Bus3Ent Entrepreneurship: La Super Store Assessment Answers

Answer:

Introduction:

The LA super store is a start up retail store that will be established and set up in Melbourne, Australia. Business will deal in providing customers with interesting options of merchandizing at negotiated prices. Financing of the business will be done by way of private investment. Such financing will help the business to carry out their operations smoothly for almost two years. Contribution toward the business venture will be made through the personal savings of the owner. The marketing plan of store is designed in an aggressive way so that it will experience steady growth and it will make itself aware to public. The objective of establishing the stores is to provide a wide range of merchandize at the reasonable prices and intends to achieve a modest net profit growth by end of two year (Akaichi et al. 2015).

Business model canvas:

The LA super store will be merchandizing in different products such as household goods, dishware, greeting cards, candy and list of many exhaustive items. Products will also include groceries that will be sold in separate department. The products will be sold at lower prices because purchasing of items is done from discontinued lines and over runs. Shipments of goods will be arrived on daily basis and store will explore new items and add it to their inventories (Allison et al. 2014). However, the products cannot be sold to retail customers of usual manufacturers. There are well known manufacturers from where the store will purchase their merchandize.

Market feasibility:

Since the customers are provided with the facility of purchasing the variety of items at negotiated price, it is expected that sales will increase steadily. The pricing of the products are done on fixed budgets and intention of store for tapping into retail market will encourage the customers in making quantity buying. The target market of the store is people from lower income band in different regions of Melbourne. Target people comprise of students, working class individuals and elderly people as well who are mostly price conscious (Botha and Robertson 2014).

It is expected that industry will grow at the rate of 10% on annual basis. The discount store model is becoming more popular and gaining publicity among consumers in an ever-changing economy. The goal of business is to provide the customers with wide selection of bargain priced items. Some of the external factors that would affect the stores are mostly usual dynamics and governmental factors.

The discount model stores have become popular because of discount private labelled products it offers to customers. One of the measures of industry contribution to overall, economy is the industry value added and that is forecasted to grow at the annual rate of 3.4% over the ten years through 2021-2022.

The key components of business is location and service provided to customers and concerning this, selection of merchandize stores is also very crucial. Discount retail store has received considerable expansion over the years and it occupies am important place in Australian competitive market.

Some of the barriers faced by discount retail store in Australia is it becomes hard for new business to imitate the experience required in ,managing the relationship with suppliers and retailers and purchasing volume as well. There can be barriers related to mobility for such firms relating to other strategic group for entering into the hard discount retailing business. It has been seen that such stores needs to subsequently exit the market if there is change in strategy at the industrial level and eventually abandoning the discount business. Barriers to mobility are another factor that is prominent in discounting retail business. It is required by firms to have some sort of experience in small proximity format (Blackburn et al. 2013).

Technical feasibility:

The growth in retail sales has been occurring through online channels and online channel accounts for about 8 percent of total retail sales. Online penetration has been the addressable market and helps in generating pool of revenue. It is required by retailers to adopt some critical steps toward making investment in technology. Store needs to make investment in digital technologies having a clear understanding so that the experience of store is enhanced. Store will be required to compete with online subscription model that will assist the customers in stocking up of recurring purchase. Store would have the opportunity for collaborating with large retail brands so that purchasing can be combined and customers are provided with transactional data on their smart phones based upon their location (Mariotti and Glackin 2014).

In order for investing in heavy digital capabilities, it is required by stores to make the examination of allocation of resource rigorously. Technological capabilities involve functionality and website designing, data analytics and collection, user-friendly interface, enhanced content so that it will, result in advanced customer communications.

Options available for producing products and services:

Many options are available for discount model stores for the development of products and services. Producing the products jointly or through the collaboration will help them in sharing cost as well as opportunities for exploring the business. Distribution of various products can be done jointly so that they can promote higher volume and discounted products and expanding the share of market. The products produced through the joint venture are sold through the joint venture itself. Since the target, market of the store is generally the mass market, therefore developing and producing the products through joint venture would be the suitable option. Joint venture or forming an alliance will help in successfully integrating the management of production facilities and investment. Store will be able to secure production capacity and production cost with the help of joint venture. There can be the introduction of new product mix with the help of forming joint venture of store with some other strategic partners. However, it might become critical to understand the each component of new product mix developed by venture.

Options for sales and distribution:

Joint venture results in pooling of the resources and expertise of the achievement of the goals of business. Such expansion along with helping the development of the new products assists in their sales and distribution as well. Such alliance will help in building strong relationship with suppliers and enable them to benefit from new technologies and getting better quality of service such relationship with suppliers will be aimed at strengthening the alliance business by guaranteeing a stronger volume of sales. Forming an alliance will help the store in accessing to the sales force and thereby helping sales and distribution of different products of stores (Rayburn and Voss 2014). There will be consolidation of distribution and operations of sales via such alliance formation.

Combination, laws, and regulation regulating the business:

All types of business have some legal responsibilities for ensuring that business are conducted in fair manner in relation to community, consumers and other businesses. It is essential for business to abide by national laws if the operation is carried out only in home country that is Australia. Business needs to be registered with Australian securities and investment commission. However, if the business activities are traded in the personal names of owner, this registration is not mandatory. Trademarks and patents of store needs to be registered with proper federal government. Store needs to have an Australian business number. Development and acquisition of business premises needs to be influenced by building regulations and local government zoning. Location and layout of business will be impacted by parking and fire regulations. There should be ethical and social responsibility management that will help the business in enhancing the knowledge of their business s by increasing awareness of the staffs of legal obligations (Roberts et al. 2013).

