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- 1. STAT212Assignment#6.docx Description In each of the 4 research scenarios and datasets below. 1. Read about the variables present, and formulate your default expectations about the relationship between two variables or groups. State these as your null and alternate hypotheses for this problem. Feel free to re-code the data to help formulate your hypothesis (for example, splitting a continuous measurement into two ordinal groups, "High" and "Low".) 2. What sort of measurements would help you evaluate your null hypothesis? compute sample statis- tics (center, dispersion, correlation) that will allow you to see if the data is consistent with your null or alternate hypothesis? 3. Create a graph that visually depicts the relationship between the variables in your hypothesis. Does the graph provide convincing evidence for one of your hypothesis? Explain why or why not. Scenario 1 The _le BodyFat.csv contains Body Fat percentage measurements, age, weight, density, height, and various body part circumference measurements. for over 200 male subjects. Scenario 2 The _le BestCity.csv contains various measurements of quantities associated with the quality of life in a collection of 20 different cities across the US. Scenario 3 The _le Normtemp.csv contains various average body temperature, gender, and heart rates for 130 participants. Scenario 4
- 2. The _le Titanic.csv contains information on those aboard the Titanic passenger class (0-crew, 1-_rst, 2-second, 3-third), Adult (1-yes, 0-no), Gender (0-Women, 1- Men), and survival status (1-yes, 0-no). Due 3/13/20 1 BestCity.csvCityIncomeCommuteJob GrowthPhysiciansMurder RateRape RateGolfRestaurantsHousingMedian AgeLiteracyHousehold IncomeRecreationA26000.049.210.81987.05.351.3925.05582.01 09400.035.35.268000.02620.0B29300.045.39.5517.06.650.8364. 09988.097000.043.26.070400.03066.0C24800.039.88.2592.08.2 77.71627.020511.0114700.029.59.460500.01297.0D27900.046.8 7.63310.06.751.2956.08946.099100.040.54.665900.02902.0E37 500.039.912.2975.05.140.1426.04000.0122200.047.15.684700.0 2214.0F31900.049.57.72238.06.938.01459.08970.0145300.039. 34.875800.01402.0G25300.044.45.4611.04.538.81063.09570.09 9500.038.66.862600.02900.0H22000.044.86.2272.07.565.7951. 019101.076400.041.62.854800.02448.0I29400.044.97.8381.08.4 48.7349.012099.0112500.041.84.572900.02756.0J42400.044.78. 01812.08.145.4397.010953.0143500.041.25.2100000.02508.0K4 0500.040.010.9294.08.069.6191.02655.0173600.041.76.410200 0.03000.0L24700.038.79.0196.02.819.0449.015796.0129200.03 3.41.765300.01570.0M24400.041.18.7404.07.377.21590.016001 .0126500.030.65.662200.01713.0N22400.042.88.3534.05.757.9 1160.016712.0102700.034.52.259200.02190.0O22200.037.88.41 66.05.650.9815.011856.0110300.035.42.757100.02142.0P27500 .048.48.11553.014.083.61195.012348.0107400.034.34.072000.0 2657.0Q23100.044.54.7502.07.942.7556.065804.0116000.038.5 2.159400.02066.0R25000.041.413.9172.04.017.8459.036151.01 20000.052.73.657300.01467.0S25800.053.55.34143.016.857.43 054.014310.0132800.036.25.071900.03520.0T22600.045.06.552 6.05.552.2861.08878.086500.041.55.354000.02977.0 Titanic.csvCLASSADULTSEXSURVIVE1111111111111111111
- 7. STUDENT EXAMINATION NUMBERS Y9998154 Y0000966 Y0076073 Y8528971 Y0071607 Y0077337
- 8. MODULE NO: MAN00001I MODULE TITLE: Business Planning Module Tutor: Dr. Alex Gillett Essay Title: Group Business Plan GROUP Number Group 2: MyTaxiBooker or name Word Count: 4,833 (excl. Executive Summary/Abstract, tables, figures, captions, table of contents, references and appendices) 0 kj628 Rectangle kj628 Rectangle
- 10. MyTaxiBooker Business Plan Serving your taxi needs in York and Leeds 1
- 11. Contents Executive Summary……………………………………………………………… … 4-5 1.0 Business Venture……………………………………………………………….. . 6-12 1.1 Product Offering 1.2 Nature of Demand 1.3 Mission 1.4 Vision 1.5 Values 1.6 Business Objectives 1.7 Strategic Capabilities 1.8 USP and Competitive Advantage 2.0 Market Analysis……………………………………………………………… … 13-24 2.1 Macro Environment Audit
- 12. 2.1.1 PESTLE Analysis 2.1.2 Porters Five Forces Analysis 2.1.3 Ansoff Matrix 2.2 Micro Environment Audit 2.2.1 The Market 2.2.2 Target Market Size 2.2.3 Customer Segmentation 2.2.4 Competitors 2.2.5 Perceptual Mapping 2.2.6 Suppliers 2.2.7 SWOT Analysis 2.2.8 Product Properties 3.0 Marketing Plan………………………………………………………………….. 25-31 3.1 Target Market 3.2 Brand Elements 3.3 Product Strategy 3.4 Advertising Strategy
- 13. 3.5 Marketing Strategy/Marketing Mix 3.6 Market Growth 4.0 Operations Strategy…………………………………………………………….. 32-36 4.1 Information Systems and Information Technology 4.2 External Accountancy 4.3 Quality Assurance and Control 4.4 Premises 4.5 Advertising Locations 4.6 Clients 4.7 Equipment 4.8 Insurance 5.0 Legal and Industry Requirements……………………………………………... 37-39 5.1 App Considerations 5.2 Employment Considerations 6.0 Human Resource Strategy……………………………………………………… 40-43 6.1 Board of Directors and Workforce 6.2 Recruitment 6.3 Training
- 14. 2
- 15. 6.4 Strategies to Maintain Staff Morale 7.0 Financial Proposal………………………………………………………………. 44-46 7.1 Projected Profit/Loss Summary 7.2 Projected Cash Flow Summary 7.3 Balance Sheet Summary 7.4 Break-even Analysis 7.5 Key Performance Indicators 8.0 Risk Analysis……………………………………………………………… …….. 47-53 8.1 Risk Assessment through PESTLE Environment 8.2 Risk Mapping 8.3 Strategic Risk, Operational Risk, Financial Risk and Commercial Risk 9.0 Beyond Start-up (Exiting or growing the business)…………………………... 54-56 9.1 Exit Strategy
- 16. 9.2 Future Development Conclusion…………………………………………………………… ……………… 57 References…………………………………………………………… ……………… 58-64 Appendices…………………………………………………………… ……………... 65-133 3
- 17. Executive Summary MyTaxiBooker is a multi-functional smartphone app and accompanying website targeted at locals and specifically the student population (over 85,000) in York and Leeds with the initial launch planned for October 2014. The identified need is for a convenient, easily accessible, cashless, intuitive, safe and cost-saving method of booking a taxi. The increase in the market for travel apps by 149% in 2013 and the expected trend continuation (Khalaf, 2014) combined with the general ‘technolisation’ of society (Walker et al., 2010) exists in light of a shift in consumer preferences
- 18. towards personal management of travel at their fingertips. The opportunity arises from an array of issues that may be broadly contained as two-fold in nature. From a student perspective, prolonged waits in undesirable weather conditions are not uncommon, followed by arbitrary waiting times that beckon the unwanted need to contact a taxi company on numerous occasions, often to discover extensive waiting times. Further, many students feel the need to walk home late at night as a result of an inability to justify journey prices, this raises safety concerns. From a company perspective, lack of competition exists within these cities and the market is dominated by a few larger taxi firms due to the incapacity of smaller firms to gain funds for efficient and effective marketing. Moreover, currently there is no proof of purchase therefore taxi companies cannot trace customers under the influence of alcohol for fare evasion. MyTaxiBooker targets these issues. Confirmation from market research suggests strong demand at 85% for MyTaxiBooker’s service offering. Furthermore, tuition fee
