Strategic Business Plan Part I and Part II
Paper Due Date
Strengths, Weaknesses, Threats & Opportunities
This strategic plan addresses the following key strengths, weaknesses, threats and opportunities which apply to Digital Queue now and in the foreseeable future:
Vision
The promoters' vision of Digital Queue in 3-4 year's time is:
Mission Statement
The central purpose and role of Digital Queue is defined as:
Corporate Values
The corporate values governing Digital Queue's development will include the following:
Honesty and transparency.
Working together with all the partners across the business.
Develop our business as part of community.
Innovative organizational culture.
People are our major asset.
Business Objectives
Longer term business objectives of Digital Queue are summarized as:
Grow the outreach of the application and establish operation across all the states within the first year of operations.
Become financially profitable by the 21 months of operations.
Be recognized as unique and high quality service for time-management and dining-out experience in the country.
Key Strategies
The following critical strategies will be pursued by Digital Queue:
Develop an applicaiton that works for Android as well as Apple phones.
Ensure cost-efficiency and attracitve price for final consumer
Establish sustainable operations for the Digital Queue appliation across 5 major states
Create strong database for further analysis and improvement of operations and profitability
The following important strategies will also be followed:
Develop and establish Digital Queue application and srvies in every state.
Bring additional services as a rewarding experience to the client, such as special partner deals for restaurants.
Develop a comprehensive plan for overseas expansion.
Major Goals
The following key targets will be achieved by Digital Queue over the next 3-4 years:
Develop an application and establish Digital Queue Operation in all the states within the first 6 months of operations.
Ensure profitability through cost-efficiency and transparent pricing strategy
Develop and implement a comprehensive marketing plan that will ensure sustainable position of the company on digital solutions for HORECA market. It is expected that the company should be able to generate sustainable monthly income of USD 320 thousand by the third year of operations.
Build and maintain the leading R&D and innovation strategy with an average annual investment of USD 180 thousand into innovation projects.
Strategic Action Programs
The following strategic action programs will be implemented:
Develop, test and implement the application for Apple and Android phones. The deadline for this milestone is week 18. Main stakeholders: IT Manager and Testers along with outsourced developers’ team.
Implement, present and approve the 5-year strategy with the major stakeholders within the next 8 weeks. Main stakeholders: Strategic Management Team
Build a comprehensive and accurate diversity strategy to offer personalized service to partners as well as final consumer across the states. The strategy should be approved by the third month of operations. Main stakeholder: HR Diversity Manager.
Develop and implement job descriptions, employee training and performance appraisal system. The milestone is to be finalized within the next 4 weeks. Main Stakeholder: General HR Manager.
Develop specific action sales plan to achieve sales and profitability goals. The milestone is to be achieved within the following 5 weeks. Main Stakeholders: sales and marketing manager.
1. Introduction & Contact Details for DigiQ
DigiQ is an online cellphone application that allows Android and Apple phone users to place themselves in remote queue. The application is a two-end product, where upstream partners, such as restaurants, medical offices and other establishments that are in need of demand management can install the application for free and a final user pays small fee for using the application and placing themselves in remote queue.
The purpose of this document is to develop a comprehensive and detailed plan for a new digital start-up Digital Queue. The company will require to raise USD 450,000 in order to develop, test and implement the application for Android and IOS. It is expected that the project will be 70% internally financed by the partners and the rest of the financing will come from bank loan. The suggested investment includes the value equal to th 6 months of operations to create a buffer in working capital. DigiQ expects to compete on the unique market proposition and fair and transparent cost structure. Innovation is the key for sustanable competitive advantage and, thus, people management and diversity strategy are essential for the business strategy.
Contact Details:
Position: General Manager and Idea Owner
Business: Time Management Applications Ltd.
Web site: www.digitalqueue.com
Phone: +1 800 2325561
2. Strategic Plan
DigiQ's main strategies and plans are as follows:
Digital Queue mission statement is the following: Our mission is to improve your living, make our society and community more transparent and enhance the communication between the businesses and individuals! The company aims to bring more comfort and free up time for individuals that use our application. At the same time, it believes that the service offered to individual consumers will bring significant improvement to the businesses by reducing cycle times, improving utilization and offering an opportunity to better understand their customers and their expectations through the data collection and reporting services. Digital Queue will offer a unique product: two-end business application that will connect customers and business that require demand and throughput management tools. DigiQ is committed to continuous innovation and improvement of its services through open channel communication with its customers and partners and adjustment of R&D based not only on their needs, but also wishes.
