BLD102_Major_Assignment_New_Business_Development_Proposal_Sam_Smith_055882

Sam Smith BLD102 Discovering New Commercial Opportunities Major Assignment 055882
The major assignment for this unit will be the production of a new business development
proposal for your opportunity/venture/product. Building on a thorough commercial feasibility
assessment, you will describe the opportunity, its markets (and how they will be accessed), any
associated risks, and the details ofthe business model to achieve this.Your proposal should also
highlight strategies for mitigating the risks inherent within it.
A clear opportunity is currently present within the Laser Tag Entertainment Venue market, in which a
new business development proposal will be conducted. Building on the preliminary evaluation of the
commercial opportunity to introduce a Laserforce Franchise into the Hobart Tasmania demographic
area, a commercial feasibility assessment will be delivered to assist in this new business opportunity.
A commercial feasibility assessment will be used to identify the market viability and how it will be
accessed, anticipate the risks involved of introducing the commercial opportunity, whilst finding the
right business model to be successfully implemented into the market (English & Moate 2009). In
each section of the commercial feasibility assessment a strategy will also be highlighted in an attempt
to mitigate the risks involved of the new business development. A description of the new business
development proposal will also be delivered up front, in order to give a clear understanding of its
compelling commercial potential.

Laserforce is currently a laser game franchise that offers more than just guns and suits, becoming a
laser tag pioneer since it was established in 1987 (Laserforce 2012-2014). Laserforce is a franchise
that currently operates as a global company, in which it was the world’s best-selling laser tag in 2013
(Laserforce 2012-2014). The company has more than 25 years in manufacturing and operating the
world’s longest running laser tag site, showing great stability in its current market. It is currently
consistent of 135 Laserforce operators worldwide, in which the new business opportunity would be to
join as an operator, developing a new Laserforce location in the Hobart area in Tasmania (Laserforce
2012-2014). Laserforce is a laser tag entertainment venue in which age and gender are not remotely
relevant to the level of fun had by consumers, in which young children are equally able to join in the
fun (Horne, T 2011). The Laserforce franchise gives a competitive edge over other laser tag venues
by offering a differentiated product to current in market competitors as it has invented living arenas as
per the map layout below (Figure 1.1)
- Figure 1.1

In the Hobart area of Tasmania, changes are currently occurring which have led to an emerging
demand for this new Laserforce product. Social trends such as Dark Mofo during the winter season
are beginning to catch consumer’s attention in the Hobart region as consumers within the market are
looking for new products to experience within Tasmania (Abey, D 2014). Competition Laser Tag site
Zone 3 Laser games in Hobart has not adapted to this change of consumers wanting new products, as
they have been located at the same place for over 10 years, showing a clear opportunity for a new
technology product. Research also suggests that Australians are early adopters of technology and
would be willing to try a new Laser Tag product such as Laserforce (English & Moate, p. 175).
Financial trends also show that in April 2014 retail trade; Australian turnover grew by 6% compared
to April 2013 (Australian Bureau of Statistics 2014). This financial trend shows that consumers
spending is growing year on year, which is increasing consumers willingness to visit Laserforce and
spend money to consume the product.
Laserforce would enter the target market through a parallel business opportunity, due to existing
competitors already in the market known as Zone 3 Laser Games in Hobart & TAS Laser skirmish
located 8.3km outside of Hobart (Tas Laser Skirmish 2004). A parallel business opportunity can be
defined as “a new business competing in parallel with other businesses by selling similar products and
services to the same sorts of customer”. Currently the Hobart Zone 3 laser games and laser skirmish
sites do not offer the higher standard and level of enjoyment that other Laserforce establishments
currently provide, so establishing the Laserforce site would look at a key differentiation of offering
better value of the product being sold. This new market opportunity is focused on purchasing a
Laserforce franchise, in which the Franchisee would use the company name Laserforce and establish
an operation located in the central Hobart, Tasmania area. The new business development would
duplicate itself off current Laserforce sites already established throughout Australia that have long
term sustainable profit and growth. Establishing this new parallel opportunity as a franchise will
assist in developing the business format and in executing a consistent marketing plan by having
support from the head office of Laserforce.