Australian state and territory government jointly administer the environmental protection. For the small business such as to be established sound environmental management practices and reducing the impact on environment will help in saving costs through productivity gain and efficiency. In this context, business is required to receive grant and assistance from government so that they are able to find new business opportunities for their green services and goods. Safety at workplace should be created through reduced waste and usage of industrial chemicals (Lubensky 2016).

Ethical issues during research: 

Trust and integrity is the most essential ethical issues faced while planning the business it is certainly possible that there might be decision-making issues and difficulties had arose in identification of ethical course of action. There can be issue relating to diversity an ethical response of business starts with recruitment of diverse workforce. Furthermore, research work would have faced governance and compliance issues if researcher had sought some additional data and information for planning the business (Zielke 2014).

Technological changes affecting the business:

Technological change is one of the rapid drivers of long-term economic growth of Australia. It has an impact on the way people perform their work in organization. Technological impact has become the game changer in this modern era of doing business. All types of business have been impacted by the latest wave of technology and there are three main areas that have lead to the transformation of retail store. Super store will have technological incorporation imbibed in customer outreach, in store operations and supply chain. Many stages in retail business are significantly impacted by footprint of technology. When a super store intends to compete on price, it could lead to adoption of e commerce platform (Roy et al. 2015). In store smart shooing carts, mobile payment and interactive kiosks will enhance operations of the super store.

Financial feasibility:

The analysis of financial position of business has been done by preparing the profit and loss statements for the period of three years. Start-up cost of business have been computed using all the relevant resources required for carrying out the operation of business. Several financial statements encompasses the net sales revenue generated by business along with expected total revenue. Assumption has been made about the selling price per unit and all the figures have been forecasted for the period of three years. The following table in appendix 1, 2 and 3 depicts the start-up cost of business and profit and loss statement along with breakeven-analysis and payback period. The graphs of net profit margin, gross profit margin and return on equity can be given in the table below.

Human Resource feasibility:

There are two mangers of LA retail store named Kim Spencer and John Tiedemann. There will be six part time employees and ten full time employees. John Tiedemann will be responsible for overseeing the day to day functioning of store and he posses the marketing skills and of expertise in handling the marketing operations. Since the retail business is done discount model, there is need of operational mangers that will be responsible for efficiently cutting down the cost of business operating so that it is left with maximum profits (Brea?Solís et al. 2013). However, profit expansion should not be done at the expense of offering non-quality services and goods to customers.

Manpower requirement:

Employees of business are the most valuable assets and management of employees are critical. It is of utmost importance to motivate employees so that they help in boosting productivity of business. Store will be motivating their employees by empowering them and assigning them with responsibility of making decisions so that they have realm of control. Energy needs to be diverted for accomplishment of tasks and thereby leading to workforce empowerment. Store needs to make investment in employee learning program and this will also help in retaining employees. Such programs will help in enhancing their skills and motivating them to achieve the business objectives. Creativity and innovation of employees should be encouraged and opportunities should be provided for knowing their jobs in proper way so that they have ideas for further development and improvement (Doyle and Beechler, 2016).

The ownership of business will be that of partnership initially. However, with the growth in business it will be established as Limited liability Corporation. The partnership business is owned and managed by two or more people, they are required to pay taxes on their business income, and they are themselves liable for various claims and debts of business.

It is believed by owner of store that structure of work should have enough room for creativity and payment to the employees should be fair and equitable in relation with the industrial payment. Quality people will be encouraged to stay in the business.

Super store can employ technological platform for training their employees and online training courses can be imparted for instructing them with the fundamentals of the business. It can employ professional trainers for imparting training to make employees well aware with the business requirement (Rayburn and Voss 2013). They should be encouraged to learn and instructed to become self-motivator.

Growth strategy of super store:

There are several growth strategies followed by business that help them in achieving the objectives of business. Super store will employ location strategy, merchandize strategy, private brand and promotion strategy. All these strategies will be incorporated in business in such a way that it will help in promoting and development of business. The strategy is employed by retail sector to have sustainable competitive advantage. Positioning strategy employed by store will help them in positioning their business so that it is attracted to then customers and they become more inclined in buying the products.

With the best employment of growth strategy, there is expectation that store will flourish in few years and this will lead to change in business structure. Initially, business is established as partnership who are the directors of store and with the growth in business, the ownership structure will be that of limited liability corporation. Employees of organization will have the opportunities for exploring their careers as the enhanced business opportunities generated from growth.

Recommendation:

The newly to be establish business of retail store will have great scope of success and growth in Australia. It is recommended via the commencing of business plan for setting up new stores to adopt the technological platform on wide scale for gaining popularity among its target market. Since technology is one of the most influential factor impact the operation of business, their incorporation is highly recommended.

Conclusion:

From the analysis and discussion of the business plan for opening of retail stores, it can be concluded that such investment proposal is viable and feasible. This is so because retail stores growth in Australia. However, revenue growth has been constrained by increasing competition on retail sector in Australia. Introducing the discount model store would viable because consumers have become increasingly price conscious and they are indisposed in spending their discretionary income. Introduction of super store will be gaining publicity, as they will be selling their merchandize at negotiated price.

Reference:

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