- 19. increases and the upward trend in cost of living imply that money saving and convenience techniques appear dominant on most people’s priority list. The company will exploit social networking as a cost efficient method of advertising to ensure maximum customer usage and development of a strong brand presence within the market. The company will utilise the ‘first mover’ advantage (Porter, 1980) as the first app of its kind and the only region specific app in York and Leeds. Rented office premises will be located in York city centre due to its close proximity to the University of York, York St John and the railway station for easy access to Leeds. Distribution staff will circulate promotional material, in and around the target regions 4
- 20. throughout the year, whilst the managing director will be responsible for negotiating deals and managing day to day activities. Furthermore, suppliers will include external accountants, lawyers, and website and app designers. An efficient outsourcing strategy will ensure low fixed costs, the effective use of capital, increases in profit levels. Employee numbers will increase so as to meet business expansion. Six start-up shareholders will collaboratively inject £70,000 start-up capital (1 individual
- 21. investing £20,000, 5 others £10,000) in order to fund advertissing as well as design and launch of the website and app and other start-up and initial running costs. As MyTaxiBooker, is a technology based product, costs are relatively low and profit forecasts are; £56,421 after year 1, £88,797 after year 2, and £106,039 after year 3. The company pays back within 1 year and 2 months and breaks even within the second month of operations. These minimalistic figures have been assumed from average assumptions extracted from market research and the company have assessed any risks that may hinder financial success. At termination of the three year period, the company will have sufficient understanding of the sales trends and demand fluctuations in high and low seasons. App popularity within York and Leeds should be such that a strong brand name will accompany the business aim of expansion to Manchester and Newcastle with a long term vision to be present in 7 UK cities by 2020.
- 22. 5
- 23. 1.0 Business Venture 1.1 Product Offering MyTaxiBooker is the innovative idea of six university students who have identified and confirmed through market research, a gap in the transport app market. MyTaxiBooker, a distinctive smartphone app and accompanying website, will remodel the existing taxi booking process and consumer experience. MyTaxiBooker ensures that students and locals in York and Leeds can benefit from an efficient travel experience as a result of its intuitive taxi booking system, coupled with the ability to earn ‘taxi miles’ through the app rewards system. MyTaxiBooker serves as an insightful data collection tool for taxi drivers and companies who list with the company; details of sales and demographics will be available through the app system. However, it is company policy that no personal user information is shared with any
- 24. secondary parties. York and Leeds possess abundant student populations, above 85,000 (Unistats, 2014) and an estimated overall population of over 900,000 (ONS, 2011) which MyTaxiBooker aims to capitalise on. The app will be available as a free download on the Apple App Store®, the Android Marketplace®, and Windows Store®. Targeting current journey concerns, costly fares, security fears, and waiting times epitomise the nature of MyTaxiBooker’s purpose. (Please see appendix 4.0 for an extensive list of features and product information and appendix 5.0 provides a process map of the service). Planning progress shall be hereby outlined. 1.2 Nature of Demand Demand for the product is ensured through identification and satisfaction of the needs of taxi users and taxi companies. Market research (appendix 1.0) suggested that out of the 100 York and Leeds students questioned:
- 25. 6 78% use a taxi at least 1-2 times a week 85% would order a taxi by app if a suitable one was available 90% suggested waiting times and price as their main concerns 58% prefer to pay for their journey by card The research findings alongside the personal experiences of the business founders enabled
- 26. identification of the following needs/concerns that are to be considered by MyTaxiBooker in order to generate high demand for our product. The table below illustrates the potential demands, both from a consumer a supplier perspective and how those demands may be satisfied by MyTaxiBooker. 7
- 27. Individuals booking through the app Taxi firms listing/advertising with the app Need/concern Satisfying the need Need/concern Satisfying the need Long waiting times High cost Safety Late taxi arrival Loss of possessions
- 28. Waiting times may be tracked and compared Discounts and taxi miles are available ID may be verified on the app to determine whether the driver is licensed to drive the vehicle Taxis may be monitored through GPS and this in turn should encourage taxi efficiency. It also reduces the need to repeatedly call taxi firms to enquire waiting times Proof of purchase so the taxi may be traced Market visibility of small taxi firms Lack of competition No proof of purchase Competition from
- 29. other forms of transport Reputation Maintenance Provides a platform where small companies are able to promote themselves against the larger firms without financial constraints Currently larger firms dominate the market due to customer familiarity. The app will enable smaller firms to offer discounts hence raise market competition Firms can identify the name of the individual who booked the app through a customer receipt. This avoids complications especially after clubs nights where people may claim a taxi they have not booked. Ease of booking, lower costs, and timing availability for consumers should promote
- 30. increased taxi usage. Firms are encouraged to act efficiently since consumers are able to observe company reviews and monitor waiting times. The liquidity of customer loyalty is such that they are easily prone to swapping to regular usage of taxi firms that appear to possess a superior reputation on the app. Increased efficiency will therefore enable ease of reputation maintenance. Option to pay by card Less need for cash Option to pay by card No cash at hand 8
- 32. 1.3 Mission “To provide economy and efficient minded taxi users with a free, user friendly and innovative platform for booking and monitoring the travel process with consistency of service, heightened opportunities for taxi affordability and safety advancement features. Our mission extends to building strong advertising links with the University of York, York St John, York College, Leeds University and Leeds Metropolitan University in order to instigate and strengthen brand awareness. Further, we seek to introduce ease into the user booking experience and develop overall user satisfaction
- 33. by addressing current concerns and discontents.” 1.4 Vision “MyTaxiBooker aims to develop and maintain its position as the leading provider of a taxi booking service providing discounts and savings specifically targeted at the UK’s student populations. The launch in York and Leeds will be the first of its kind in the UK and distinctive as the only region-specific UK taxi app outside London. Although the ‘free-rider effect’ (Lieberman & Montgomery, 1988) may be possible, whereby companies mimic an idea without the extensive costs of research and development, MyTaxiBooker intends to establish a strong reputation in its primary regions prior to extending services to other large cities with large student populations. We envisage the prospect of widespread customer loyalty through the advantage of being the ‘first mover’ in the market.” 9