Develop an applicaiton that works for Android as well as Apple phones.
Ensure cost-efficiency and attracitve price for final consumer
Establish sustainable operations for the Digital Queue appliation across 5 major states
Create strong database for further analysis and improvement of operations and profitability
3. Background & Status
The following is a brief review of DigiQ's development and current status:
Digital Queue was created by a group of entrepreneurs, working with restaurants and related businesses offering a range of online solutions to simplify their business operations.
For the past 5 years the company placed a lot of emphasis on looking for solutions in time-management and throughput and capacity management.
As the business plan in question is not yet implemented it is not possible to provide actual figures. It is estimated, however, that the company will be able to establish profitable operations by the 21st month of operation with sustainable income of USD 320,000 per month.
Internal financing is estimated at 70% of the total required investment.
Preliminary testing of the application for a limited number of users on Android phones rended very positive result in terms of infrastructure efficiency and customer feedback.
Market research demonstrates the increasing interest in online and remote solutions for time management for businesses as well as individuals.
4. Offerings
DigiQ's main offerings are introduced below.
Digital Queue is a light and user-friendly applicaion that will be available for free download from Android and IOS phones.
The company will adopt transparent pricing policy, charging final consumer a fixed fee of USD 0.50 per reservation and fixed monthly fee of USD 35 from its partners after 2 month trial.
Application is extremely light and demands just basic internet infrastructure and Android or IOS phone for boh, final user and partner.
The company will work with several representative sales agents, whose compensation will be based on commission from sales.
It is expected that the company will offer a unique solution to the market and, therefore, main competition is seen in the potential for development of internal applications or managing online reservation system. These solutions, however, do not offer differential for the downstream consumer.
Main alternative products are simple booking management systems and existing free application available to book restaurant slots at a fixed fee.
5. Target Markets
The following is a summary of DigiQ's target markets, customers and main competitors:
Digital Queue target market is determined as the US with the main focus on capital cities. This target market is identied for the upstream partnering organization.
Typical customer for the Digital Queue product is an average middle and upper class consumer that frequents restaurants and has time-sensitive schedule with other appointments, such as medical consultation, hairdresses and others.
The size of the market on the upstream is estimated at 8,000 companies country-wide.
Downstream market is limited to the population of the country at the age between 17 and 60 years old, using smartphones and with an average income of over USD 35,000 per annum.
Market research shows that the main competitors for Digital Queue application are own Apple developers, IBM and small market players, such as digital application entrepreneurs.
6. Marketing & Sales Plans
DigiQ's proposed marketing strategies and sales plans are as follows:
Long-term marketing strategy is focused around the Digital Queue application with geographic scope limited to the US market.
Digital Queue will sign special representant agreements with one agent in each state and will offer exclusive selling rights.
Additionally,the company will be working on direct sales basis with is team of internal professionals.
Short-term sales strategy sets the target of 120 upstream partners.
The company expect to subcontract application sales on upstream channel to 10 representing agents over the first year of operations.
Marketing budgetis estimated at 35% of the monthly sales revenue for the first year of operations and 19% of the sales revenue for the following three years of operations.
Overall monthly sales revenue by the end of the first operational year is estimated at USD 190,000, demonstrating stable increase of 20% per months due to new contract deals with partners.
7. Technology & R&D
Digital Queue is a technology-based start-up and it is expected that R&D and innovation costs will be the highest in the balance sheet of the company.
Overall budget for R&Dactivities by the time of organizational maturity is estimated at USD 180,000 per year.
8. Management & Operations
DigiQ's management and its operational plans are presented below.
Strategic Management Team and the Founders of the company have mixed and complementary profile.
Operations Manager, Geffrey Smoth has over 10 years business development experience in IT companies, including for restaurant sector. Recently completed his MBA, he also holds Bachelor Degree in Program Engineering.
HR Manager, Jennifer Holden, has 7 years experience divrsity and talent managemnet within large and medium size corporations. With Bachelor Degree in Human Resource Management and Organizational Psychology, she will be responsible for building the Digital Queue operational team and developing the Supplier and Partner Code of Compliance.
