Charlotte Supplements is a small-scale organization operating in Charlotte North Carolina (NC) selling over 6,000 products. The portfolio of the company includes supplements for vitamins, minerals, herbs, and sports edibles. Due to its scale, the company does not interact with the audience digitally regarding product information such as prices. Moreover, the company operates for a limited span each week (CS, 2017). The purpose of this paper is to propose a business model and a competitive strategy for overcoming this small-scale but a potential competition. The paper will explain the core concept of strategy briefly prior to the proposition. Creating a rational business plan for acquiring Healthy Home Market (HHM), an established name, for giving a tough competition to Charlotte Supplements is the core objective.
Business Strategy – Brief Concept, Formation, and Rationale
As explained by Ovans (2015), the basic concept of the word “strategy” is pursuing an ideal competitive locus in the industry. The explanation is further evaluated by Favaro (2015), arguing that the purpose of creating and pursuing a strategy is for acquiring efficiency, quality, change agility, and industrial network. In context to HHM as the business focus acquired to compete with Charlotte Supplements, a “Broad Scale Market Capitalization (BSMC)” strategy is determined, which is designed specifically to cater the physical and psychological needs of the target audience.
According to Myler (2015), the strategy for catering the modern era audience should be unique and noticeable for increasing the industrial weight of a business, particularly after the acquisition. Business regulators with a strategy possess a capability of visioning a bigger picture (Scarborough & Zimmer, 2012). Besides, Scarborough & Zimmer (2012) even affirmed that a strategic management signifies the competency of a successful entrepreneur. Hence, the BSMC strategy would regulate on three simultaneous pillars namely “mass satisfaction of need”, “interactive customer experience”, and “simplicity”.
Justifying the rationale and purpose of each pillar, the mass market is becoming health conscious with the passage of span. Majority household audience shifted their lifestyle towards organic consumptions, intake of health supplements, and routine workouts (Middlebrook, 2016). The modern era need is physical fitness and healthy diet, which allowed HHM to capitalize the prime locations of Charlotte recently (HHM, 2016). The first pillar of the BSMC strategy will focus on promoting the healthy diet intakes to the audience in the form of organic food, essential vitamins, and fresh fruits.
Proceeding to the second pillar of the BSMC strategy, after the acquisition, HHM will increase their presence on the social media. Since the business is growing at a slower pace, it is not sensible for investing heavily in the marketing activities. Social media is an economic and major source of persuading customers with utmost transparency in the age of digitalization. The focus on constant interactions will be given while delivering the service of guidance regarding the health-oriented products. The company will be engaged in interacting with the audience through different platforms such as Facebook, Twitter, and Instagram for a rapid expansion. The digital market capitalization is significant for capturing the portion of market entertained by Charlotte Supplements until recently.
Simplicity is the final pillar of the proposed strategy for competing Charlotte Supplements before and during the acquisition of business. Since the products offered by HHM are not technology oriented and the business scale is limited, the company will strictly focus on satisfying the need of an engaged audience initially. The audience will be communicated regarding the benefits of adopting a healthy lifestyle through social media platforms. Moreover, the business would ensure that the customers are receiving quality from HHM, particularly while interacting via digital platforms and consuming the offered household products. Throughout the initial stage of the strategy, HHM will work smartly while catering the audience and competing with the existing business in order to avoid costly activities that could sabotage the core purpose of the business in the long run.
Build or Buy? A Significant Focus of the Paper
Addressing the question specifically, buying an existing business is more feasible than initiating the operations from a scratch. Explaining with the strong rationales, buying an existing business ensures security to the financial resources. As an entrepreneur, it is easier to raise finance for acquiring an established entity rather convincing the investors for an unknown start-up. An existing figure is already generating liquidity due to a market capitalization. The risk is least involved in taking over an established firm while compared to a new appellation (Scarborough & Zimmer, 2012; Entrepreneur, 2015).
Proceeding, purchasing an established firm would grant an instant access to the customers. Customers are essential for every business, specifically for triggering the survival mode in an industry. As a new business, fundamental processes such as spreading awareness, capturing customer attention, and related activities are mandatory for initiating the survival mode. The processes demand heavy investments due to a high dependency over attractive marketing activities in order to establish a strong brand image among the audience. However, buying an existing business offers customers at ready. Such decisions require a strong and justified strategy, such as BSMC proposed earlier, for securing the customer base extensively (Scarborough & Zimmer, 2012; Entrepreneur, 2015).
A direct focus on expansion is the major reason for purchasing an existing business rather initiating a new brand. As an unknown entity, a business would require conducting excessive and longitudinal exercises prior reaching to the stage of growth. Such essential practices are usually time-consuming and exhausting for the deployed resources, which have limited availability. However, an existing business requires focusing on specific portions and/or departments in order to aid the preparation of growth. Moreover, the growth constructively influences an overall image of an enterprise with utmost sustainability in an industry (Scarborough & Zimmer, 2012; Entrepreneur, 2015). Hence, a strict focus is given to the purchase of an existing business, namely HHM that could eliminate the growing competition in an industry.
Form of Ownership
As per the tendency of competition, proposed a business strategy and the decision of purchasing an existing figure, partnership or private limited ownership are the two most feasible ownership forms currently. Justifying the significance of both individually, Eriksson, Nummela & Saarenketo (2014) stated that a partnership formation is an opportunistic ownership, particularly when the capital is moderate. A partnership business is a simple type of ownership regulated by two or more owners pursuing a common objective namely profit. Each owner has a similar concern of avoiding potential business losses since the liability is unlimited. As result, this type of business formation operates on a mutual trust, credibility, and usually an equal and focused contribution from each owner (Kohler, 2015).
