VeloBreath: Cycling Apparel Business Plan, London, 2018-2019

This report details the business plan for VeloBreath, a cycling apparel company launching in London. It begins with an executive summary and introduction, outlining the company's value proposition of providing waterproof and breathable cycling apparel to commuters and families. The report then presents the business idea, including customer segmentation and a five-point plan for customer relationship management, service, discounts, product improvement, and feedback. The growth strategy focuses on market penetration, expansion, product development, diversification, and acquisition. The report also includes a detailed analysis using Porter's five forces model, covering industry rivalry, customer bargaining power, supplier bargaining power, threat of substitution, and threat of new entrants. A risk analysis, including avoidance, mitigation, and contingency plans, is also provided. The report also includes HRM details and concludes with recommendations, and references.

Running head: ENTREPRENEURAL DEVELOPMENT
ENTREPRENEURAL DEVELOPMENT
Name of the Student
Name of the University
Author note

1ENTREPRENEURAL DEVELOPMENT
Executive summary
VeloBreath is a line of waterproof apparel for cyclists newly launched in the UK with the vision
of providing regular cyclists a comfortable solution against sweat and rain. The product line-up
is developed keeping in mind the cyclists who venture on their bicycles on a daily basis and
suffer the consequences of harsh weather and sweat. This article describes the business value
proposition, business model and the growth strategy adopted by ValueBreath in order to
successfully establish a market in the UK for a line of innovative cycling apparel.

2ENTREPRENEURAL DEVELOPMENT
Table of Contents
Executive summary.........................................................................................................................1
Introduction......................................................................................................................................3
Value Proposition............................................................................................................................3
Business Idea...................................................................................................................................4
Growth Strategy...............................................................................................................................5
Porter’s five force model.................................................................................................................6
Industry rivalry:...........................................................................................................................6
Bargaining power of customers:..................................................................................................7
Bargaining power of suppliers:....................................................................................................7
Threat of the substitution:............................................................................................................8
Threat of new entrants:................................................................................................................8
Risk analysis (avoid/mitigation/contingency plan):................................................................9
HRM (no of people, rules, structure, company ownership):.........................................................12
Conclusion.....................................................................................................................................14
Recommendations..........................................................................................................................14
References......................................................................................................................................16
Appendix........................................................................................................................................18

3ENTREPRENEURAL DEVELOPMENT
Introduction
The company VeloBreath is a cycling apparel retail business, with their flagship store at
Old Street, London. The organizational structure of the enterprise is headed by The Chief
Executive Officer or the CEO, who has the general responsibility of managing the general affairs
of the company. The Board of Directors of the company is comprised of three directors
responsible for the three divisions of the company, which are sales and marketing, human
resources, and finance (Chi, Tansuhaj and Sun 2016). The sales and marketing department is
accountable for research and development, pricing and distribution of products, customer and
sales communication; the HR department for administration and recruitments, logistics and
employee relations; and the Finance department for accounting, auditing, and planning finances
of the company (Liu 2018). Their latest introduction to the collection is a product called
‘VeloBreath’. It is a waterproof cycling costume which comes in a range of bright colours which
would make the cyclist visible on the road. The following report will speak about the business
strategy which the company might follow in order to gain the maximum revenue and business
development.
Value Proposition
In recent times, the number of cyclists has been increasing in great numbers all over the
world due to health promoting activities, especially in the UK. With the number of cyclists, the
demand for the right kind of apparel is also on the rise. This is where the VeloBreath comes in. It
would create value for its target customers namely, the commuters who use cycle to their
destinations and families with children (Fernandes 2015). The product is waterproof, which is
perfectly suited to the ever-changing weather of the UK. The costumes are available in bright

