also addressed. The business aims for expansion across Australia and internationally, with a focus on offering personal logistic services to improve shipping times.

RUNNING HEAD: SMARTSHOP
MANAGEMENT
ENTREPRENEURSHIP AND INNOVATION

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Executive summary
Smartshop is one of an Australian based company offering multiple ranges of products. It
targets both male and female as its products does not focus on a single gender. In order to
manage the employees, it will avail the use of unity of command, democratic style and
participative leadership style. For the business promotion, social media marketing (Facebook)
and traditional marketing (advertisement in newspaper) will help the company to draw
customer’s attention towards its products.
The key competitors are Amazon and eBay as they are engaged in similar product line. To
minimize the competition, it will rely on sustainability, innovation, and maintaining product
quality. It will consider ‘angel investors’ to fund its business as it offers high advantages.
It will also face risk of product substitution, price sensitivity and challenge of increasing
reputation, brand recognition and market share in Australia.

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Contents
Introduction................................................................................................................................3
Management...............................................................................................................................3
Style........................................................................................................................................3
Structure.................................................................................................................................4
Marketing...................................................................................................................................5
Competitor analysis....................................................................................................................6
Financial Analysis......................................................................................................................7
Funding...................................................................................................................................8
Key risks and challenges............................................................................................................8
Conclusion..................................................................................................................................9
Bibliography.............................................................................................................................10

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Introduction
The report reflects on a business plan of an enterprise named ‘Smartshop’. It is a new
business entity offering wide number of products from pin to piano. It is an Australian based
company that operates via offline as well as online channel. It enables worldwide access to
international customers and fulfils their demand through parcel service from Australia
(Smartstopselfstorage, 2020). It products are aimed at both male and females as they are not
based on a particular gender. The key objective of the business is business growth by raising
the number of offline stores initially in Australia and then in international market. It also aims
to introduce personal logistic services to minimize shipping timing and enable early delivery
of products. It has multiple competitors but the main rivals of the business are Amazon and
EBay. Considering the report structure, the initial section lays emphasis on suitable
management style and structure for smooth business operations. The second section
comprises of various communication strategies to connect to target market for the business
promotion. The passing part includes the competitors and financial analysis of the company.
Additionally, it includes the information based on funding and key risk and challenges of the
business.
Management
Management is a process of planning, organising, staffing, directing, motivating, and
controlling the activities and resources to achieve the organization objectives.
In order to direct employees, it will opt for ‘Unity of command’ principle. According to this
principle, an employee will receive orders from one boss. This will remove the possibility of
confusion, chaos, conflicts in the workplace. For effectively managing the human resource,
the organization will lay prior consideration to motivate the human resource. It will avail the
use of performance based incentives and t will provide financial incentives according to their
work quality. This will provide dual benefits to the company, firstly, it will enables in raising
and maintaining the employee motivation in the workplace. Secondly, it will assist the
organization to avail better outcome from its working staff (Rahman, 2012).
Style
Management style refers to the technique, abilities, and methods used by a leader (manager)
to control and manage the subordinates to fulfill the organization long term goals. There is

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presence of adequate number of management styles like Autocratic, Democratic,
Transformational, Transactional and Laissez-Faire leadership style.
It will be best suitable for the company as it involves offering opportunity to employees to
participate in decision making, problem solving. The leader lays prior attention to motivate,
empower, develop and support employees through positive means (Rolková & Farkašová,
2015).
Structure
The suitable organizational structure is highly essential for successful execution of work in
the organization. There are multiple forms of structure and it includes Hierarchical,
divisional, matrix and team based. According to the Hofstede ‘Power distance’ dimension,
Australia has low power distance as it scores only 38 (Hofstedeinsight, 2020). This states that
superiors are highly accessible and offers support to their employees. Additionally, direct,
informal and participative form of communication prevails between the higher and lower
level of management in an organization in Australia.
Therefore, Divisional based organizational structure will be best suitable in the Smartshop
Company. It refers to dividing the employees in multiple segments according to their skills,
knowledge and preference. It is suitable in the presence of high number of product line and
distinct market. The company will frame the divisions according to the product line. It will be
appropriate for the company as it is less hierarchical, offers flexibility and enables
coordination in working activities. It will assist in framing fine interpersonal relation with the
human resource and result in low power distance (Drucker, 2012).
Marketing
It is a set of actions for promoting the products and services to the target market of the
company. There are high numbers of marketing channels and techniques for brand promotion
(Kerin & Hartley, 2015).
The company should opt for digital as well broadcast media for raising awareness among the
customers. In digital platform, it should consider social media marketing and in broadcast
media, advertisement in newspaper is recommended (Saravanakumar & SuganthaLakshmi,
2012).