- 36. Ensuring equitable market exposure for larger and smaller taxi firms Enhancement of student safety Fair treatment of all stakeholders Efficient and reliable service for users Rapid growth so as to maximise company shareholder returns whilst maintaining stakeholder satisfaction Competitive Remuneration
- 37. Packages (discussed with employees regularly) 1.6 Business Objectives MyTaxiBooker functions in line with the management by objectives concept (Drucker, 1954). All objectives should be Specific, Measurable, Attainable, Realistic and Time-bound (SMART) (Doran, 1981). To break even within the first three years To increase app usage by 3% (comparing usage to the respective month in the previous year) To begin expansion of services to Newcastle and Manchester in the fourth year of operations. Key Business Objectives 10
- 39. 1.7 Strategic Capabilities Makadok (2001) emphasises the importance of capabilities which determine the firm’s capacity to efficiently deploy resources. In the first three years of operations, the firm will follow the dynamic capabilities view which focuses on competitive survival and adaptation during times of rapid external change in the macro environment. However often, adaptation is not possible due to practical feasibility constraints that apply to technological industries. Operation in a low competition market The app is introduced at a time where there is a strong need
- 40. which has been identified through market research, ‘right place at the right time’ Flexible to changes in the market environment since all operations are maintained electronically A financial advantage since low start-up and running costs result in a requirement for low capital investment and a net profit margin First mover advantage through technological leadership which is often considered the most strategic advantage if capitalised upon, ensuing long lasting profits (Reinganum, 1983) University support for advertising and promotion CAPABILTIES However the firm recognises the following resources as possible long-term contributors to sustained competitive advantage: 11
- 42. Tangible Resources Intangible Resources external expertise from a panel, managerial skills, practices and procedures Innovation and creativity – technical skills and capacity for innovation Reputation – Evaluation and control systems, company culture Financial resources such as cash accounts and the ability to raise equity Human – experience and capabilities of Physical Resources such as the office, favourable promotion locations Technological resources – intellectual property distributors and the managing director, Applying Barney's (1991) VRIN (Valuable, rare, inimitable, and
- 43. non-substitutable) framework assists determination of whether a resource is a source of sustainable competitive advantage. Priem and Butler (2001) state that this framework has little prescriptive value; and it is difficult to decide resources that meet all the VRIN criteria however, reflection does position managers to consider unique profit-creating resources that collectively construct the businesses resource base. 1.8 USP and Competitive Advantage The uniqueness of MyTaxiBooker and lack of competition in its target regions warrants the company an ability to distinguish itself as unique, offering a multi-functional free service with numerous user benefit-creating features (see appendix 4.0). The opportunity for strong brand presence and customer loyalty may ultimately instigate a brand image that is synonymous with booking a taxi in York and Leeds. According to primary research, 85 of 100 student respondents and all four taxi respondents (ten were contacted) would utilise the
- 44. app with the purpose of addressing journey apprehensions and ensuring an ordered and unproblematic booking process on behalf of both parties. 12
- 45. 2.0 Market Analysis 2.1 Macro Environment Audit 2.1.1 PESTLE Analysis (Please see appendix for 6.0 for PESTLE analysis) PESTLE (Political, Economic, Socio-cultural, Technological, Legal, and Environmental) analysis is an effective method of assessing the inevitable macro environmental factors that may impact on the success of MyTaxiBooker (Lynch, 2009). Model Weaknesses PESTLE can readily become obsolete
- 46. Analysis provides purely a list of factors Our Approach The company will regularly update the analysis in order to ensure anticipation, avoidance and minimisation of any threats that may limit, or take advantage of factors that may contribute to the company’s future success (Blythe, 2009). Analysis will be updated using contribution from all people involved in the business (employees and members of the board) in order to capture different business perspectives; in turn aiding the development of strategic thinking and the decision making process of MyTaxiBooker. Rapid market change renders it increasingly difficult to anticipate trends that may affect an organisation in the future. However, the simple framework will enable the firm to rapidly position itself with
- 47. regards to current market trends. It must be used in conjunction with other frameworks in order to ensure a holistic view of the company’s marketing environment (Cheverton, 2005). PESTLE highlights the opportunities and threats likely to affect the company and these will inspire the external inputs into the SWOT analysis. The factors under each heading have been listed in order of present and future significance, enabling the company to prioritise in order to counteract any risk that these factors may cause. 13
- 49. The company will use frameworks as a supporting tool for analysis and evade over-reliance since this can often lead to the oversimplification of data in the decision making process. 2.1.2 Porters Five Forces Analysis Michael Porter (1979) argued that the state of competition relies on five basic forces that affect the organisation. He developed the model to the then popular SWOT analysis which he believed to be without rigour. MyTaxiBooker will function in an industry, composed of a group of firms offering similar services. The following provides a useful tool for analysing the relationship between competitors, suppliers and the market. Intensity of rivalry within the industry Threat of substitute products Bargaining power of buyers Bargaining power of suppliers
- 50. Threat of new entrants (Lynch, 2009) The five forces model will be utilised in order to create a qualitative evaluation of MyTaxiBooker’s strategic market position and respond to apparent opportunities/deal with potential threats (Grundy, 2006). However, it must only be used at the business industry level as opposed to the industry group level. The analysis has been criticised by Coyne and Subramanium (1996), stating that unrealistic assumptions underlie the five forces such as that 14
- 51. buyers, competitors and suppliers do not interact, that barriers to entry create value and that participants in the market can plan for and respond to competitive. However, the framework provides the business with a tool for raising awareness as to the potential forces impeding on its operations and an understanding of the relationship between competitors, suppliers, and the market.