4ENTREPRENEURAL DEVELOPMENT
colours, serving two purposes. It will make the cyclist visible on road, even in very poor weather
and also attract customers, including children. The product is made of breathable material which
will allow the cyclist to wear it for long hours during heavy physical activity without feeling the
discomfort of excess sweating (Dhanapala 2015). The products are manufactured from high
quality materials in styles which adapts to the local culture. The combination of all these factors
makes VeloBreath a quality product to be marketed to the public interested in taking up cycling
in the future or individuals who are already avid cyclists. Market analysis has been performed in
order to see whether a sustainable brand could be built with this product (Osterwalder et al.
2014).
Business Idea
The whole idea behind this kind of an innovation is to offer the customers a product that they
can rely upon in the not-so-sweet days of their cycling routine. Customers form the soul of any
business idea thereby making it a matter of absolute importance to provide primary attention to
the product and the customer base in order to garner specific ideas and key points that will help
development of the product and maintain sales (Nanda & Rhodes-Kropf 2013). At the same time,
segmenting the customer base also becomes important to strategically manoeuvre any sales or
development related issues that might pop up because of a poorly identified customer segment.
Customer segmentation is done based on criteria like lifestyle, economic conditions, age etc.
VeloBreath targets customers who engage in moderate to extreme cycling in their daily life,
mostly marathon cyclists but also tends to the base of regular recreational cyclists. In order to
successfully implement the business idea, VeloBreath follows a five point plan of action as
follows:

5ENTREPRENEURAL DEVELOPMENT
1. They attempt to develop and maintain a successful relationship with their customer by
offering them a wide variety of high quality products at both, the retail outlets as well as
on different e-commerce platforms.
2. They attempt to provide an all-round 24/7 customer service support via telephone and
email.
3. Their business plan includes propositions for providing discounts and bundled products
in order to improve the customer purchase value.
4. They work towards improving their product quality and value by maintaining constant
communication with their customers via social media in order to gain their valuable
feedback.
5. Their plans also include a former-customer feedback system where they maintain
communication with their customers, former customers as well as followers on social
media platforms like YouTube and Facebook. This allows them to understand the current
trends as well as changes that are happening in other similar sectors which they can
gather ideas from to improve their product segment.
Growth Strategy
VeloBreath is built with the vision of providing customers one less reason to slack in
their daily cycling routine. It has already been observed and established that a cycling apparel
which is not so environment friendly causes to be a hindrance for cyclists. VeloBreath has
attempted to target that issue by manufacturing and distributing waterproof cycling apparel for
reasonable price targeted towards the age group of 6 to 65, thereby countering the challenges that
come with uncomfortable clothing.
VeloBreath’s growth strategy is illustrated as follows (Kowalkowski 2015):

6ENTREPRENEURAL DEVELOPMENT
1. Market penetration: Establishing a range of innovative and waterproof clothing line-up
targeted towards cyclists.
2. Market expansion: Through e-commerce, social networking and social media giveaways
and sales promotions and selling via retail flagship as well as online stores, expand the
customer base for the product.
3. Product expansion: Curate the design and material based on customer feedback and
suggestions to enhance the product.
4. Diversification: Establish a wide range of products, both in terms of design and customer
requirement and choices.
5. Acquisition: Acquire the physical as well as the online marketplace by selling the
products while at the same time maintaining a reasonable price point at 34 Euros.
Porter’s five force model
A company like VeloBreath is expected to be aware of the market conditions and business
environment to assess their competitors or potential factors of threat. In order to address the
analysis of potential strengths and threats of the company, the following has been done.
Industry rivalry:
Porter’s Model of Five forces revolves around the central concept of industrial rivalry or
relation with potential competitors in the market. Pope and Nauright (2016) opine that industry
rivalry is one of the strong market forces in the highly competitive markets like London because
of the presence of large numbers of firms manufacturing almost similar documents. As far as the
market of London is concerned, it can be pointed out that main customer segments which the
partnership firm targets consists mainly of families with children and daily commuters using
bicycle. It can be pointed out that there are several firms in London catering to the customer