- Figure 1.2
Determining the market viability is the first of three steps in order to determine the commercial
feasibility rating of the new business development opportunity. Market viability is specifically
devoted to probing potential demand by observing general behaviour of the marketplace and how
related products and services are selling (English & Moate, p. 175). Please see the attached
commercial feasibility assessment for Market Viability of the introduction of a Laserforce site in
Hobart, Tasmania. In Figure 1.2, consistent strengths (Green) and weaknesses (black) can be clearly
identified in areas of the graph which can then lead to introducing techniques for mitigating the risks
of launching the new business opportunity. As previously mentioned, Social trends are beginning to
catch consumer’s attention in the Hobart region as consumers within the market are looking for new
products to experience within Tasmania (Abey, D 2014). This social trend and pattern of spending is
clearly identified through statistics obtained in figure 1.3 through the Australia Bureau of Statistics.

Average weekly household expenditure on goods and services
- Figure 1.3
It can be seen that there is large market growth in Australia’s household’s expenditure on goods and
services of 38% since the previous survey was conducted back in 2003-04. The above graph shows a
positive shift in household expenditure in relation to recreation activities, which specifically relates to
Laserforce’s target market. It is currently the 4th
highest area of expenditure, in which the 3 higher
spending categories above it are classified as essential needs such as a house or food items.
Consumers in today’s society love to live in the ‘now’, unlike previous generations who specifically
only consumed if they had the relevant savings at hand. Market growth is a clear strength when
introducing a Laserforce site in Hobart due to these social trends and increased expenditure in
recreational activities such as sporting and entertainment venues as per the household expenditure
increases.
A successfuldistribution channel would have to be one of the highest priorities in setting up a
Laserforce site in Hobart. If you observe the current distribution locations of laser tag competitors in
the Hobart area,there are only two, Zone 3 Laser Games in Collins Street, Hobart, and Laser skirmish
located at in Mount Nelson. Both these current locations have current poor distribution locations.
Zone 3 Laser games cannot be viewed from the street by consumers, whilst Laser Skirmish is located
in the outskirts of the city in a low consumer traffic area. Establishing a successfullaser tag venue
such as Laserforce requires direct distribution of the product in a site location that reaches the largest

number of people who will in turn see and buy the product. To establish a Laserforce site, the
franchise recommends an arena size of at least 400m2 in order to be suitable for 30-60 laser tag suits
(Laserforce 2014). In order to find a shed location of that size within CBD area of Hobart that
reaches a large amount of consumers, it will incorporate extreme difficulty accompanied with high
costs. As per figure 1.2, it is also evident in the market viability assessment that for consumers to
play at a Laserforce venue,it is more classified as a want rather than a need. Consumers do not have
a requirement to consume a game at Laserforce like they would at a restaurant in which they need
food to survive. Consumers do however have a need for physical activity and recreation, which is the
underlying need for consumers within the market.
In order to mitigate the risks involved of introducing Laserforce into the Laser Tag market, a focus
should be kept on ensuring a successful distribution site location whilst implementing a strategy to
uncover the underlying need of consumers of the Laserforce product. A study was conducted in the
greater Hobart area of 5400 people specifically looking at variables of the purpose and frequency of
trips of consumers in the Hobart greater area and looking at the mode of transport as well. It was
identified that the highest percentage of trips in greater Hobart area are undertaken by car – almost
75% of all trips are by car as driver or passenger. The three highest traffic routes are within greater
Hobart 25%, Clarence 13.2% and Glenorchy 11.9% (Department of Infrastructure, Energy and
Resources 2010). These statistics give an indication that in order to mitigate the risks of in-effective
distribution, a Laserforce location must be set-up on a busy section of road within the greater Hobart
area with a big enough location for parking space of up to 60 spots. This will enable consumers to see
the product being delivered enticing them to consume the product and deliver a successful distribution
channel. In order to mitigate the risk of consumers not having a need to play Laserforce, the business
will need to develop a differentiated brand with introducing membership programs to consumers.
Developing repeat business by offering a member’s night once or twice a week along with monthly
competitions will develop a need for physical exertion from consumers to play Laserforce on a regular
basis. Another strategy that can be used is the offering of memberships to consumers. Consumers