- 52. Werner (1984) argues that Porter’s five forces fail to consider the unique resources and capabilities that enable a firm to be successful in an industry. Therefore, when MyTaxiBooker transfers focus towards competitive advantage, it will combine the analysis with a RBV analysis in order for the firm to understand the competitive strengths that may enable it to overcome the forces, (Please see appendix 7.0 for five forces analysis) 2.1.3 Ansoff Matrix The app will undertake a product development strategy approach since it will utilise an existing industry and develop a differentiated product therefore improving the performance of the industry (Ansoff, 1957). The app provides an alternative taxi ordering method in York and Leeds. Please see section 9.2 (Further Development) for a fuller understanding of the matrix application to the business. 15
- 54. 2.2 Micro Environment Audit 2.2.1 The Market The business market is the York and Leeds taxi industry (719 taxis) which is primarily dominated by large taxi companies. In York, Streamline and 669 taxis dominate the market; Leeds is dominated by Amber taxis. These companies have agreed to the use of our service (please see appendix 2.0) which in turn should encourage smaller taxi companies to participate. The York and Leeds markets do not currently possess an alternative booking system to the traditional phone call system. 2.2.2 Target Market Size The market size is large with a number of educational institutions possessing large student populations; the University of York with 15,253 students, York St. John University (5,824 students) and the surrounding colleges such as York College (7,492) students. There is an ever larger student presence in Leeds with Leeds University (33,600 students), and Leeds Metropolitan University
- 55. (18,994 students). 2.2.3 Customer Segmentation MyTaxiBooker will provide a solution to meet the needs of individuals and taxi firms identified in section 1.2 (Nature of Demand). A combination of desk and field market research has confirmed the need and the desire of our product amongst university students, locals and taxi firms. Heterogeneity in demand from our customer base is such that it can be segmented into diverse demand functions (Dickson & Ginter, 1987). This will enable the company to focus marketing on those more likely to use the product and identify the relevant resources to undertake this process. 1. Segment geographically – York and Leeds 2. Segment by markets (Business-to-Consumer and Business-to- Business), as follows: 16
- 58. Type of factor Business-to-Consumer Business-to-Business Characteristics of people/ organisations Purchase/use Users’ needs
- 59. and preferences for product Smartphone users: university/college students and locals, both male and female that use taxis as a means of transportation Size of purchase Size of their purchase is assumed to be 5% commission of an average £9.50 journey Brand Loyalty Provided that the app increases customer utility, brand loyalty will be high amongst this segment since no competition exists Purpose of Use
- 60. To facilitate the consumer in booking a taxi Purchasing Behaviour Frequency of use will be varied but market research suggests a minimum of 1 to 2 times per week. Seasonal variations will alter frequency (holiday periods) Importance of Purchase Enables a more convenient booking process as opposed to calling multiple taxi firms Product Similarity Not applicable since no … Small contents page for editing reference · 1.Executive summary 1 · 2.Business details 1 · 3.Industry and market analysis 2 · 4.Customers and value proposition 2
- 61. · 5.Marketing and sales 3 · 6.Operations and Resources 3 · 7.Management team, personnel, and company structure 1 · 8.Legal and industry requirements 4 · 9.Financing & financial forecasts4 · 10.Risk assessment 5 · 11.Key milestones 5 · 12.Beyond Start-up5 3.1 Industry Analysis: Current UK school uniform suppliers come with one of two major issues: their uniforms are either too expensive or they contribute to the growing issue of fast fashion as 350,000 tonnes of unwanted clothing head to UK landfills every year (WRAP, 2012). At Uniformed we are aiming to provide school uniforms that serve as a solution to both of these issues. Offering parents with a cheaper alternative, that are made entirely out of recycled clothing, without skipping out on quality. For the meantime there are little-no direct substitutes for a school uniform, even though there is no legislation regarding
- 62. the wearing of school uniforms. The decision falls on the individual schools, and it is traditional custom that school children in the UK wear them. This is not to say that it will not change in the future, although there are no signs of doing so. Uniformed’s target market is the low end of the market. We aim to satisfy the needs of those looking to save money on school uniforms, so largely low-income families, in the (specific?) London area. As well as those who are conscious of the environmental effects of fast-fashion and seeking an eco- friendlier alternative. The ‘back to school’ market is growing year on year as the latest research from Mintel (2019) estimates that the back-to- school market was worth £1.16 billion (up 36% from the previous year) in 2018, with the number of children in school continuously growing (see figure 1). This paired with the increasing spending on school uniforms (see Market Analysis) leads us to believe this industry is a safe one to enter, with considerable profit potential. With the end goal being to supply school children up and down the country with our cheaper, more sustainable uniforms. Year State funded primary school pupils State funded secondary school pupils State funded school pupils All school type pupils (including independent schools) 2013 4,309,580 3,210,120 7,519,700 8,249,810 2014 4,416,710
- 63. 3,181,360 7,598,070 8,331,385 2015 4,510,310 3,184,730 7,695,040 8,438,145 2016 4,615,170 3,193,420 7,808,590 8,559,540 2017 4,689,660 3,223,090 7,912,750 8,669,085 2018 4,716,245 3,258,450 7,974,695 8,735,100 2019 4,727,090 3,327,970 8,055,060 8,819,765 Figure 1: School Population: Primary, Secondary, All schools (School census, 2019) There are no specific taxes on textile production, only costs related to imports/exports which are irrelevant given that we do not plan to import materials nor export our products.
