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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
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
Strengths
Weaknesses
Opportunities
Threats
Weight
CPM Table
Book Emp.
Amazon
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:
Virtual meetings
Weight
Score Weighted
Score
Strengths
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
Internal Resistance
New business venture
0.10
0.13
1.00
Total
1
1
0.10
0.13
2.52
Weight
Score Weighted
Score
Opportunities
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
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.
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.
4.5 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.
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4.6 Strategies
A five point based strategy is implemented which include definition of:\
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.
Prices
Promotions
Promotion for frequent visitors and free VR meetings based on user point
system
Place
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
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).
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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.
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
-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
-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
-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
Misc. Expenditures
-300
5.38
NPV ( $ ,000)
@ 15% Rate
USD 5,071
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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
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
15
28%
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
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.
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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.
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References
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Grnroos, C., 1994. From marketing mix to relationship marketing: towards a paradigm shift in
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Lazer, W., 1969. Marketing's changing social relationships. The journal of Marketing, pp.3-9.
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Marketing Magazine UK. 2016. Starbucks forges Spotify partnership that rewards customers
with
music.
[ONLINE]
Available
at:
http://
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Appendices
Appendix 1 Screenshot of Excel File
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