The term ‘strategic management’ refers to the process by which the goal and initiatives of an organisation is formulated and implemented. This process is generally carried out by the top level management of an organisation after considering the availability of resources and assessing several internal and external competitive environment of an organisation. While the external competitive environment refers to the competitive market, the internal competitive environment refers to the internal operation that meets the need of external environment. Like any other business a retail industry need to adapt a strategy that will help them to not only survive but also make a long term successful business operation in the competitive industry and it could only be achieved when the internal operation is flexible to the external environment.
Vision, mission and goals
Trend Station aims to meet a high level of consumer satisfaction by providing goods and products according to the changing consumer preferences and demands. Their goal is to make their brand listed among the major retailers of the world. Their mission is not only to create a large consumer base, but also extend their business branches in different parts of the world.
Products and services
Initially trends station aims to make retail business in clothing, shoes and accessories industry only. Their products includes clothing, shoes and accessories range for men, women and kids. However, in their long term business plan, they want to introduce bathing and hygiene products along with beauty essentials including make up products and perfumes. Trend Station also aims to offer a flexible exchange options for their consumers.
Business, organisation and finance structures
Trend station plans to start up a business with an owner’s investment of about AUD 65000 with an additional loan of AUD 100000. In addition to it, they aims to sell some of their shares to manufacturers from whom they are obtaining resources. They aim to offer consumers broad range of products at comparatively less price from their competitors to have their hold in the market, thereby earning less profit in the first year and gradually aim to increase this profit share in the following years.
The main strength of Trend station lies in the range of product, they are offering to their consumers along with the price range. Weakness of Trend station lies in the fact that they are inexperienced in this market. Opportunity lies in the fact that with growing consumer demand, there is huge potential for retail industry. The current retail industry has experienced a rise by 0.4% by February, 2018, while the previous months experienced a rise by 0.3% in January, 2018 and 0.3% in december, 2017 (abs.gov.au, 2018). The threat of Trend station lies with the existing competitors lie Myer Pty Ltd, Country Road.
Premises, Plant and Equipment
The internal ambiance of a retail store is of primary importance. AII the items sections are prominently separated with hoarding and discounted offers mentioned (Roggeveen, Nordfâlt & Grewal, 2016). The trial rooms are properly maintained. The store is itself quite spacious to provide the consumer a relaxed shopping experience. All the clothes, shoes and accessories are properly stored for easy access of the consumers.
Information System and Telecommunications
The staffs are trained enough for guiding and assisting the consumers in choosing their preferred range. The information regarding discount and exchange policy are always explained clearly to the consumers. The consumer database, which is being updated at the time of billing is further utilised for updating the consumers about the current promotional offers in the store
InteIIectuaI Property, licenses and membership insurances
Trend Station has got themselves registered and licensed which further helped in assuring the consumer about the authenticity of the store. The store also offer membership cards to their consumers for providing different membership offers to them. As a member, all the purchases of the consumer are insured
Goals, Milestones , Strategies
Goals and Milestones
The main goal of trend station is to provide their consumers with huge range of products and merchandise in comparatively cheaper price than their competitors. They aim to achieve a healthy profit margin by first year and increase the net profit in the following years.
Trend station aims to carry out their marketing strategy based on seven factors (7 p’s of marketing mix) that will influence the consumers to purchase from their store.
The factors are - product, price, promotion, place, people, physical evidence, process. The
first factor is the type and range of products that Trend Station is offering. Second factor
is price at which the products are offered to the consumer. According to Dahl (2018),
another factor is promotional strategy in the form of advertisement in different social media platforms or other forms of advertisement. According to Mason, Kjellberg, & Hagberg, (2015), another factor is place or the location of the store. Fifth factor is the people or the target customer. Physical evidence refers to the employment of staffs, store ambiance, product packaging. According to Arnett & Wittmann (2014), process refers to the way the consumers will be provide services in the form of selling the products, or updating about the ongoing offers or the exchange policy
According to Keszey & Biemans (2016), the sales of any retail store will depend on the way the store is meeting the need, demand and preferences of the consumers. Trend station aims at achieving high level of customer satisfaction which could only be achieved by meeting the need, demand and preferences of the consumers.
Customer management and Retention
Along with attracting new consumers, retaining old consumers are equally important for the success of a business. The discounted offers and affordable price will attract new customers while providing membership offers and continuous updating about every ongoing offers will help retaining the ould consumers. The way consumers will be served apart from the products offer will help a great deal in managing consumers (Sharma & Syam, 2018)
PricingTrend station aims to obtain all goods and products directly from manufacturers. In addition to that to hold the market they aim to keep low profit margin in the initial stage of the business. All these factors will enable them to keep an affordable pricing for the goods and products sold in the store.