- 64. Government regulation is relaxed – the list of guidelines is addressed in the market analysis. No new issues are expected to arise with the impending exit from the European Union. 3.2 Market Analysis: Mintel estimates that the back-to-school market was worth £1.16 billion in 2018. This is a huge market with lots of opportunity for new players and an even bigger potential to undercut the market given the continuous rise on prices of school uniforms. The Department for Education (DfE) asked 1183 parents about the cost of school uniform in 2015 and (adjusted for inflation) the figures came to £217 for a primary school girl, and £207 for a boy. Our uniforms priced at [????] are [%] cheaper. To begin with, we will be aiming to target 30 schools in the (specific?) London area, selling on average to 20% of the students in that school. Given the average number of children in primary schools is 281 (Staufenberg, 2018), this gives us an estimated number of customers per school of 56, and thus, 1860 estimated customers overall. Competitors competencies vary, with some being highly established and respected suppliers specialising in quality, and others looking to provide simpler options at a cheaper price. Some of the specialist retailers are deploying eco-friendly ranges, but none of our competitors can match us on price nor environmental protectionist measures. Company
- 65. Competitor 1 (Uniform Direct) Competitor 2 (Stevenson’s) Competitor 3 (David Luke) Competitor 4 (Supermarkets) Our Company (Uniformed) Revenues (£) xxxxxxx 130,400,000 44,480,000 xxxxxxx Need from someone else No. of Employees xxxxxxx (small company) 212 25 xxxxxxx (large amount) Need from someone else Size 5 stores 28 (16 high street, 12 on campus) 10 online stockists, 50+ in-store stockists xxxxxxx (large amount) Online shop Price Low-Medium (collection dependent) High High Low-Medium (supermarket dependent) Low Quality Low-Medium (collection dependent) High, bespoke products offered
- 66. Medium, some bespoke products Medium-Low (supermarket dependent) Medium? Choice Low Very Large Moderate Moderate-Large (Supermarket dependent) Medium? Delivery Free on orders over £25, priority delivery available Worldwide – price dependent on order size. Done through stockists Excellent delivery services, free on expensive orders, express delivery offered. Nationwide – price dependent on order size Eco-friendly? No eco-friendly products Endorser of ‘Old School Uniform’. All packaging they use is recycled. Eco-Uniform range using plastic bottles to make the polyester in products. Borderline fast-fashion activity. Some chains will package with recycled materials but overall very bad for the environment. 100% made out of recycled clothing. Packaging made of recycled materials too. Figure 2: Table comparing competitors against Uniformed The lack of eco-friendly products on the market offer a gaping hole for us to slot in to. Whilst some competitors have eco- friendly ranges, we are the first and only provider in which 100% of our activity is eco-friendly. Uniformed are fully committed and uncompromising in our product and message.
- 67. And everything that we do, goes towards creating a financially cheaper alternative for parents, without skipping out on quality by sourcing our materials from the leading used clothing provider in the UK (ukusedclothes.co.uk). To further ensure quality we only accept clothing in their “Cream” range which consist of new/nearly new clothing from UK high street brands ONLY. We aim to create a trendy & desirable range to move focus from the idea that it is “recycled clothing”. It’s important to us to reaffirm that they aren’t old/reused clothing, we have taken something old and made it into something new. We intend on being as transparent about the process (making videos etc?) as possible to show kids/parents that these aren’t old or ruined hand-me-downs, but new, clean, eco-friendly alternatives. When it comes to barriers to entry concerning potential future competitors, costs are low which is an issue and we don’t have substantial funding to corner off the market. However, with sufficient funding we will be able to expand production and make it difficult for potential competitors to replicate our model. We are building a strong relationship with our suppliers hoping to bargain lower prices with larger orders. There is no current supplier making new uniforms out of recycled clothes/materials. We will be successful because Uniformed presents an innovative way to provide eco-friendly uniforms for kids. The nature of our production process means that we are not at risk of running out of cheap materials/ingredients. Regulation in this industry is extremely relaxed, within the wider textile industry the main elements are: · General obligation to state the full fibre composition of textile products; · Exemption applicable to customised products made by self-employed tailors; · Empowerment of the European Commission to adopt
- 68. delegated acts amending the technical Annexes of the Regulation, in line with Article 290 of the Treaty on the Functioning of the European Union. 3.3. Customer Value Proposition: · Save: your money and the planet. Paying less towards a better environment for future generations. Purchasing our uniforms over our competitors means you can be part of a solution to the fast fashion problem and save money on your children’s uniforms whilst you do so. Staufenberg, J. (2018). ‘DfE: Schools get bigger as pupil population increases by 66,000’. Schools Week. Published June 28th 2018. Available at: https://schoolsweek.co.uk/dfe-schools-get-bigger-as-pupil- population-increases-by-66000/ [Accessed April 23rd 2020] WRAP. (2012). ‘Valuing our clothes: the evidence base’. WRAP. p.2. Available at: https://www.wrap.org.uk/content/textiles-overview [Accessed April 23rd 2020] School census. (2019). Main text: Schools, Pupils and their Characteristics. GOV.UK. Published 27th June 2019. Available at: https://assets.publishing.service.gov.uk/government/uploads/sys tem/uploads/attachment_data/file/812539/Schools_Pupils_and_t heir_Characteristics_2019_Main_Text.pdf [Accessed 23rd April 2020] Department of Education. (2015). ‘Cost of School Uniform Research Report’. GOV.UK. Published June 2015. Available at: https://assets.publishing.service.gov.uk/government/uploads/sys
- 69. tem/uploads/attachment_data/file/436576/RR474_Cost_of_scho ol_uniform.pdf [Accessed 23rd April 2020] Mintel. (2019). ‘Counting the cost: Brits spend £1.2 billion sending kids back to school.’ Mintel Press Office. Published 18th August 2019. Available at: https://www.mintel.com/press- centre/retail-press-centre/counting-the-cost-brits-spend-1-2- billion-sending-kids-back-to-school [Accessed 23rd April 2020] 5.Marketing strategy Marketing Objectives Our marketing aims include: - To build and maintain the loyalty of our customers through relationship marketing - To eventually achieve brand awareness as one of the most environmentally sustainable uniform production companies - To gradually expand our base across London, allowing us to further expand our reputation Our marketing mix is a tool that will enable us to achieve our marketing objectives (Jobber, 2013). Marketing plan Target market Our target market is children from low-income backgrounds with household incomes below £30,000. One in six families are forced to cut back on food and other basic essentials to afford their children’s school uniform (Battersby, 2019). In 2018 there were over 2.74 million children living in families in relative low income (Gov.UK, 2020). Therefore, the size of this segment is very large in comparison with the overall market. Our products will be at a lower cost to our competitors, enabling our company to be a suitable option to those from low-income
