Business Plan: Only-Grocery China Venture
Introduction
Business operations emanate from the inculcation of diverse approaches in the functional aspects towards successful outcomes. Most fundamentally, the internationalization prospect has led to the emergence of the need for plausible entry modes that are bound to ensure profitability in the foreign market. Thus, Only-grocery is a firm that has been within the operational mandate of provision of a differentiated product and service delivery to its clients. As such, the firm focuses on providing fresh agricultural products within the online mandate to the prospective clients. As a novel idea within the diverse markets, the company aims towards market venture into china through the inculcation of diverse strategic approaches. Through strategy implementation, the company, using its new approach in business operations is bound to ensure profitable outcomes within the foreign market. Thus, this paper will examine the entry approach for Only-grocery Company through an analysis of the evident case questions.
Background
Internationalization is an emergent prospect within the operational avenue of organizations. As such, internationalization entails making market entry into new and untapped markets. Thus, through internationalization, businesses manage to sustain and expand extensively their operations. Expansion of operations as per many pundits is bound to result into profitable outcomes and ensure the going concern of an organization is within a long term mandate. Hence, inculcation of internationalization entails and requires an intensive investment into diverse approaches towards understanding the market. Through understanding the prospective market, effective product development and marketing approach is bound to prevail which is critical towards ensuring market share. Thus, from the analysis of Only-grocery, the firm aims towards making market entry into china through its novel approach in business conduct that entails the use of the internet towards successful outcomes in business transactions. The performance approach within the organization is highly new and requires inculcation of proper strategies to capture the market. Investing into diverse approaches or options available such as acquisitions, licensing, and joint ventures and so forth will depend on understanding of the external environment of operation. Thus, this paper will be highly comprehensive towards market comprehension and investment into diverse approaches in performance mandate.
Description of the product or service and why it will be in demand in the given market chosen
Only-grocery is a startup business that focuses on market operations within china. As such, the company has strong financial backing emanating from two venture capitalists that exude vested interests on the operational sphere of the company. The two venture capitalists have a 51% ownership stake at Only-grocery with a decisive role within the operational facet of the organization. Furthermore, through the venture capitalists, their comprehensive input has mainly emanated from the comprehension and setting up of a formidable e-business platform. The e-business mandate that Only-Grocer firm has been investing into mainly entails three basic models that focus on profitability. Thus, the three models for the e-business or online business approach is as follows:
First and foremost, the approach that Only-Grocery strategically prefers to inculcate is the e-business mandate. The E-business tactical approach is an inclusive approach within the performance mandate. As such, e-business denotes both communication and transaction of the various goods and services available. Thus, through e-business, the diverse models evident include:
- Business to business model (B2B)
The business to business model denotes organizations transacting with each other in regards to the goods and services available. Through the availability of the internet, companies can communicate regarding the goods available, purchasing of the raw materials evident, shipping status and so forth (Extern 2013). Thus, the business to business model at Only-Grocery will denote maintaining proper availability of agricultural products from the diverse suppliers both in the local and foreign markets. As such, investing into real time information and communication with the suppliers will ensure proper tracking of the available products bought prevails. Furthermore, real time communication will ensure that the company is able to manage profoundly the available suppliers and meet the demands by the clienteles due to the available products and services.
- Business to consumer model (B2C)
The business to consumer model focuses on organizations selling goods and services to potential customers. Admittedly, the business to consumer model focuses on online marketing and online purchase of goods within the organizational website. Information relay to the customers is bound to sustain purchase of goods and services. Amazon is a clear example of a business to consumer model that has been highly successful (Exter 2013). As the core competency model within the operational approach at Only-Grocery, the business to consumer model will entail relaying diverse fresh agricultural products to the prospective consumers within a real time information relay in the websites. Accordingly, through the business to consumer model, the organization will manage to capture a large consumer market and sustain profitability in performance.
- Consumer 2 consumer model (C2C)
The consumer to consumer model focuses on generating an avenue in which consumers can interact and sell commodities to each other. As such the consumer to consumer model at Only-Grocery will denote consumers that undertake subsistence farming manage to sell their various agricultural products among each other with the organization accruing a commission from the sales made.
Thus, from the analysis of the three basic models that Only-Grocery will incorporate towards plausible outcomes, it is imperative to examine the reasons as to why demand will be extensive in china. As such through analysis of the reasons for demand, the company will ensure that comprehensive performance mandate prevails.
