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Redhawks Consulting
D-Bamboo Home & Garden Shop
Key Concern
• To ensure the long-term survival of D-Bamboo Home and Garden Shop
PESTEL AnalysisPolitical • 3 Branches of Government: Executive, Legislative, Judicial
• Parliamentary democracy• Political pressure from Jamaat-al Muslimeen
Economic • Turbulent economic climate• Excellent investment site for international business • Growth Rate: 5.5%• GDP Per Capita: $18,300 USD• Public debt: 26.6% GDP• Inflation:
Social • Population: 1.3 million• Literacy rate: 98.6% • Cultures: African 40%, Indian 40%, European Chinese, Middle Eastern• Religions: Catholic 26%, Hindu 22.5%, 9 others each at approximately 10% or lower • Languages: English, Caribbean, Hindustani, French, Spanish, Chinese• Crime rate: Steadily increasing over past 3 years
Technological • Internet usage: 163,000 people• Cell phones: 1,655,000 • Televisions: 425,000• Radio: 680,000
Ecological • Climate: Tropical with Rain season June-December• Natural Resources: Petroleum, Natural Gas, Asphalt• Current issues: Water and oil pollution, deforestation, soil erosion
Legal • Under English Common law• Licensing required for importing plants and seedlings
Porter’s 5 Forces
Suppliers• Customers turn into suppliers
• Several local suppliers are used
• Large network of suppliers
• Equipment from larger hardware retailers
New Entrants• Rumor of new company entering market
Buyers• Willingness to travel significant distances• 60% Working women• 15% Retirees• 10% Expatriate workers• 10% Teenagers• 5% Farmers
Substitutes• Self-grown
•Home gardens
Industry Competitors• New shop 1 km away
• New shop entering shopping mall
• Larger competitors offer similar products
SWOT AnalysisStrengths • Large product line• Offers unique and exotic plants• Loyal customer base• Extended hours of operation• Located in a high traffic area of town• Excellent bookkeeping practices
Weaknesses• Expansion of car park decreased plants
available for sale• Limited promotion• Lack of proper signage• Shop not clearly visible to motorists
Opportunities• Provide plant rental service• Relocation • Increase pricing • Partnering with local science teachers• Better control supply chain• Provide landscaping service• Customer incentive program
Threats• Nearby shop opening offering similar
pricing• Turbulent economic state of Trinidad• Competitors beginning to supply similar
items
Marketing Mix
Product- Medium- to low-end plants- Gardening supplies- Ornamental flowers- Plant and vegetable seedlings- Bonsai, turtles, aquariums
Place- Located in heavily traffic area- Recessed angle of building- Across the street from popular gas station- Main highway 200 meters from shop
Pricing- 100% markup on plants < $20- 50% markup on plants > $20- 50% markup on shop items - 35% markup on items > $150
Promotion- Flyer distribution for grand opening and special events- Plant and balloon giveaways- 30% discount on seedlings - No outdoor sign- Posters on roadside wall periodically
Consumer60% Working women
15% Retirees10% Expatriate workers
10% Teenagers5% Farmers
Monthly Sales & Expenses2007 2008 2009
Sales Revenue
Expenses Sales Revenue
Expenses Sales Revenue
Expenses
January $19,870 $10,531 $37,730 $20,752
June $34,945 $18,521 $43,475 $23,911
August $25,650 $13,595 $22,910 $12,601
October $34,865 $17,781 $36,235 $19,205 $21,820 $12,001
December $79,945 $47,967 $88,290 $54,740 $65,000* $35,750*
Note: Amounts are in Trinidad and Tobago dollars * Projections for December 2009 by D-Bamboo owner.
Estimated Financials2008 2009
Sales Revenue $491,000 $458,000
Expense $280,000 $252,000
Profit from Operating $211,000 $206,000
Note: Amounts are in Trinidad and Tobago dollars
Identification of Alternatives
1. Relocation2. Major IMC3. Limited IMC 4. Providing additional services5. Price increase6. Retreat7. Stay the same8. Customer Incentive
Alternative 1:Relocation
• $80,000 Initial Cost• Depreciated over 10 years = $8,000• $5,000 annually• 20% increase• $81,000 per year
Alternative 2:Major IMC
• $40,000 Expense• 40% (Conservative)• $189,600 per year
Alternative 3:Limited IMC
• Three times current expense• $2,250 Expense• 7.5% (Average)• $33,338 per year
Alternative 4:Additional Services
• $100,000 Total Expenses• 35% Markup on high prices• $135,000 Revenue• $35,000 per year
Alternative 5:Price Increase
• 7.5% Decrease sales volume• 5% Sales increase• ($12,582)
Alternative 6:Retreat
• Decreasing equity• Potential for growth• Not feasible
Alternative 7:Stay the Same
• Decreasing profits• Not feasible
Alternative 8:Customer Incentive
• $47,000 Discounts paid• $51,700 Additional revenue• $4,700 per year
Feasibility
• Relocation• Major IMC• Limited IMC • Providing additional services• Price increase• Retreat• Stay the same• Customer Incentive
Weighted Average Competitive Strength Analysis
Relocation Major IMC Limited IMC Additional Services Customer Incentive
Profitability 0.4 3 1.2 3 1.2 1 0.4 1 0.4 1 0.4
Brand Image 0.3 3 0.9 3 0.9 2 0.6 2 0.6 2 0.6
Customer Loyalty 0.1 1 0.1 2 0.2 2 0.2 2 0.2 3 0.3
Accessibility 0.2 3 0.6 1 0.2 1 0.2 2 0.4 1 0.2
1 2.8 2.5 1.4 1.6 1.5
Budget
• $55,000 Cash Reserve• $110,000 Credit Available
• $30,000 Cash• $70,000 Credit
Recommendations
Relocation Major IMC Limited IMC Additional Services Customer Incentive
Score 2.8 2.5 1.4 1.6 1.5
Rank 1 2 5 3 4
Direct Cost 85,000 40,000 2,250 25,000 5,000
Available Yes No Yes No Yes
Phases of Implementation
I. Customer Incentive ProgramII. RelocationIII. Integrated Marketing and
Communications CampaignIV. Milestone ReviewV. Long-term Planning
Phase I:Customer Incentive Program
• Time Frame: Upon approval of plan• For every $100 spent– 10% discount on next purchase– Encourages return of customer
Phase II:Relocation
• Time frame: 0-12 months• Ideal location:– Close to the current location– Availability of a green house– Easily seen from street– New sign installation
Phase III:Limited Integrated Marketing &
Communications • Time frame: The move - Ongoing• Use of Flyers and posters• Internet exposure– Increase in technology– Use social media
Phase IV:Milestone Review
• Time Frame: 12 months - Ongoing• Periodic Reviews– 3-6 month intervals
• Criteria– Customer Satisfaction– Owner Perception– Profitability
Phase V:Long-Term Planning
• Time Frame: 5 years +• Expansions as Budget allows– More extensive Marketing– Additional Services:• Commercial Landscaping• Science/Biology Education
Timeline
Phase I: Customer Incentive Program
Phase II: Relocation
Phase III: IMC Campaign
Phase IV: Milestone Review
Phase V: Long-term Planning
0 3
6 9 12 +Months
Spending SummaryMove 85,000.00 Customer Incentive 5,000.00 Limited IMC 2,250.00 Reserve 7,750.00 Total: 100,000.00
Revenue SummaryMove 81,900.00Customer Incentive 4,700.00Limited IMC 33,338.00Total: 119,938.00
Redhawks Consulting
D-Bamboo Home & Garden Shop