7ENTREPRENEURAL DEVELOPMENT
segment. These competing firms use aggressive business strategies like aggressive promotion to
acquire more customers and sustain in the market. For example, Rapha, Decathlon and Evas are
the key market players that is already providing a tough time for VeloBreath. The three strategies
of positioning can effectively help the company to gain competitive advantage. The positioning
strategy focuses on placement of the business based on Varity, Access and Need. VeloBreath is
considering the need and access based strategies where from the study on market reflects
unsuitability of trending outfits in UK due to the changing weather conditions (Jhamb 2016). It is
not possible for any other company until now providing the most suitable costume for rainy
weather at a cost effective budget but developing the change can open up new opportunities. The
maximum accessibility will be expected from different channels.
Bargaining power of customers:
The customer power to put the business under pressure is assured with the needs of
customers. Products of same profile are available from different companies and hence, it is the
challenge for VeloBreath to work on its USP and bring around the customers in need. Fabbri and
Klapper (2016) mention in this respect that customers in developed markets like London have
immense powers. As already pointed out that the market of London already has presence of
companies like Rapha and Decathlon. It can also be pointed out that customers as per Lacoste
and Blois (2015) can impact the companies with their purchase decisions which actually results
in revenue generation. As far as VeloBreath is concerned, it can be pointed out that the
customers would have several options before them while choosing cycling costumes. Thus, it can
be pointed out that the company should take into account the expectations of customers in its
product line to acquire and retain their loyalty.

8ENTREPRENEURAL DEVELOPMENT
Bargaining power of suppliers:
The supplier power to alter business functions under pressure are externally one of the
significant stakeholder reactions. The suppliers impact the company profitability and hence,
VeloBreath is concerned about limiting the pressure from its suppliers by introducing production
extents supporting local suppliers. Fabbri and Klapper (2016) mention that suppliers in
competitive markets enjoy huge power to impact pricing of products. This is because suppliers
can impact the prices by increasing or decreasing of the prices they charge from their customers,
namely companies like VeloBreath. Thus, it can be inferred that the company should acquire raw
materials from several suppliers. This would prevent any one supplier exercising too much
impact on the firm. In fact the partnership firm would be able to acquire inventories from several
suppliers at economies of scale.
Threat of the substitution:
The original products are meant to be one-piece devoid of any similarity in manufacturing
elements. However, existence of companies who can provide similar products at cost
effectiveness can snatch the customers attention and increasing competitive rivalry.
Organisations need to play unique for maintaining the positions and so do VeloBreath for
developing high end featured costumes at effective pricing. It does not matter if the cost would
be high but product sustainability will make more customers buy the same from VeloBreath.
Cherkesova et al., (2018) point out that the new companies face threats of substitutes due to their
new status in the markets. For example, as far as VeloBreath is concerned, the cycling costumes
produced by the company would face competition from other types of costumes like biking
jackets. Thus, it can be pointed out that company should acquire a strong target base of
customers which it would serve to generate continuous flow of revenue.

