UNIVERSITY NAME

Book Emporium Co
Student Name
5/4/2016

Table of Contents
Section 1.0 Executive Summary ..................................................................................................3
Section 2.0 Introduction ..............................................................................................................4
2.1 Book Emporium Co ...........................................................................................................4
2.2 Strategic Plan .....................................................................................................................4
Section 3.0 Situation Analysis .....................................................................................................5
3.1 Market Summary ...............................................................................................................5
3.2 SWOT Analysis .................................................................................................................5
3.3 Competition .......................................................................................................................6
3.4 Product Offering ................................................................................................................7
3.5 Keys to Success .................................................................................................................7
3.6 Critical Issues ....................................................................................................................9
Section 4.0 Marketing Strategy ................................................................................................. 10
4.1 Mission ............................................................................................................................ 10
4.2 Marketing Objectives ....................................................................................................... 10
4.3 Financial Objectives ........................................................................................................ 11
4.4 Target Markets................................................................................................................. 11
4.5 Positioning ....................................................................................................................... 11
4.6 Strategies ......................................................................................................................... 12
4.7 Marketing Mix ................................................................................................................. 12
4.8 Marketing Research ......................................................................................................... 13
5.0 Financials ............................................................................................................................ 14
5.1 Break-even Analysis ........................................................................................................ 14
5.2 Sales Forecast .................................................................................................................. 16
6.0 Controls .............................................................................................................................. 17

6.1 Implementation ................................................................................................................ 17

6.2 Market Organisation ........................................................................................................ 17
6.3 Contingency Planning ...................................................................................................... 17
Conclusion ................................................................................................................................ 18
References ................................................................................................................................ 19
Appendices ............................................................................................................................... 21
Appendix 1 Screenshot of Excel File .................................................................................. 21

List of Figures
Figure 1. MARR vs NPV Book Emporium ............................................................................. 15

List of Tables
Table 1. SWOT Table .................................................................................................................6
Table 2. CPM Table ....................................................................................................................6
Table 3. IFE Matrix for Book Emporium.....................................................................................8
Table 4. EFE Matrix for Book Emporium ...................................................................................8
Table 5. 7 Ps of Book Emporium............................................................................................... 13
Table 6. Cash flows NPV analysis and Break-even Point .......................................................... 14
Table 7. Sensitivity Analysis ..................................................................................................... 15
Table 8. Sales Forecast .............................................................................................................. 16

Section 1.0 Executive Summary

Book Emporium Co is a suggested business venture where new environment for book readers
will be provided. Unlike other book seller Book Emporium will be using high-tech VR gear to
incorporate VR reading skills thus making this idea innovative.
Project plan for Book Emporium Co is presented long with various factors that control the
success of this project. There are potential strengths which can be exploited to gain competitors
advantage while big players use their investment to overcome such thing, our goal is to achieve
high standard of customer care along with financial gain.
Their advantage is that they have this great idea which has not been implemented yet. Also there
is a high growth of VR import in most of the countries as these glasses can be used with normal
smartphones thus making them more popular.
Marketing Mix strategy will be used to formulate a test based execution where selected target
market will be interacted by products and services and thus their responses will be used to
analyse the market.
Overall, Book Emporium will benefit from innovative idea and initial brand endorsement by
coffee groups to penetrate the market and will be a success based on financial analysis as well.
.

Section 2.0 Introduction

This section is the introduction of the whole report where all the relevant sections are further
elaborated in later part of this report. The purpose is to formulate detailed business plan based on
strategies already studied in subject.

2.1 Book Emporium Co

Book Emporium is a source where a unique way of book reading is devised, users can read
books via virtual reality gears and can meet with other users via the same gear, there will be
lending/ buying fees of gears and special services and the services will be centrally hosted via
webserver having high bandwidth.
In this way a unique way of book reading and management will be formed, this will be marketed
using already built coffee houses as focus groups identified users having coffee/tea are most
likely to use this service so the same strategy will be used to capture markets in Asia and North
America (Pew Research Center, 2014).

2.2 Strategic Plan

The purpose of this part is to consider the overall strategic management process and consider
what is happening in the environment in order to judge how those happening may affect the
organization. In addition there is a consideration of organization's strengths and weaknesses and
the opportunities and treats that has significant impact on the organization process.

