Competitive Analysis and Strategic Assessment
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Competitive Analysis and Strategic Assessment
Competitive analysis and sources of competition, the strengths of your competitors’ companies, and the other factors affecting your ability to compete.
Some of the similar businesses have been in the market for quite some time and their marketing strategies have paid off to the extent of having their own regular customers who keep increasing by the day because of their good work. They have set high standards and have strived at maintaining them. These businesses have already had their targets met and fulfilled. Thus putting them at a better advantage.
One of the factors affecting competition is customer loyalty. Most potential customers are usually loyal to their usual ideal place. This makes them very rigid when it comes to trying new places and things, especially those that involve food. They fear they might get disappointed when they try food from a new place or even worse get sick because it might be a dirty place.
Three (3) strategies and three (3) marketing tactics for attracting first-time customers.
Online marketing for the business will give the customers an opportunity to make a visit to the business remotely before going thus giving positive results. Having a website that markets the business and what it does and displaying some of the food products and cuisines will get the business many customers. Also partnering with online food applications and making programs for the new customers like having some cuisines or food products on offer when they buy some will get the business many customers as well.
Having a google plus account for the business will be an added advantage. Google plus usually displays the details of the business and when searching for real estate, the business will pop up on someone’s list. This will make a potential customer curious to know what the business has to offer and give them the curiosity to explore. Yelp reviews will also come in handy because customers who have been to that place will rate it and encourage more people to visit.
Having an entertainment in the business like a television or radio or Wi-Fi will have attract customers. Wi-Fi usually is the one thing that customers would love using, because while waiting for their cuisine, they can be browsing or working at the premise. Making business cards and distributing to the customers and other potential customers is also a good marketing strategy for the business.
The most important face of any business is usually the employees. When the employees are aggressive, friendly resourceful, disciplined and good, the number of the customers usually increase gradually. Smiling to the customers and treating them well with respect will have customers coming in because of that. An attractive name and business logo will get the business many customers. Employees will have nice shirts and dresses with the business company logo printed on them. When they work outside work, some potential customers might be curious and want to see the place. The interior and exterior décor of the business will matter. A good interior design will make a potential customer curious.
Types of risks your business opportunity will face both internally and externally. Provide strategies to mitigate these risks.
Considering the business is a startup, the employees might not be paid well. This might make the employees be less willing in working thus putting the business at risk. Therefore, the manager will have to come up with ways to encourage and motivate the employees like when there are some issues, he/she should make sure that their voices and needs are heard and be put as a priority. Also he/she should treat the employees with respect so they can feel acknowledged in the work place.
Lack of good communication and record keeping can also put the business at risk. This can happen if the manager in charge is not organized or has a poor work ethic. The other staff members as well can fall to this when they probably do not know what they are required to do. A routine training before and during the job should be regularly done to instill the knowledge and skills they are needed to know.
The interior décor of the business might also put the business at risk. If the floors are slippery or not properly done and the other necessary equipment’s are not of standard, potential customers will less likely come to the business. Thus making sure that the quality of floor and the other necessary equipment are good and adding more interior decorations to the business will keep customers coming.
Hygiene in this business is a priority. It can give both internal and external risks to the business. Lazy and ignorant employees risk the business by not keeping the business premise clean. If the place is dirty, potential customers will be automatically discouraged resulting to an internal risk. This business deals with handling food, food products and cuisines thus it requires utmost care. If a customer or several customers get food poisoning from the business, it risks losing permit in the area.
A law suit can be filed and it would not be good for the growth and reputation of the business. The business thus should always be maintained clean to avoid such risks in future. A cover for public liability and product liability should be taken. The public liability cover will cover for the health of the customers and the product liability will cover for the business once it has been sued and risk closure.
The business deals with African cuisine which involves cooking and use of either heat or fire or gas. The business thus can experience a risk through fire. The cooking equipment for the business will use mostly heat or fire or gas and an accident that will lead to fire can be fatal. Educating the staff on fire and safety will reduce such chances but just to be safe, a cover on property will be effective. This cover will work when the property of the business can be lost in the fire.
The equipment used in the business might break down bringing another risk to the business. An example is when the refrigerator breaks down. It will spoil the food. This will make the business run the risk of perishable foods. This risk can be managed by taking a cover on the equipment used. This cover will take care of the parts of the equipment or the equipment itself when it breaks.
The business can also be at risk of being burgled either when closed or open. This can be done by the customers or the employees. The stock or money of the business risks being stolen. Measures on security should be taken care of before it creates an opportunity for theft. A cover on theft is also necessary because it caters for the stock and the stolen contents.
A customer can accidentally get injured, damage the property of the business or get ill because of the business. Some of these are usually accidental, like when a customer breaks his or her leg because of slipping. Thus a cover on public liability will take care of those for the minor accidents. A property liability will cater for the damage caused on the property of the business by the customer.
Sources of funding available and funding strategy
There are several ways one can get funding to start up a business. One can either get loans from family members or friends, one can borrow loan from a microfinance bank or a bank or the government and from other investors willing to pit their money in a business. The ideal way to get funding for this business is to get a loan from a trusted bank or the government. This can be hard because the bank rarely gives out loan to first time business holder. The government or bank will take some assets as leverage. I would also look for an investor who either has the same passion as mine or can see that the business has potential.
Create a report of operating costs required for your product or service venture, using the Planning Shop’s Business Plan Financial package.
| Item | Amount ($) | Yearly ($) |
| Transport | 25,000 | 300,000 |
| Licenses | 14,000 | 168,000 |
| Tools and equipment | 20,000 | 240,000 |
| Insurance | 18,000 | 216,000 |
| Advertisement | 9,000 | 108,000 |
| Total | 86,000 | 1,032,000 |
Working operational cost
| Current Assets | Year 1 | Year 2 | Year 3 |
| Cash at bank ($) | 180,000 | 209,000 | 220,000 |
| Cash at hand ($) | 60,000 | 72,000 | 80,000 |
| Total current Assets | 240,000 | 272,000 | 300,000 |
| Current liabilities | 160,000 | 200,000 |
| Working capital | 80,000 | 100,000 |
Prepare a break-even analysis in which you explain the report you created to the venture capital group
| Item | Year 1 ($) | Year 2 ($) | Year 3 ($) |
| Rent | 24,000 | 52,000 | 47,000 |
| Transport | 300,000 | 42,000 | 38,000 |
| Tools and equipment | 240,000 | 211,800 | 64,000 |
| Total fixed costs | 564,000 | 305,000 | 149,000 |
| Variable Cost | Year 1 ($) | Year 2 ($) | Year 3 ($) |
| Electricity | 93,000 | 49,000 | 29,000 |
| Transport | 57,500 | 58,000 | 64,000 |
| Advertising | 62,000 | 45,000 | 44,000 |
| Telephone | 66,500 | 56,000 | 49,000 |
| Total variable cost | 279,000 | 208,000 | 186,000 |
Break-even point= Sale * Fixed cost
Sales – Variable cost
1st year = 5000000 * 564,000
(5000000 – 279,000)
= 597331.0739
2nd year = 2,000,000 * 305,800
2,000,000 * 279,000
= 341,294.6429
3rd year= 800,000 * 149000
(800,000 – 186,000)
= 194136.8078
Reference
University-wide entrepreneurship education: Alternative models and current trends by Deborah H Streeter, John P Jaquette Jr, Kathryn Hovis
Market Research for Implementation of Demand-side Management Programs in Ecuador by Edgar Eugenio Izquierdo 1996
Entrepreneurship through social network by Howard Aldrich, Catherine Zimmer 1986