China is an emerging global power house in regards to profitable outcomes for organizations. Thus, from the analysis of the country, the various reasons for demand in china regarding both the online business approach and fresh agricultural products include:
- Chinese consumer behaviour: the Chinese market, in reference to is highly sensitive regarding to tastes and preferences of its consumers. Thus, from the analysis of the market, consumers prefer fresh products within a convenient mandate. Through fresh groceries available for the prospective customers both within the stores at Only-Grocery, customers at china will manage to make orders.
- Expansion of the internet market: the Chinese internet use is highly expanding and companies are capitalizing on the vibrant internet market. As a clear example, Alabama has been hugely successful within the local and foreign markets through investment into the online business approach.
Explanation of the target market and PESTLE analysis
Majority of the multinational organizations have been evidenced by an emergent and growing chines lucrative market that is bound to sustain profitable outcomes. As such, from the analysis of china, a more mass targeting approach will be inculcated regarding the targeting approach of the market. Accordingly, the mass targeting approach will highly capitalize on the over 1 billion population that is bound to ensure profitability in performance. Nonetheless, in the market venture, the company will first focus on Beijing market within a mass targeting approach. However, the mass targeting approach will highly depend on comprehension of the external environment of operation. The use of the PESTLE that denotes analysis of the political, economic, social, technological, legal and environmental aspects will generate vast information on the prospective Chinese market. Thus, an analysis of the aforesaid external environment is as follows:
Political factors
The political environment of china has become highly friendly for multinational organizations regarding their market venture. Accordingly, from the analysis of china, a shift from the planned to a more mixt economic system has become evident. The previous planned economic system that the government incorporated was mainly based on a highly regulatory avenue in which the government regulated the operations within the private sector. On the other hand, the shift towards the mixed economic system by the Chinese government denotes a blend of both free and planned economic system in which private sectors can operate within a more relaxed political environment. Government influence within the operational mandate is highly minimal.
Economic factors
The chines economic environment is highly growing and expanding at a phenomenal mandate. With an average GDP growth of over 5% in the past five years, the economic environment presents a lucrative environment for companies to invest. Furthermore, the over 1.3 billion population is a highly incentive and proper environment for organizations towards market entry and sustenance of profitability and revenue yield.
Social factors
Chinese populous are highly hardworking and construed towards ensuring self-growth and development within the economic sphere. As such, the societal framework that is built on the values of hard work, trust and loyalty in working has resulted into extensively busy individuals that demand convenience buying of goods and services. Thus, towards meeting the convenience purchasing needs of customers, companies have been investing into various approaches towards meeting consumer demands.
Technological factors
Technology is fast paced and dynamic across the global mandate. Most fundamentally, the growth of internet users has been evident within the economic environment. From the analysis of china, over 50% of the population is internet users. An over 50% denotes an upward of 600 million internet users that is highly plausible for companies in their operational mandate in ensuring profitability.
Legal factors
Legal factors denote the diverse laws and regulations that are bound to impede on the operational facet of Only-Grocery. Thus, from the analysis of china, the government controlled All-China federation of trade union (ACFTU)) is bound to impede on the performance mandate. The aforesaid union requires that any foreign company sets up an effective employee union within the Chinese market. Accordingly, Only-Grocery should opt either to employee the evident or local labour market or import its own personnel from USA. Employment of the local labour market is bound to ensure reduction in litigations emanating from the ACFTU.
Environmental factors
The environment of operation requires intensive investment into diverse regulations that focus on sustainability in operations. Sustainability denotes making as minimum environmental impact as possible towards ensuring that the future generations can live and operate profoundly. From the analysis of the chines market, the environmental laws are highly minimal and less strict as compared to other countries. There is no evident effluent or carbon tax thus denoting a less environmentally regulative market.
Strategic analysis
The company will invest into the foreign direct investment model towards market entry into china. Accordingly, the foreign direct investment approach will denote a more individualized market entry approach into the Chinese market. As such, Only-Grocery will invest into the direct approach due to the prevailing advantages, disadvantages and the plausible information emanating from an internal analysis of the company. Thus, the various advantages and disadvantages of the foreign direct model are as follows:
Advantages
- Foreign direct investment will necessitate financial and managerial control of the operations of the company
- Foreign direct investment will ensure that the company capitalizes on the evident incentives for new businesses in china
- Foreign direct investment will significantly reduce the prospects of conflicts of interest with the diverse business partners
Disadvantages
- Foreign direct investment is highly risky since the company will invest all its finances towards setting up and ensuring operations of the business in china
- The concept of extensive financial investment into research and development towards comprehending the Chinese market is bound to result into obstacles in the process of setting up operations
Internal analysis of Only-Grocery
Resource focused strategy
Resourced focused policy of approach is a strategic method which many of the managers have been using in the formulation of their strategies. As such, the strategy is mainly focused on the internal environment as opposed to the external environment. The external environment forms a reasonably proportional part in its analysis. Most pundits state that the advantage of focusing on the internal environment as a policy in strategy analysis and formulation, the company takes into consideration the factors that it has mandate and can regulate. As well, the factors that the company has control over are mainly the strengths and weaknesses. As such, in the first part of this paper I will analyses Only-Grocery in respect to the various resources that circumvent its internal environment.