Section 3.0 Situation Analysis

In this section, current situation analysis and market competition analysis is performed which
will be used in later sections to formulate methodology for business.
3.1 Market Summary
This section will highlight the necessary information on the outlook, growth, current demand,
target market, and potential customers of Book Emporium. In this section target audience
coverage will be discussed along with initial service areas. Customer demographics will be
discussed.
The target area is limited to Asia and North America where in Asia leading book houses are:
Bookshop in India, Crossword Bookstores, D. C. Books, Bucketbolt.com, Xin Hua, Danxiangjie,
Ferozsons, Book Off, Kinokuniya, LIBRO, etc.
Where North America market is dominated by: Barnes & Noble, Books-A-Million, Book Off
USA, Powell's Books (which includes the world's largest independent new and used bookstore),
Schuler Books & Music, Books, Inc., Amazon, Ebay, etc.
The major competitor are those who sell books online and have portal for lending books on
daily/monthly basis. Although, in North America there are various sites that provide online
reading plus portal functions, there are limited setups in Asia providing the same. Market
penetration in Asia is rather easy than in US. But in US technological advances are welcomed
and appreciated while in Asian market these changes require heavy marketing and sometimes
celebrity endorsement is the solution.
3.2 SWOT Analysis

Strengths

Weaknesses

1- Advantage because of Innovation

2- Diversified Market focus
3- Excelling in Coffee
4- Multi-cultural Management Board
5- New Gears thus more efficient

1- US market share difficult to achieve

2- Dependency on VR gear
3- Relatively high prices as compared to pirated
books
4- Internal Resistance
5- New business venture

Opportunities

Threats

1- Privately Owned, thus less stable

2- Big operators with huge funding like Amazon
3- Regulations imposed by government
4- Asia Market exposed to piracy

1- International Events to show idea

2- Ally in coffee and restaurants
3- Incentives for frequent users
4- Expansion in Australia and Europe
5- Innovation

Table 1. SWOT Table

The table above shows SWOT analysis, this table is summarized using internal factor evaluation
(IFE) and external factor evaluation(EFE) analysis and this table shows the overall standing of
Book Emporium.
3.3 Competition
Major competitors of Book Emporiumwill be, Amazon and Powell's Books with highest number
of books, Powell's Booksenjoys the top position and is using its high share value to dominate the
book seller business (McCombs, 2002).
The table below compares the Book Emporium with its competitors, CPM table uses the same
weighted technique to grade critical success factors and thus taking sum of all the weighted
scores to grade all the firms.

Critical Success Factors

Weight

CPM Table
Book Emp.

Amazon

Rating Score Rating Score

Services
Technical Facilities
Rates
General Safety
Human Resource
Corporate Social
Responsibility
Market Share
Superior IT Services
Total

Powells Books
Rating

Score

0.48
0.21
0.34
0.45
0.21
0.20

3
3
4
2
3
3

0.36
0.21
0.68
0.30
0.21
0.30

2
3
4
2
2
1

0.24
0.21
0.68
0.30
0.14
0.10

0.15
3 0.45
0.17
2 0.34
1.00
2.68
Table 2. CPM Table

2
1

0.30
0.17
2.53

2
3

0.30
0.51
2.48

0.12
0.07
0.17
0.15
0.07
0.10

4
3
2
3
3
2

As seen in above table that Book Emporium has a weighted sum average of 2.68 which is higher
than the other two. Although services required are top-class in case of Book Emporium,
affordable prices are strong points of other firms.
3.4 Product Offering
The products that will be offered are:

Books to read using VR glasses

Virtual meetings

Discounted Prices when used with coffee brands

Smart lend and return system

Automated pricing system

Virtual environment using VR reality videos for fun

3.5 Keys to Success

Internal factor analysis based on weighted score pointer is used where all the internal parameters
including strengths and weaknesses are first weighted as per their relative importance and then
they are rated based of their current position.
This weighted score is used to measure if the organization is exploiting its strengths to cover its
weaknesses or it is currently being outperformed by its weaknesses. Factor analysis is done is the
table below:

Internal Factor Evaluation Matrix

Key Internal Factors

Weight

Score Weighted
Score

Strengths

Advantage because of Innovation

Diversified Market focus
Excelling in Coffee
New Gears thus more efficient
Multi-cultural Management Board