- 70. backgrounds. Additionally, at first, we will only target children in primary school, from the ages of 5 to 11 years, due to our lack of resources, as less materials will be required. Then, once growth is achieved, our company will establish a segment expansion strategy into all school uniform clothing (Shaw, 2012). Branding and Positioning The company will create their brand awareness primarily through word-of-the-mouth. Once the first initial contacts are made, we are hopeful word will spread. Eventually, as our company expands, schools will reach out to us to provide their schools with our eco-friendly uniforms. Our main focus is providing prosperous value to our first schools, thereby building our brand as a reputable organisation. Uniformed will utilize their environmentally sustainable image to create a memorable and meaningful aspect to the brand through storytelling. Positioning involves the design of the company’s image and offering, creating a distinct competitive position in the targeted consumer’s mind. Uniformed will position themselves as a supplier of environmentally sustainable uniforms for primary school children. The organisation will be most beneficial for the environment, in relation to our competitors, thereby providing competitive advantage. Additionally, the lower cost of our product in comparison with our well-known competitors will further successfully position the company to attract the low- income segment. Marketing Mix The marketing mix consists of the 7P’s model, enabling Uniformed to portray all service operations within the market. The 7P’s model is a more recently developed model than the 4P’s model, which only consists of product, price, place and promotion (Ivy, 2008). The marketing mix is highly relevant to the company’s overall marketing plan but may need to be
- 71. adjusted as the company grows. Product Uniformed sell a range of clothing items in primary school uniforms for children. These uniforms are entirely reproduced from second-hand clothing. Our product variety is large due to the different types of clothing required. Figure 1.0 Uniform items list Girls uniform Girls sportswear Boys uniform Boys sportswear Blouse T-shirt Shirt T-shirt Blazer Shorts Blazer Shorts Jumper Jumper Jumper Jumper Skirt Skort Shorts Tracksuit Pinafore Tracksuit Trousers Socks Tights
- 72. Socks Socks Socks Customers can choose to purchase any variety of clothing dependent on their requirements, for example, some schools require girls to wear skirts, while others require pinafores. The selection of clothing items have been designed to meet the needs of all customers. In regard to Ansoff’s Matrix, Uniformed is undergoing product development. This is where the innovative construction of second-hand clothing takes place in an already established school uniform market (Ansoff, 1957). The modification of our product through utilizing previously owned clothing is an inventive approach to reducing the impacts of fast fashion. All of our clothing will be fitted based on these age range brackets: · 5 to 6 years · 7 to 8 years · 9 to 10 years · 11 to 12 years Price In our calculation of price, we have summarised uniforms’ as a whole to provide a widened outlook on the cost of our products. Our aim is to price our products at a strict minimum of 5% below our competitors. Thereby, visibly highlighting our lower cost of products, enabling us to attract our targeted segment. This shows our competitive pricing strategy, constructed through Porters Five Forces analysis (Porter, 1980). We are aiming to achieve a matched or reduced price for our products,
- 73. when compared with our competitors, to ensure Uniformed is a cheaper alternative. Figure 1.1. Table showing cost of item for girls’ uniform for 11 to 12 years Girls uniform Cost per item £ Girls sportswear Cost per item £ Blouse 1.30 T-shirt 0.80 Blazer 8.00 Shorts 1.30 Jumper 1.70 Jumper 1.70 Skirt 2.80 Skort 2.80 Pinafore 3.50 Tracksuit 3.00 Tights (pair of 2) 1.50 Socks (pair of 2) 0.50 Socks (pair of 2)
- 74. 0.50 Figure 1.1. Table showing cost of item for boys’ uniform for 11 to 12 years Boys uniform Cost per item £ Boys sportswear Cost per item £ Shirt 1.30 T-shirt 0.80 Blazer 8.00 Shorts 1.30 Jumper 1.70 Jumper 1.70 Shorts 2.20 Tracksuit 3.00 Trousers 2.80 Socks (pair of 2) 0.50 Socks (pair of 2) 0.50
- 75. Our product will vary slightly based on age. This summary above is based on the highest age of 11 to 12 years. Our product cost will decrease by 15p for every reduced age bracket, for example, a girls’ blouse at 7 to 8 years will cost £1.00. By providing an outline of our product cost per item, it allows our customers to decide on the specific quantity of the product. We are aware there will be a peak of purchase in the months of July and August before the new school year begins. However, this will not impact our production because our research has indicated school uniform items will constantly be required throughout the year due to damage and lost property. ****Uniformed aim to reach an estimated 15% growth per year, with a minimum of 1,000 orders of our items within the first year, ensuring our reputable brand expansion as well. We have set a goal to reach over 6,000 orders of our items after 5 years. Place Our manufacturing and production will occur in London with Appareltasker. This manufacturing company will receive the second-hand clothing from UK Used Clothing Ltd and will produce our uniforms utilizing these materials. Our manufacturer is located in Epsom Street, London. London is a suitable location for our business to grow due to its high population and high percentage of low-income households. This will be the only physical workplace that will be required because all manufactured clothing will be shipped directly to our customers. As our company grows and evolves, it is predicted our business may expand into other areas outside of London, dependent on our rate of success. The sole location for contacting our company will be through our website. This will provide all contact details, such as our telephone number and email, enabling schools to contact us