Marketing Manager Jatinder Ghandi, holds Masters degree in marketing and PR. He dedicated past 5 years to developing social and media marketing strategies for start-ups. Currently works as an independent consultant for marketing change management strategies for various companies. Jatinder will be joining Digital Queue as Marketing Manager in a full-time position.
The headquarters of the company will be located in a 35,000 office in one of the business buildings outside downtown area. This will provide the company with comfortable working environment and needed space within the forecasted budget.
Operations of the company as related to the management of upstream and downstream relationships will be handled internally. Digital Queue will build on own intelligence and competence base to ensure sustainable competitive advantage. The development of the application, however, will be outsourced to a partner that has siginificant experience in the industry and can complement knowledge of our professionals with their findings and expertise.
Digital Queue will work under matrix corporate structure with five main departments in place: HR Department, Sales Department, Operations, Marketing and R&D and Innovation.
9. Financials
DigiQ's financial projections and prospects are summarized below:
The business plan is build on the calculated assumption that the start-up capital required is USD 750,000, icluding the working capital of USD 60,000 for the first 6 months of operations. The entry cost will account for the 60% of the total amount and therest of the investment will be injected over the first operational year.
Digital Queue management team has very strong financial position and it was decided that 7-% of the initial funding will come internally, while remaining 30% will come from a bank oan secured over the first year of operations, mainly for the cash flow purposes.
Expected Net Profit Margin of the company is 35%.
Debt/equaty is expected to reach 0.3 by the end of the 2nd year of operations.
Sales breakeven under the neutral scenario is USD 227,500 per month. This number is expected to be reached by the 16th operational month, based on the assumption that downstream partner base will reach 150,000 customers, with an average of 3 monthly booking at USD 0.5 rate. Partners base by the same month will be at least 30 companies, paying a monthly fee of USD 85.
In the worst case scenario the breakeven point will be reached by the 22nd month of operations.
10. Funding
The total funding need for DIgital Queue to start and sustain its operation for the first 16 months is USD 850,000. Equaty capital is already secured is accounted for USD 406,000. This capital will cover all the developement, test and the implementation costs of the system as well as will allow the company to build a team for effective operation.
The remaining of the funding will be secured through the bank loan and devided into 6 equal payment starting on the 2nd month of operations. This will allow better liquidity and an opportunity to maintain a healthy level of reinvestment in R&D and innovation sector.
11. Implementation
DigiQ's medium-term implementation plans are as follows:
Implement, present and approve the 5-year strategy with the major stakeholders within the next 8 weeks. Main stakeholders: Strategic Management Team
Build a comprehensive and accurate diversity strategy to offer personalized service to partners as well as final consumer across the states. The strategy should be approved by the third month of operations. Main stakeholder: HR Diversity Manager.
Develop and implement job descriptions, employee training and performance appraisal system. The milestone is to be finalized within the next 4 weeks. Main Stakeholder: General HR Manager.
Develop specific action sales plan to achieve sales and profitability goals. The milestone is to be achieved within the following 5 weeks. Main Stakeholders: sales and marketing manager
Start full-speed operations and sales program by week 20.
12. Conclusion
Digital Queue is an innovativ product on a growing market with strong potential for differentiation of the income streams through market data and advertisement.
Strong management team and combined expertise of the founders will bring the company to success within the accurately estimated deadline.
Digital Queue product can be utlized in a variety of industries where interaction and service for the final consumer demands accurae throughput capacity management and remote services can bring additional competitive advantage.
Equaty to debt structure shows strong position of the investers and their confidence in the product viability.
Works Cited
Ministry of Economic Development. "Growth and Dynamics of New Zealand Screen Industry." Ministry of Economic Development. April 2012. Web 13 Apr 2016, http://www.mbie.govt.nz/info-services/sectors-industries/screen-industry/documents-image-library/Economic%20study%20of%20the%20New%20Zealand%20film%20industry%20-PDF%201.1%20MB.pdf
Reuters. "RPT-China's Dalian Wanda buys Australian cinema chain Hoyts". Reuters. 2 June 2015. RetriWeb 3 June 2015, http://www.reuters.com/article/hoytsgroup-ma-wanda-cinema-idUSL3N0YO5RG20150602
