Introduction of F-Smart Key Idea
F-Smart Key will be a startup business targeting both local and international markets. The business will be dealing with a product line of key holders. F-Smart Key will be a limited company. The smart key holder is a compact and essential tool resembling the size of a Swiss army knife that will reduce the amount of space that keys occupy in an individual’s pocket. Instead of too much rattling and jingling in one’s pocket, the key holder will keep the keys composed and aligned. This, as a result, permits one to flip the key that is required for a particular door. Moreover, the tool has been designed in a way that it has other purposes, like bearing an opener that contains a loop on the other end for attaching thicker keys. Besides, the f-smart key also has an in-built tracker tile that can help one find his or her lost keys. Note that the tile contains a battery life of about five months. Thus, the device will automatically send a notification to an individual’s phone within a particular radius.
Unique Selling Point
There shall be two main categories of customer’s for the smart key. These are domestic, as well as institutional customers. Both of them shall use the device for their safety purpose. Through competition with other similar business, the company intends to attain a market share of 40 per cent. A much broader appeal exists during high school and university admissions when most students require the smart keys for security purposes as mentioned earlier. These are the occasions when great sales will be realized (Grönroos, 2012). Besides, new and existing organizations have shown a great interest in the product.
After an intense investigation around the area, the company realized that the targeted customers would need an efficient smart key holder that will enable them to effectively organize their keys while in their pockets and also to minimize chances of keys getting lost. Hence, the company will majorly focus on the smart key holder, rather than dealing with a wide range of products. The device is fast selling given that it permits placing five keys on top of each stud. Moreover, the smart keys have varieties of spacers for holding keys of different sizes (Goi, 2009).
The company will ensure that the products are sold both online and offline. As such, it will reach a broad range of potential customers. These include both the local and international buyers. Moreover, the organization will use online distributors to facilitate faster strategic placement of the smart key (Brownlie & Saren, 2014). Most of the organizations in the industry have been reluctant to integrate online sales; hence, F-Smart Key intends to be unique.
It shall be wise for the company not to set high or low prices for its clients. F-Smart Key Solutions will be keen to ensure that fellow retailers and wholesalers do not complain about offering prices much lower than the industry, given that the firm will be sourcing from the cheapest supplier. Therefore, the introductory prices will be slightly lower than the coverage market rate to popularize the business. This is one of the features of being customer oriented. Considering that the market is comprised of price-sensitive clients, charging them a slightly lower price below that of competitors will lead to increased market share for the company.
To create substantial market coverage awareness, F-Smart Key Solutions will initiate various promotional strategies. Such include online and offline advertisements, through social media, television, and newspapers, as well as direct marketing mailshots. The best time for the promotional activities will be during school and university admissions and the launch of new organizations, both at international and local levels. Various components of the smart key, like having a tile tracker built on it, should be made known to potential customers during a promotion.
Market Segmentation, Targeting, and Positioning
Through segmentation, the organization will be able to identify various market niches and conduct research on the specific needs of customers. The firm will have to serve customers from each segment differently, depending on their needs, financial status, as well as tastes and preferences. F-Smart Key Solution will carry out different segmentation strategies to fully satisfy its customers. One of the approaches is demographic segmentation. Further classifications will be based on values, beliefs, lifestyle, and behaviour (Chaston, 2014).
The company will need to evaluate the potentiality of each of the market segments. Factors to be considered will be such as the size of the market, or the level of income (Chaston, 2014). Moreover, anticipated profits must be more than the cost of production, as well as the expenses involved in reaching out to each segment.
F-Smart Key Solutions will need the incorporation of positioning maps to come up with the market overview (Chaston, 2014). The company can design big, small key holders, as well as those with and without tile trackers. Each design will have a unique price tag. This will enable the organization to reach all the potential clients, irrespective of their levels of income and tastes, among other factors.
F-Smart Key Solution has the advantage of offering a unique product, which is much differentiated from other competitors. Besides, the smart key has many features that come with various benefits like trackers that will help in the location of the key in case it gets lost (Hill & Westbrook, 2014).
The organization has a weakness of budgetary limitation and how to attract skilled personnel. This is because it is a new venture.