Suitable Business Strategy
Trend Station aims to adopt a suitable business strategy considering different aspect related to the business like location of the store, target market, products and prices offered. This will help in benefitting the consumers and the organisation in the long run (Tolstoy, Jonsson s Sharma, 2016),
Australian retail industry has experienced a rise in the retail industry which is more than the estimated growth. All the retail industry like household goods retailing, food retailing, clothing, shoes and personal accessories retailing has experienced the growth, their percentage may vary from industry to industry (businessinsider.com.au, 2018)
Trend station aims to offer casual, formal, party wear to men and women of all age group and associated with different profession. In addition to that, they also aim to offers huge range of shoes and accessories collection for them. They also aim to provide, clothes, shoes and accessories range for kids. As a result, the target market for Trend station covers all the section of population.
There are several popular retailers in Australia. However the range of products they offer differs from each other. Some have retaining in computers and electronic good, games, entertainments, some provide retailing in food including raw food, fruits and vegetable. Trend station deals with clothing, shoes and accessories. The popular retailer dealing with these same ranges of products are Myer Pty Ltd, Country Road, Jay Jays, Jeanswest, Just Jeans.
Influence of Five Forces
Porter’s five forces are an effective tool that helps an organization to understand the
factors influencing competition in the industry they are working. The five forces are
Competitive Rivalry, Suppliers power, buyers power, threat of new entry and threat of substitution. Competitive rivalry refers to the competitors who are working or carrying out business in the same industry. Trend Station’s competitive rivalry existed with the already existing popular retailer who deals with the same product range. Suppliers power is a positive force for an organization. Trend Station operates in a huge market covering many section of population. In order to meet the need of such huge market, they need several manufacturers for the supply of resources. With the growing retail
Set up cost
While setting up a retail business, various cost elements plays an important role. The primary cost elements are the costs involved in registration of the organisation and setting up of the venue. Other factors involving costs of an organisation includes the costs relating to setting up of infrastructure, payroll and HR expenses (costs involving employees), venue cost (buying of the venue where the store is being set up) and location identification. Along with these cost elements, an organisation has other expenses such as expenses on advertising and marketing. Based on the estimated sales, an estimated purchase of resources is needed to be deducted to calculate an estimated profit.
Profit and loss forecast
While setting up Trend Station, a retail store, it is assumed that estimated sales of about AUD 1000000 will be achieved in the first year which further is estimated to reach AUD 1800000 by fifth year. The expenses involved during the first year of business will not be the same as following years. Based on this calculation, Trend Station aimed to experience a sale of about AUD 230000 in the first year which is estimated to grow in the following year and reach an amount of AUD 662000 by fifth year. This growth in net income will establish the fact that Trend station indeed is growing as a retail store.
Cash Flow Forecast
The cash flow forecasts of an organisation suggest the finance position of the business. The cash from operating activities is estimated to increase from AUD 215000 in the first year to AUD 624000 by the fifth year. Cash involved in investing activities is estimated to grow from AUD (-) 2000000 to AUD (-) 2350000. Ending cash and cash equivalents are estimated to increase from AUD (-) 1335000 to AUD 424000.
Balance Sheet forecast
The estimated current asset worth is AUD 750000 and fixed asset worth is AUD 2250000. The current liability is estimated to be AUD 165000 and the equity is AUD 2250000. Apart from these, additional funding can be obtained by owner's investment, loan, and selling of share.
Trend Station aimed to achieve an estimated sale of about AUD 1000000 at the end of first year. Contribution can be derived by deducting variable costs from sales. Trend station assumed to sell about 100000 units in the first year. In order to calculate contribution per unit sold, it is required to divide the total contribution by the total number of units. Fixed cost is assumed to be AUD 220000. Break-even point could be achieved by dividing the fixed cost by contribution per unit.
This business plan discussed the objectives, mission and goal of the Trend Station. It also discuss the product and services it aimed to offer. This plan also discussed the marketing strategy needed to successfully run the business. It also discussed the existing retail market, the existing competitors dealing with the same products like Trend Station. This plan also discussed a financial forecast relating to setup costs, profit and loss and balance sheet. This plan also carried out a cash flow analysis to understand the financial position of Trend Station along with a break-even analysis.
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