Only-Grocery resources
Pegged as a promising and dominant leader in the online grocery delivery and sale, the company has in its portfolio a myriad of resources that form and play a pivotal role. As such the resources play a substantial role in its production steps for the performance capability in production and delivery aspects to its clients in competitive terms in form of quality and standards. As such the company has both physical and immaterial resources that are quite important in its production.
1.3 Physical resources
The physical resources are inclusive of the human capital and financial resources. The company has myriads of tangible resources that it has in its possession and management. Physical resources are buildings, and various technological endowments in form of equipment. Only-Grocery has in its management strategy many buildings in various regions across china that it has bought. As such the presence of wholly owned warehousing plants affirms that the company will enjoy low costs of production. As such, through the reduced costs of production, the company will offer better quality of products at minimized prices. Additionally, its technological endowment, which mainly entails equipment, ensures that the company will rarely use leasing or renting hence strategically managing its production costs.
As aforementioned, the company enjoys solid financial base which is crucial as it is able to carry out its production steps without much financial setbacks such as shortage I cash flow. The remarkable cash flow in the company is imperative due to the many financial activities that the company will or may undertake in such as acquisitions and the direct investment approaches. As such, its financial positioning will enable the company to avoid debt financing in its operations. Admittedly, as per many pundits, the company will also maintain a competitive workforce which is dedicated and driven towards the growth of the company. Its competitive workforce will be the sole reason as to the delivery of products to the shelves and subsequently landing into the households of their various consumers. Come ford and Callaghan (2011) states that the company will use training and development of its employees in its strategies of ensuring that the employees involved in production offer high quality of products and service. As such, the employees involved in marketing will be crucial to ensuring that the products are bought by the consumers hence training and development is an effective tool. Moreover, (Comeford and Callaghan 2011) states that through effective training and development, the company will sustain its products to the impulse segment as opposed to just a common product.
Immaterial resources
Immaterial resources denote the intangible aspects that will play a pivotal role towards successful performance at Only-Grocery. Thus, as the main immaterial resource, differentiated capabilities will be imperative towards successful outcomes in Only-Grocery. Through the immaterial resource, a way forth in regards to extensive profitability is bound to prevail within the organization.
Differentiated capabilities
Only-Grocery will enjoy distinctive capabilities that will enable it to ensure production maneuvers that are superior to its rivals in the various sectors. As such the various differentiated capabilities that Only-Grocery will possess include, human resource competency, innovative aspects and architecture. The aforesaid three aspects will be crucial to the company maintaining a competitive footing over its various rivals. Human resource competency will mainly emanate from the two venture capitalists and the inculcation of a formidable IT department that will focus on website optimization and inculcation of diverse approaches towards enhancing customer traffic to the business website. Undoubtedly the company will sustain a superior product status as compared to its competitors. Through the fresh agricultural products approach, superior products are bound to be evident within the market. On the other hand, the company’s architectural planning will be crucial in maintaining the daily running to be congruent with its strategic objectives. Within its architecture, the company has a structural system in which it outsources distribution and delivery of products to the prospective clients which is bound to ensure that it manages to maintain and manage its operations.
Conclusion
Strategic management and inculcation of proper approaches are ever becoming a daunting task for many businesses to inculcate. Additionally, through time, strategic management has been ever growing tougher due to the globalization phenomena. As such, many of the large businesses are at cross roads in handling new frontiers and business environments. However, many of the businesses are beginning to incorporate various aspects of strategic analysis in coping with the ever growing cutthroat environment. Continuously, strategic analysis entails a perpetual aspect of business research into the internal and external environment within which the business operates in order to come up with formidable strategies. Thus, from the above analysis, it is evident that Only-Grocery requires inculcation of proper comprehension of the internal and external environment towards profitable outcomes. Through analysis of the internal and external environment, revenue yield and sales are bound to prevail in china. The above analysis reveals that the Chinese market is highly vibrant and is bound to result into long term profitability within Only-Grocery. Thus, the implementation of the various strategies evaluated above, the company is bound to ensure sustainable operations within the market.
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