- 76. when needed. It is expected within especially the first year of operation we will be the ones reaching out to our potential customers. Promotion Uniformed will use their promotional efforts through creating an online presence to gain brand awareness. By using social media applications, such as Instagram and Facebook, this will enable the company to create a familiar image. This direct marketing enables the company to connect with potential customers. The exponential growth of social media and networking over recent years highlights the significance of this strategy for technological adaptation and future growth (Smith, 2019). People Due to the limited direct contact with our customers, our digital customer service will provide an optimum high-quality experience, ensuring our customer loyalty. Providing an effective online customer service will create a desirable reputation for the company. Process Acquiring our second-hand clothing from UK Used Clothing Ltd, ensuring the rapid production of our uniforms via Appareltasker, and transporting our products to our customers demonstrates the importance of an efficient supply chain. We understand the importance of minimising this time period to ensure our customers’ satisfaction, while abiding by our environmental sustainability policies. Physical Evidence We appreciate our customers are taking a risk of uncertainty in regard to our product, as there is no evidence until the product has been delivered. However, one strategy that will resolve this issue is meeting with potential clients before purchase and
- 77. presenting them with samples of our uniform items. This reassures customers the expected quality they will receive if they choose to purchase. This strategy will most likely be implemented for our first initial customers, until we gain a reliable reputation. 6.Operations Strategy Location Uniformed does not have any business property, enabling the company advantageous flexibility and choice. This may change as the company expands, where we may purchase a shop location, but currently is unavailable due to the lack of resources. It may be more beneficial to gain a location once the funds are achieved so prospective customers visually inspect the clothing before purchase, reducing consumer purchase uncertainty (Littler and Melanthiou, 2006). Additionally, the disadvantage of not having a specific location means customers will have an increased wait time per order. Whereas, a shop could hold products immediately ready for sale, resulting in no customer wait time for low quantity orders. Manufacturer facilities All second-hand clothing materials will be purchased from UK Used Clothing Ltd and will be transported directly to Appareltasker to be manufactured into our school uniforms. They will produce the clothing within 4 weeks. Once orders have been produced, our van will collect those orders and transport them to the customer. Most customers will need to be in a close proximity within the M25. This ensures our customers are a close distance to our manufacturer, which will reduce our pollution damage via transportation. It is more beneficial to outsource our production processes due to the viable complexity and large variety of machinery required to produce these uniforms. Additionally, outsourcing to a large established manufacturer prevents restrictions on our production capacity.
- 78. Procurement Appareltasker has been chosen as our manufacturer due to their principled environmental policies. These policies coincide with our environmental standards, ensuring zero waste production, while reducing environmental pollution. We will enter a short- term contractual agreement of 1 year with Appareltasker. This will ensure us supplier-dependability, while still allowing flexibility due to the short time arrangement. If this arrangement is undesirable after the contract has expired, there are various other suitable options for our production. Management-information systems and Information Technology The website will rely on utilizing information technology. Our website will be created by our employees with vast knowledge on design and IT. This website will be simple and straightforward, with the primary purpose of providing customers contact information to the management team. Weekly sales will be recorded on a spreadsheet through Microsoft Excel, which will be evaluated. Additionally, annual trends will be documented, allowing any seasonal trends to be classified. These documents will provide management with the necessary knowledge to certify enterprise success, while determining if company modification is required. Legal and Industrial Requirements Our company is new in the market and will follow all the legal and industrial laws as stipulated by the UK Business Acts to avoid any penalties. The company name will first be registered so as to acquire the certificate of incorporation, the new company’s memorandum and articles. Registration will also ensure our recognition by the tax body. As the business
- 79. progresses, we will be keeping our structural registration up to date. By doing so, the company will be able to renew its work permits, and to submit annual tax returns as required by the national laws. The company will not only submit tax returns on goods sold but also ensure that all the workers tax returns are up to date. Also, under the business structure, we will ensure that we design our own trademarks and pledge to renew them after every 10 years as required by the law. We are strictly committed to ensure that the company works within its legal boundaries and that it curbs any risks pertaining legal complications as regards employment strategies. The company will bear all the legal employers liability concerning the employees’ health and wellness. “Your employer will be responsible for your health and safety while you are at work” (Barret, 2016) . Although we, the stakeholders, are going to the founding employees of this company, insurance strategies will be laid down as demanded by the employee acts. We will also be responsible for protecting all our employees and customers’ data. As required by the advertisement laws in the UK, the company while designing its marketing and recruiting strategies will incorporate the issue of gender, race and social class diversities. “Employment discrimination statutes prohibit employers from discriminating against individuals on the basis of protected characteristics like race or sex” (Chase, 2020). Our company will find ways of reaching all social classes in a friendly manner. Our social media advertisement, for instance, will involve both gender and all races present in London. As a data protection strategy, this company will create and officiate a private website, accessible only to key stakeholders. We are doing this in the spirit of protecting our own products from competitors, protecting our customers addresses and protecting what is called the company’s secret. This will be done through enhancing our data monitoring and even the physical surveillance. We will install CCTV cameras and keep all recordings on the website. No handwritten documents shall be made. The data protection rule