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With the passing years, the number of social media users is also increasing in Australia as
well in global world. Therefore, the company should opt for highly used social media channel
for promotion of its product. In the year 2019, Facebook is the top used social media website
with high strength of users. About 71% of the population of Australia uses Facebook and
therefore, it counts as a suitable media. It will help the company to gain the attention of youth
population and reach large mass of population.
The company will opt for advertisement in famous newspaper of Australia. It will promote its
products by advertisement in ‘Herald Sun’ as it has around one million readers (Anon.,
2018). This media will allow the company to gain the attention of middle age group as well.
Competitor analysis
It is a new business enterprise offering wide number of products to the customers. Amazon
and eBay counts as its key competitors because these operate in digital channel only and
offers similar products. Amazon and eBay are offering services for many years and they have
strong customer base. Therefore, the company should avail the use of effective strategies to
draw customer’s attention towards its product.
The company should lay prior attention to dominate the market by its physical stores.
Amazon and eBay does not operate in physical channel and it can provide a competitive
advantage to the company. It should provide attractive offers like discounts, and schemes to
the customers in its physical stores. Moreover, it should initiate absence of checkout counter
in its stores to make it more convenient to the customers. The customer will make the
payment through their devices and does not have to wait in queues. Thus, initiation of
convenient stores will offer high benefit to the company. Hence, laying high focus on brick
and mortar stores will yield fine result by minimizing competition.
It should devote more efforts in building customer satisfaction as it is highly mandatory for
long term success. This will save some marketing cost of the company as satisfied customers
will gave better word of mouth and it will improve the company’s reputation and recognition
in the market.
With the increasing pollution, the customers are becoming more conscious about the society
and environment. They are showing their preference for environmental friendly products.

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Therefore, availing the use of sustainability in its business will help the company to draw
customer’s attention. It will focus on the concept of ‘reuse’ and ‘recycle’ in its business
operations (Forbes, 2019). This will help the company to cut cost of production and gain
better response from the customers. Moreover, it will benefit the company to fulfill its
corporate social responsibility towards the society.
The Smartshop should offer innovative products as it directly draw customer attention
towards its product. Additionally, it should lay continuous efforts in improving its product
quality.
Financial Analysis
Financial analysis involves evaluating the financial performance and providing
recommendation for future growth. As mentioned in previous report, the company will
require a start-up cost of around $500 thousand. It is anticipated that with the passing year the
revenue expenses of the company will be increased and the revenue will be generated from
both online and offline sources.
In order to cut cost, the company will avail the use of latest technology, machineries and
automation. This will reduce the company’s dependence on its human resource. Therefore,
less number of employees will minimize the cost incurred in labour.
Funding
The company will rely on ‘Angel Investors’ (individuals with high net worth) to fund its
business. These provide financial resources to the small start-ups in return for ownership
equity in the company. This funding approach will be appropriate for the Smartshop because
it will offers high number of advantages to the company (Ding, et al., 2014).
1. The angel investors will offer adequate support and guidance to the business through
their knowledge and experience in the industry.
2. It is highly suitable for small business enterprise and it is a feasible process to avail
financial resources.
3. The angel investors help the company to earn substantial growth.
4. The company does not require a collateral to avail financial resources for business
functioning. Additionally, it is less risky than granting loan from financial institutions
(Banks).