In context to the current situation of industrial antagonism with Charlotte Supplements, HHM has a possibility of being purchased in order to form a partnership. The decision would provide a prompt ownership of the company with minimal paperwork. Besides, it would be easier for convincing each owner regarding the terms and conditions that exist in the partnership treaty.
As an alternative, a private limited is also in a consideration while purchasing HHM. Nonetheless, the ownership requires a mandatory certificate of incorporation from a legislative figure. However, the certificate would limit the liability to the business. None of the partners would compromise their private assets in order to settle the potential debts in case of a shutdown. Besides, the members would have a mutual acknowledgment and understanding with each other. A major advantage of this formation, besides the limited liability, the management of corporate conducts is flexible. A privately owned corporation can determine the desired code of conducts for regulating the internal environment, which even affirms long-term sustainability. Unlike a partnership, a private limited business can determine the hierarchy as per the feasibility and consent. The beneficial element is important for conducting the operations with utmost independence.
Based on the existing scenario, HHM can be considered for a private limited formation in order to strengthen the competitive position in the industry. Since Charlotte Supplements is a small-scale enterprise, it would fail drastically while competing with a private limited ownership throughout the lifecycle stages. Since the plan is to purchase an existing business, it is easier for attracting investors externally for funding the process of private limited certification. In personal opinion, a private limited ownership is the most suitable option for competing Charlotte Supplements promptly as per the proposed strategy.
Proposed Business Plan
Business Description and Vision
HHM is a Private Limited Ownership offering a range of organic foods, vitamin supplements, and grocery items to the households. HHM is a complete household diet solution store focusing on the health and affordability of a general audience in Charlotte. Our vision is to promote and persuade people for adopting a healthy lifestyle initiating by changing the routine diet inexpensively. We guarantee fresh and healthy household products without artificial ingredients and/or preservatives.
Market Analysis Summary
According to the United States (US) Census Bureau (2015), the existing number of households living in Charlotte is approximately 305,488 with 2.55 persons per household. As previously identified, the health consciousness among the American audience is increasing rapidly. Moreover, the region has approximately 15 grocery stores currently operating. The major threat of competition is expected from the large-scale entities such as Trader Joe’s, Urbana Wellness Spa, and Earth Fare. The identified players offer a high-quality organic food at a competitive price all over Charlotte (Foursquare, 2017).
Our Core Competencies
At HHM, we are already an established entity in Charlotte. Unlike the identified players above, we are a complete organic food and health solution for the customers at a competitive price. Our audience can seek dietary advice from the experts via in-store interactions and social media platforms. Our store is operating 24/7 in the region, which would allow customers to walk-in, shop, and interact regarding health issues throughout a day. Besides a constant customer entertainment, we offer economic pricing, which is more attractive to the households in contrast to the competitive pricing. As communicated in our vision, we encourage an affordable and healthy lifestyle in Charlotte.
Procurement and Logistics
Ensuring the freshness and health in our products, HHM performs procurement from family grown farms nearby Charlotte. Currently, we are aiming for collaboration with Renfrow Farms, Tega Hills Farms, East of Eden Farm, and DD Farms simultaneously in order to purchase fresh fruits, vegetables, and meat. Their respective locations nearby the HHM stores in Charlotte are a major support in controlling the prices constantly. Moreover, the collaborated farms will be offered a profit share for further development and sustainability of the value chain of HHM. Their expansion is considered significant for the development and industrial growth of HHM in upcoming fiscal years.
References
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Eriksson, T., Nummela, N., & Saarenketo, S. (2014). Dynamic Capability in a Small Global Factory. International Business Review, 23(1), 169–180. http://dx.doi.org/http://dx.doi.org/10.1016/j.ibusrev.2013.03.007
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Foursquare. (2017). The 15 Best Places for an Organic Food in Charlotte. Foursquare. Retrieved 25 January 2017, from https://foursquare.com/top-places/charlotte/best-places-organic-food
HHM. (2016). Farm 2 Family Foods. Healthy Home Market (HHM). Retrieved 27 January 2017, from http://healthyhomemkt.com/farm-2-family-foods/
Kohler, M. (2015). Everything You Need to Know About Business Partnerships. Entrepreneur. Retrieved 25 January 2017, from https://www.entrepreneur.com/article/244632
Myler, L. (2015). Your Strategy should be as unique as Your Business. Forbes. Retrieved 25 January 2017, from http://www.forbes.com/sites/larrymyler/2015/08/22/your-strategy-should-be-as-unique-as-your-business/#7378d4febf9e
Ovans, A. (2015). What Is Strategy, Again? Harvard Business Review (HBR). Retrieved 25 January 2017, from https://hbr.org/2015/05/what-is-strategy-again
Scarborough, N. & Zimmer, T. (2012). Effective Small Business Management: An Entrepreneurial Approach (10th ed.). New Jersey (NJ): Prentice Hall/Pearson.
United States (US) Census Bureau. (2015). Quick Facts Charlotte City, North Carolina. United States (US) Census Bureau. Retrieved 25 January 2017, from http://www.census.gov/quickfacts/table/PST045215/3712000