would have the option of a Membership button when they first purchase a Laserforce game. From
that point on, any games they play additionally they receive a membership discount whilst also
becoming part of a members group, setting up a need through a social trend.
- Figure 2.1
When introducing a Laserforce centre in the Hobart region, anticipated risks must be evaluated to
identify current and future risks that may evolve for the business opportunity. Boundary risks are
commonly an anticipated risk that has the ability to restrict the commercial potential in start-up and
can evolve into future risk for the business (English, J. & Moate,B. (2009). As you can see from the
above graph, Figure 2.1, strengths (green) and weaknesses (Black) have been highlighted in order to
identify the anticipated risks of the new business opportunity. Due to purchasing Laserforce as a
franchise off a global company, the deliverables risk can be seen as strength when introducing this
new business opportunity. Details such as the business operating characteristics and features can be
based off the franchise model. As per Figure 1.1, the site details can all be based off the Franchise
specific maze design, using game formats such as warbot mode and stargate mode to have consistent
deliverables to consumers (Laserforce 2014). The laser packs are simply purchased off the franchisee
as per the design below in figure 2.2, included as part of the package the Laserforce franchise “will
install your equipment, check your premises for "playability", and train you and your staff well before

opening day” (Laserforce 2012-2014). This level of service will ensure that the Laserforce business
will have skilled people, the right equipment, the right processes and the right controls to deliver a
consistent level of quality at an acceptable price (English & Moate 2009).
- figure 2.2

As outlined in black in figure 2.1, the technology risk can be seen as an area of concern for the
Laserforce business opportunity. As technology is constantly evolving, Laserforce faces a high
potential risk from home gaming consoles, leading to consumers to staying within their homes instead
of heading to visit Laserforce to play a game. Although at this stage the Laserforce market does not
seem to becoming close to maturity or saturation due to these technological developments, it could
have significant disruptive developments in the future. For example, technology could develop to a
level, in which you could experience a laser game type simulation experience without the need to
attend a laser tag site. In order to mitigate the boundary risk of Technology, you could use a strategy
that was previously mentioned, that of membership incentives. As an organisation, you would run
membership operations similar to a sport or gym, so that it encourages attendance at the venue as they
are part of a team or society group.
- Figure 3.1
The final section of the commercial feasibility assessment is finding the right business model. When
introducing a Laserforce site in Hobart, finding the right business model is the most critical out of all
the 3 sections. Due to the importance of finding the right location for the Laser Tag Maze in order for
the business to be successful,physical resources and financial resources show a severe weakness in

this model. On top of this, due to the technical requirements needed to operate the laser packs,
financial and operations expertise will require some support, however should be easily mitigated due
to support from the Franchisee. The main strength that the commercial feasibility assessment shows
when finding the right business model is specifically in relation to the financial structure and cash
flow. Being part of the Laserforce franchise is a key contributing factor to successfulreturns and cost
structure of this business opportunity. Laserforce statistics show that of all their sites that opened in
the last 8 years around the world, 92% are still happy and profitable (Laserforce 2014). The
Laserforce site structures have the highest rate of repeat play with some operators showing a retain
rate of over 97% (Laserforce 2014). As Laserforce would be a new product within the Hobart area,
due to this exciting new operation, you would expect operating cash flow to positive within the first
year of operation. Modelling the pricing structure as per advised by the Laserforce franchise will
assist in ensuring this level of profit is achieved.
Implementing a Laserforce business model will lead to a significant requirement of physical and
financial resources. When discussing direct distribution, the survey showed that in Hobart the
location of your business premises is key to the success due to the high amount of travelling done by
car by consumers. Due to other competitors currently having poor location sites that are not
physically viewable on the street,competitive strength could be obtained by finding the best location
for the laser tag venue. Upon buying a Laserforce franchise,the company advise that you at least
have an initial $150 000 American dollars to setup a basic centre (Laserforce 2014). This shows that
you will need a high initial upfront amount of cash in order to setup a successfulLaserforce site in
Hobart. Technical expertise is without a doubt so important for the business model, as the installation
of all the wires and equipment will need to be performed when installing the maze whilst laser packs
will need to be maintained once the site is opened to the public. Without having this technical
expertise, if there is a pack or maze fault during business hours, it could cause severe revenue leakage
for the company.