The organization will be opportunistic to introduce an online selling platform that most similar organizations have been reluctant to launch. Besides, the organization has a chance of increasing its sales during high school and college admission.
The major threat is that there are already other players in the industry. This poses stiff competition in the market. However, through in-depth strategic planning, the organization is anticipating to control a significant market share.
The company’s competitors are the existing businesses which comprise wholesalers, retailers, wayside shops, and supermarkets. Among them are those that have already been established in the industry, as well as those willing to join. The organization will overcome and outweigh its competitors through the use of Bowman’s strategic clock (Farquhar & Meidan, 2010). F-Smart Key Solution shall gain insight into how its smart keys should be positioned to give it the most competitive advantage in the market. Moreover, the organization will have a variety of alternatives, which will be based on two dimensions. These are the perceived value of the keys and the price (Burd & Cherington, 2010). To have a competitive positioning that outplays the competitors, the organization will need the differentiated strategy, which will offer the customers the highest level of perceived added value (Farquhar & Meidan, 2010).
Efficient financial analysis will enable the proprietor to know the effects of every transaction that will be taking place in the business. It will show the levels of profit, which is a determinant of a firm’s growth and survival in the competitive industry. The pre-operational cost will be calculated to show the initial costs that will be incurred before starting the business. A proforma income statement will be derived to be used as a budgeting tool. A proforma balance sheet will also be prepared to indicate how capital will be distributed among various assets. Additionally, a cash flow statement will be prepared.
The planned business will be started with little capital from members’ contributions, as well as a loan from the bank. For the business to become popular in the market the firm. One of the strategies is the advertisement. This can be achieved through various radio stations, TV, newspapers, in addition to posters. This is to ensure that information reaches as many potential customers as possible. Sweet talking is another strategy. Marketing team shall be required to use a polite and convincing language when handling customers to make them buy the products/ services offered by the company. Another strategy is through sales promotion. This method provides users with experience of the products, thus, luring them to buy the products. Still, the firm shall be providing after-sales services. This is a unique strategy that will make the firm stand out among its competitors. Another way involves hanging banners on the premises where the business operates. This is aimed at catching the attention of potential customers.
Recruitment will be either internal or external, depending on the skills required. If a vacant position requires skills that are already within the organization, then there shall be no need for external recruitment. Training will not be necessary as the business will employ already qualified human resources to cut down operating expenses. However, in the event that there is a need for employee development, then this will be achieved through seminars and attending workshops.
Financial Forecast and Break-Even Analysis
|FACILITIES||QUANTITY||UNIT PRICE (||TOTAL COST
|Books of accounts||450|
The sources of money needed to purchase these facilities will be as follows.
Own advances: £850000
Bank loan: £1280000
Comprehensive Financial Plan and Break-Even Analysis
It refers to the money spent before the business becomes operational. These costs shall be split into particular units as shown in the table.
|Items||Costs in pounds|
|Adding and weighing machine||10000|
|Electricity installation and reinforcement||21700|
|Books of account||11000|
Projected Cash flow
Estimation of Working Capital
|Cash at bank||680000000|
|Cash at hand||20000000|
|Work in progress||80000000|
|Goods available for sale||180000||225000||250000||265000||270000||27500||280000||280000||295000||310000||380880||380000|
|Cost of sales||40000||65001||70000||65000||60000||55000||30000||35000||20000||70000||75000||180000|
Proposed Income Statement (year 3)
|Goods available for sale||180000||215000||242000||264000||288000||310000||335000||36000||382000||405000||470000||510000|
|Cost of sales||20000||350000||42000||44000||48000||48000||50000||60000||62000||25000||50000||50000|
Proposed Proforma Income Statement
Desired Financing Amount
Pre-operational cost: £652100
Working capital: £2840000
Fixed assets: £212400
Bank overdraft: £955060
In conclusion, the smart key idea is no doubt a venture that will have lifeblood in the future. Through financial, breakeven, and SWOT analyses, the business idea should be integrated to enable the organization to serve the vast majority of customers at both local and international levels. Moreover, offering differentiated smart keys with various features will no doubt make the organization to thrive in the competitive market and to command a significant market share.
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