0.20
0.05
0.07
0.08
0.15

4
3
3
3
4

0.80
0.15
0.21
0.24
0.60

0.15
0.05
0.02

1
2
2

0.15
0.10
0.04

Weaknesses

US market share difficult to achieve

Dependency on VR gear
Relatively high prices as compared to pirated books

Internal Resistance
New business venture

0.10
0.13
1.00

Total

1
1

0.10
0.13
2.52

Table 3. IFE Matrix for Book Emporium

A relative weighted value of 2.53 shows that the Book Emporiumwill be exploiting its
innovative idea to gain competitive advantage and it is going in the right direction. By improving
US market share, and ensuring anti-piracy (Caudill, and Murphy, 2000 and Laczniak, and
Murphy, 1993), this can further be improved to close on 3.00 value which are the future goals of
Book Emporium Co.
External factor analysis is performed to analyse the impact of external factors on organization,
weighted scoring method is used but instead of strength and weaknesses, opportunities and
threats are used. The best opportunity for Book Emporiumare international events to gain
popularity because of innovative idea.

External Factor Evaluation Matrix

Key External Factors

Weight

Score Weighted
Score

Opportunities

International Events to show idea

Innovation
Incentives for frequent users
Ally in coffee and restaurants
Cheap Gears from China
Expansion in Australia and Europe

0.20
0.10
0.12
0.05
0.06
0.04

4
3
4
3
3
3

0.80
0.30
0.48
0.15
0.18
0.12

0.16
0.07
0.10
0.10
1.00

2
1
1
1

0.32
0.07
0.10
0.10
2.62

Threats

Privately Owned, thus less stable

Regulations imposed by government
Asia Market exposed to piracy
Big operators with huge funding like Amazon
Total

Table 4. EFE Matrix for Book Emporium

In EFE analysis, the average weighted score was 2.62 which shows that currently Book
Emporiumwill be using its opportunities to gain profitability and growth.

3.6 Critical Issues

Critical issues are the partnership documents and interest rates/ commission rates setup by the
coffee shops plus international piracy. Also business security details in online setups are very
important as there are threats of various malware/viruses/worms infecting the whole system. An
important threat is denial of service attach (DDOS) where the website is being hit various times a
second to make the server out of service. For such attacks anti-DDOS plus firewall must be
installed to the whole system.

Section 4.0 Marketing Strategy

The Book Emporium major role is to adopt partnership based Emporium system where virtual
meetings can take place using various technical gears during regular breaks (Marketing
Magazine UK, 2016). It would be like a book convention but not in person, everyone will
participate from their own location using virtual reality. This system will be initially launched as
an iOS application which will be able to simulate virtual reality using VR glasses of various
firms including Googles Cardboard based VR glasses. In this manner the meeting can take place
without being physically being there.
Marketing strategy will highlight the high bandwidth internet connection to incorporate several
simultaneous connections with the host and thus making the Emporium site a centre for
interconnection.In this section, vision and mission and values of Book Emporium are discussed
along with various strategies.

4.1 Mission
The mission of this firm is to strive for partnership with various software companies to develop
the Emporium Software and making a campaign like other firms do media partnerships with
other firms to endorse their products. One of the many potential partnership would to tie-up a
coffee shop with book club thus making market endorsement of book emporium with coffee.
Alternatively, a new coffee named after emporium can be launched to encourage people to use
this book club. This will make book club more attractive to coffee lovers and will attract more
audience.
There will be a wide selection of books including all the niches of literature. Unlike Amazon this
club will have a competitor edge i.e. VR Book Club meetings. This club is expected to do good
both financially and service wise if the right amount investment is put along with proper
marketing strategy.

4.2 Marketing Objectives

There will be three major marketing goals which include:

Market pricing based on market penetration

Possibility of partnership with unique features

New platform and new media (VR) to offer

10

As per Grnroos (1994), as the time passes needs and demands of customers change. Doing
such venture in old school book based business is risky if not backed up by latest trends, in
our case VR makes the difference. Using low profit policy and offering seller lowest
commission Book Emporium can generate huge product portfolio, also this emporium will
offer hardware gear for virtual meeting at discounted rates to attract more customers.

4.3 Financial Objectives

A joint venture (JV) based approach where investment are made by major company will be used
to ensure necessary financial flexibility. An expected amount for the whole setup of new venture
will be onetime $1,500,000 while other yearly expenses will include maintenance, backup and
support, marketing, human resources and payroll etc. will be around $160,000. Remaining
amount of $340,000 per year will be incorporated into targeted marketing. A feedback system
where clients can submit feedback will be developed to ensure customer feedback.

