Identify Market Oppurtunities Task 2 Essay

Executive Summary : BBQfun was established in 2009 by current CEO, Pat Mifsud. BBQfun offers an extensive product range, incorporating both local and imported goods. Since 2010, the increasingly competitive retail environment, technological change, changes in consumer buying patterns and consumer confidence has led to disappointing sales. However, BBQfun intends to return to healthy sales of $11 million in 2012 through building on its organisational strengths, through targeted marketing strategies aimed at key segments and through exploiting marketing opportunities. Currently, BBQfun operates two stores, one in Brisbane (Kenmore), and one on the Gold Coast. BBQfun is seeking business and marketing opportunities that could lead to interstate or national expansion if viable and scalable. Mission ââ€"  To provide our customers with great value outdoor lifestyle products and second-to-none customer service. Vision ââ€"  To be, within five years, south east Queensland’s leading outdoor lifestyle retailer. Values ââ€"  Quality ââ€"  Customer value ââ€"  People: Active encouragement of safety, teamwork, diversity, excellence, innovation and continuous improvement. Strategic directions The strategic context in which BBQfun will achieve its mission and vision is through: ââ€"  engaging with customers through promotion and market research ââ€"  building reputation for quality products and quality customer service ââ€"  supporting people to perform via training and performance management ââ€"  controlling costs. ââ€"  increasing sales revenue and profitability. Analysis Analyse 3 Opportunities and which of these fit with organisational goal Objectives | Opportunities | Engaging with customers through promotion & market research. | E-commerce | Reduce direct & indirect cost of the operations. | Own brand, Bargain market | Building reputation for quality products and quality customer service | E-commerce | New marketing opportunities impact | Own brand | E-commerce | Bargain market | Sales volume (units) | BBQ: 7200 | BBQ: 12600 | BBQ: 10000 | Sales volume (units) | Furniture: 3120 | Furniture: 5040 | Furniture: 5000 | Sales volume (units) | Accessories: 40320 | Accessories: 63360 | Accessories: 52500 | | Own brand | E-commerce | Bargain market | Price | BBQ: $600 | BBQ: $620 | BBQ: $500 | Price | Furniture: $850 | Furniture: $880 | Furniture: $650 | Price | Accessories: $50 | Accessories: $55 | Accessories: $40 | Unit contribution margin | BBQ: $500 | BBQ: $300 | BBQ: $200 | Unit contribution margin | Furniture: $600 | Furniture: $420 | Furniture: $220 | Unit contribution margin | Accessories: $40 | Accessories: $20 | Accessories: $10 | Total revenue | 8988000 | 15732000 | 10350000 | Total gross profit 2012/13 | 7084800 | 164000 | 3625000 | Additional fixed costs | Add lease $1000000 Add labour $500000 Add plant (depreciation): $500000 | Add training: $50000 Add online store development: $100000 Add new plant and equipment (depreciation): $150000 Add labour: $250000 Add reconfiguartion of warehouse/office: $50000 | See approved budget (no change in fixed costs) | Total net profit 2012/13 | 200086 | 1679286 | 1259714 | External factors Before implementing 3 new changes what are the legislation and standards need to be analysed Import & Export standards for both the countries Legislation regarding taxes maybe different in both countries Expensive labour cost Risk analysis Risk | Impact | Likelihood | Mitigation | Web server down | High | Likely | Back up server, Back up of data | Failure to adequately train employees | High | Unlikely | Adherence to performance management policy, Time to time training sessions | Not having confidence in Own brand | High | Unlikely | Serious marketing, Customer awareness programs, 24/7 customer service | Cost Benefit Analysis (CBA) Action | Cost | Benefit | Risk | F or MF or NF | Own brand | $6884714 | More profit | Not having confidence in Own brand | F | E-commerce | $5484714 | Less Cost | Web server down | F | Bargain market | $4884714 | More business | Failure to adequately train employees | MF | Return on investment Return on investment (Income-Cost) Cost Own Brand: $8988000 – $6884714 / $6884714 = 0.3055 E-commerce: $15732000 – $5484714 / $5484714 = 1.868 Bargain market: $10350000 – $4884714 / $4884714 = 1.118 Rank new opportunities Rank 3 opportunities based on its benefit. Rank One – Own Brand Rank two – E-Commerce Rank Three – Bargain Market Cost & Resources Brief cost & resources required to implement each new oppurtunity. Resources | Costs | | Additional staff | $25000 year average | Additional staff costs: $250000 | Plant & equipment depriciation | Delivery trucks ($20000 each) Forklifts ($10000 each) | Plant & equipment costs :- $120000 & $30000 | Promotional Costs | $500000 | Website developers | Contractors ($2000/ a day) | Website development cost: $100000 | Staff training | $ Online customer service training $3000 per staff member | Staff training cost $24000 | Management change leadership training for store managers and team leaders | $3000 each | Management & leadership costs: $42000 | Warehouse and office reconfiguration | Re-configuration cost :- $50000 | Total | $6016000 |