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5. The company is not legally obliged to pay interest on fund and enables better
discipline in the organization (Kulkarni, 2019) .
Key risks and challenges
1. The company’s products are not proved in the market and therefore it attains a risk of
business failure in Australia. In order to minimize the risk the company should rely on
environment scanning of Australia through the application of theoretical models like
PESTLE and Porter’s Five Forces Framework.
2. The company attains a risk of product substitution in the industry as switching from
Smartshop product to Amazon/eBay product is low. Therefore, in the presence of low
switching cost, the company will face a risk of product substitution.
3. The Australians are highly sensitive to the price and they show low brand loyalty in
their purchasing process (Brien, 2018). This is a challenge for the company to develop
loyal customers in Australia. Additionally, generating profit is not an easy task as
customers are price sensitive. In order to min fulfill this challenge, the company will
avail the use of ‘Economy pricing’. It refers to selling products at a relatively low
price by reduction in production cost. It will allow the company to gain the attention
of price sensitive customers and earn fine monetary return from the customers.
4. The existing companies like Amazon and eBay have high reputation and goodwill in
the market. Therefore, it acts as a challenge to develop reputation in the market. To
fulfill this challenge the company should invest money in paid promotion by pop
celebrities.
5. Another challenge is to gain effective market share in the industry. For the fulfillment
of this challenge, the company should devote its attention in the production of
innovative products and offer fine customer service.
Conclusion
The report summarizes the concept of business plan of Smartshop. From the above
discussion, it is acknowledged that it is a new business enterprise based in Australia. It offers
products via online and offline channel to both genders in Australia. It also targets customers
from international market. The company will consider unity of command to manage the
employees. It will opt for democratic leadership style to raise motivated employees, and gain
better performance. The divisional organizational structure will suit the company as it aligns

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with the power distance dimension of the country. It will develop the use of digital and
broadcast media for the business promotion. Therefore, the company will opt for social media
marketing and advertisement in newspaper named ‘The herald’. In social media marketing,
Facebook is the best possible platform to gain the attention of large number of customers. It
is analyzed that Amazon and eBay are its key competitors as they offer similar products and
via online channel. The company will avail the use of multiple strategies to minimize
competition in the industry. Considering risk and challenges, it faces risk of business failure,
maintaining market share and attracting price sensitive customers. Additionally, it will opt for
angle investors to fund its business. Hence, it is a profitable business and it will yield fine
result if adequate attention is laid in minimizing risk and fulfilling challenges.

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References
Anon., 2018. 10 most read newspapers in Australia: 12 months to July 2018. [Online]
Available at: https://mediaweek.com.au/10-most-read-newspapers-in-australia-october-2018/
[Accessed 20 January 2020].
Brien, J. O., 2018. Report: Australian consumers aren’t loyal to brands. [Online]
Available at: https://www.cmo.com.au/article/643562/report-australian-consumers-aren-t-
loyal-brands/
[Accessed 20 January 2020].
Ding, Z., Sun, S. & Au, K., 2014. Angel investors’ selection criteria: A comparative
institutional perspective. Asia Pacific Journal of Management, 31(3), pp. 705-731.
Drucker, P., 2012. Management. s.l.:Routledge.
Forbes, 2019. 7 Ways Amazon and Walmart Compete -A Look At The Numbers. [Online]
Available at: https://www.forbes.com/sites/blakemorgan/2019/08/21/amazon-versus-
walmart-goliath-versus-goliath/#19d5e3e04674
[Accessed 20 January 2020].
Hofstedeinsight, 2020. COUNTRY COMPARISON. [Online]
Available at: https://www.hofstede-insights.com/country-comparison/australia/
[Accessed 20 January 2020].
Hughes, C., 2019. Social media usage Australia 2019 by brand. [Online]
Available at: https://www.statista.com/statistics/729950/australia-social-media-usage-by-
brand/
[Accessed 20 January 2020].
Kerin, R. & Hartley, S., 2015. Marketing: the core. s.l.: McGraw-Hill.
Kulkarni, S., 2019. Angel Investing: Insider Secrets to Wealth Creation. s.l.:Harper Collins.
Rahman, M., 2012. Henry Fayol and Frederick Winslow Taylor’s contribution to
management thought: An overview. ABC Journal of Advanced Research, 1(2), pp. 32-41.
Rolková, M. & Farkašová, V., 2015. The features of participative management style.
Procedia economics and finance, Volume 23, pp. 1383-1387.

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Saravanakumar, M. & SuganthaLakshmi, T., 2012. Social media marketing. Life Science
Journal, 9(4), pp. 4444-4451.
Smartstopselfstorage, 2020. About SmartStop. [Online]
Available at: https://smartstopselfstorage.com/about-us
[Accessed 20 January 2020].

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Appendices
Figure 1: Australia’s score in cultural dimension
Source: (Hofstedeinsight, 2020)
Figure 2: Social media usage by ranking
Source: (Hughes, 2019)
Figure 3: Newspaper ranking according to the number of readers in Australia