- 80. in the UK requires that one must ensure customers information is kept secure, accurate and up to date (Ziegler, 2019). Any customer or employee who shares information with us will therefore be able to retrieve them anytime with the help of our management. As the company grows, we will create and run our own private cloud for storage purposes, bearing in mind the various data security threats witnessed in public cloud platforms. Financing and Financial Forecasts In year zero, all costs will be from our pockets as the proprietors of the business. We will finance the land acquisition, equipment purchase, installation and the plant commissioning costs. For the sake of this project, we will assume that all these acquisitions have been settled and the plant is ready to go. We will not therefore include these costs in our sensitivity analysis. Financing as per this paper therefore commences at year one, where the only costs to be financed are: costs of raw materials and the working capital. The raw materials are priced as illustrated in the market analysis section above. The company will be accepting mixtures of both adult and children clothing creams provided they pass our quality tests. This mix goes for averagely £2 per kilogram. Comment by Eleanor Marshall: rent of location premises and equipment costs? highly unlikely we would be able to outright purchase these At this stage we will assume that every buyer will be purchasing the entire uniform (both class-wear and games skirt). This will roughly require about 5 kg of raw materials. We are targeting a total of 1680 pupils from the 30 schools in London but only 1000 orders are projected for the first year. This will require about 5000 kg of the raw materials costing us £10,000. We will keep 20% of this capital for paying for all utility requirements in the company. At this stage, we are our own employees, and in order to grow the company, we will not consider monthly
- 81. salaries. All the profits will be channeled back to the company’s growth. Another mandatory cost will be tax. We will assume a tax rate of 30% per taxation year. Comment by Eleanor Marshall: Why are we assuming a taxation rate of 30% per taxation year, when corporation tax is currently 19% We will then carry out a sensitivity analysis to forecast for profits, expenses and the break even production point. Assuming that the number of female students equalizes the number of female students, and with the projection 1000 orders for the first year, 500 male and 500 female orders will be made. From the costs displayed in the tables above, a female student's full purchase costs £28.90 while that of a male student = £23.8. This averages to £ (23.80 + 28.90) = £57.20 for both genders. The orders are projected to increase by 15% yearly for the first 5 years. Comment by Eleanor Marshall: ? The sensitivity analysis based on the production alone shows a steadily rising profit line from year 1 to 4. We cannot at this time determine the break-even production point because we have not estimated the fixed capital costs. Based on production expenditure alone, excluding fixed capital costs, depreciations and salaries, every production year provides profit that surpasses the year’s capital inputs as shown in the figures below. Cumulatively, at the end of year 4, the company has made a profit of £50,158.45. This positive trend makes it arguable that the payback period will easily be achieved within the first 10 years of operation. This is so owing to the fact that the company is a small entity whose fixed capital costs will not be very high. Payback period’s achievement will further be facilitated by the existing depreciation laws. Comment by Eleanor Marshall: surely fixed capital costs need estimating? every project previously has done that and created a breakeven analysis
- 82. References Barret, B. a. D. L., 2016. Is the Employers' Liability (Compulsory Insurance) Act 1969 Fit for Purpose?. Industrial Law Journal. Chase, M. a. M., 2020. Compare This: How Employers Use Comparator Evidence to Defeat Employment Discrimination Claims. Ziegler, S. E. E. a. A. M. P. H., 2019. The Impact of the European General Data Protection Regulation (GDPR) on future data business models: Toward a new paradigm and business opportunities. Digital Business Models. 10. Risk Assessment 10.1 Critical Success Factors · Choosing the best pricing model that allows the company to benefit from the low cost of raw materials, and thus remain competitive in the market · Picking the best location to operate from so as to secure maximum sales potential and reach as many customer bases as possible · Maintain good relationships with suppliers · Good links with schools, as the largest customer base 10.2 PESTLE Analysis of Risks
- 83. Table showing the PESTLE risks likelihood of occurrence and impact: PESTLE Risk Occurrence Likelihood (1=very low - 5=very high) Impact (1=very low - 5=very high) Political 2 3 Economic 2 4 Social 5 3 Technological 4 2 Legal 3 2 Environmental 1 5 Scatter graph, showing the spread of the data in the table above: 10.3 Further Risk Factors · Strategic Risk · When considering strategic risk, an important theoretical concept is that of Porter’s 5 forces. · Mitigation-
- 84. 11. Beyond Start-up 11.1 Short term development After the first three years, we intend to expand to other locations particularly around the southeast. A new location should be aimed to be opened every few years using the revenue from the business, to expand the customer base. These new location ventures can be financed through a multitude of different ways, the main aim is that this is through the profits which can be reinvested. 11.2 Long term development Ansoff’s Matrix Existing Product New Product Existing Market Market Penetration Product Development New Market Market Development
- 85. Diversification · Market Penetration · Expansion into new locations · Boost popularity with new marketing strategy · Market Development · Product Development · Diversification Appendices
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- 87. https://www.gov.uk/government/publications/children-in-low- income-families-local-area-statistics-201415-to- 201819/children-in-low-income-families-local-area-statistics- 201415-to-201819 (Accessed 20 March 2020). Shaw, E. H. (2012). Marketing strategy: From the origin of the concept to the development of a conceptual framework. Journal of Historical Research in Marketing. Ansoff, H. I. (1957). Strategies for Diversification. Harvard Business Review. Jobber, D. (2013). Principles and practice of marketing. London: McGraw Hill. Porter, M.E. (1980). Competitive Strategy. Free Press, New York. Ivy, J. (2008). A New Higher Education Marketing Mix: the 7Ps for MBE Marketing. International Journal of Educational Management, 22(4), 288-299. Smith, K. (2019). The importance of social media in business. LYFE Marketing. [Online]. Available at: https://www.lyfemarketing.com/blog/importance-social-media- business/ (Accessed 16 April 2020). Littler, D. and Melanthiou, D. (2006). Consumer perceptions of risk and uncertainty and the implications for behaviour towards innovative retail services: The case of Internet Banking. Journal of Retailing and Customer Services.