9ENTREPRENEURAL DEVELOPMENT
Threat of new entrants:
The fear of new entries is a common factor but proper market analysis and maintaining brand
value hardly provides the scope to new companies to master at selling. Zhang et al. (2018) point
out that companies face threats of new entrants. The companies like VeloBreath should establish
itself in the market strongly in order to counteract threats of new entrants.
Risk analysis (avoid/mitigation/contingency plan):
The management of the firm should recognise the risks which are shown below. It should
take recognise the impacts of the risks on the business and take steps to mitigate the same.
Risks of VeloBreadth
R
i
s
k
n
o
Doc
ume
nt
cont
rol
infor
mati
on
Ris
k
iden
tifie
r
Risk
Cate
gory
Risk
Des
crip
tion
Impa
ct of
the
risks
Ris
k
res
pon
se
cate
gor
y
Ow
ner
of
risk
Preca
utiona
ry
recom
menda
tions
Own
er of
Risk
resp
onse
actio
n
1 Profi
t and
Loss
state
ment
,
bala
nce
sheet
s
Falli
ng
prof
its
in
spite
of
stro
ng
mar
keti
ng
strat
egie
s
Mar
ket
risks
1.
Mar
ket
risks
can
origi
nate
due
to
intro
duct
ion
of
new
prod
ucts
by
exist
ing
com
petit
ors
and/
or
entr
y of
new
firm
s
1. Fall
in
reven
ue
and
losing
of
consu
mers.
(short
term
impac
t)
2.
Losin
g
invest
ors,
and
suppl
y
chains
due to
falling
capaci
ty to
give
positi
ve
Stra
tegi
c
deci
sion
s,
mar
keti
ng
strat
egie
s
Fina
nce
depa
rtme
nt,
Mar
keti
ng
depa
rtme
nt,
Risk
man
ager
,
Engi
neer
1.
Format
ion of
a
strong
risk
manag
ement
strateg
y.
2.Use
of
moern
risk
manag
ement
system
s
3.Stren
gtheni
ng
market
ing of
produc
ts,
introdu
cing
new
and
Mar
ketin
g
depa
rtme
nt

10ENTREPRENEURAL DEVELOPMENT
with
simi
lar
prod
ucts.
2.
Loss
of
mate
rials
,
tech
nolo
gical
reso
urce
s
and
man
pow
er
due
to
fire
and
expl
osio
ns
ROI.
(medi
um
term)
3.
Good
will
risk
and
losing
of
global
marke
t
positi
on
(long
term
loss)
4.
Reduc
ed
produ
ctivity
due to
increa
sing
accide
nts
and
loss
of
resour
ces
innova
tive
produc
ts with
less
compet
itors
2
Risk
regis
ter
Emp
loye
es,
cust
ome
rs or
any
othe
r
stak
ehol
der
Vary
WH
S
risks
to
emp
loye
es
due
to
colli
sion
with
obje
cts
etc
Loss
of
produ
ctivity
,
action
s from
Safe
Work
Hig
h to
very
high
Man
age
men
t
Safety
trainin
g of
emplo
yees
Man
age
ment
and
the
conc
erne
d
depa
rtme
ntal
head
s

11ENTREPRENEURAL DEVELOPMENT
3 Unju
stifie
d
loss
of
capit
al,
Unjs
utifie
d
loss
of
data,
Une
xplai
nabl
e
alter
of
infor
mati
on
Emp
loye
es,
cust
ome
rs or
any
othe
r
stak
ehol
der
Cyb
er
theft
risks
1.Cy
ber
attac
k
wou
ld
caus
e
loss
of
ICT
data
and
desi
gns
whic
h
wou
ld
attra
ct
huge
secu
rity
risks
towr
ads
the
com
pany
.
2.
Cyb
er
attac
ks
lead
to
loss
of
cust
ome
r
and
fina
ncial
data
of
extr
eme
busi
ness
signi
fica
nce.
Loss
of
cust
ome
r
data
and
1.
Loss
of
senset
ive
busine
ss
data.
2.
Loss
of
financ
ial
resour
ces.
3.
Unaut
horise
d
access
to the
busine
ss
strate
gy
infor
matio
n of
the
comp
any.
4. R1
Hig
h
Ape
x
man
age
men
t
and
all
the
depa
rtme
ntal
head
s
1.
Tighte
ning of
securit
y.
2.
Allocat
ing
new
email
ids and
passwo
rds to
each
emplo
yees.
3.
Manda
ting
subord
inates
to
obtain
approv
al of
superio
rs to
accede
to
specifi
c
inform
ation.
4.
Makin
g it
compu
lsory
for all
emplo
yees to
exchan
ge
official
inform
ation
exclusi
vely
on the
formall
y laid
path of
inform
ation
sharing
.
5.
Emplo
yees
holdin
g
assista
Ape
x
man
age
ment
and
all
the
depa
rtme
ntal
head
s