4.4 Target Markets

In initial phase there will be two targeted locations including Asia and North America (Lazer,
1969). This is decided because of the culture in North America for book stores and Asia is
selected for it size and revenue that is generated because of book sales. Potential targeted age
group will comprise of men and women in the age range of 21 to 76 years and thus both genders
in this range are habitual of coffee so partnership with a renowned coffee brand will be done
(McQueen, and Miller, 1985, Henke, 1995, Oh, Jeong1996, and Eldering, 2001).

4.5 Positioning
The firm will be relying on the tech gear as this is costly item and it is high maintenance, also
virtual environment creation and graphics designing is also costly so this will be done using
support from dedicated teams from software houses.
The initial investment will be high as in such venture many fail because of low financial assets
so we will use our partners to inject heavy amount at the start using reliable investors that are
willing to take this risk (Frobes, 2015). The competitor edge will be uniqueness as this type of
service/ platform is not available now and this will make Book Emporium unique.

11

4.6 Strategies
A five point based strategy is implemented which include definition of:\

Identifying narrowly defined target customer

Main category of business

Unique selling point or benefit

Identification of real competition

Differences from competitors including strengths.

These unique points are used to outline the main strategy of business development of Book
Emporium Co, identifying and answering these point will clarify the business targets and goals.

4.7 Marketing Mix

In marketing mix we will be using 7Ps for service offering strategy where 7Ps will be analysed
based of the following table (Kotler, 1997 and Kotler, Roberto, and Lee, 2002):
Product

The product is Book Club collaboration with coffee shops

The product include borrowed/ bought books, and virtual reality gear (along
with coffee products of partners)
Unique point is experience of a controlled meeting using VR

Prices

Prices will be competitive as per the market:

In Asia where book lease charges are low, major earnings will be made using
VR gear and coffee products
In North America, the major income will be from both products i.e. book sales
and VR gear.

Promotions

Promotion for frequent visitors and free VR meetings based on user point
system

Place

No restriction of a place as this will Emporium can be used from anywhere

online, for coffee based system a sponsored coffee shop will be available in
selected areas.

Packaging

Books and VR gear packaged with attractive and unique packaging design to
encourage customer satisfaction.

Positioning

12

Market position will be analysed using statistics from website plus partner

coffee shop databases

This data will be used to adjust product parameters to achieve a better position.
People

Sales team and business development (BD) teams will be responsible for
external promotion of this Emporium while internally various seminars will be
conducted to enlighten internal workforce.
Table 5. 7 Ps of Book Emporium

The references used included Borden (1964), Grnroos (1994), and Grnroos (1997).

4.8 Marketing Research

This is a broader term where all the aspects of a business is examined including questions
regarding, target market, competitors, regulations imposed, financial variables, technological
advances (in case of VR gear), and other factors (Crane, and Desmond, 2002). In a narrow
meaning it is often treated as financial analysis of various factors and the financial implications
they impose. These financial implications are then analysed using financial tools, including
NPV, Break-even point, IRR, etc. to ensure business strategy is valid and to attract more
investors using the financial portfolio. In our case the best way to do marketing research after
financial modelling and forecasting is to perform a test market based method. In this method a
test market is setup in an area which is closely related to targeted areas and a test market is setup
where user response will be measured as to how many users actually used VR gear to visit Book
Emporium when having coffee. This will formulate the basis of the market response and any
adjustments in the marketing plan will be based on this test research.

13

5.0 Financials
In this section various financial implications are pre-planned and are analysed to gain knowledge
of the financial gains expected of this business activity.

5.1 Break-even Analysis

In this analysis break-even point is analysed where the initial investment of $1,740,000 has been
done while remaining $260,000 has been retained for future injection of business. Cash flow
details are summarized in table 6.
Cash Flows ( $ ,000)
Year

Year

Year

Year

Year

Year

Year

Year

Year

Year

Year

Year

Year

Year

10

11

12

-1,000

-500

-500

-500

-500

-500

-500

-500

-500

-500

-500

-500

-500

Duty plus Taxes

-20

-20

-20

-20

-20

-20

-20

-20

-20

-20

-20

-20

-20

Commission to Coffee
Shops

-30

-30

-30

-30

-30

-30

-30

-30

-30

-30

-30

-30

-30

Salaries

-20

-21

-22

-23

-24

-26

-27

-28

-30

-31

-33

-34

Cost of Sales

-300

-330

-363

-399

-439

-483

-531

-585

-643

-707

-778

-856

Advertising

-360

200

200

200

200

200

200

200

200

200

200

200

200

Telephone, utilities and

etc.