In order to mitigate the risks associated with obtaining the capital required for the Laserforce business
opportunity, borrowing money is critical. Maintaining a good relationship with your banker and other
potential lenders such as a private investor is critical to reducing this risk of potentially running out of
money or not having the financial resources to create competitive strength. When funding the site
location, having enough capital to purchase the location outright, instead of leasing the property, will
mitigate the financial resources risk substantially as the company will have a fixed asset leading to
further equity capital. Furthermore, there are also risks associated with requiring significant technical
expertise to allow the business to operate successfully. In order to overcome these risks, the franchise
specifically advise that they will install your equipment, check your premises for "playability", and
train you and your staff well before opening day. They will also ensure that your business hits the
ground running, and their installation team can remain at your site for a period after you open, which
will assist in overcoming this technical expertise risk (Laserforce 2012-2014).
OPPORTUNITY 52
RISK 36
COMPLEXITY 26
TOTAL 114
COMMERCIAL FEASIBILITY
RATING 65.14
- Figure 4.1
Above is figure 4.1, which shows the commercial feasibility result of 65.14. The purpose of the
commercial feasibility rating is to provide you with an overall measure of the commercial potential
idea, in which the result will fall in one of three sections, green, yellow or red (English & Moate
2009). In a rating between 0-100, the colours represent as: Green is 80 or more, yellow 60-79 and red
light is below 60, in which 0 shows commercial potential as low, whereas 100 shows commercial
potential as good, in which further investment of time, energy and money is likely to be rewarded

(English & Moate 2009). The initial result shows that commercial potential is marginal, in which the
business opportunity should not be heavily invested at this stage. If, however you adjust the risks
associated in each section in relation to Technology, distribution, needs, technical expertise and
financial resources and re-score as if the risks have been mitigated as per previously discussed, the
feasibility rating increases,as shown below in figure 4.2.
OPPORTUNITY 56
RISK 38
COMPLEXITY 41
TOTAL 135
COMMERCIAL FEASIBILITY
RATING 77.14
In summary, Laserforce is a growing franchise that has shown great success across the world, in
which 10 sites were installed in Australia last year (Laserforce 2012-2014). The commercial
feasibility assessment shows probable success upon entry into this market, however its commercial
potential can been seen as marginal, even with the majority of high risks being mitigated. Choosing
to develop this new business opportunity of a Laserforce in Hobart, the business operator must be a
moderate-risk taker who is willing to bear some risks but work hard to avoid or overcome them along
the way.

References
English, J. & Moate, B. (2009), Discovering New Business Opportunities. Allen & Unwin, Sydney
Australian Bureau of Statistics 2014. HouseholdExpenditure Survey,Australia:Summary of Results,
2009-10, viewed 28th
June.
http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6530.0Main%20Features22009-
10?opendocument&tabname=Summary&prodno=6530.0&issue=2009-10&num=&view=
Department of Infrastructure, Energy and Resources 2010. Greater Hobart Household Travel Survey:
Summary of analysis and key findings, viewed 28th
June.
http://www.dier.tas.gov.au/__data/assets/pdf_file/0006/54591/Household_Travel_Survey_Summary_-
_Final.pdf
Laserforce 2014. Laserforce: Professional Laser Tag Systems, viewed 28th
June
http://www.laserforcetag.com/documents/brochures/LaserforceBrochureV6.1USA.pdf
Laserforce 2012-2014. The worlds most trusted laser tag supplier, make every game an immerse and
challenging experience, viewed 12th June http://www.laserforcetag.com/laser-tag-arenas
Horne, T 2011. Get in the Zone! You know you want to!, Laser Games: A Phasor for all, viewed
12th
June, http://www.think-tasmania.com/get-in-the-zone-you-know-you-want-to/

Tas Laser Skirmish 2004. Hobart: The Lea Scout Centre – Kingston, viewed 12th
June
http://www.taslaserskirmish.com.au/index.php?option=com_chronocontact&chronoformname=Playin
g%20Fields&Itemid=30
Abey, D 2014. Dark Mofo Festival shines light on Hobart’s hidden gems, viewed 12th
June,
http://www.themercury.com.au/entertainment/dark-mofo-festival-shines-light-on-hobarts-hidden-
gems/story-fnj3tycr-1226913083149
AustralianBureauof Statistics2014. PopularStatistics,viewed28th
June,
http://www.abs.gov.au/ausstats/abs@.nsf/web+pages/statistics?opendocument
AustralianBureauof Statistics2014. Retail Trade,Australia,Apr2014, viewed28th
June,
http://www.abs.gov.au/AUSSTATS/abs@.nsf/ProductsbyReleaseDate/3DDA13ECDC094B1CCA25773
4002042F2?OpenDocument

BLD102_Major_Assignment_New_Business_Development_Proposal_Sam_Smith_055882

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (12)

Similar to BLD102_Major_Assignment_New_Business_Development_Proposal_Sam_Smith_055882

Similar to BLD102_Major_Assignment_New_Business_Development_Proposal_Sam_Smith_055882 (20)

BLD102_Major_Assignment_New_Business_Development_Proposal_Sam_Smith_055882