-10

-10

-10

-10

-10

-10

-10

-10

-10

-10

-10

-10

-10

Inflows

1,000

1,100

1,210

1,331

1,464

1,611

1,772

1,949

2,144

2,358

2,594

2,853

Income Taxes

-119

-131

-144

-158

-174

-192

-211

-232

-255

-281

-309

-340

-20

-20

-20

-20

-20

-20

-20

-20

-20

-20

-20

-20

-20

Net Cash Flow

-1,740

181

238

301

370

446

530

622

724

836

959

1,094

1,243

Present Value

-1,740

-1,559

-1,321

-1,020

-650

-203

327

949

1,673

2,509

3,468

4,562

5,806

Cumulative Cash

-1,740

-1,559

-1,321

-1,020

-650

-203

327

949

1,673

2,509

3,468

4,562

5,806

Period

Land, web server and

other assets price
Inventory (Books plus
VR Googles)

Misc. Expenditures

-300

Break Even (Years)

5.38

NPV ( $ ,000)
@ 15% Rate

USD 5,071

Table 6. Cash flows NPV analysis and Break-even Point

14

In table 6, the NPV for a project period of 12 years based on a discount rate of 15% is
$5,071,000 where the IRR was found to be 20.9% as shown in Table 7. Sensitivity analysis is
performed in Table 7 and graphical results are depicted in Figure 1.
Sensitivity Analysis
MARR
10%
12%
14%
16%
18%
20%
20.911%
22%
24%
26%
28%
30%

NPV
1,390
1,015
707
454
244
69
0
-76
-197
-299
-384
-456

Table 7. Sensitivity Analysis

MARR vs. NPV

1,500.00

10%

1,000.00

12%
14%

NPV

500.00

16%
18%

0.00

20%

MARR

20.911%
22%

NPV

24%

26%

-500.00

-1,000.00

MARR

Figure 1. MARR vs NPV Book Emporium

15

28%

5.2 Sales Forecast

Sales forecast for Book Emporium is summarized in Table 8 where expected income via sales is
shown, an increase of 10% is expected in sales and thus the cost of sales is set to 30% of the total
sales while income taxes are also deducted to get net cash inflow against year.
Year

10

11

12

Inflows

1,000

1,100

1,210

1,331

1,464

1,611

1,772

1,949

2,144

2,358

2,594

2,853

Cost of Sales

-300

-330

-363

-399

-439

-483

-531

-585

-643

-707

-778

-856

Income Taxes

-119

-131

-144

-158

-174

-192

-211

-232

-255

-281

-309

-340

Net Inflow

581

639

703

773

851

936

1,029

1,132

1,245

1,370

1,507

1,658

Table 8. Sales Forecast

16

6.0 Controls
In the section based on previous analysis control function are discussed where the ideal controls
are required in this project.

6.1 Implementation
Milestone based approach will be used where every milestone with a pre-set date of completion
will be finalised and execution is done accordingly. These milestones are shown in table 6 where
all the necessary expenses are discussed. The major portion of the implementation is planning
those milestones.

6.2 Market Organisation

For this a separate firm will be hired to perform marketing of the whole project where all the
target audiences are focused by that media group and thus resulting is focused results (Weisbuch,
Kirman, and Herreiner, 1997 and Weisbuch, Kirman, and Herreiner, 2000). The first identified
markets are Asia and America where there is a significant chance of success as shown by
focused groups.

6.3 Contingency Planning

Although fool proof plan if developed still there is a contingency plan which refers to operation
of Book Emporium in the same manner as that of other stores if the VR concept fails, thus
making this venture flexible to issues like those.

17

Conclusion
Project plan for Book Emporium Co is presented long with various factors that control the
success of this project. There are potential strengths which can be exploited to gain competitors
advantage while big players use their investment to overcome such thing, our goal is to achieve
high standard of customer care along with financial gain.

18

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Marketing Magazine UK. 2016. Starbucks forges Spotify partnership that rewards customers
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20

Appendices
Appendix 1 Screenshot of Excel File

21